3 ms·
> - undergrad: 75k average for 43 years --> 3.2m lifetime That number isn't actually for undergrads, it's for everyone that's completed at least a bachelor's.
by everforward 3y ago
> - undergrad: 75k average for 43 years --> 3.2m lifetime
That number isn't actually for undergrads, it's for everyone that's completed at least a bachelor's. About 1/3 of those people have a master's or higher.
Pulling from https://nces.ed.gov/programs/coe/indicator/cba/annual-earnings https://nces.ed.gov/programs/coe/indicator/cba/annual-earnin... which does break down by educational level, those should be 1.86m vs 2.64m, for a difference of ~783k. The standard 10 year student loan would come out to $54k total, so $729k. The average person takes 21 years to pay that off though, which would bring the total to ~84k, leaving a 699k difference.
It would be worth factoring in that there's a filtering process for undergrads, and that high school is the default category. I would expect average lifetime earnings to be higher for undergrads even it was a nominal category and colleges didn't exist, because admittance is selective.
It also discounts the value of student loans. This is a little spurious, but I pulled the S&P500 returns for the past 47 years. If our highschool graduate got a $45,000 loan at 4% interest (modern value and interest) in 1975, dumped it into the S&P500 and reinvested the returns, they would have $1,573,832.60 (minus the still-outstanding $45k principle) in 2023, making their lifetime earnings 3.6m. That alone is over 50% of the undergrad's total lifetime earnings, and for doing practically nothing.
If the high school graduate invested the same proportion of their income that the undergrad spends on student debt payments, they would have $2,803,589 in 2023.
Even without reaching that far back, if one person went to college in 2018 and the other invested their $45,000@4% interest and paid $180/month into it, the college person graduates with -$45,000 and the investor has $22,619 in profit. For the same situation starting in 2003, the investor has $221,217 in profit already.