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You don't seem to be concerned at all by the ballooning student loan debt. Also, it's not clear that the wage premium from attending college has to do with wha

You don't seem to be concerned at all by the ballooning student loan debt. Also, it's not clear that the wage premium from attending college has to do with what is learned in college. Some scholars believe that it is largely a signaling device. Others believe that it is used as a proxy for general intelligence tests, which companies try to avoid using when hiring employees (due to a SCOTUS case from several decades ago, dealing with disparate racial impact). It may be true that the wage premium has outweighed the cost of attendance in the recent past, but this could easily change as tuition continues rising, and critically as interest rates are much higher than in recent years. The discount rate to which future earnings are subject is much larger than in the past 30 years, which means that the required wage premium has to be much larger than if the interest/discount rate were closer to zero. Basically, ZIRP was a boon for colleges, not just startups.

bandrami 3y ago
> You don't seem to be concerned at all by the ballooning student loan debt. I'm not, no. As long as the income premium exceeds the debt it doesn't really matter what the numbers involved are. > but this could easily change as tuition continues rising I mean, yes, if things were different they might be worse than they are. That's true of anything.
- gnicholas 3y ago
  > if things were different they might be worse than they are. That's true of anything. Sorry for being too subtle. What I was pointing out is that the higher interest rates we are currently seeing, in combination with the ever-rising cost, could mean we're at (or even past) the tipping point now. This won't be apparent to many people until 10-15 years after the tipping point is reached, when people realize that the premium they thought they were getting is outweighed by their loan payments. But this is just the tail of the dog. The main point is that college is largely about signaling, which means that much of the value is in the acceptance letter, not the diploma. Why pay $400,000 to get the diploma if this is the case?

bandrami 3y ago

> You don't seem to be concerned at all by the ballooning student loan debt. I'm not, no. As long as the income premium exceeds the debt it doesn't really matter what the numbers involved are. > but this could easily change as tuition continues rising I mean, yes, if things were different they might be worse than they are. That's true of anything.

gnicholas 3y ago
> if things were different they might be worse than they are. That's true of anything. Sorry for being too subtle. What I was pointing out is that the higher interest rates we are currently seeing, in combination with the ever-rising cost, could mean we're at (or even past) the tipping point now. This won't be apparent to many people until 10-15 years after the tipping point is reached, when people realize that the premium they thought they were getting is outweighed by their loan payments. But this is just the tail of the dog. The main point is that college is largely about signaling, which means that much of the value is in the acceptance letter, not the diploma. Why pay $400,000 to get the diploma if this is the case?