5 ms·

How Much Your Time in College is Worth

30 points by jayshahtx 14y ago

rwhitnah 14y ago
Some of the shortcuts taken by these quick studies are always really interesting to me. First, I wouldn't assume the same career duration for both GEDs and College Grads - generally, a dropout will start working earlier. A general "GED average" also pretty highly weights the comparison for other reasons - poverty, area (areas with higher education and wealth levels have higher average earnings, even among those with GEDs), career type. It's an okay generalization to make in this case, but it does bias the results somewhat. People with similar levels of education/wealth tend to group together, which means a lower salary in a poorer area may have similar buying power to what seems like a higher salary in a more expensive area. Unfortunately what might be the most telling metric is much harder to define: how much would person X make in her lifetime if she went to college, and how much would she make without? Even simplifying to the same field (their strengths would be similar in both cases), it's extremely difficult to plot her career trajectory. Of course, this may all be due to my personal bias - college dropout, doing fine, and making well above the average starting salary for a CompSci grad by age 25. Decent savings, no debt - it was a much harder road, but I'm not sure I'd make the tradeoff knowing what I do now. Personally, though, I can't discount the value I've felt in not having the average $27,000 in student debt hanging over my head [1]. It's enabled me to take risks, try new things, change career twice, and follow my passions. [1] http://money.cnn.com/2012/10/18/pf/college/student-loan-debt/index.html http://money.cnn.com/2012/10/18/pf/college/student-loan-debt...
deleted 14y ago
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deleted 14y ago
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argonaut 14y ago
If you're a coder (CS major), do not go to college just to earn more money. You need to have better reasons than that. Why? There is no doubt in my mind that if you're the type of student who can get into MIT/Stanford/CMU/Berkeley/etc (at least Berkeley Engineering), you will earn more by not going to college (at least in tech hubs like SV and NY). Assuming you have a marketable skill (iPhone, Android, front-end, Django, Rails, etc), entry level (including internships) starts at $80k. If you don't have such a skill, you can teach yourself over a summer. In four years, you could be making $110k+ (very conservative). A CS grad straight out of a top college will probably make $93k (EDIT: revised to $95k, which is average for a Stanford/CMU/Cal CS grad) [1], depending on the market climate. You factor in the anywhere between $0-250k tuition you're spending on college (financial aid depending), and the ~$380k you'd earn in 4 years, and, at least on the financial side, you come out way ahead if you don't go to college, anywhere between $380k to $630k ahead, just from those 4 years alone†. In fact, this probably applies to most colleges, not just top-tier ones, but in which case the salary numbers are more variable. You also won't be behind in terms of knowledge as long as you're proactive - the resources for self-teaching theoretical CS have never been more numerous than they are today. Now, that being said, the reasons I'm attending college instead of dropping out (I did take a year off to work at a YC startup): I value the unique social experience of college, my parents are paying for everything (huge mitigating factor - if I had to pay for everything I would not be going), and I see the value in pushing myself out of my social, academic, and extracurricular comfort zones - hanging out with business students, doing debate, taking classes in literature, etc. [1] https://studentaffairs.stanford.edu/cdc/jobs/salary-grads https://studentaffairs.stanford.edu/cdc/jobs/salary-grads, http://www.cmu.edu/career/salaries-and-destinations/2012-survey/pdfs-one-pagers/2012_SCS.pdf http://www.cmu.edu/career/salaries-and-destinations/2012-sur..., https://career.berkeley.edu/Major/CompSci.stm https://career.berkeley.edu/Major/CompSci.stm †Tax not included (subtract ~22%). The effect of having a higher salary due to work experience not included. Number varies depending on your housing costs. Number varies depending on student loan interest. Number varies depending on yearly tuition increases. The $250k figure for college tuition usually includes housing, your employment take-home money will depend on where you want to live in Silicon Valley (SF = big hit; East Bay = fairly affordable).
- Paul_D_Santana 14y ago
  I agree. The social experience should be at the top of the list of reasons to go to college. And while I am incredibly enthusiastic to see how online learning helps to curb the ever-growing debt crisis of the "traditional" university education, I do wonder how will this affect the social aspect of the college years? (Meaning the maturing, the friendships, and the non-classroom learning.)
- Darmani 14y ago
  Your argument is quite sensitive to the numbers, and your estimates of the numbers are questionable. Maybe someone from CMU CS is starting with $90k, but everyone I've talked to has offers significantly higher. Two of my closest friends have starting offers over $150k. Instead of spending their time sharpening how quickly they can map the shape of a button to the appropriate API call, they acquired deep knowledge of computing, and thus can do things in an hour most people couldn't in a month.
  - argonaut 14y ago
    I've added numbers for average salary figures. I think that should be preferred to anecdotes. A rockstar in college who makes 150k (notwithstanding that the max salary for CMU SCS in 2012 was 135k) straight out of college is probably capable of making just as much if not more if had they dropped out of college. It remains that in the average case dropping out makes more financial sense.
  - mfn 13y ago
    Just out of curiosity, and if you don't mind answering, are these offers $150k base? Or is that the value of the whole compensation package, including signing bonuses and stock options?
    - Darmani 13y ago
      One offer is $150k salary, plus stock (somehow, the company still has its own stock, despite having already been acquired for $300 million). This person is finishing a 5th-year Master's though. The other offer is $110k salary, plus $40k annually in stock. Since the company is Google, it's pretty fair to treat that as $150k.
ctbeiser 14y ago
If you took statistics in college, you might recall that correlation does not imply causation. There's a hidden third set of factors here; your intelligence, wealth, etc. That people who go to college make more does not mean that college means you make more. The way I see it, those with higher future earning potential more frequently decide to go to college.
- gz5 14y ago
  +1 Also think we are shooting a bit behind the bird to try to make current/future value conclusions on any present data as the value of a degree relative to other options is changing so rapidly.
minopret 14y ago
By trekking through a great deal of intellectual territory in college, way more than you will in an equivalent span of working years, you're mitigating a big risk. That's the risk that you will find it difficult to span gaps in your understanding as your occupation and your career go through earthshaking changes. As a software developer it is pretty well certain that you will be affected by these kinds of changes. With college behind you, you will have a greater range of topics in your repertoire and the confidence of knowing that you have faced plenty of difficult topics before. It's not as though a bright developer who bypasses college cannot dealt with change. But college helps.
reader5000 14y ago
If I shake hands with the top 10% of SAT scorers in the country, then 10 years down the road determine that their average earnings are greater than that for their age cohort, does that mean my handshake is worth $200,000? This is precisely what universities do and argue that buying into the massive education bubble is still a "good investment" since you earn more. I have no doubt there is value to classroom lecturing and the "soft" features like interaction with a wide range of your peers (assuming you choose to leave your dorm room), but the value of college can't be estimated by earnings differentials between college graduates and non-college graduates.
ryguytilidie 14y ago
I feel like people are looking at this the wrong way. Of course you could make an extra 80k/yr by going to college than not, but I imagine if you're an amazing developer and you go to Stanford, you're basically set for life with the combination of prior coding skills, network and things you learned at Stanford, thinking about working an 80k/yr job would be laughable, right?
- argonaut 14y ago
  Well, in 4 years you would be making a lot more than 80k, and you would probably have 10x the number of connections if you've even made any marginal effort to network (going to meetups, inviting people to have coffee/lunch, etc.)
rayiner 14y ago
Discount rate is too high, salary growth rate is too low.
droithomme 14y ago
These comparisons compare salaries of largely illiterate and innumerate people who dropped out of high school to people who have graduated with an engineering degree. They articles always then declare the difference in salaries to be the value of any college degree. These comparisons are absurd and statistically invalid. People who drop out of high school are more likely to be mentally incapable of doing high paid engineering work than those who are also able to graduate from an engineering program. The people capable of graduating from an engineering program were capable before graduating. Those who are high school drop outs are more likely to be incapable. There's a cool study (can't find the cite) where they looked at lifetime wages of people who were ACCEPTED to a given university and then compared those who actually went to college and graduated to those who decided not to go to college after being accepted. The lifetime wages were the same, showing that it was the selection process of getting admitted to college that was simply choosing for talent and not anything that college does to anyone. Those who benefit from burdening the next generation with massive education debt don't discuss this though and claim that it is not selecting for talent. To show that is the case, take people who are in that illiterate high school dropout category, send them to college, and then compare their lifetime salaries to the ones who were not illiterate. This study has not been done. Yes, I am aware there are hundreds of studies proving that college graduates make more than non-graduates, I am not contesting that there are such studies or that they are the majority of studies on this topic. In any case regardless of whether you believe in the existence of the unnamed study I regret I can't name, I hope it is obvious that the set of people who are high school drop outs and the set of people who have graduated with an engineering degree are not randomly selected people differing only in if a machine called college molded them into a higher earning resource asset. Since they are not randomly selected people differing only if a engineering education has been applied to them as a black box function, it is not correct to assume that salary differences between the two are solely attributable to whether or not they have been run through this black box.
- argonaut 14y ago
  There was the Krueger study: http://cdn.theatlantic.com/static/mt/assets/business/dalekrueger_More_Selective_College.pdf http://cdn.theatlantic.com/static/mt/assets/business/dalekru..., but it compared grads who applied to top universities (like Ivy League) and got rejected vs. those who applied and got in, and found no difference in lifetime earnings, when you adjusted for class rank.
crucifiction 14y ago
You have 40+ years of working for the man, why start so early? Getting a CS degree is fun if you like CS and are good at it. Drinking beer and hanging out with friends at all hours for 4 years are much better than working as a code monkey straight out of high school. Your average comp over your lifetime might be the same, or maybe a little more if you avoid debt and get 4 years of extra coding experience, but I bet the college grad never regrets going to college.
nilkn 14y ago
This thread reminds me of one of my minor pet peeves with HN: a lot of people here repeatedly speak of SF and NYC salaries as if they were universal across the country and nobody would ever want to work anywhere else. It's not a big deal because most of the arguments here are relative and not dependent on specific numbers but rather differences. I also understand HN began as a place to discuss Silicon Valley startups. But still I think it would be nice if HN were generally more cognizant of salary variations across location.

30 points by jayshahtx 14y ago

Some of the shortcuts taken by these quick studies are always really interesting to me. First, I wouldn't assume the same career duration for both GEDs and College Grads - generally, a dropout will start working earlier. A general "GED average" also pretty highly weights the comparison for other reasons - poverty, area (areas with higher education and wealth levels have higher average earnings, even among those with GEDs), career type. It's an okay generalization to make in this case, but it does bias the results somewhat. People with similar levels of education/wealth tend to group together, which means a lower salary in a poorer area may have similar buying power to what seems like a higher salary in a more expensive area. Unfortunately what might be the most telling metric is much harder to define: how much would person X make in her lifetime if she went to college, and how much would she make without? Even simplifying to the same field (their strengths would be similar in both cases), it's extremely difficult to plot her career trajectory. Of course, this may all be due to my personal bias - college dropout, doing fine, and making well above the average starting salary for a CompSci grad by age 25. Decent savings, no debt - it was a much harder road, but I'm not sure I'd make the tradeoff knowing what I do now. Personally, though, I can't discount the value I've felt in not having the average $27,000 in student debt hanging over my head [1]. It's enabled me to take risks, try new things, change career twice, and follow my passions. [1] http://money.cnn.com/2012/10/18/pf/college/student-loan-debt/index.html http://money.cnn.com/2012/10/18/pf/college/student-loan-debt...

deleted 14y ago

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deleted 14y ago

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argonaut 14y ago

If you're a coder (CS major), do not go to college just to earn more money. You need to have better reasons than that. Why? There is no doubt in my mind that if you're the type of student who can get into MIT/Stanford/CMU/Berkeley/etc (at least Berkeley Engineering), you will earn more by not going to college (at least in tech hubs like SV and NY). Assuming you have a marketable skill (iPhone, Android, front-end, Django, Rails, etc), entry level (including internships) starts at $80k. If you don't have such a skill, you can teach yourself over a summer. In four years, you could be making $110k+ (very conservative). A CS grad straight out of a top college will probably make $93k (EDIT: revised to $95k, which is average for a Stanford/CMU/Cal CS grad) [1], depending on the market climate. You factor in the anywhere between $0-250k tuition you're spending on college (financial aid depending), and the ~$380k you'd earn in 4 years, and, at least on the financial side, you come out way ahead if you don't go to college, anywhere between $380k to $630k ahead, just from those 4 years alone†. In fact, this probably applies to most colleges, not just top-tier ones, but in which case the salary numbers are more variable. You also won't be behind in terms of knowledge as long as you're proactive - the resources for self-teaching theoretical CS have never been more numerous than they are today. Now, that being said, the reasons I'm attending college instead of dropping out (I did take a year off to work at a YC startup): I value the unique social experience of college, my parents are paying for everything (huge mitigating factor - if I had to pay for everything I would not be going), and I see the value in pushing myself out of my social, academic, and extracurricular comfort zones - hanging out with business students, doing debate, taking classes in literature, etc. [1] https://studentaffairs.stanford.edu/cdc/jobs/salary-grads https://studentaffairs.stanford.edu/cdc/jobs/salary-grads, http://www.cmu.edu/career/salaries-and-destinations/2012-survey/pdfs-one-pagers/2012_SCS.pdf http://www.cmu.edu/career/salaries-and-destinations/2012-sur..., https://career.berkeley.edu/Major/CompSci.stm https://career.berkeley.edu/Major/CompSci.stm †Tax not included (subtract ~22%). The effect of having a higher salary due to work experience not included. Number varies depending on your housing costs. Number varies depending on student loan interest. Number varies depending on yearly tuition increases. The $250k figure for college tuition usually includes housing, your employment take-home money will depend on where you want to live in Silicon Valley (SF = big hit; East Bay = fairly affordable).

Paul_D_Santana 14y ago
I agree. The social experience should be at the top of the list of reasons to go to college. And while I am incredibly enthusiastic to see how online learning helps to curb the ever-growing debt crisis of the "traditional" university education, I do wonder how will this affect the social aspect of the college years? (Meaning the maturing, the friendships, and the non-classroom learning.)
Darmani 14y ago
Your argument is quite sensitive to the numbers, and your estimates of the numbers are questionable. Maybe someone from CMU CS is starting with $90k, but everyone I've talked to has offers significantly higher. Two of my closest friends have starting offers over $150k. Instead of spending their time sharpening how quickly they can map the shape of a button to the appropriate API call, they acquired deep knowledge of computing, and thus can do things in an hour most people couldn't in a month.
- argonaut 14y ago
  I've added numbers for average salary figures. I think that should be preferred to anecdotes. A rockstar in college who makes 150k (notwithstanding that the max salary for CMU SCS in 2012 was 135k) straight out of college is probably capable of making just as much if not more if had they dropped out of college. It remains that in the average case dropping out makes more financial sense.
- mfn 13y ago
  Just out of curiosity, and if you don't mind answering, are these offers $150k base? Or is that the value of the whole compensation package, including signing bonuses and stock options?
  - Darmani 13y ago
    One offer is $150k salary, plus stock (somehow, the company still has its own stock, despite having already been acquired for $300 million). This person is finishing a 5th-year Master's though. The other offer is $110k salary, plus $40k annually in stock. Since the company is Google, it's pretty fair to treat that as $150k.

ctbeiser 14y ago

If you took statistics in college, you might recall that correlation does not imply causation. There's a hidden third set of factors here; your intelligence, wealth, etc. That people who go to college make more does not mean that college means you make more. The way I see it, those with higher future earning potential more frequently decide to go to college.

gz5 14y ago
+1 Also think we are shooting a bit behind the bird to try to make current/future value conclusions on any present data as the value of a degree relative to other options is changing so rapidly.

minopret 14y ago

By trekking through a great deal of intellectual territory in college, way more than you will in an equivalent span of working years, you're mitigating a big risk. That's the risk that you will find it difficult to span gaps in your understanding as your occupation and your career go through earthshaking changes. As a software developer it is pretty well certain that you will be affected by these kinds of changes. With college behind you, you will have a greater range of topics in your repertoire and the confidence of knowing that you have faced plenty of difficult topics before. It's not as though a bright developer who bypasses college cannot dealt with change. But college helps.

reader5000 14y ago

If I shake hands with the top 10% of SAT scorers in the country, then 10 years down the road determine that their average earnings are greater than that for their age cohort, does that mean my handshake is worth $200,000? This is precisely what universities do and argue that buying into the massive education bubble is still a "good investment" since you earn more. I have no doubt there is value to classroom lecturing and the "soft" features like interaction with a wide range of your peers (assuming you choose to leave your dorm room), but the value of college can't be estimated by earnings differentials between college graduates and non-college graduates.

ryguytilidie 14y ago

I feel like people are looking at this the wrong way. Of course you could make an extra 80k/yr by going to college than not, but I imagine if you're an amazing developer and you go to Stanford, you're basically set for life with the combination of prior coding skills, network and things you learned at Stanford, thinking about working an 80k/yr job would be laughable, right?

argonaut 14y ago
Well, in 4 years you would be making a lot more than 80k, and you would probably have 10x the number of connections if you've even made any marginal effort to network (going to meetups, inviting people to have coffee/lunch, etc.)

rayiner 14y ago

Discount rate is too high, salary growth rate is too low.

droithomme 14y ago

These comparisons compare salaries of largely illiterate and innumerate people who dropped out of high school to people who have graduated with an engineering degree. They articles always then declare the difference in salaries to be the value of any college degree. These comparisons are absurd and statistically invalid. People who drop out of high school are more likely to be mentally incapable of doing high paid engineering work than those who are also able to graduate from an engineering program. The people capable of graduating from an engineering program were capable before graduating. Those who are high school drop outs are more likely to be incapable. There's a cool study (can't find the cite) where they looked at lifetime wages of people who were ACCEPTED to a given university and then compared those who actually went to college and graduated to those who decided not to go to college after being accepted. The lifetime wages were the same, showing that it was the selection process of getting admitted to college that was simply choosing for talent and not anything that college does to anyone. Those who benefit from burdening the next generation with massive education debt don't discuss this though and claim that it is not selecting for talent. To show that is the case, take people who are in that illiterate high school dropout category, send them to college, and then compare their lifetime salaries to the ones who were not illiterate. This study has not been done. Yes, I am aware there are hundreds of studies proving that college graduates make more than non-graduates, I am not contesting that there are such studies or that they are the majority of studies on this topic. In any case regardless of whether you believe in the existence of the unnamed study I regret I can't name, I hope it is obvious that the set of people who are high school drop outs and the set of people who have graduated with an engineering degree are not randomly selected people differing only in if a machine called college molded them into a higher earning resource asset. Since they are not randomly selected people differing only if a engineering education has been applied to them as a black box function, it is not correct to assume that salary differences between the two are solely attributable to whether or not they have been run through this black box.

argonaut 14y ago
There was the Krueger study: http://cdn.theatlantic.com/static/mt/assets/business/dalekrueger_More_Selective_College.pdf http://cdn.theatlantic.com/static/mt/assets/business/dalekru..., but it compared grads who applied to top universities (like Ivy League) and got rejected vs. those who applied and got in, and found no difference in lifetime earnings, when you adjusted for class rank.

crucifiction 14y ago

You have 40+ years of working for the man, why start so early? Getting a CS degree is fun if you like CS and are good at it. Drinking beer and hanging out with friends at all hours for 4 years are much better than working as a code monkey straight out of high school. Your average comp over your lifetime might be the same, or maybe a little more if you avoid debt and get 4 years of extra coding experience, but I bet the college grad never regrets going to college.

nilkn 14y ago

This thread reminds me of one of my minor pet peeves with HN: a lot of people here repeatedly speak of SF and NYC salaries as if they were universal across the country and nobody would ever want to work anywhere else. It's not a big deal because most of the arguments here are relative and not dependent on specific numbers but rather differences. I also understand HN began as a place to discuss Silicon Valley startups. But still I think it would be nice if HN were generally more cognizant of salary variations across location.