Just How Hard is University to Overcome
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@Dashrender said in Just How Hard is University to Overcome:
Without loans, my wife wouldn't have gone to college, and wouldn't be in the "no college" optionless career she's in.
Yes, and she'd likely have more lifetime earnings even so. But that's not important.
What is most important is that you can never consider the irrelevant factors. People who work in "degree only" fields, as mandated by law, should not be in the pool of consideration for college decision making because college is not an option for them. Period.
Likewise, those that simply cannot get into college and/or complete it should not be in the pool.
Both of those groups might be interesting to study, but they have literally zero value to the decision process of deciding whether to go to college or not. People who can't go to college have no decision to make. People going to college by necessity also have no decision to make. it is people considering college vs. not-college alone who are in the decision pool.
Does that make sense? Leaving in the entire pool has a lot of pro-university skewed numbers created by laws designed to prop up the university numbers. If we removed the laws, the market would, we expect, show that teachers that skip college would earn far more than those that don't (on average) just like other fields (on average.) It's legal manoeuvring alone that makes that not the case, it has nothing to do with the market or the value of education.
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I totally get your point, and understand it. But the numbers you present in the OP only apply to the 5% that can afford to pay for college with cash.
Instead you should show what non cash people could afford to do savings wise to show more realistic situation.
For example, as we know from above, college at these numbers cost $700/week. Let's assume a normal person can afford to put $50/week away, and leave the rest of the numbers the same. and to give more to the college side we won't include interest.
So $50/wk for 4 years = $10,400. Now, we can only hope that by the time these people reach 22 yrs old that they can afford to put away more than $50, but who knows.
I'd like to see your OP chart reworked with only $10,400 instead of $146K and see how far ahead they end up.
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@Dashrender said in Just How Hard is University to Overcome:
Again, you're talking about them needing to save $700/week. Few 18 yo are making $700/wk, let alone having $700/wk to put into savings. I suppose if they get what I'll call lucky, when they hit 20 or 21, they MIGHT have a job that allows them to save over the $700 to try to recover the missing money from previous months/years, but even that seems very unlikely.
So explain to me how it isn't ridiculous to spend $700/wk on something you don't need (I would ignore this spend if it was on food, shelter, water, sanitation, etc.) but not ridiculous to think that money spent on "wants" could be put into some other "want"? You can't have it both ways.
The ability to go to college is the ability to invest the money somewhere else. It goes part and parcel. If you can't afford college, then of course you can't invest the money either. But you didn't have college as an option so it doesn't matter; the decision is not yours to make.
Anyone who has the ability to go to college automatically has the ability to put away their portion of the average cost into savings. And the average says that on average, that's the better bet.
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@Dashrender said in Just How Hard is University to Overcome:
I totally get your point, and understand it. But the numbers you present in the OP only apply to the 5% that can afford to pay for college with cash.
No, they apply the least to those that can pay with cash! A point that you yourself made. The need to take out ANY loans makes my point more, not less.
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@Dashrender said in Just How Hard is University to Overcome:
Instead you should show what non cash people could afford to do savings wise to show more realistic situation.
That's a lot more complex, but it's a simple thing to show. You said it yourself, taking out loans lowers the value. Lower value is lower. Period. It's that simple. If paying with cash is a loss, taking on debt is a bigger loss.
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@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
Without loans, my wife wouldn't have gone to college, and wouldn't be in the "no college" optionless career she's in.
Yes, and she'd likely have more lifetime earnings even so. But that's not important.
Not likely - my wife did work full time all the way from HS through college - but even if she didn't, I'm not sure she would be making more than $35-40K at this point. While it's possible she could be, but I look around and it really seems unlikely. Until her sister graduated from nursing school (at 37), my wife was probably close to double what any of her siblings were making. Now the nurse sister is probably on par.
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@Dashrender said in Just How Hard is University to Overcome:
So $50/wk for 4 years = $10,400. Now, we can only hope that by the time these people reach 22 yrs old that they can afford to put away more than $50, but who knows.
If they can't put more away, then they will never pay off their loans in most cases. Never. Which, in turn, means that they can never retire. The amount of loss increases.
Basically it comes to this... if you can't afford to pay off the loans, you lose. If you can afford to pay them off, you could do better by putting that money into investments.
The BLS numbers show how much more you can make, and the numbers are not big enough to cover the cost. All of this looking at debt doesn't change that.
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@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
Again, you're talking about them needing to save $700/week. Few 18 yo are making $700/wk, let alone having $700/wk to put into savings. I suppose if they get what I'll call lucky, when they hit 20 or 21, they MIGHT have a job that allows them to save over the $700 to try to recover the missing money from previous months/years, but even that seems very unlikely.
So explain to me how it isn't ridiculous to spend $700/wk on something you don't need (I would ignore this spend if it was on food, shelter, water, sanitation, etc.) but not ridiculous to think that money spent on "wants" could be put into some other "want"? You can't have it both ways.
The ability to go to college is the ability to invest the money somewhere else. It goes part and parcel. If you can't afford college, then of course you can't invest the money either. But you didn't have college as an option so it doesn't matter; the decision is not yours to make.
Anyone who has the ability to go to college automatically has the ability to put away their portion of the average cost into savings. And the average says that on average, that's the better bet.
again, this argument only applies to the tiny percentage that can afford to pay cash for college. and those people aren't worth talking about.
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@Dashrender said in Just How Hard is University to Overcome:
I'd like to see your OP chart reworked with only $10,400 instead of $146K and see how far ahead they end up.
You mean if the average cost of college was trimmed by like 93%? If college is free or nearly free, it probably wins. But if college gets cheaper, more people go, and its value drops again. So that can't happen in a bubble.
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@Dashrender said in Just How Hard is University to Overcome:
@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
Without loans, my wife wouldn't have gone to college, and wouldn't be in the "no college" optionless career she's in.
Yes, and she'd likely have more lifetime earnings even so. But that's not important.
Not likely - my wife did work full time all the way from HS through college - but even if she didn't, I'm not sure she would be making more than $35-40K at this point. While it's possible she could be, but I look around and it really seems unlikely. Until her sister graduated from nursing school (at 37), my wife was probably close to double what any of her siblings were making. Now the nurse sister is probably on par.
But is double enough to offset the cost? Double per year, with fewer years, and the cost of college is a loss. Go back and look at the chart... making double what you would make without college is assumed in the numbers already and is a loss.
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There is another ENORMOUS factor that has been left out. People with higher per year incomes pay much, much higher tax rates. So earning twice as much doesn't give you anywhere near double the buying power. Spreading earnings out over more years lowers the tax burden by quite a bit. So those college graduates not only pay for college up front (or with loans) but also pay with a higher tax penalty for the remaining years.
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@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
I totally get your point, and understand it. But the numbers you present in the OP only apply to the 5% that can afford to pay for college with cash.
No, they apply the least to those that can pay with cash! A point that you yourself made. The need to take out ANY loans makes my point more, not less.
I've never disagreed that your point - that college in general is the craziest way to waste your money - so let's agree to that right now!
So please - let's stop beating the dead horse of your "point" and instead talk about the value of the rest of the discussion to those that CAN'T pay cash and must take out loans.
See most people will look at your top chart and go - gee, if only I wasn't stupid and gone to college, I'd have 4.8 Million in the back at retirement - but the reality is that isn't true. They'd much more likely have $10,400 compounded at 8.8% for around 40 years, approx $303,521.29 That's a significant difference.
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@Dashrender said in Just How Hard is University to Overcome:
See most people will look at your top chart and go - gee, if only I wasn't stupid and gone to college, I'd have 4.8 Million in the back at retirement - but the reality is that isn't true.
that's where I disagree. they would if they treated the money purely as investments instead of as free money to spend. I'm saying that they WOULD have that much (on average.)
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@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
I'd like to see your OP chart reworked with only $10,400 instead of $146K and see how far ahead they end up.
You mean if the average cost of college was trimmed by like 93%? If college is free or nearly free, it probably wins. But if college gets cheaper, more people go, and its value drops again. So that can't happen in a bubble.
I'm changing the game on you - you only looked at those who could afford to pay cash for college.. now I'm asking you to compare those who can't pay cash - so we already know if they take a loan, they are screwed even more than the cash folks, so again, we can move past them...
But those who don't go, don't take loans, and still make crap wages, and can only afford $50/week, not $700, what does that person look like.
Maybe you're going to say that those people don't matter to this discussion because if they weren't motivated enough to take out student loans, then they probably aren't going to be motivated enough to get better jobs down the road?
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So for reference, student loans, for those able to get them (many of us cannot so these are not realistic numbers, many students must use credit cards for this) run from 4.3% to 6.8%. That's the first step.
So if you pay $10K up front, you have over $130K in loans to pay off later.
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@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
Without loans, my wife wouldn't have gone to college, and wouldn't be in the "no college" optionless career she's in.
Yes, and she'd likely have more lifetime earnings even so. But that's not important.
Not likely - my wife did work full time all the way from HS through college - but even if she didn't, I'm not sure she would be making more than $35-40K at this point. While it's possible she could be, but I look around and it really seems unlikely. Until her sister graduated from nursing school (at 37), my wife was probably close to double what any of her siblings were making. Now the nurse sister is probably on par.
But is double enough to offset the cost? Double per year, with fewer years, and the cost of college is a loss. Go back and look at the chart... making double what you would make without college is assumed in the numbers already and is a loss.
making double is assumed? The lifetime income from HS+ to CS was only $600K, that's nothing. that's not double! $1.8 mil vs $2.4 mil != double income for college people, not even close to double with a Masters.
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@Dashrender said in Just How Hard is University to Overcome:
Maybe you're going to say that those people don't matter to this discussion because if they weren't motivated enough to take out student loans, then they probably aren't going to be motivated enough to get better jobs down the road?
No, I would say the opposite. Going to college is the laziest thing that most people can do. It's the only socially acceptable way to avoid work, for most people, for that part of their lives. So taking out loans for college that one cannot possibly afford is, in most cases, a level of laziness unsurpassed in nearly any other aspect of life.
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@Dashrender said in Just How Hard is University to Overcome:
@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
Without loans, my wife wouldn't have gone to college, and wouldn't be in the "no college" optionless career she's in.
Yes, and she'd likely have more lifetime earnings even so. But that's not important.
Not likely - my wife did work full time all the way from HS through college - but even if she didn't, I'm not sure she would be making more than $35-40K at this point. While it's possible she could be, but I look around and it really seems unlikely. Until her sister graduated from nursing school (at 37), my wife was probably close to double what any of her siblings were making. Now the nurse sister is probably on par.
But is double enough to offset the cost? Double per year, with fewer years, and the cost of college is a loss. Go back and look at the chart... making double what you would make without college is assumed in the numbers already and is a loss.
making double is assumed? The lifetime income from HS+ to CS was only $600K, that's nothing. that's not double! $1.8 mil vs $2.4 mil != double income for college people, not even close to double with a Masters.
Double PER WEEK. Yes, lifetime college makes less. So not double in the end.
What gets people about college is that they forget the difference between the ends and the means. The "ends" say that skipping college earns more over the lifetime. The misdirection is getting students to focus on weekly or annual earnings after graduation and to ignore total earnings.
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@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
See most people will look at your top chart and go - gee, if only I wasn't stupid and gone to college, I'd have 4.8 Million in the back at retirement - but the reality is that isn't true.
that's where I disagree. they would if they treated the money purely as investments instead of as free money to spend. I'm saying that they WOULD have that much (on average.)
Again, only the cash paying people could say that !!!!! I'm not talking about them any more. They are not a factor.
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@Dashrender said in Just How Hard is University to Overcome:
@scottalanmiller said in Just How Hard is University to Overcome:
@Dashrender said in Just How Hard is University to Overcome:
See most people will look at your top chart and go - gee, if only I wasn't stupid and gone to college, I'd have 4.8 Million in the back at retirement - but the reality is that isn't true.
that's where I disagree. they would if they treated the money purely as investments instead of as free money to spend. I'm saying that they WOULD have that much (on average.)
Again, only the cash paying people could say that !!!!! I'm not talking about them any more. They are not a factor.
No, never once am I referring solely to people paying cash. I'm only referring to them as the conservative case, never referring to them alone.
