Before college can be creating well-rounded citizenry or provide "excellent life experiences" or any of the other things people want of it, it must first provide a good ROI. This is a necessary foundation. If it is not doing that, then all the other fancy things are merely digging the debt trap in deeper because you're paying for all these things while failing to obtain a method of paying them back.
As a culture, in decades past we were used to college generally being so cheap that providing a good ROI wasn't that big a deal. It's much easier to get a good ROI out of something cheap. So we focused on the higher layers and were able to neglect the fact that the higher layers were always built on a foundation of the fact that college in general was a good ROI. Consequently we have come to misinterpret those higher level things as the purpose of college.
But it is necessary that these aspirational benefits be setting on a good foundation of good ROI to not be abusive to the customer.
It is not and must not be considered some sort of betrayal to be worried about ROI for college. It must simply be seen as an understanding of the fact that as the costs have changed, the way we must analyze college has also changed. It was always true, it's just now it has manifested in a larger way.
It’s one thing to take four years of your life deepening your thinking ability and stretching your mind without a good roi if you come out the other end without crushing debt and prospects for employment that can sustain you, even if those prospects have nothing to do with your college experience. This is what college was like until the last four decades or so.
It’s entirely another to come out the other side in crippling debt and no prospects for any kind of sustaining job.
In some sense, twice the cost for twice the benefit might be worth it to those who can afford it, because the time-wise investment (4 years or so of your life) remain constant.
A "better" ROI doesn't necessarily mean a positive ROI.
Getting negative 10% return on a $1,000 investment doesn't matter as much as getting a negative 10% return on a $100,000 investment.
Return on Investment: https://en.wikipedia.org/wiki/Return_on_investment
From https://en.wikipedia.org/wiki/Vector_(mathematics_and_physic... :
> A Euclidean vector is thus an equivalence class of directed segments with the same magnitude (e.g., the length of the line segment (A, B)) and same direction (e.g., the direction from A to B).[3] In physics, Euclidean vectors are used to represent physical quantities that have both magnitude and direction, but are not located at a specific place, in contrast to scalars, which have no direction.[4] For example, velocity, forces and acceleration are represented by vectors
Quantitatively and Qualitatively quantify the direct and external benefits of {college, other alternatives} with criteria in additional to real monetary ROI?
From https://en.wikipedia.org/wiki/Welfare_economics
> Welfare economics also provides the theoretical foundations for particular instruments of public economics, including cost–benefit analysis,
So sure! If all we are looking at is ROI then you are right! By definition! As long as you restrict your refutation ("by that metric") in a way that ignores the additional metric I had been trying to add to the conversation. I was trying to point out that there are other metrics that matter.
Is the unique loss you identify not accounted for in the traditional ROI expression?
>> Why would people make an investment with insufficient ROI (Return on Investment)?
> Insufficient information.
> College Scorecard [1] is a database with a web interface for finding and comparing schools according to a number of objective criteria. CollegeScorecard launched in 2015. It lists "Average Annual Cost", "Graduation Rate", and "Salary After Attending" on the search results pages. When you review a detail page for an institution, there are many additional statistics; things like: "Typical Total Debt After Graduation" and "Typical Monthly Loan Payment".
> The raw data behind CollegeScorecard can be downloaded from [2]. The "data_dictionary" tab of the "Data Dictionary" spreadsheet describes the data schema.
> [1] https://collegescorecard.ed.gov/
> [2] https://collegescorecard.ed.gov/data/
> Khan Academy > "College, careers, and more" [3] may be a helpful supplement for funding a full-time college admissions counselor in a secondary education institution
> [3] https://www.khanacademy.org/college-careers-more
https://www.khanacademy.org/college-careers-more/college-adm... :
- [ ] Video & exercise / Jupyter notebook under Exploring college options for Return on Investment (according to e.g. CollegeScorecard data)
But I'm actually really interested in reading a historical perspective of education, so if you've got some sources I'd appreciate your sharing them.
To put it another way, education for the sake of education is higher on the Maslow Hierarchy than being able to make a decent ROI on college. Self-actualization is great and all, but when you're telling people to pursue it at the expense of whether or not they're going to eat something it's not noble and honorable, it's tone-deaf at best and can be downright evil when huge propaganda machines are deployed to convince people to do it, because the people selling self-actualization benefit.
Debt skews the understanding by moving the time that the payments come due around but they're still due. It doesn't change the fundamental calculation.
"the collegiate cast was largely poor"
But were they going into massive, life-changing debt? Poor people going to a generally cheap (by modern standards!) college is no big deal. But now we're sending poor people to expensive college, so they can self-actualize at the expense of a good chunk of the rest of their life. This isn't noble.
But anyway, what's the point of looking that far back and cross-content, why don't we compare it to American universities just a few decades ago?
It was common for family lineages fo hundreds of people to support promising students to do the Imperial examinations and they didn't do it out of the goodness of their hearts. Equally people don't pay for their sons to study law for their intelectual development. Only the relatively wealthy could afford to send a son to college. Just being able to afford them not working for 3-5 years marks them as wealthy even if they fely poor in comparison with others of their social class.
I'd like to say _at the same time_, college can provide a good ROI and good citizens, life experiences, etc.
But besides college, what are some other choices, programs, whatever that could provide some of college's added features? Public service (in the U.S., military, Americorps, Peace Corps)? What's available in other countries?
The thing is that finishing an apprenticeship enables you to do an applied Bacelor in the field. After a Bachelors, you can continue on in academia if you like. And you can go back to school at 30 to finish your (Fach-)Abitur, if you failed it before. The state will even pay you to attend. There's very clear paths to jobs, but also a lot of ways to change your direction.
Going back to apprenticeships, they are plentiful and often well-payed. For example, most of the Sys-admins I know did an apprenticeship, which consists of 3 years of school while working half-time at a company. This combination of school and work is the best of both worlds for experience, and it enables young people to get a career path without too much though.
I don't disagree, the thing is that well-rounded citizenry is a necessary prerequisite for a democratic society. That means, as a society we need to make the ROI for an individual worth it by paying for it as a society or offer meaningful alternatives.
This is one of the things that capitalism is terrible at, and thus it must be supplemented through public spending.
It starts with who is let in the doors, and to some extent, it’s garbage in garbage out. Putting ROI solely on the institution is not right. Maybe you can say it should be the institution’s job to only bring in motivated students, but there are only so many of those to go around.
There are other funding mechanisms possible, but after decades of free flowing money from government backed loans to students, university budgets are extremely inflated and should be substantially cut back if we expect someone else (I.e. taxes) to be paying the tuition.
This, along with the perception that any college degree is a golden ticket, is the root of the problem.
The article mentions that 2/3rds of high-school graduates now attend college. That number is double what it was 30 years ago, and I'd argue that only a small fraction of that additional one-third should be getting a college degree.
My assumption is that a large percentage of the additional one-third is getting college degrees based in part or whole on free-flowing government-guaranteed financial aid, which is provided under the (mistaken) assumption that raising disadvantaged students up the income ladder can be solved by throwing money at them in order to get them any college degree.
Commercial healthcare and education seem to really bring about the worst aspects of a market economy, in some countries. Not sure where it works well, it maybe somewhere.
Mostly, IMO, because they're not free markets. Healthcare actively fights price transparency, and is largely driven by fixed demand and artificially constrained supply. College costs can only do what they do because the whole thing is financed by grants and uniquely binding loans pushed on students who barely understand what they're getting into. If we could force the whole thing into an actual free market, it'd vastly improve the situation.
Just because you are not paying for it doesn't mean it has zero costs. If you're not paying for it, someone else is, the ROI burden gets shifted to the society as a whole, which is much, much worse than the burden being on an individual.
Is it better for society to get a decent education for a low cost, for society as a whole? It seems to work for Sweden, and many other European countries. [4]
[1] https://sv.wikipedia.org/wiki/Helårsstudent_och_helårspresta...
[2] https://sfs.mit.edu/undergraduate-students/the-cost-of-atten...
[3] https://www.topuniversities.com/university-rankings/world-un...
Ah yes, "qualifies".
How many citizens "qualify"?
The number of people who qualify is decided by two people - the person allocating money and the person running the education system.
The person allocating the money says "I'll give you {amount}". The person running the education system says "{amount} will let us educate {number}".
Nah, they say "I'll give you {amount} to educate {number}", and then the educator tries to do as much as possible with the resources they got. There is no negotiation about either {amount} or {number}, other than trying to argue that amount or number needs to be changed because quality or industry wants more/less.
In such a system, it's typical that one bureaucracy decides what "qualify" means.
And another decides what "educate" means.
> I could fill Volumes with Descriptions of Temples and Palaces, Paintings, Sculptures, Tapestry, Porcelaine, &c. &c. &c. -- if I could have time. But I could not do this without neglecting my duty. The Science of Government it is my Duty to study, more than all other Sciences: the Art of Legislation and Administration and Negotiation, ought to take Place, indeed to exclude in a manner all other Arts. I must study Politicks and War that my sons may have liberty to study Mathematicks and Philosophy. My sons ought to study Mathematicks and Philosophy, Geography, natural History, Naval Architecture, navigation, Commerce and Agriculture, in order to give their Children a right to study Painting, Poetry, Musick, Architecture, Statuary, Tapestry and Porcelaine.
We've just gotten a bit stuck at the middle step.
[1] https://www.masshist.org/digitaladams/archive/doc?id=L178005...
I wish we could get stuck on the 2nd stage forever! But I feel like we are well into the 3rd stage and may be on the way back to the 1st ;)
This comment is coming from the position of privilege. And I cannot possibly agree to it.
Gone are the good old days of cheap/free college in the US. As parents, it is our responsibility to help our kids to avoid these "new" financial traps.
These kids will be robbed from their own future if we let them be enslaved to large debts. Not to mention a lot of other complex issues such as jobs disappearing due to automation, greater wealth gap even between the middle class, etc.
The kids are too young to understand these traps. We should help them.
> This comment is coming from the position of privilege.
Absolutely. That's why I said so later in the message. I can now afford to pay the ridiculous prices without either me or my children going into debt. Ironically, that ability is a direct result of me going to college, with massive (mostly need-based) financial aid. But I am not pretending that my past history is relevant in today's world. My decision back then was based on a situation that no longer exists, not for me, my children, nor anyone else.
> And I cannot possibly agree to it.
What part? I agreed that ROI is valuable information. I guess you're saying that it's ok to reduce college to financial ROI, that ROI outweighs everything else and so everything else can be ignored.
I agree with that if you're in a situation where you will end up in massive debt. Having a good time and learning lots is not going to counterbalance that. But not everyone is, and it's not based completely on how much money you have. Financial aid availability varies, college prices are across the board higher but some are less overpriced than others, community college transfers can halve the total expense, etc. The scenario of ending up debt-ridden is far, far more common today, but it's still far from universal.
Looking only at theoretical ROI leads to bad decisions like going into a field you hate because it has better ROI, then abandoning it and ending up worse off. You need to look at ROI and other outcomes.
Subsidized college is politically convenient because you can sell it to corporate interests as reducing the cost of skilled labor, to labor as a way to move up social strata, and to lower-level elites as a way to facilitate booting incompetent or uncouth people out of their stratum (you can sum up the latter two clauses as "meritocracy").
If people weren't forced to accept subsidized college as a substitute for wealth redistribution (IMO this is largely the case) you might not see so much obsession with ROI.
Large debt is a unique burden. One should not start their financial life with it. Much like skiing, running or doing calculus, one should do baby steps first before proceeding to make huge investments and committing oneself to a decade or more of indebtedness.
Many ancient societies held a strong taboo against massive debts - for a reason. For people outside prison, it is the closest you can get to enslavement in a completely legal way.
When going to college means taking on tens of thousands of dollars in debt, it makes sense to start looking at ROI, especially when there's a certain group of people that will tell you "If you want to make a living wage, then you need to go to college and make something of yourself!", then will ostracize them for making bad financial decisions when they take on massive student loan debt to pay for the college.
EDIT: To add a point of anecdata, when I finished my BS in CS in 2014, I came out with ~$45,000 in student loan debt. And this is on the LOWER end of debt, and I was only able to have it so low because I had already been living in the city my university was in. I still worked ~30 hours/week while going to school full time. If I had to stay in dorms or something, I probably would have had $100K+ in debt. It's absolutely ridiculous.
$45,000 is well above the average student loan debt even as of 2021, which is variously reported as $35-40k (but see $30k, below). The median debt amount is substantially lower (~1/2), but it doesn't fit the narrative so it's rarely reported.
What's unclear to me is whether these numbers are for all outstanding debt, or for debts at graduation. This site says the 2021 average debt at graduation is $36k, https://educationdata.org/average-student-loan-debt-by-year ($30k at https://thecollegeinvestor.com/33643/average-student-loan-mo...). But this site says the median outstanding debt amount for all people with student loans is $20-25k, https://www.federalreserve.gov/publications/2021-economic-we... That's very confusing, especially considering that [1] and [2] give $17k and $19k, respectively, for the median. I can't square these numbers unless, perhaps, it's the case that people even at the lower end aren't paying down principal and are accumulating interest debt. (EDIT: The "all outstanding" median Fed figure makes more sense when you realize that it excludes those who managed to pay off their loans entirely, and so it will have a long tail of very high debt students, the very same students inflating the average to begin with, and the ones most likely to be stuck in a debt trap.)
[1] https://thecollegeinvestor.com/33643/average-student-loan-mo... [2] https://www.valuepenguin.com/average-student-loan-debt
There's another possibility too: People who attended but never graduated. I know someone who went to a community college for a year, taking out about $10K in student loans, but dropped out before completing their Associate's. [0]
The thing is, there's so many possible categories when it comes to considering loan debt. People who didn't graduate, people who got an Associate's and stopped, people who got an Associate's and kept going, but didn't finish their Bachelor's, people (like me) who were able to stay in their existing home while going to school versus having to stay in college housing...I could go on.
And how you choose which subset of student loan debtors can determine the narrative you want to shape. If a study only focuses on people with at least a Master's that stayed in college dorms, then you'll probably get a high number, but of course the news sites will have a headline that claims "The average college grad has $XXX,XXX in student loan debt", and only mention in the body of the article (that many people won't read) that it's only a subset of college grads.
[0] Somewhat irrelevant footnote: This person then rants about college being a complete waste of money because you'll "still end up working Comcast tech support for $13/hour".
At some point, I think we'll have to get serious about letting the universities collapse and providing opportunities to get the other benefits without spiraling costs. Maybe a large fraction of our grandkids will end up going to college in Estonia, which will make it their "thing" to provide high quality education for a fraction of the price. Or maybe the US will import the apprenticeship model from Germany. Or maybe remote work will become so common that it'll become normal for post high school kids to congregate in inexpensive apartment complexes with decent videoconferencing setups, companies will finally get back to investing in training their new employees, and we can call it dorms 2.0.
I know so many people who graduated programs like psych and they are barely making above minimum wage and didn't really get to utilize their degree. And not only that, but they often have a lot of debt.
On the other hand, trades are in very high demand. Most trade programs here are just 1-2 years long and you'll exit them with a job secured almost right away and already be making fairly decent money. You'll be making more money than almost anyone with a Uni degree in a non-STEM field. But despite this, it was barely even presented as an option in high-school. We had Universities come and give talks about what it's like, and what kinds of programs they offered. Did we get the same about other education options? Nope.
For some reason there is this view in society that you have to have a degree otherwise you won't be successful and that you're not smart. In fact media/entertainment often also pushes this same narrative which doesn't help things either.
So many of those psych grads I talked about ended up going back to college (In Canada college is like a trades school or community college in America) to take additional programs on HR or admin related topics. They find their degree didn't get them anywhere and they end up having to go to another kind of education to make themselves hirable.
Every choice a person makes has an implicit ROI calculation. It is good to make them explicit to make them accurate, to prevent from being disappointed due to erroneous calculations.
It's also good to be explicit about the bits not calculated in the ROI.
Utility functions that only use monies as input is sooo 18th century.
"Succeeding" at the current setup (which includes not going broke) requires high school juniors to know enough about what they want to do that they can do the ROI calculation, and heavily penalizes them for getting it "wrong". Which is ridiculous and unfair. It also pushes everyone to be the sort of people who I don't particularly like to hang out with.
Housing already is an unsubsidized loan, if not more, to live in a brick room with immature kids that shouldn't be in school. Did I mention how much sleep you don't get?
Meal plans are required your freshman semester, that's $2200 at an affordable school.
Even with all the grants and student loans in the world you still have to take out private loans. Private loans you have to pay on every month.
Work study is factored into costs already, meaning to get those numbers you have to work at the University. Work study is only available to lowest of income, and those with parents are screwed out of it.
Uni's are also not close enough to most external work, so how exactly are students going to pay on those loans?
Parking is non existent at major universities. Owning a vehicle is not a real concept, and even if a student does (like I), insurance and costs are very expensive. How is that being paid for?
There are far too many students whom parents refuse to help. Parent income has no relevance to affordability of school for many students. Turns out American parents are terribly ignorant, even after their degree.
We need to federally regulate universities, fire a lot of people, remove most general requirements, shorten degrees to 2 years, and a whole lot of other things.
Imagine knowing that one of the houses you are looking to buy will leave you worse off than the others. Would you find that information useful?
Think of this as the same thing - some choices will leave you permanently worse off. I'd rather know that ahead of time so that I can either avoid them, or at a minimum, understand what I'm getting in to.
You should consider helping your kid to learn a foreign language of a developed country, such as France, Germany. The investment into private tutor, who will prepare him for TEFAQ or DAF test will pay off in the long run. Once he knows French or German he can apply to really good universities in France, Germany or Quebec(Canada). The education in Europe is really cheap. Its about 1500 euro per year, and his monthly expenses are within 1000 euro. So you end up paying about 15K euro per year. The price range for Quebec province universities is about 7000 CAD per year and about 1000 CAD for monthly expenses.
Overall, the investment in a foreign language will completely pay off. In the worst scenario your son will have a backup plan to move to Europe/Canada and live a normal life.
US is not the only place in this world to get a good education.
I was undecided whether to major in either electrical engineering or journalism. I had a passion for both, I was a amateur radio operator who built his own gear and was also editor of my high school newspaper.
When a counselor at my university told me that I was four times more likely to get a job as a J grad in when I graduated vs an ee grad it made my decision for me. I mean after all he was the expert. Four years later however the exact reverse was true ;<).
Canadian universities are still eye-wateringly expensive if you're an international (i.e. non-Canadian) student according to tuition fee schedules from University of Toronto¹, McGill², Queens³, University of British Columbia⁴ and Western University⁵.
¹ https://planningandbudget.utoronto.ca/wp-content/uploads/202...
² https://www.mcgill.ca/undergraduate-admissions/finances/cost...
³ https://www.queensu.ca/registrar/sites/webpublish.queensu.ca...
⁴ https://students.ubc.ca/enrolment/finances/tuition-fees/unde...
⁵ https://www.registrar.uwo.ca/student_finances/fees_refunds/p...
As a Montrealer the thought of paying 53 000$ to study a year at McGill is insane to me. Especially since international students have to study one more year than those from Quebec!
McGill being more expensive than other universities is a large part of why I chose not to study there, and that was only around 10 000$ extra over my whole degree.
11 years of schooling before college, extracurriculars, friends and family weren’t enough for that? Huh, maybe something wrong is not only with colleges but with child upbringing as a whole if that’s true for many people.
Colleges also often provide a space for people to access mental healthcare for the first time independently without the overwhelm of psychologytoday.com or other directory. Please note that there are several significant and life-altering mental illnesses that also typically kick in around this time, and early intervention does wonders.
Some people certainly don't need that, but I think a soft-entry into the real world in a more limited environment is not to be dismissed outright. It was certainly helpful for me.
No matter how good your family and secondary schooling is (and for many people, it is lousy!), I think that having only one environment and set of perspectives before you're assumed to be a solo capable adult is not ideal.
I just hope people at least consider all of the other "outputs" of going to college when reading something like this. The ROI analysis is good data, it answers an important question. But there are many, many other important questions worth answering. (And most of them aren't quantifiable, so it's not like you could do a study on them if you wanted to.)
College can be an awful experience for some people even if they end up making good money. And it can be an excellent life experience for people who end up making dirt. I got lucky -- I had a great experience, I learned a lot of important non-academic things, I broke out of my shell, and it's pretty directly responsible for a large portion of my earnings. (And yes, the numbers for my university and major from the study match my current income and age quite well.)
But now I have a kid in high school, and I'm facing all the questions about what futures to keep open and what ones to sacrifice in the service of others. College is much more expensive now. My family was dirt poor and so I had massive financial aid; any financial aid my kid gets will have to be merit-based. Degree inflation has sucked away a lot of the value of having a degree. I can afford to support a less secure (low-risk) path through life if I think it would be better for my kid as a human being. These are not easy questions to be facing.