> The average stock market return is about 10% per year for nearly the last century, as measured by the S&P 500 index.
I don’t know why people are getting hung up on this 10%, it’s just the historic returns everyone in Boglehead and FI/RE communities uses. If you wanted to use the 6-7% real returns after inflation that is fine too. The numbers still are the same, you’ll just get an inflation adjusted number. You’ll need inflation adjusted numbers on your college earnings too though, I don’t think the “extra 1 million earned by a college grad” is inflation adjusted.
I believe there have been studies that show that graduates who are unlucky enough to be job searching during a one or two-year recession have a lifelong income deficit compared to those who don't
This isn't the alternative for most people. There isn't an option to get a mix of 80k in federal and non-federal students loans to throw into the stock market. The real question is, for most people, does it make sense to take on ~80k in student loans and go to school for 4-5 years, or should you try to immediately enter the job market.
Plus, expecting 10% real returns, year after year, in some chosen passive fund is unrealistic modeling.