Cost of College vs Starting Income

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dm200
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Cost of College vs Starting Income

Post by dm200 » Tue Mar 20, 2018 10:02 am

I was discussing the recent costs of a college education vs the income benefits with a young person recently.

I graduated about 50 years ago (with modest grades) with a basic liberal arts degree. This was a (then) a high tuition private university. I cannot recall the room and board charges, etc. BUT I specifically recall that my TOTAL tuition (very high back then) for four years was $7,100. My starting salary (gross) upon graduation was $7,700.

I looked at the tuition (only) for my university for 2016-2017 ant it was about $50,000 for ONE YEAR. I would be sure that a similar graduate of that university today would NOT get a gross salary of $200,000 or so.
Last edited by dm200 on Tue Mar 20, 2018 10:39 am, edited 1 time in total.

KlangFool
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Re: Cost of College vs Starting Income

Post by KlangFool » Tue Mar 20, 2018 10:07 am

dm200 wrote:
Tue Mar 20, 2018 10:02 am
I was discussing the recent costs of a college education vs the income benefits with a young person recently.

I graduated about 50 years ago (with modest grades) with a basic liberal arts degree. This was a (then) a high tuition private university. I cannot recall the room and board charges, etc. BUT I specifically recall that my TOTAL tuition (very high back then) for four years was $7,100. My starting salary (gross) upon graduation was $7,700.

I looked at the tuition (only) for my university for 2016-2017 ant it was about $50,000 for ONE YEAR. I would be sure that a similar graduate of that university today would get a gross salary of $200,000 or so.
dm200,

Pardon my skepticism. I am not aware of anyone offering 200K to someone with an undergraduate degree. So, I do not know how could you be sure of that. Did you mistype? Are you trying to type 50K instead?

KlangFool

mak1277
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Re: Cost of College vs Starting Income

Post by mak1277 » Tue Mar 20, 2018 10:08 am

KlangFool wrote:
Tue Mar 20, 2018 10:07 am
dm200 wrote:
Tue Mar 20, 2018 10:02 am
I was discussing the recent costs of a college education vs the income benefits with a young person recently.

I graduated about 50 years ago (with modest grades) with a basic liberal arts degree. This was a (then) a high tuition private university. I cannot recall the room and board charges, etc. BUT I specifically recall that my TOTAL tuition (very high back then) for four years was $7,100. My starting salary (gross) upon graduation was $7,700.

I looked at the tuition (only) for my university for 2016-2017 ant it was about $50,000 for ONE YEAR. I would be sure that a similar graduate of that university today would get a gross salary of $200,000 or so.
dm200,

Pardon my skepticism. I am not aware of anyone offering 200K to someone with an undergraduate degree. So, I do not know how could you be sure of that. Did you mistype? Are you trying to type 50K instead?

KlangFool
I suspect he knows that and his post is just a snide way of remarking that $50k per year is too much for college.

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Re: Cost of College vs Starting Income

Post by mlipps » Tue Mar 20, 2018 10:14 am

dm200 wrote:
Tue Mar 20, 2018 10:02 am

I looked at the tuition (only) for my university for 2016-2017 ant it was about $50,000 for ONE YEAR. I would be sure that a similar graduate of that university today would get a gross salary of $200,000 or so.
You would be wrong. Based on my experience & the recent grads we hire at my company, I'd say 80% of graduates start in the range of 40-65k.

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dm200
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Re: Cost of College vs Starting Income

Post by dm200 » Tue Mar 20, 2018 10:41 am

KlangFool wrote:
Tue Mar 20, 2018 10:07 am
dm200 wrote:
Tue Mar 20, 2018 10:02 am
I was discussing the recent costs of a college education vs the income benefits with a young person recently.

I graduated about 50 years ago (with modest grades) with a basic liberal arts degree. This was a (then) a high tuition private university. I cannot recall the room and board charges, etc. BUT I specifically recall that my TOTAL tuition (very high back then) for four years was $7,100. My starting salary (gross) upon graduation was $7,700.

I looked at the tuition (only) for my university for 2016-2017 ant it was about $50,000 for ONE YEAR. I would be sure that a similar graduate of that university today would get a gross salary of $200,000 or so.
dm200,
Pardon my skepticism. I am not aware of anyone offering 200K to someone with an undergraduate degree. So, I do not know how could you be sure of that. Did you mistype? Are you trying to type 50K instead?
KlangFool
OOPS - edited my post - let out the "NOT". I meant the exact opposite. My point was that the ratio of total tuition to starting annual salary has increased several fols over the decades since my graduation.

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dm200
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Re: Cost of College vs Starting Income

Post by dm200 » Tue Mar 20, 2018 10:42 am

ased on my experience & the recent grads we hire at my company, I'd say 80% of graduates start in the range of 40-65k.
Yes, I agree - see my edited post - left out the "NOT" :(

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Re: Cost of College vs Starting Income

Post by mmmodem » Tue Mar 20, 2018 10:52 am

I graduated in 2007 from a State University. My yearly tuition was in the neighborhood of $10k. My first job paid $50k. That means my college cost me $20k + 2 years junior college. It was a small amount. Say it was $5k for easy math. This, my first job paid me double the cost of my education.

I fondly remember most of my colleagues talking about their crushing student loans from fancy colleges. Meanwhile, I and another state university alum had none and worked in the same place. Call me optimistic if you will but I don't worry about under funding my kids 529.

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Re: Cost of College vs Starting Income

Post by jeroly » Tue Mar 20, 2018 11:14 am

dm200 wrote:
Tue Mar 20, 2018 10:02 am
I was discussing the recent costs of a college education vs the income benefits with a young person recently.

I graduated about 50 years ago (with modest grades) with a basic liberal arts degree. This was a (then) a high tuition private university. I cannot recall the room and board charges, etc. BUT I specifically recall that my TOTAL tuition (very high back then) for four years was $7,100. My starting salary (gross) upon graduation was $7,700.

I looked at the tuition (only) for my university for 2016-2017 ant it was about $50,000 for ONE YEAR. I would be sure that a similar graduate of that university today would NOT get a gross salary of $200,000 or so.
1. Tuition costs have outpaced inflation. Did you think that people were not aware of this? If not, then what was the point of this post?

For the benefit of anyone who, after reading this post, might think that going to college isn't a good idea or a good value these days...

A. Just because tuition costs have outpaced inflation does not mean that college is now a bad idea, or even a bad investment. To determine the latter, one needs to examine the TOTAL costs involved, including room/board PLUS the opportunity costs involved with not working for four years vs working right after HS graduation.

B. There is a much bigger problem finding employment with just a HS diploma these days vs 50 years ago.

C. There are lots of ways to save on college costs these days, including: earning college credits through the much greater number of AP offerings in high schools compared to 50 years ago; going to Junior/community college for the first year or two; getting scholarships /financial assistance (the latter of which there's much more available than 50 years ago).

C2. On the subject of scholarships : many schools' tuition these days is really just the 'list price' and for true comparison purposes, one needs to consider the discounted after scholarship cost.

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Re: Cost of College vs Starting Income

Post by mac808 » Tue Mar 20, 2018 11:30 am

dm200 wrote:
Tue Mar 20, 2018 10:02 am
I was discussing the recent costs of a college education vs the income benefits with a young person recently.

I graduated about 50 years ago (with modest grades) with a basic liberal arts degree. This was a (then) a high tuition private university. I cannot recall the room and board charges, etc. BUT I specifically recall that my TOTAL tuition (very high back then) for four years was $7,100. My starting salary (gross) upon graduation was $7,700.

I looked at the tuition (only) for my university for 2016-2017 ant it was about $50,000 for ONE YEAR. I would be sure that a similar graduate of that university today would NOT get a gross salary of $200,000 or so.
Ironically some of the few (very rare) jobs starting close to $200k are in tech and possible to get without a college degree, if you're able to demonstrate hard skills in other ways.

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Re: Cost of College vs Starting Income

Post by adamthesmythe » Tue Mar 20, 2018 11:46 am

> many schools' tuition these days is really just the 'list price' and for true comparison purposes, one needs to consider the discounted after scholarship cost.

Yes.

Even so, the eventual financial benefit of a college education needs to be balanced against (all) the costs.

I do believe that immediately going into college is increasingly a bad idea for those (1) unclear on their objectives (2) uncommitted and/or (3) undertaking a major without a clear career path.

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Re: Cost of College vs Starting Income

Post by dsmil » Tue Mar 20, 2018 11:51 am

I've heard a rule of thumb to not take on more college debt than what your expected starting salary after graduation will be. It seems like a reasonable rule to take note of. I took on $40k of debt (parents paid other $80k) and my starting salary was $52k.

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Re: Cost of College vs Starting Income

Post by Pajamas » Tue Mar 20, 2018 11:56 am

It is still possible to get a four year degree for the cost of a new graduate's salary at many public universities.

I think what you are pointing out is explained by the increased demand for college degrees now vs. fifty years ago. The population has increased significantly, more students come to the U.S. from other countries, and the percentage of the population that gets college degrees has also increased steadily and continues to do so. So it is no surprise that the "best" college degrees have increased in cost disproportionately as the number of exclusive schools and their capacities have not kept pace with the demand. In other words, the exclusive schools have become more exclusive.

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Re: Cost of College vs Starting Income

Post by KlangFool » Tue Mar 20, 2018 1:30 pm

adamthesmythe wrote:
Tue Mar 20, 2018 11:46 am
> many schools' tuition these days is really just the 'list price' and for true comparison purposes, one needs to consider the discounted after scholarship cost.

Yes.

Even so, the eventual financial benefit of a college education needs to be balanced against (all) the costs.

I do believe that immediately going into college is increasingly a bad idea for those (1) unclear on their objectives (2) uncommitted and/or (3) undertaking a major without a clear career path.
adamthesmythe,

https://nces.ed.gov/fastfacts/display.asp?id=40

<<Question:
What are the graduation rates for students obtaining a bachelor's degree?

Response:
The 6-year graduation rate for first-time, full-time undergraduate students who began seeking a bachelor's degree at a 4-year degree-granting institution in fall 2009 was 59 percent. That is, 59 percent had completed a bachelor's degree by 2015 at the same institution where they started in 2009.>>


This is assuming that the student graduated. There are 41% that did not graduate in 6 years.

KlangFool

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Re: Cost of College vs Starting Income

Post by SeaToTheBay » Tue Mar 20, 2018 1:32 pm

Image
Speaks for itself.

In-state high-quality public university is where the value is.

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Re: Cost of College vs Starting Income

Post by oldfatguy » Tue Mar 20, 2018 1:37 pm

KlangFool wrote:
Tue Mar 20, 2018 1:30 pm
... There are 41% that did not graduate in 6 years.

KlangFool
That's not exactly right. 41% don't graduate from the school where they started, but many (certainly not all) of that group transfer and graduate at other colleges.

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Re: Cost of College vs Starting Income

Post by KlangFool » Tue Mar 20, 2018 1:39 pm

oldfatguy wrote:
Tue Mar 20, 2018 1:37 pm
KlangFool wrote:
Tue Mar 20, 2018 1:30 pm
... There are 41% that did not graduate in 6 years.

KlangFool
That's not exactly right. 41% don't graduate from the school where they started, but many (certainly not all) of that group transfer and graduate at other colleges.
oldfatguy,

Show us the number.

KlangFool

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Re: Cost of College vs Starting Income

Post by Grt2bOutdoors » Tue Mar 20, 2018 1:44 pm

SeaToTheBay wrote:
Tue Mar 20, 2018 1:32 pm
Image
Speaks for itself.

In-state high-quality public university is where the value is.
Looks like the publishing monopoly still continues. :annoyed Highway robbery to pay hundreds of dollars for a new textbook when all that has been changed is a few lines in a couple of chapters.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Cost of College vs Starting Income

Post by ncbill » Tue Mar 20, 2018 1:45 pm

mmmodem wrote:
Tue Mar 20, 2018 10:52 am
I graduated in 2007 from a State University. My yearly tuition was in the neighborhood of $10k. My first job paid $50k. That means my college cost me $20k + 2 years junior college. It was a small amount. Say it was $5k for easy math. This, my first job paid me double the cost of my education.
Youngest is currently shopping for undergrad programs, non-STEM major.

Here in-state public costs $15-$20k/year all-in.

Out of state public are essentially the same as private, $40-$50k/year all-in.

First choice for them is a private, out-of-state school, which means they'll need to win a scholarship from Uncle Sam, 'cause mom & dad ain't payin' extra.
Last edited by ncbill on Tue Mar 20, 2018 1:47 pm, edited 2 times in total.

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Re: Cost of College vs Starting Income

Post by adamthesmythe » Tue Mar 20, 2018 1:48 pm

KlangFool wrote:
Tue Mar 20, 2018 1:30 pm
adamthesmythe wrote:
Tue Mar 20, 2018 11:46 am
> many schools' tuition these days is really just the 'list price' and for true comparison purposes, one needs to consider the discounted after scholarship cost.

Yes.

Even so, the eventual financial benefit of a college education needs to be balanced against (all) the costs.

I do believe that immediately going into college is increasingly a bad idea for those (1) unclear on their objectives (2) uncommitted and/or (3) undertaking a major without a clear career path.
adamthesmythe,

https://nces.ed.gov/fastfacts/display.asp?id=40

<<Question:
What are the graduation rates for students obtaining a bachelor's degree?

Response:
The 6-year graduation rate for first-time, full-time undergraduate students who began seeking a bachelor's degree at a 4-year degree-granting institution in fall 2009 was 59 percent. That is, 59 percent had completed a bachelor's degree by 2015 at the same institution where they started in 2009.>>


This is assuming that the student graduated. There are 41% that did not graduate in 6 years.

KlangFool
I'm not sure what Klangfool was responding to...but...a look at the tables shows something interesting.

Graduation rates are consistently higher at not for profit schools compared to public. The truly appalling graduation rates are for for-profit schools.

My personal opinion is that a less-motivated student runs a greater risk of not finishing if at a public university.

> more students come to the U.S. from other countries

This has accelerated an increase in list prices and helped the financial position of universities when it comes to giving aid. Until recently there has been a transfer of wealth from non-US students paying list to US students recieveing aid.

By the way, this is changing. Recently non-US students have been declining in numbers and this is likely to become worse because of unfriendly government policy.

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Re: Cost of College vs Starting Income

Post by jharkin » Tue Mar 20, 2018 1:56 pm

I graduated from engineering school around '98. I recall that the tuition alone was something like 18k the first year rising to 20-something senior year. So call it 80k for 4 years, tuition only. Full ride with books, room, board etc was probably 100-120.

My first job paid 45k.

So 50 years ago your ratio was 1:1
20 years ago my ratio was a bit over 2:1
Today the ratio for that 200k education is probably 3:1

Not surprised at all.... hence all the news articles questioning the ROI of a degree today. But the paradox is at the same time its getting harder and harder to get a decent paying job without one, and in many fields a Masters is the new minimum....

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Re: Cost of College vs Starting Income

Post by warner25 » Tue Mar 20, 2018 2:03 pm

In general I think the observation is true. There is clearly a lot of variability in what people pay, even at the same school, and certainly in what they get paid afterwards.

When I think about what this means for our kids, I struggle to wrap my head around it. On one hand, the numbers seem crazy. On the other hand, it's easy to convincingly argue that paying even "sticker" price at a high cost school is a good deal compared to having no degree today.

50 years ago, I think one of the following was true:

(1) College was vastly under-priced because it wasn't yet widely understood to be the path to an upper-middle class income; kind of a market inefficiency that could be exploited.

(2) College was priced correctly because it was actually risky to give up four years of solid income that could be easily obtained without a degree; conditions which rapidly disappeared due to automation, globalization, etc. making the college degree holders look brilliant.

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Re: Cost of College vs Starting Income

Post by LiterallyIronic » Tue Mar 20, 2018 2:04 pm

dm200 wrote:
Tue Mar 20, 2018 10:02 am
I looked at the tuition (only) for my university for 2016-2017 ant it was about $50,000 for ONE YEAR. I would be sure that a similar graduate of that university today would NOT get a gross salary of $200,000 or so.
It's going to be all over the map, based on course of study, because tuition costs the same for every major.

I graduated in 2008 with a BS in Business Management. Tuition was about $1,500/semester when I started in 2001 and $1,800/semester when I graduated. Got a job paying $9.50/hour.

I graduated in 2016 with a BS in Computer Science. Tuition was about $2,400/semester when I started in 2013 and $2,600/semester when I graduated. Got a job paying $50k.

YMMV.

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Re: Cost of College vs Starting Income

Post by warner25 » Tue Mar 20, 2018 2:09 pm

Grt2bOutdoors wrote:
Tue Mar 20, 2018 1:44 pm
Looks like the publishing monopoly still continues. :annoyed Highway robbery to pay hundreds of dollars for a new textbook when all that has been changed is a few lines in a couple of chapters.
The prices are high, but my personal experience as a current graduate student is that professors are increasingly sensitive to this issue and actually make very little use of textbooks. Most assigned readings are available online for free, at least through the library's many publication subscription services. Textbooks are recommended, but only for read-ahead or reinforcement. Older editions are just fine. Lectures and assignments are self-contained.

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Re: Cost of College vs Starting Income

Post by Jack FFR1846 » Tue Mar 20, 2018 2:09 pm

oldfatguy wrote:
Tue Mar 20, 2018 1:37 pm
KlangFool wrote:
Tue Mar 20, 2018 1:30 pm
... There are 41% that did not graduate in 6 years.

KlangFool
That's not exactly right. 41% don't graduate from the school where they started, but many (certainly not all) of that group transfer and graduate at other colleges.
I expect that the number of students who transfer is relatively high for various reasons. Include the 2 year community college transfers in those numbers. Both my son and I started college at a mediocre private college in engineering. Both of us figured out that we could take on a much bigger challenge and transferred to a much better (and expensive) college. So we'd both fall into the class of not having finished at the college we started at. Plenty of students find it too hard at a top college. They transfer to an easier one. Many decide that a different major is right and their college doesn't offer it. My twin nephews did exactly this. They both started in different Arizona colleges and literally swapped colleges, changing majors. Seems in my family, only my wife started and finished at one college.

I'll throw in another data point on cost. At this top engineering college, I graduated in 1985. Tuition was $4k a semester ($32k over 4 years). I started at an engineering job at a starting wage of $30k. After one year, was at $33k. My son is at this same college. Tuition and fees (no room and board) is just over $48k a year. We expect he'll start in the $70k a year range after graduation, going by friends' kids graduating recently in engineering and starting in the northeast.
Last edited by Jack FFR1846 on Tue Mar 20, 2018 2:11 pm, edited 1 time in total.
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Re: Cost of College vs Starting Income

Post by KlangFool » Tue Mar 20, 2018 2:09 pm

warner25 wrote:
Tue Mar 20, 2018 2:03 pm

On the other hand, it's easy to convincingly argue that paying even "sticker" price at a high cost school is a good deal compared to having no degree today.
warner25,

1) I disagreed. There is no guarantee that the student will get needed resources even in a high-cost school. In fact, it is worse if the student is average or below average at those schools.

2) My view is to do not put all your eggs in one basket. Do not spend all your financial resources on a high-cost undergraduate degree. Then, you have the resource for the student to get a second shot at a degree. Or, the student needs more time. All else failed, the money could be spent on a house for the kid. Then, the kid could survive with a lowered income job.

3) Diversified your investment. Do not put all your eggs in one basket.

KlangFool

oldfatguy
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Re: Cost of College vs Starting Income

Post by oldfatguy » Tue Mar 20, 2018 2:13 pm

KlangFool wrote:
Tue Mar 20, 2018 1:39 pm
oldfatguy wrote:
Tue Mar 20, 2018 1:37 pm
KlangFool wrote:
Tue Mar 20, 2018 1:30 pm
... There are 41% that did not graduate in 6 years.

KlangFool
That's not exactly right. 41% don't graduate from the school where they started, but many (certainly not all) of that group transfer and graduate at other colleges.
oldfatguy,

Show us the number.

KlangFool
I am not aware of any centralized tracking of those figures, but the part you quoted in your post says the same thing: " ... 59 percent had completed a bachelor's degree by 2015 at the same institution where they started. " The doesn't mean the other 41% didn't graduate, it means they didn't graduate from the first school they attended.

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Re: Cost of College vs Starting Income

Post by dm200 » Tue Mar 20, 2018 2:21 pm

Not sure how this factor enters into changed patterns of college enrollment from the 1960's, but back then one very motivating factor for most male students to be and remain enrolled in college was the military draft.

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Re: Cost of College vs Starting Income

Post by KlangFool » Tue Mar 20, 2018 2:21 pm

oldfatguy wrote:
Tue Mar 20, 2018 2:13 pm
KlangFool wrote:
Tue Mar 20, 2018 1:39 pm
oldfatguy wrote:
Tue Mar 20, 2018 1:37 pm
KlangFool wrote:
Tue Mar 20, 2018 1:30 pm
... There are 41% that did not graduate in 6 years.

KlangFool
That's not exactly right. 41% don't graduate from the school where they started, but many (certainly not all) of that group transfer and graduate at other colleges.
oldfatguy,

Show us the number.

KlangFool
I am not aware of any centralized tracking of those figures, but the part you quoted in your post says the same thing: " ... 59 percent had completed a bachelor's degree by 2015 at the same institution where they started. " The doesn't mean the other 41% didn't graduate, it means they didn't graduate from the first school they attended.
oldfatguy,

<<The doesn't mean the other 41% didn't graduate, it means they didn't graduate from the first school they attended.>>

1) We know that the other 41% did not graduate in 6 years from the first school that they attended.

2) Unless you have a better number, we do not know whether the other 41% never graduated or graduated from other schools. Or, what is the breakdown? So, it is pure speculation whether it is a minority or majority of the 41% never graduated.

KlangFool

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Pajamas
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Re: Cost of College vs Starting Income

Post by Pajamas » Tue Mar 20, 2018 2:24 pm

It doesn't really answer the question, but 37% of college students transfer in six years. Of course, not all of them eventually graduate, but that is a good chunk of the ones who don't graduate from the same school in six years, since that is 41%.

https://www.insidehighered.com/quicktak ... s-transfer

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Re: Cost of College vs Starting Income

Post by oldfatguy » Tue Mar 20, 2018 2:44 pm

KlangFool wrote:
Tue Mar 20, 2018 2:21 pm

2) Unless you have a better number, we do not know whether the other 41% never graduated or graduated from other schools. Or, what is the breakdown? So, it is pure speculation whether it is a minority or majority of the 41% never graduated.

KlangFool
We do know that some of the 41% graduate from other schools, we just don't know exactly how many, because it isn't tracked.

Correction: NCES did recently begin tracking transfer numbers, and released the first report with that data last year.

https://nces.ed.gov/pubs2017/2017150rev.pdf

On page 14 you will see the 8 year completion rates for for full-time and part-time "non-first-time" students (i.e., those who transferred in to a school). The completion rate of the full-times is 66% at public schools and 64% are private non-profits.
Last edited by oldfatguy on Tue Mar 20, 2018 2:56 pm, edited 1 time in total.

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Re: Cost of College vs Starting Income

Post by Shikoku » Tue Mar 20, 2018 2:53 pm

KlangFool wrote:
Tue Mar 20, 2018 2:09 pm
warner25 wrote:
Tue Mar 20, 2018 2:03 pm

On the other hand, it's easy to convincingly argue that paying even "sticker" price at a high cost school is a good deal compared to having no degree today.
warner25,

1) I disagreed. There is no guarantee that the student will get needed resources even in a high-cost school. In fact, it is worse if the student is average or below average at those schools.

2) My view is to do not put all your eggs in one basket. Do not spend all your financial resources on a high-cost undergraduate degree. Then, you have the resource for the student to get a second shot at a degree. Or, the student needs more time. All else failed, the money could be spent on a house for the kid. Then, the kid could survive with a lowered income job.

3) Diversified your investment. Do not put all your eggs in one basket.

KlangFool
KlangFool,

I have to respectfully disagree with you. My philosophy: Go to a better college even the cost is high provided someone can afford it. The kids will have chance to be surrounded by a lot of smart people. There is certainly risks in spending a lot of money on a college degree.

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Professor James Flynn did a significant amount of research on this topic.
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Re: Cost of College vs Starting Income

Post by Sockpuppet » Tue Mar 20, 2018 2:53 pm

Many elite institutions have massive endowments that provide most of their students with scholarships and grants that can make a 50K a year university cheaper than a school with seemingly more affordable tuition.

Public Universities also offer very affordable rates in many states.

Going 200K into debt for a school is probably not a good move, but that's the real issue. Not the school's "sticker" price.

KlangFool
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Re: Cost of College vs Starting Income

Post by KlangFool » Tue Mar 20, 2018 3:09 pm

Shikoku wrote:
Tue Mar 20, 2018 2:53 pm

The kids will have chance to be surrounded by a lot of smart people.
Shikoku,

Why is that useful for your kid?

A) If your kid is not at least above average aka top 33% of those places, they will feel like a dummy for all 4 years of their college life. How would you feel to be a failure and below average student through no fault of yours?

B) Is it useful to be surrounded by smart people? There are more dumb people in the world than smart people. The ability to socialize and work with dumb aka normal people is a lot useful in real life.

http://www.businessinsider.com/malcolm- ... th-2013-10

You should read the above book by Malcolm Gladwell's. It is useful to be a big fish in small pond.

KlangFool

carolinaman
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Re: Cost of College vs Starting Income

Post by carolinaman » Tue Mar 20, 2018 3:20 pm

warner25 wrote:
Tue Mar 20, 2018 2:03 pm
In general I think the observation is true. There is clearly a lot of variability in what people pay, even at the same school, and certainly in what they get paid afterwards.

When I think about what this means for our kids, I struggle to wrap my head around it. On one hand, the numbers seem crazy. On the other hand, it's easy to convincingly argue that paying even "sticker" price at a high cost school is a good deal compared to having no degree today.

50 years ago, I think one of the following was true:

(1) College was vastly under-priced because it wasn't yet widely understood to be the path to an upper-middle class income; kind of a market inefficiency that could be exploited.

(2) College was priced correctly because it was actually risky to give up four years of solid income that could be easily obtained without a degree; conditions which rapidly disappeared due to automation, globalization, etc. making the college degree holders look brilliant.
IMO, a big factor with college high and rising costs is student loans. Colleges know they can increase tuition, etc because if necessary, students will borrow money and get themselves deeper in debt.

Shikoku
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Re: Cost of College vs Starting Income

Post by Shikoku » Tue Mar 20, 2018 3:37 pm

KlangFool wrote:
Tue Mar 20, 2018 3:09 pm
Shikoku wrote:
Tue Mar 20, 2018 2:53 pm

The kids will have chance to be surrounded by a lot of smart people.
Shikoku,

Why is that useful for your kid?

A) If your kid is not at least above average aka top 33% of those places, they will feel like a dummy for all 4 years of their college life. How would you feel to be a failure and below average student through no fault of yours?

B) Is it useful to be surrounded by smart people? There are more dumb people in the world than smart people. The ability to socialize and work with dumb aka normal people is a lot useful in real life.

http://www.businessinsider.com/malcolm- ... th-2013-10

You should read the above book by Malcolm Gladwell's. It is useful to be a big fish in small pond.

KlangFool
KlangFool,

If my kid is among the top half of the cohort, I will consider him to be a good fit. One of my suggestion will be to enroll in a college where a lot of smart kids go. I do not disagree with going to a college that is a good fit for a particular student so that the student do not feel dumb.

Yes, it is useful to be surrounded by smart people. Please read the following article which provides an outline of Professor Flynn's research.

You Can Boost Your Own IQ - With Help
https://www.iol.co.za/entertainment/cel ... lp-2028098

Do you disagree with Professor Flynn's research?
"I don't worry too much about pointing fingers at the past. I operate on the theory that every saint has a past, every sinner has a future." -- Warren Buffett

dknightd
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Re: Cost of College vs Starting Income

Post by dknightd » Tue Mar 20, 2018 3:42 pm

A related thought, every year you are in school is likely one less year you can save, and start compounding

N10sive
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Re: Cost of College vs Starting Income

Post by N10sive » Tue Mar 20, 2018 3:45 pm

Shikoku wrote:
Tue Mar 20, 2018 2:53 pm
I have to respectfully disagree with you. My philosophy: Go to a better college even the cost is high provided someone can afford it. The kids will have chance to be surrounded by a lot of smart people. There is certainly risks in spending a lot of money on a college degree.
While a lot depends on the student, I agree mostly that a better college will provide a better education. There are a few factors than just "being around smart people"

1. Most likely higher quality teachers
2. Supported by larger companies influencing degree programs, technology etc. (this is also area dependent)
3. Labs/Hands on teaching. In my degree this was the most lacking at my college. There were a couple labs but focused more on theory than practical and in my field practical experience can go a long way.
4. Resources
5. Back to the supported by companies, internships are easier to find, more fruitful, better networking connections etc.

I didn't go to the best of colleges. Wasn't the best student either. But have gotten to the point where I am comfortable in my field and around others technical wise. A student needs to have a drive to excel in their specific degree field. That is why I didn't go to an expensive school as I didnt really know what I wanted to do. I was making 50k at 18 on a path to making 80k by the time I was 25 years old so college really wasn't at the forefront.

It did help in increasing my salary to now over six figures. But Id imagine I could be in a similar spot if I didn't spend 50k on a college education and 5 years of studying instead of working and training.

N10sive
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Re: Cost of College vs Starting Income

Post by N10sive » Tue Mar 20, 2018 3:49 pm

dknightd wrote:
Tue Mar 20, 2018 3:42 pm
A related thought, every year you are in school is likely one less year you can save, and start compounding
This! While most jobs now need a bachelors degree and heck most people want a masters, there are plenty of trades that are being bypassed that pay decent.

I have plenty of friends who didn't go to college and are working these trades. They have houses, families, and are getting by well it seems. They are pry making the average American income, possibly have two income streams. Don't know about retirement though.

warner25
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Re: Cost of College vs Starting Income

Post by warner25 » Tue Mar 20, 2018 3:51 pm

KlangFool wrote:
Tue Mar 20, 2018 2:09 pm
...There is no guarantee that the student will get needed resources even in a high-cost school... Do not spend all your financial resources on a high-cost undergraduate degree...
My point was not about high cost vs. low cost schools. My point was just about having a degree vs. not having a degree.

The most simplistic argument is that median annual income for a Bachelor's degree holder is $25k more than median income for someone with a high school diploma (source: https://www.bls.gov/opub/ted/2015/media ... n-2014.htm ), so even if college costs $200k and the student has zero income for four years, they still break even relatively early in their career and ultimately come out way ahead. [Obviously there is a lot more complexity, and I've yet to see anyone do a thorough apples-to-apples comparison accounting for all the various factors at play, but this is a fairly convincing starting point to me.]

I acknowledge your point about having $200k up-front to buy a house or put into stocks instead, but that leads to a separate discussion about the status and enjoyment of low-paid vs. high-paid jobs, and the wide array of jobs that are totally unobtainable without a degree.
KlangFool wrote:
Tue Mar 20, 2018 3:09 pm
Is it useful to be surrounded by smart people?
It's useful to be surrounded by, and make friends with, people who will do well in their careers and eventually make, or at least influence, hiring and promotion decisions in their organizations. I think most people get their jobs through people they know.

jminv
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Re: Cost of College vs Starting Income

Post by jminv » Tue Mar 20, 2018 3:59 pm

Back in the day, a smaller percentage of the population went to university. Today, it's higher and naturally the returns to an education have dropped. Since university is a requirement for many job positions, population percentage that goes has increased, and there are grants and loans to otherwise poor credit risks, college inflation has been high. Without the continued financial support, degrees that did not have a favorable ROI would no longer be offered. It's also very difficult for a high school student to decide what they want to do for the rest of their life particularly since high schools tend to put students on a path toward liberal arts degrees. I wish that schools had more of a career service department that helped students decide what they're really interested and good at and then show them the earnings you can expect throughout your lifetime. I think students really choose what they want to do while they're at college which is not optimal. I did this.

If you pick a major where there is still high demand for your major, you can still earn outsized returns. When I went to school which wasn't all that recently (I'm mid thirties), I paid around 35k total for an engineering degree from a state school and my first job out of school paid 72k. It went up to 92k after a month, 104k after a year, and 250k after two years and although I changed sectors and went back to school, it's still been increasing with time.

As a side note, universities are very interesting because of how they're able to engage in price discrimination down to the individual student level through the FAFSA while not discounting to anyone since the difference is paid for with funds from grants and loans.

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steadyeddy
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Re: Cost of College vs Starting Income

Post by steadyeddy » Tue Mar 20, 2018 4:07 pm

SeaToTheBay wrote:
Tue Mar 20, 2018 1:32 pm
Image
Speaks for itself.

In-state high-quality public university is where the value is.
So, basically all the major costs associated with having children have skyrocketed.

Shikoku
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Re: Cost of College vs Starting Income

Post by Shikoku » Tue Mar 20, 2018 4:30 pm

dknightd wrote:
Tue Mar 20, 2018 3:42 pm
A related thought, every year you are in school is likely one less year you can save, and start compounding
True but...
"Not going to college will cost you about half a million dollars."

Source: Is College Worth It? Clearly, New Data Say
https://www.nytimes.com/2014/05/27/upsh ... a-say.html
"I don't worry too much about pointing fingers at the past. I operate on the theory that every saint has a past, every sinner has a future." -- Warren Buffett

RetiredCSProf
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Re: Cost of College vs Starting Income

Post by RetiredCSProf » Tue Mar 20, 2018 4:38 pm

More students are continuing on to college than 50 years ago. At public schools, government funding has not kept pace with the increasing enrollment -- that is, even if public funding were increased each year per student at the rate of inflation, it would still fall short because there are more students. Thus, the public schools have had to increase their tuition to make up the difference.

Instead of offering on-campus housing all four years; many 4-year public schools promise housing for two years. And classes extend into the evening. Our local community college offers classes from 7AM to 10 PM.

My undergraduate tuition was $95 per semester (in-state at public university); my first job, as a systems programmer, paid $10,300 per year. Today, the tuition at my alma mater is $15K per year and a similar job would pay about $50K per year. As operating systems have grown, companies have little need for hiring a systems programmer.

Just as my first job is OBE; other jobs have opened up. Was there a career in video game design 50 years ago? How many jobs were there in animation? Genetics? If we limit the students of today to studying for the careers of yesterday, then we fall behind.

Shikoku
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Re: Cost of College vs Starting Income

Post by Shikoku » Tue Mar 20, 2018 4:41 pm

carolinaman wrote:
Tue Mar 20, 2018 3:20 pm
IMO, a big factor with college high and rising costs is student loans. Colleges know they can increase tuition, etc because if necessary, students will borrow money and get themselves deeper in debt.
"[A] major factor driving increasing costs is the constant expansion of university administration. According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions."

"[A]n analysis by a professor at California Polytechnic University, Pomona, found that, while the total number of full-time faculty members in the C.S.U. system grew from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183 -- a 221 percent increase."

Source: The Real Reason College Tuition Costs So Much
https://www.nytimes.com/2015/04/05/opin ... -much.html
"I don't worry too much about pointing fingers at the past. I operate on the theory that every saint has a past, every sinner has a future." -- Warren Buffett

Sockpuppet
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Re: Cost of College vs Starting Income

Post by Sockpuppet » Tue Mar 20, 2018 4:43 pm

KlangFool wrote:
Tue Mar 20, 2018 3:09 pm
Shikoku wrote:
Tue Mar 20, 2018 2:53 pm

The kids will have chance to be surrounded by a lot of smart people.
Shikoku,

Why is that useful for your kid?

A) If your kid is not at least above average aka top 33% of those places, they will feel like a dummy for all 4 years of their college life. How would you feel to be a failure and below average student through no fault of yours?

B) Is it useful to be surrounded by smart people? There are more dumb people in the world than smart people. The ability to socialize and work with dumb aka normal people is a lot useful in real life.

http://www.businessinsider.com/malcolm- ... th-2013-10

You should read the above book by Malcolm Gladwell's. It is useful to be a big fish in small pond.

KlangFool
Gladwell's book argues that Williams College could be a better fit for many than Harvard.

But it doesn't really argue that Chico State is a better choice than Harvard.

Being surrounded with intelligent peers does motivate many. But yes getting people into schools where they are going to struggle isn't a benefit for them.

But just looking for the school where you can be the biggest fish I don't think is optimal and ignores the more subtle argument Gladwell was making.

Atilla
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Re: Cost of College vs Starting Income

Post by Atilla » Tue Mar 20, 2018 4:57 pm

steadyeddy wrote:
Tue Mar 20, 2018 4:07 pm
SeaToTheBay wrote:
Tue Mar 20, 2018 1:32 pm
Image
Speaks for itself.

In-state high-quality public university is where the value is.
So, basically all the major costs associated with having children have skyrocketed.
I'm more cynical. I see skyrocketing costs where official efforts are made to make things "more affordable". College/Textbooks and Healthcare - check. I don't think it's by mistake...I think it's deliberate.
The Village Idiot - here for your entertainment.

Sockpuppet
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Re: Cost of College vs Starting Income

Post by Sockpuppet » Tue Mar 20, 2018 5:11 pm

Certainly there is a balance between viewing education as strictly an investment and valuing education for education's sake.

This doesn't have to be a choice between 200K in debt from a liberal arts college and earning a cheap degree from Cheyenne University of Pennsylvania (no longer under threat of losing accreditedation!)

There are some options in between.

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Pajamas
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Re: Cost of College vs Starting Income

Post by Pajamas » Tue Mar 20, 2018 5:24 pm

KlangFool, by your standards, it does not seem like you are getting your money's worth if only half of the children you send to college graduate. Maybe you should change your approach to this since it is so important to the children.

KlangFool
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Re: Cost of College vs Starting Income

Post by KlangFool » Tue Mar 20, 2018 5:52 pm

Pajamas wrote:
Tue Mar 20, 2018 5:24 pm
KlangFool, by your standards, it does not seem like you are getting your money's worth if only half of the children you send to college graduate. Maybe you should change your approach to this since it is so important to the children.
Pajamas,

You still do not get it. We are willing to pay X for a college education. We are not willing to pay 2X for a college education. We can send 2 of our nephews and nieces to college with 2X of money. It is a safer and better bet.

KlangFool

Shikoku
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Re: Cost of College vs Starting Income

Post by Shikoku » Tue Mar 20, 2018 6:02 pm

KlangFool wrote:
Tue Mar 20, 2018 4:40 pm
1) Diversity. It is important and useful for children to learn to socialize and work with all kinds of people.

2) I live in a very affluent neighborhood. My kids go to high school with smart kids. If they go to a selective college, they will socialize with exactly same kind of people that they grew up with. There is no new life experience here. A public state university will provide them with better exposure with real people.

In summary, it might be a new life experience for some folks. But, for others, it is the same old social circle.
Just to point out that the link I have posted earlier in this thread with a list of colleges with smart kids, there are many public institutions. Please check it out...

Lumosity's Smartest Colleges 2013
https://www.scribd.com/document/1849803 ... leges-2013

So I really do not have to send my kids to very expensive colleges for them to educate along with other smart students. If my child is a good fit in any of the top 50 colleges in the list, I will be happy. In fact, our older child is attending one of the colleges in the list. It will cost $135K-$150K if he finishes in four years.

I also live in an affluent area of the suburb but my children have friends/classmates who receive reduced cost lunch at the public school. My children work in a homeless shelter, in a food pantry, and in a hospital in summer to get some exposure to the realities of life.
"I don't worry too much about pointing fingers at the past. I operate on the theory that every saint has a past, every sinner has a future." -- Warren Buffett

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