Cost of College vs Starting Income

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
KlangFool
Posts: 17844
Joined: Sat Oct 11, 2008 12:35 pm

Re: Cost of College vs Starting Income

Post by KlangFool »

Shikoku wrote: 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.
Shikoku,

<< 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.
>>

The question here is will you be willing to send your kid to a college that cost 100K to 150K more for an undergraduate degree. That is the topic that we discussed in this thread.

KlangFool
Shikoku
Posts: 406
Joined: Fri Oct 27, 2017 11:01 pm
Location: USA

Re: Cost of College vs Starting Income

Post by Shikoku »

KlangFool wrote: Tue Mar 20, 2018 6:10 pm
Shikoku wrote: 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.
Shikoku,

<< 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.
>>

The question here is will you be willing to send your kid to a college that cost 100K to 150K more for an undergraduate degree. That is the topic that we discussed in this thread.

KlangFool
KlangFool,

Yes. I am absolutely not willing to sacrifice kids education for money.

I think one of the sub-questions we are discussing is if we should send our kids to a college where they will be surrounded by smart kids. My answer is a resounding 'yes' as long as I can afford it. Actually, I have recently done a non-Bogleheads thing -- did a cash-out refinance (shhhh... do not tell any other Bogleheads!) of our primary home to make my cash-flow situation better for the next eight years while kids are in college.

Our younger child will go to the best college he can enroll irrespective of the price tag. As I wrote you few days ago in another thread that I will retire in a low-cost country if necessary but I will spend as much as necessary for my children's education as long as I can afford.
"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
Traveler
Posts: 844
Joined: Fri Aug 30, 2013 9:07 pm

Re: Cost of College vs Starting Income

Post by Traveler »

I went to a state school 1990-94 and am estimating total tuition and fees for the four years was about $9000 (I know my first year was $1800 and the last year was $2700). I more or less had a full ride scholarship so I didn't actually have to come up with the cash. My degree is in business and my first job started at $22,300/year.
RollTide31457
Posts: 259
Joined: Tue Nov 28, 2017 8:06 pm

Re: Cost of College vs Starting Income

Post by RollTide31457 »

Why are y’all paying for someone else’s education? Military service, loans, working part or full time are still viable options to finance one’s education. Also, it’s a great way to accelerate the maturity curve.
ncbill
Posts: 880
Joined: Sun Jul 06, 2008 4:03 pm
Location: Western NC

Re: Cost of College vs Starting Income

Post by ncbill »

So to summarize, for some posters the ratio doesn't matter - no concern about compensation after obtaining an expensive education.

No problem spending $250k for a salary of $25k, or spending that and then the kid drops out never to complete even an undergraduate degree.

Even here I would think for most an out-of-pocket $250k after-tax expense would have a measurable impact on their retirement plans.
Sockpuppet
Posts: 259
Joined: Mon Oct 23, 2017 9:06 pm

Re: Cost of College vs Starting Income

Post by Sockpuppet »

RollTide31457 wrote: Tue Mar 20, 2018 6:58 pm Why are y’all paying for someone else’s education? Military service, loans, working part or full time are still viable options to finance one’s education. Also, it’s a great way to accelerate the maturity curve.
Colleges typically have an expected “family contribution” amount so you’re kind of screwing your kids if you refuse to contribute money toward their college nowadays.

My parents didn’t contribute a dime toward my college education and I paid off my tuition without taking a single loan by working nearly full time at McDonalds. I graduated as Saluditarian after only three and a half years (took an extra course each semester to save money).

It did build character but I don’t think it’s as feasible today. Also, I don’t know if I would recommend it to someone if it was.
stoptothink
Posts: 8373
Joined: Fri Dec 31, 2010 9:53 am

Re: Cost of College vs Starting Income

Post by stoptothink »

Sockpuppet wrote: Tue Mar 20, 2018 7:44 pm
RollTide31457 wrote: Tue Mar 20, 2018 6:58 pm Why are y’all paying for someone else’s education? Military service, loans, working part or full time are still viable options to finance one’s education. Also, it’s a great way to accelerate the maturity curve.
Colleges typically have a expected “family contribution” amount so you’re kind of screwing your kids if you refuse to contribute money toward their college nowadays.

My parents didn’t contribute a dime toward my college education and I paid off my tuition without taking a single loan by working nearly full time at McDonalds. I graduated as Saluditarian after only three and a half years (took an extra course each semester to save money).

It did build character but I don’t think it’s as feasible today. Also, I don’t know if I would recommend it to someone if it was.
I finished my education in 2012, 11yrs of it, and have a very similar story...as do 4 of my siblings, including a step-sibling who will be graduating in a few weeks. All 100% debt-free without a penny of parental assistance. It is certainly more difficult than it once was, but I have 5 examples in my own family about how it is possible.
Sockpuppet
Posts: 259
Joined: Mon Oct 23, 2017 9:06 pm

Re: Cost of College vs Starting Income

Post by Sockpuppet »

stoptothink wrote: Tue Mar 20, 2018 8:05 pm
Sockpuppet wrote: Tue Mar 20, 2018 7:44 pm
RollTide31457 wrote: Tue Mar 20, 2018 6:58 pm Why are y’all paying for someone else’s education? Military service, loans, working part or full time are still viable options to finance one’s education. Also, it’s a great way to accelerate the maturity curve.
Colleges typically have a expected “family contribution” amount so you’re kind of screwing your kids if you refuse to contribute money toward their college nowadays.

My parents didn’t contribute a dime toward my college education and I paid off my tuition without taking a single loan by working nearly full time at McDonalds. I graduated as Saluditarian after only three and a half years (took an extra course each semester to save money).

It did build character but I don’t think it’s as feasible today. Also, I don’t know if I would recommend it to someone if it was.
I finished my education in 2012, 11yrs of it, and have a very similar story...as do 4 of my siblings, including a step-sibling who will be graduating in a few weeks. All 100% debt-free without a penny of parental assistance. It is certainly more difficult than it once was, but I have 5 examples in my own family about how it is possible.
Wow, that’s pretty incredible.
User avatar
willthrill81
Posts: 21006
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Cost of College vs Starting Income

Post by willthrill81 »

Pajamas wrote: 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.
At the regional, public university I work for, tuition and fees are about $7k a year for in-state students. So even if it takes a student six years to graduate, that's 'only' $42k, and most of those in fields with decent-demand will make at least that upon graduation.

I went through nine years of college to get my Ph.D. a little over a decade ago, plus my wife's B.S., and our total cost (tuition, fees, books) was about $40k. I don't count food, rent, etc., which we paid for at the time through working, plus some of that tuition. We had about $30k of student loans between us both which we repaid quickly.

This business of people thinking it's necessary to spend $50k-$200k on an undergraduate degree to get a good job these days is beyond me.
The ratio of debt payments to family income for heads of households younger than age 35 gradually declined from 18% in 1989 to 14% in 2016. The drop resulted from a combination of lower overall interest rates and the shift in debt composition from consumer credit to education.
https://vanguardblog.com/2018/03/05/dem ... ror-story/
SeaToTheBay wrote: Tue Mar 20, 2018 1:32 pmIn-state high-quality public university is where the value is.
:thumbsup
Last edited by willthrill81 on Tue Mar 20, 2018 8:26 pm, edited 3 times in total.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
Mike Scott
Posts: 1410
Joined: Fri Jul 19, 2013 2:45 pm

Re: Cost of College vs Starting Income

Post by Mike Scott »

Our state funding is at the same $ amount as in 1998. Tuition has increased significantly during that same time. I don't remember exactly, but it has roughly doubled. Fees, room and board have increased much more than tuition. There are students who graduate with more debt than earning potential but the worst cases are students with student loan debt who do not graduate. Our kids always knew the value of the scholarships that allowed them to graduate with no debt, but as time goes by they are beginning to understand how valuable this was as they see their former classmates struggle with loans.
stoptothink
Posts: 8373
Joined: Fri Dec 31, 2010 9:53 am

Re: Cost of College vs Starting Income

Post by stoptothink »

Sockpuppet wrote: Tue Mar 20, 2018 8:17 pm
stoptothink wrote: Tue Mar 20, 2018 8:05 pm
Sockpuppet wrote: Tue Mar 20, 2018 7:44 pm
RollTide31457 wrote: Tue Mar 20, 2018 6:58 pm Why are y’all paying for someone else’s education? Military service, loans, working part or full time are still viable options to finance one’s education. Also, it’s a great way to accelerate the maturity curve.
Colleges typically have a expected “family contribution” amount so you’re kind of screwing your kids if you refuse to contribute money toward their college nowadays.

My parents didn’t contribute a dime toward my college education and I paid off my tuition without taking a single loan by working nearly full time at McDonalds. I graduated as Saluditarian after only three and a half years (took an extra course each semester to save money).

It did build character but I don’t think it’s as feasible today. Also, I don’t know if I would recommend it to someone if it was.
I finished my education in 2012, 11yrs of it, and have a very similar story...as do 4 of my siblings, including a step-sibling who will be graduating in a few weeks. All 100% debt-free without a penny of parental assistance. It is certainly more difficult than it once was, but I have 5 examples in my own family about how it is possible.
Wow, that’s pretty incredible.
I was fortunate to have some athletic scholarships and research grants, but I worked (at least) full-time for 11yrs as I completed undergrad, MS, and PhD. During that time I also put an (ex) wife through undergrad and dental school completely debt-free, and my (2nd, forever) wife returned to complete her undergrad last year and we are cash-flowing it. I have never filled out a FAFSA or received a penny in help from parents (mine or anybody else's). My youngest step-sibling was not as fortunate with scholarships as I, pure hard work. We all basically followed the money, making college decisions based upon expected cost and ROI, and worked our tails off. You would be blown away what the cost difference in schools can be (sister is graduating from what is, by a massive margin, the cheapest private university in the country). As you can guess, we are all definitely in the camp that we may help our children financially with university education, but we will absolutely make sure they strongly consider cost when making decisions about where to go and what to study.
billy269
Posts: 119
Joined: Mon Nov 18, 2013 2:50 pm

Re: Cost of College vs Starting Income

Post by billy269 »

There are deals out there to be found. I'm doing my masters in education online through a well known public university for a tuition cost of $8200. After the tax credit and my employer incentive my total cost will be around $3200. Obviously worth the cost for the jobs it will allow me to apply to.
Shikoku
Posts: 406
Joined: Fri Oct 27, 2017 11:01 pm
Location: USA

Re: Cost of College vs Starting Income

Post by Shikoku »

RollTide31457 wrote: Tue Mar 20, 2018 6:58 pm Why are y’all paying for someone else’s education? Military service, loans, working part or full time are still viable options to finance one’s education. Also, it’s a great way to accelerate the maturity curve.
One of the reasons: It is in the DNA. My parents paid for my undergraduate education, and I will pay for our children's undergraduate education. My parents had the option to tell me that they could not support college expense but they did not. They encouraged me to get the best education I could and paid for that, and I will do the same for our children's undergraduate education. I do not think I am doing anything unusual.
"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
riverguy
Posts: 498
Joined: Sun May 23, 2010 10:33 pm

Re: Cost of College vs Starting Income

Post by riverguy »

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.
Most of the stuff that has skyrocketed has govt fingers in it. Take the student loan guarantees away and make them dischargeable in BK and the bubble pops overnight. Colleges get back to actually having teach stuff that matters. All the worthless degrees disappear. Fat paychecks for administrators disappear. No one loans to kids unless they think they have a decent chance of paying the loan back. Prices for college would have to plummet and become afffordable paying cash.
Bacchus01
Posts: 3182
Joined: Mon Dec 24, 2012 9:35 pm

Re: Cost of College vs Starting Income

Post by Bacchus01 »

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
At the same school. I attended four, yes four, undergrad schools and graduated in 5 with more than 180 credits and a 3.8+ gpa.

In fact, the smartest money today is to start at a 2 year or JC campus and transfer to the big school when you hit your major classes.
caffeinefree
Posts: 28
Joined: Sat Mar 23, 2013 10:17 am

Re: Cost of College vs Starting Income

Post by caffeinefree »

jharkin wrote: 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....
I graduated from a public university with an engineering degree in '08. My tuition was ~$5-6k/year, so call it $22k for 4 years with tuition only. Full ride with room and board, etc., probably $50k because I was in a cheap area and lived on ramen noodles. :D

My first job paid $50k (I graduated in the middle of the recession, so was lucky to find a job at all, but that's another story altogether).

So 10 years ago AT A PUBLIC UNIVERSITY my ratio was about 1:1.

Even better, since I went to an in-state university, I got a state scholarship that covered 100% of my tuition and books and another scholarship from the school for $10k. With the 529 my parents had set up, I was actually getting checks back from the school every year. I know some of these options (like the 100% scholarship) aren't available to students today, but there's a lot to be said for going to a state university. And I got the exact same job as the folks who came out of private engineering schools with $100k in student loans.

The biggest issue today, aside from the astronomical price tag of higher education, is the fact that high school students are given ZERO guidance on the long-term impacts of student loans on their financial lives. What 18 year old really understands what it means to take out $100k in loans for a liberal arts degree? We should be teaching classes in high school that show students how to do the kind of cost/benefit analysis that we're discussing here.
Bacchus01
Posts: 3182
Joined: Mon Dec 24, 2012 9:35 pm

Re: Cost of College vs Starting Income

Post by Bacchus01 »

stoptothink wrote: Tue Mar 20, 2018 8:05 pm
Sockpuppet wrote: Tue Mar 20, 2018 7:44 pm
RollTide31457 wrote: Tue Mar 20, 2018 6:58 pm Why are y’all paying for someone else’s education? Military service, loans, working part or full time are still viable options to finance one’s education. Also, it’s a great way to accelerate the maturity curve.
Colleges typically have a expected “family contribution” amount so you’re kind of screwing your kids if you refuse to contribute money toward their college nowadays.

My parents didn’t contribute a dime toward my college education and I paid off my tuition without taking a single loan by working nearly full time at McDonalds. I graduated as Saluditarian after only three and a half years (took an extra course each semester to save money).

It did build character but I don’t think it’s as feasible today. Also, I don’t know if I would recommend it to someone if it was.
I finished my education in 2012, 11yrs of it, and have a very similar story...as do 4 of my siblings, including a step-sibling who will be graduating in a few weeks. All 100% debt-free without a penny of parental assistance. It is certainly more difficult than it once was, but I have 5 examples in my own family about how it is possible.
Congrats. My wife and I both got our undergrad and MBAs with a total of 18 years of school between us. We received no financial support from our parents and graduated with less than $30K in debt combined across 4 degrees. And most of that debt was because I bought a used car with a student loan as the rate was much lower than a used car loan at the time.
Bacchus01
Posts: 3182
Joined: Mon Dec 24, 2012 9:35 pm

Re: Cost of College vs Starting Income

Post by Bacchus01 »

RollTide31457 wrote: Tue Mar 20, 2018 6:58 pm Why are y’all paying for someone else’s education? Military service, loans, working part or full time are still viable options to finance one’s education. Also, it’s a great way to accelerate the maturity curve.
Interesting question. My wife and I went around on this for a long time. With our oldest now a HS Jr, this is front and center.

In the end we believe there is no better gift we could give our children than the opportunity for an education. And is helping fund it gives them options they might not otherwise have. Our kids do not know and in fact believe we are not paying a thing.

Ironically, I fully expect our kids to go to the flagship state U (Wisconsin). Which is pretty reasonable by today’s standards for a Top institution.
alfaspider
Posts: 3046
Joined: Wed Sep 09, 2015 4:44 pm

Re: Cost of College vs Starting Income

Post by alfaspider »

KlangFool wrote: Tue Mar 20, 2018 1:53 pm
Pajamas,

It is not. Even in the most selective university, the graduation rate is not 100%. This is a personal finance forum. When we think about financing our kids for college, we take on the risk that our kid may not graduate with a degree or they may take longer than 4 years.

KlangFool
It's true that there is always a risk of non-graduation, but isn't personal finance partially about putting the odds in your favor to the extent possible? If I had to choice of sending my kid to a institution where 90% graduate, or one where 50% graduate, I'd be willing to spend more for the institution where there is a higher rate. In my experience, schools with high graduation rates tend to identify and go out of their way to help students that are struggling. Most of the schools with average rates expect the students to help themselves.
oldfatguy
Posts: 649
Joined: Tue Feb 27, 2018 1:38 pm

Re: Cost of College vs Starting Income

Post by oldfatguy »

caffeinefree wrote: Wed Mar 21, 2018 7:37 am
The biggest issue today, aside from the astronomical price tag of higher education, is the fact that high school students are given ZERO guidance on the long-term impacts of student loans on their financial lives. What 18 year old really understands what it means to take out $100k in loans for a liberal arts degree? We should be teaching classes in high school that show students how to do the kind of cost/benefit analysis that we're discussing here.
All borrowers of federal student loans are required to complete a 20-30 minute "entrance counseling" online that includes a detailed analysis of repayment costs. Perhaps the bigger problem is that many parents complete this for their students, instead of making them do it themselves.
KlangFool
Posts: 17844
Joined: Sat Oct 11, 2008 12:35 pm

Re: Cost of College vs Starting Income

Post by KlangFool »

alfaspider wrote: Wed Mar 21, 2018 7:51 am
KlangFool wrote: Tue Mar 20, 2018 1:53 pm
Pajamas,

It is not. Even in the most selective university, the graduation rate is not 100%. This is a personal finance forum. When we think about financing our kids for college, we take on the risk that our kid may not graduate with a degree or they may take longer than 4 years.

KlangFool
It's true that there is always a risk of non-graduation, but isn't personal finance partially about putting the odds in your favor to the extent possible? If I had to choice of sending my kid to a institution where 90% graduate, or one where 50% graduate, I'd be willing to spend more for the institution where there is a higher rate. In my experience, schools with high graduation rates tend to identify and go out of their way to help students that are struggling. Most of the schools with average rates expect the students to help themselves.
alfaspider,

<<If I had to choice of sending my kid to a institution where 90% graduate, or one where 50% graduate, I'd be willing to spend more for the institution where there is a higher rate. >>

1) Are you willing to do this for a few of your nephews and nieces? Aka, not your kids?

2) Can you afford to do this?

3) More in this context is 2X. Aka, 100% more.

4) This what I am talking about in my context.

KlangFool
oldfatguy
Posts: 649
Joined: Tue Feb 27, 2018 1:38 pm

Re: Cost of College vs Starting Income

Post by oldfatguy »

alfaspider wrote: Wed Mar 21, 2018 7:51 am ... If I had to choice of sending my kid to a institution where 90% graduate, or one where 50% graduate, I'd be willing to spend more for the institution where there is a higher rate. In my experience, schools with high graduation rates tend to identify and go out of their way to help students that are struggling. Most of the schools with average rates expect the students to help themselves.
There is probably some truth to that, but I think a bigger factor in differing graduation rates is the type of students enrolled at each institution. If a school has a higher graduation rate, it is likely because they enroll better quality (academically) students. Those students would graduate no matter where they went.
KlangFool
Posts: 17844
Joined: Sat Oct 11, 2008 12:35 pm

Re: Cost of College vs Starting Income

Post by KlangFool »

oldfatguy wrote: Wed Mar 21, 2018 8:26 am
alfaspider wrote: Wed Mar 21, 2018 7:51 am ... If I had to choice of sending my kid to a institution where 90% graduate, or one where 50% graduate, I'd be willing to spend more for the institution where there is a higher rate. In my experience, schools with high graduation rates tend to identify and go out of their way to help students that are struggling. Most of the schools with average rates expect the students to help themselves.
There is probably some truth to that, but I think a bigger factor in differing graduation rates is the type of students enrolled at each institution. If a school has a higher graduation rate, it is likely because they enroll better quality (academically) students. Those students would graduate no matter where they went.
oldfatguy,

When the price difference is 2X, it is the difference between

A) Send the student to one school and hope that it works out in 4 years. It is the only shot.

B) Send the student to school A. And, if it did not work out, transfer to school B. The student can take 8 years to graduate.

KlangFool
oldfatguy
Posts: 649
Joined: Tue Feb 27, 2018 1:38 pm

Re: Cost of College vs Starting Income

Post by oldfatguy »

KlangFool wrote: Wed Mar 21, 2018 8:36 am
oldfatguy wrote: Wed Mar 21, 2018 8:26 am
alfaspider wrote: Wed Mar 21, 2018 7:51 am ... If I had to choice of sending my kid to a institution where 90% graduate, or one where 50% graduate, I'd be willing to spend more for the institution where there is a higher rate. In my experience, schools with high graduation rates tend to identify and go out of their way to help students that are struggling. Most of the schools with average rates expect the students to help themselves.
There is probably some truth to that, but I think a bigger factor in differing graduation rates is the type of students enrolled at each institution. If a school has a higher graduation rate, it is likely because they enroll better quality (academically) students. Those students would graduate no matter where they went.
oldfatguy,

When the price difference is 2X, it is the difference between

A) Send the student to one school and hope that it works out in 4 years. It is the only shot.

B) Send the student to school A. And, if it did not work out, transfer to school B. The student can take 8 years to graduate.

KlangFool
Personally, I would not consider graduation rate much at all as a factor in selecting a college.
KlangFool
Posts: 17844
Joined: Sat Oct 11, 2008 12:35 pm

Re: Cost of College vs Starting Income

Post by KlangFool »

oldfatguy wrote: Wed Mar 21, 2018 8:50 am
KlangFool wrote: Wed Mar 21, 2018 8:36 am
oldfatguy wrote: Wed Mar 21, 2018 8:26 am
alfaspider wrote: Wed Mar 21, 2018 7:51 am ... If I had to choice of sending my kid to a institution where 90% graduate, or one where 50% graduate, I'd be willing to spend more for the institution where there is a higher rate. In my experience, schools with high graduation rates tend to identify and go out of their way to help students that are struggling. Most of the schools with average rates expect the students to help themselves.
There is probably some truth to that, but I think a bigger factor in differing graduation rates is the type of students enrolled at each institution. If a school has a higher graduation rate, it is likely because they enroll better quality (academically) students. Those students would graduate no matter where they went.
oldfatguy,

When the price difference is 2X, it is the difference between

A) Send the student to one school and hope that it works out in 4 years. It is the only shot.

B) Send the student to school A. And, if it did not work out, transfer to school B. The student can take 8 years to graduate.

KlangFool
Personally, I would not consider graduation rate much at all as a factor in selecting a college.
oldfatguy,

I agreed.

KlangFool
User avatar
SmileyFace
Posts: 5747
Joined: Wed Feb 19, 2014 10:11 am

Re: Cost of College vs Starting Income

Post by SmileyFace »

Back to the original statement:

For DECADES everyone has been stating that college cost increases are outpacing inflation so why is there a surprise that in 50 years the cost of an education has increased as compared to a starting salary? Seems like an obvious result of all the data we have been reading about in the last 20 years. I could also make similar statements about the percentage of salary that goes towards medical costs.

dm200 - am I missing the point of your comment?
User avatar
TomatoTomahto
Posts: 11144
Joined: Mon Apr 11, 2011 1:48 pm

Re: Cost of College vs Starting Income

Post by TomatoTomahto »

Pajamas wrote: 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.
Heck, if you're very lucky, it's even possible to get a four year degree for the cost of a new graduate's salary at some private and expensive universities. I'm not saying that it's typical, just that it's possible.
Okay, I get it; I won't be political or controversial. The Earth is flat.
stoptothink
Posts: 8373
Joined: Fri Dec 31, 2010 9:53 am

Re: Cost of College vs Starting Income

Post by stoptothink »

billy269 wrote: Tue Mar 20, 2018 8:51 pm There are deals out there to be found. I'm doing my masters in education online through a well known public university for a tuition cost of $8200. After the tax credit and my employer incentive my total cost will be around $3200. Obviously worth the cost for the jobs it will allow me to apply to.
Full time annual tuition for the private university my sister will be graduating from in a few weeks is ~$5600/yr. The public just up the road is a few dollars cheaper. FWIW, my sister already makes 5x what she pays in tuition...working part-time as a server at a local Brazillian churrascaria. These are not "elites", but they certainly have some good programs and have major cache in this area. My best friend went to said private university and then onto Wharton (after a few years in the workforce) and in the last 2yrs I have lost employees to Stanford, Baylor, UT-Southwestern, and UT-San Antonio medical schools. All but the one going to Stanford received significant scholarships, and all 4 attended undergrad at one of those two local universities. Yes, my area has the cheapest university options in the country, but you can also go 30 miles north and spend 5x as much at the private university which is less academically prestigious (and I know dozens who have done just that).

When it comes to education a lot of people don't even bother to consider the cost and I have noticed that, despite the frugal nature of most bogleheads, this seems to be one thing where cost often isn't a consideration. My belief, based upon my own experience and of that of those around me, is that university education is what you make it; that you can have great outcomes regardless of how prestigious (and expensive) the school you attend is. But, your opinion and experience may vary.
User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Cost of College vs Starting Income

Post by Pajamas »

riverguy wrote: Tue Mar 20, 2018 10:16 pm Most of the stuff that has skyrocketed has govt fingers in it. Take the student loan guarantees away and make them dischargeable in BK and the bubble pops overnight. Colleges get back to actually having teach stuff that matters. All the worthless degrees disappear. Fat paychecks for administrators disappear. No one loans to kids unless they think they have a decent chance of paying the loan back. Prices for college would have to plummet and become afffordable paying cash.
I guess what color things appear to be depends on what tint your lenses are.

Looks to me like the stuff that has skyrocketed in price relies on skilled labor and is produced domestically. Textbooks is a special case because the industry has basically become an extortion racket with gimmicks like access codes forcing students to buy them new. On the other hand, free textbooks are readily available.

The goods and services that have gotten cheaper either have a low marginal cost (software, cellphone service) or are now manufactured overseas and imported.

The flat items are somewhere in between. A lot more of our food is now imported and cheap labor is also imported for domestic food production (migrant workers) but much of the cost for food is in processing and distribution. Housing has come to rely more on imported materials and cheap imported labor but still is almost always assembled locally.
User avatar
Crustus
Posts: 45
Joined: Thu Mar 29, 2007 8:02 pm
Location: New Jersey

Re: Cost of College vs Starting Income

Post by Crustus »

And . . .
KlangFool
Posts: 17844
Joined: Sat Oct 11, 2008 12:35 pm

Re: Cost of College vs Starting Income

Post by KlangFool »

ks289 wrote: Wed Mar 21, 2018 7:19 am
KF,
It is unfortunate when students are not able to succeed in completing their undergraduate program from multiple standpoints (not just financial and emotional). While the adult student is ultimately responsible for completing their degree, many college age individuals are not yet at their full capacity for organization and motivation and may be greatly influenced by their peers and the setting/culture of the school.

Most of must set a budget for our financial support. However, to disregard the potential benefits of selective, smaller, specialized, liberal arts oriented, or other schools which may be more accommodating or geared towards an individual's needs (but more expensive) may contribute to failure and ultimately be less cost effective in the long run. Graduation rates are not purely determined by the maturity/motivation of the student.

Even at the level of elementary/middle school, I prefer to send my children to private school because they were not being challenged or surrounded by motivated students in their highly rated public school.
ks289,

To each its own.

1) There are many self-made millionaires in my family. They ranged from people that never attended high school to those graduated with a graduate degree from the elite university. So, we believe that formal education is useful but it is not the only path to achieve success in our lives.

2) I am from a multigeneration business family. We judge whether someone is successful by their degree of financial independence.

KlangFool
User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Cost of College vs Starting Income

Post by Pajamas »

KlangFool wrote: Wed Mar 21, 2018 11:49 am 1) There are many self-made millionaires in my family. They ranged from people that never attended high school to those graduated with a graduate degree from the elite university. So, we believe that formal education is useful but it is not the only path to achieve success in our lives.

2) I am from a multigeneration business family. We judge whether someone is successful by their degree of financial independence.

KlangFool

I thought your family didn't believe in elite universities?

I thought half of the people in your family who go to college don't graduate?

What business are you in, KlangFool, and what path did you take to financial independence?
ThriftyPhD
Posts: 870
Joined: Mon Jul 31, 2017 10:43 am

Re: Cost of College vs Starting Income

Post by ThriftyPhD »

You need to be careful in interpreting average starting salary of graduates as well as graduation rates. Fancy small historic private university is drawing from a different pool of students than the public commuter college.

Graduation rates at pricier universities can be higher for a few reasons:
  • Affluent parents may be more involved, actively motivating the child to succeed.
  • Children of affluent parents may be more prepared for college, having attended high schools with more extensive college preparatory coursework and AP classes.
  • Children of affluent parents are better funded, and can have more time to focus on studies.
  • These schools draw from children of alumni, and can have a higher rate of students who have parents who graduated from college. These students would have a better sense of how to prepare for college.
  • These schools can be much more selective, accepting only those that are most likely to succeed.
  • These schools tend to draw less from the nontraditional students, who may be working and attending school part time, both taking longer to graduate and having a higher chance of a life event leading to transfer or withdrawal from school.
  • More cynically, schools that tout their high 4 year graduation rate are also motivated to game the system, ranging from extensive administrator involvement, to extreme grade inflation, to 'unique' ways of calculating graduation rates.
  • Less cynically, but no more helpful, is that the high costs FORCE people to focus on graduating on time, while those at lower cost public schools may choose to switch majors and pay that extra year in costs.
The higher starting salary for graduates can be skewed by the fact that a larger portion of affluent students at super selective universities are not entering the traditional job market. Wilber von Affluent IV is getting his Prestige University degree and then joining the board at Wilber von Affluent III's company. His $10 million salary will greatly skew the average, especially given the smaller number of students per graduating class. Affluent parents may also be better equipped to network on behalf of their child, teach their child to network, or to fund networking opportunities during the college years so that their child starts off with a better job. The student who can take the unpaid internship at Google every summer is more likely to get hired there after graduation than the student flipping burgers each summer.
ks289
Posts: 655
Joined: Sun Mar 11, 2012 12:42 pm

Re: Cost of College vs Starting Income

Post by ks289 »

KlangFool wrote: Wed Mar 21, 2018 11:49 am
ks289 wrote: Wed Mar 21, 2018 7:19 am
KF,
It is unfortunate when students are not able to succeed in completing their undergraduate program from multiple standpoints (not just financial and emotional). While the adult student is ultimately responsible for completing their degree, many college age individuals are not yet at their full capacity for organization and motivation and may be greatly influenced by their peers and the setting/culture of the school.

Most of must set a budget for our financial support. However, to disregard the potential benefits of selective, smaller, specialized, liberal arts oriented, or other schools which may be more accommodating or geared towards an individual's needs (but more expensive) may contribute to failure and ultimately be less cost effective in the long run. Graduation rates are not purely determined by the maturity/motivation of the student.

Even at the level of elementary/middle school, I prefer to send my children to private school because they were not being challenged or surrounded by motivated students in their highly rated public school.
ks289,

To each its own.

1) There are many self-made millionaires in my family. They ranged from people that never attended high school to those graduated with a graduate degree from the elite university. So, we believe that formal education is useful but it is not the only path to achieve success in our lives.

2) I am from a multigeneration business family. We judge whether someone is successful by their degree of financial independence.

KlangFool
I appreciate that there are numerous paths to life and financial success and that educational achievement is just one.

The focus on completing an undergraduate degree is pertinent to the discussion of college costs, because obviously the main purpose of going to college is to get a degree. If your approach to funding and choosing a college for your family members contributes to a low rate of graduation, it may be prudent to have more flexibility to help more of them graduate. If your point is that the 50% that didn't graduate were somehow helped by their having attended college without graduating, then your experience may not be applicable to others and begs the question of why they bothered attending college at all.
User avatar
nativenewenglander
Posts: 179
Joined: Sun Jul 30, 2017 6:05 am

Re: Cost of College vs Starting Income

Post by nativenewenglander »

My wife just graduated from a community college with an associates degree, as a PTA, total cost with books was $20K. All her now licensed classmates are employed making $35-42K, she's working part time by choice at $22 per hour. I thought that was a pretty good ROI compared to most degrees.
Shikoku
Posts: 406
Joined: Fri Oct 27, 2017 11:01 pm
Location: USA

Re: Cost of College vs Starting Income

Post by Shikoku »

KlangFool wrote: Wed Mar 21, 2018 11:49 am
ks289 wrote: Wed Mar 21, 2018 7:19 am
KF,
It is unfortunate when students are not able to succeed in completing their undergraduate program from multiple standpoints (not just financial and emotional). While the adult student is ultimately responsible for completing their degree, many college age individuals are not yet at their full capacity for organization and motivation and may be greatly influenced by their peers and the setting/culture of the school.

Most of must set a budget for our financial support. However, to disregard the potential benefits of selective, smaller, specialized, liberal arts oriented, or other schools which may be more accommodating or geared towards an individual's needs (but more expensive) may contribute to failure and ultimately be less cost effective in the long run. Graduation rates are not purely determined by the maturity/motivation of the student.

Even at the level of elementary/middle school, I prefer to send my children to private school because they were not being challenged or surrounded by motivated students in their highly rated public school.
ks289,

To each its own.

1) There are many self-made millionaires in my family. They ranged from people that never attended high school to those graduated with a graduate degree from the elite university. So, we believe that formal education is useful but it is not the only path to achieve success in our lives.

2) I am from a multigeneration business family. We judge whether someone is successful by their degree of financial independence.

KlangFool
1) I prefer best possible education for our children to get started. To us, better the education, higher the chance of success. And that is why my parents spent for the best possible undergraduate education for me.

2) My family uses health and happiness as the first measure of success. Financial independence has a lower priority when measuring success.

We consider money as important but it is not the most important thing in life that we have to measure success by money. I found the following article interesting.

Billionaire Richard Branson's definition of success has nothing to do with money
https://www.cnbc.com/2016/08/04/billion ... money.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
User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Cost of College vs Starting Income

Post by Pajamas »

KlangFool wrote: Wed Mar 21, 2018 1:03 pm Half of my nephews and nieces that we sponsored.
Have you thought about restricting your sponsorship to a community college course of study that leads to an associate's degree and a great likelihood of employment, such as in therapy assistant or dental hygienist, radiology or lab tech, paralegal, information technology, etc.? Then if they successfully complete that, they can go on to earn a bachelor's degree at a state college or work or both, with or without further family assistance. Seems like they might have a better success rate with a tiered process. Many community colleges also have a lot of supportive programs, and programs targeted to international students.
KlangFool
Posts: 17844
Joined: Sat Oct 11, 2008 12:35 pm

Re: Cost of College vs Starting Income

Post by KlangFool »

Shikoku wrote: Wed Mar 21, 2018 1:05 pm
2) My family uses health and happiness as the first measure of success. Financial independence has a lower priority when measuring success.

We consider money as important but it is not the most important thing in life that we have to measure success by money.
Shikoku,

Did you face starvation regularly in your childhood? That is the kind of background that my family came from.

<<2) My family uses health and happiness as the first measure of success.>>

Those things only come into play when you are not homeless and starving.

<<We consider money as important but it is not the most important thing in life>>

If you do not have money to survive, you cannot live. You have no life.

KlangFool
User avatar
SmileyFace
Posts: 5747
Joined: Wed Feb 19, 2014 10:11 am

Re: Cost of College vs Starting Income

Post by SmileyFace »

Shikoku wrote: Wed Mar 21, 2018 1:05 pm
1) I prefer best possible education for our children to get started. To us, better the education, higher the chance of success. And that is why my parents spent for the best possible undergraduate education for me.
This is very much career dependent. Did you get a Liberal Arts School degree? That's what the OP originally brought up.
anoop
Posts: 1794
Joined: Tue Mar 04, 2014 1:33 am

Re: Cost of College vs Starting Income

Post by anoop »

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.
While that is one way to look at it, I view at as everything that is a necessity is skyrocketing.

My question would be -- what is the cause for these skyrocketing costs?

(I have an opinion, but it will get political very quickly and so I'll refrain from sharing it.)
Shikoku
Posts: 406
Joined: Fri Oct 27, 2017 11:01 pm
Location: USA

Re: Cost of College vs Starting Income

Post by Shikoku »

DaftInvestor wrote: Wed Mar 21, 2018 1:21 pm
Shikoku wrote: Wed Mar 21, 2018 1:05 pm
1) I prefer best possible education for our children to get started. To us, better the education, higher the chance of success. And that is why my parents spent for the best possible undergraduate education for me.
This is very much career dependent. Did you get a Liberal Arts School degree? That's what the OP originally brought up.
I have degrees in STEM field but our thought process that best possible education is the key for success for our children is true irrespective of the major they select.
"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
User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Cost of College vs Starting Income

Post by Pajamas »

steadyeddy wrote: Tue Mar 20, 2018 4:07 pm
So, basically all the major costs associated with having children have skyrocketed.
All of those costs (except possibly new cars) are associated with having children.
Shikoku
Posts: 406
Joined: Fri Oct 27, 2017 11:01 pm
Location: USA

Re: Cost of College vs Starting Income

Post by Shikoku »

KlangFool wrote: Wed Mar 21, 2018 1:16 pm
Shikoku wrote: Wed Mar 21, 2018 1:05 pm
2) My family uses health and happiness as the first measure of success. Financial independence has a lower priority when measuring success.

We consider money as important but it is not the most important thing in life that we have to measure success by money.
Shikoku,

Did you face starvation regularly in your childhood? That is the kind of background that my family came from.

<<2) My family uses health and happiness as the first measure of success.>>

Those things only come into play when you are not homeless and starving.

<<We consider money as important but it is not the most important thing in life>>

If you do not have money to survive, you cannot live. You have no life.

KlangFool
True and agree.

But if I can afford and have significant human capital, I consider it my responsibility to provide the best possible undergraduate education for my kids, even that requires risking a financially satisfying retirement.
"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
KlangFool
Posts: 17844
Joined: Sat Oct 11, 2008 12:35 pm

Re: Cost of College vs Starting Income

Post by KlangFool »

Shikoku wrote: Wed Mar 21, 2018 1:59 pm
True and agree.

But if I can afford and have significant human capital, I consider it my responsibility to provide the best possible undergraduate education for my kids, even that requires risking a financially satisfying retirement.
Shikoku,

We have a philosophical difference in term of what we believe in the best way to help our children.

You believe in

A) Paying for the best undergraduate education possible.

I believe in

A) Paying for a "Good Enough" undergraduate education.

B) Keeping some financial resources in reserve in case that (A) does not work out. If (A) works out, use that money to fund the children's Roth IRA, graduate degree, and/or house down payment.

To each its own.

KlangFool
User avatar
LadyGeek
Site Admin
Posts: 66510
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Cost of College vs Starting Income

Post by LadyGeek »

This thread has run its course and is locked (topic exhausted, contentious). See: Locked Topics
Moderators or site admins may lock a topic (set it so no more replies may be added) when a violation of posting policy has occurred. Occasionally, even if there are no overt violations of posting policy, a topic (or thread) will reach a point where the information content of the discussion has been essentially exhausted and further replies are much more likely to cause distress to the community than add anything of value.
Update: A number of posts containing a contentious interchange have been removed.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
Locked