Comment by rebootthesystem | Hacker News Reader

Comment by rebootthesystem | Hacker News Reader

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rebootthesystem

> reconsider mortgaging the house (figuratively) to

No, this is real.

One of my kid's friends is going for Mechanical Engineering at a school that will cost her $60K per year. And she is committed to go past and Bachelor's and obtain a Masters.

I have begged and pleaded with her to reconsider. I have done all the research for her showing salary potential, payments and a comparison showing what would happen if the delta in payments were to be invested in a Roth IRA for, say 30 years. She won't budge.

This girl is going to graduate with an M.E. degree and $300K in debt. This is insane beyond belief. That degree is not worth that kind of money, not by a long shot. Average salaries are in the $60K to $80K range depending on location and industry. Getting significantly north of $100K is very difficult and getting to $200K seems down-right impossible. And so this girl is going to have MD level debt with an earning potential nowhere near that of an MD.

In other words, she is signing up for financial slavery.

And worst than that, she is making a bad decision today that will cause severe damage to her future family. She will realize this when she marries and has kids. And, if her husband comes in with another $200K in debt. Well, that's a formula for a really shitty life for 30+ years. Great education, shit life.

I have to admit I don't understand how these decisions are made.

BTW, I forget the exact number but investing $500 a month on a Roth IRA from, say, 20 to 50 years of age has you waking up one day with something like $1.6 million in the bank. Keep at it until age 65 and it is somewhere around $3 million. Which means that paying an extra $500 a month for a high dollar student loan has a huge opportunity cost. A $300K loan probably means payments that are $1000 a month above those for a loan to go to a mid-tier university.

And so she said: "My parents are going to take out a second mortgage and pay $200K out of the $300K. It'll be OK."

To which I replied: You are smart, you took a lot of advanced math in High School. Go figure out how much you would have in 30 years if your parents gave you $200K and paid for you to go to an investment adviser to invest that money wisely. Then do the research and find out how much more you might earn if you pay $300K for your degree rather than $100K.

The reality is pretty simple, though: a lot of people making decisions like this will look at their career options when they graduate and have to face the real world, struggle for a while, then realize that they're more than qualified to make twice the money as a junior programmer and make the switch then, recouping their costs easily unless they're really stubborn.

Half the people that I went to school with in physics, math, econ, bio, did exactly that. They're doing just fine now because TBH, those fields are vastly more intellectually challenging to learn at a research level than being a well qualified working programmer is (doing proper CS at a grad level is a different story, on par with those other fields, but you don't need to be a research-class CS PhD to be an above average programmer), and most of them already had to learn to program to get through their courses anyways, so it's an easy transition.

It's the people in completely non-technical majors that have the most trouble, because they don't know math, they don't understand proofs or algorithms, or even basic problem solving, let alone how to design systems, and worse, they've never really had to learn to effectively use software except in extremely limited ways.

What other options are you presenting though? I keep seeing really expensive school vs. no school when in fact there is a wide sliding scale. If someone can get into a top tier school, then by all means try to make it work. But most people will not go to a top tier school, so they should be going to local colleges. Too many kids only see college as a 4 year party away from their parents, and to my dismay many parents encourage this thought.

I went to a local college while living at home with my parents. That saved tons of money. I also worked 20-30 hours/week while in college and paid for most of while I was going. I get that not everyone lives close to a decent college, but many do and still go away.

Read reboot's last sentence again:

Then do the research and find out how much more you might earn if you pay $300K for your degree rather than $100K.

So the suggested alternative to a 300K college is a 100K college.

Exactly. There are many mid-range colleges where a great education can be had for a lot less than $300K.

Here's a good article:

https://www.wsj.com/articles/do-elite-colleges-lead-to-highe...

Quote:

"What we found startled us. For STEM-related majors, average earnings don’t vary much among the college categories. For example, we find no statistically significant differences in average earnings for science majors between selective schools and either mid-tier or less-selective schools. Likewise, there’s no significant earnings difference between engineering graduates from selective and less-selective colleges, and only a marginally significant difference between selective and mid-tier colleges."

Another reality check quote from the same article:

"Our findings are crucial for families to understand because chasing a prestigious STEM degree can leave students burdened with huge amounts of unnecessary debt. Financial aid can certainly help, but for many families, the cost of education can still differ dramatically across schools. For example, if an engineering student chose to attend the University of Pennsylvania instead of Texas A&M, the average starting salary would differ by less than $1,000, but the tuition difference would be over $167,000. At that slightly higher salary, you’d have to work for more than 150 years before you make up for that vast tuition difference."

This is startling and should be considered by every single student and family engaged in choosing a school.

We're on the same page then :)

Something else not mentioned is that the education can be better better than the not top-tier schools because they are typically focused on teaching instead of research. In another thread I talked about my smallish college where the dept. chair on down rotated through teaching the into CS classes in addition to their higher level duties.

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