Is college worth it? A return-on-investment analysis

There are other funding mechanisms possible, but after decades of free flowing money from government backed loans to students, university budgets are extremely inflated and should be substantially cut back if we expect someone else (I.e. taxes) to be paying the tuition.

Subsidized college is politically convenient because you can sell it to corporate interests as reducing the cost of skilled labor, to labor as a way to move up social strata, and to lower-level elites as a way to facilitate booting incompetent or uncouth people out of their stratum (you can sum up the latter two clauses as "meritocracy").

If people weren't forced to accept subsidized college as a substitute for wealth redistribution (IMO this is largely the case) you might not see so much obsession with ROI.

Before college can be creating well-rounded citizenry or provide "excellent life experiences" or any of the other things people want of it, it must first provide a good ROI. This is a necessary foundation. If it is not doing that, then all the other fancy things are merely digging the debt trap in deeper because you're paying for all these things while failing to obtain a method of paying them back.

As a culture, in decades past we were used to college generally being so cheap that providing a good ROI wasn't that big a deal. It's much easier to get a good ROI out of something cheap. So we focused on the higher layers and were able to neglect the fact that the higher layers were always built on a foundation of the fact that college in general was a good ROI. Consequently we have come to misinterpret those higher level things as the purpose of college.

But it is necessary that these aspirational benefits be setting on a good foundation of good ROI to not be abusive to the customer.

It is not and must not be considered some sort of betrayal to be worried about ROI for college. It must simply be seen as an understanding of the fact that as the costs have changed, the way we must analyze college has also changed. It was always true, it's just now it has manifested in a larger way.

Every choice a person makes has an implicit ROI calculation. It is good to make them explicit to make them accurate, to prevent from being disappointed due to erroneous calculations.

> I could fill Volumes with Descriptions of Temples and Palaces, Paintings, Sculptures, Tapestry, Porcelaine, &c. &c. &c. -- if I could have time. But I could not do this without neglecting my duty. The Science of Government it is my Duty to study, more than all other Sciences: the Art of Legislation and Administration and Negotiation, ought to take Place, indeed to exclude in a manner all other Arts. I must study Politicks and War that my sons may have liberty to study Mathematicks and Philosophy. My sons ought to study Mathematicks and Philosophy, Geography, natural History, Naval Architecture, navigation, Commerce and Agriculture, in order to give their Children a right to study Painting, Poetry, Musick, Architecture, Statuary, Tapestry and Porcelaine.

We've just gotten a bit stuck at the middle step.

[1] https://www.masshist.org/digitaladams/archive/doc?id=L178005...

11 years of schooling before college, extracurriculars, friends and family weren’t enough for that? Huh, maybe something wrong is not only with colleges but with child upbringing as a whole if that’s true for many people.

I know so many people who graduated programs like psych and they are barely making above minimum wage and didn't really get to utilize their degree. And not only that, but they often have a lot of debt.

On the other hand, trades are in very high demand. Most trade programs here are just 1-2 years long and you'll exit them with a job secured almost right away and already be making fairly decent money. You'll be making more money than almost anyone with a Uni degree in a non-STEM field. But despite this, it was barely even presented as an option in high-school. We had Universities come and give talks about what it's like, and what kinds of programs they offered. Did we get the same about other education options? Nope.

For some reason there is this view in society that you have to have a degree otherwise you won't be successful and that you're not smart. In fact media/entertainment often also pushes this same narrative which doesn't help things either.

So many of those psych grads I talked about ended up going back to college (In Canada college is like a trades school or community college in America) to take additional programs on HR or admin related topics. They find their degree didn't get them anywhere and they end up having to go to another kind of education to make themselves hirable.

I was undecided whether to major in either electrical engineering or journalism. I had a passion for both, I was a amateur radio operator who built his own gear and was also editor of my high school newspaper.

When a counselor at my university told me that I was four times more likely to get a job as a J grad in when I graduated vs an ee grad it made my decision for me. I mean after all he was the expert. Four years later however the exact reverse was true ;<).

Imagine knowing that one of the houses you are looking to buy will leave you worse off than the others. Would you find that information useful?

Think of this as the same thing - some choices will leave you permanently worse off. I'd rather know that ahead of time so that I can either avoid them, or at a minimum, understand what I'm getting in to.

Large debt is a unique burden. One should not start their financial life with it. Much like skiing, running or doing calculus, one should do baby steps first before proceeding to make huge investments and committing oneself to a decade or more of indebtedness.

Many ancient societies held a strong taboo against massive debts - for a reason. For people outside prison, it is the closest you can get to enslavement in a completely legal way.

When going to college means taking on tens of thousands of dollars in debt, it makes sense to start looking at ROI, especially when there's a certain group of people that will tell you "If you want to make a living wage, then you need to go to college and make something of yourself!", then will ostracize them for making bad financial decisions when they take on massive student loan debt to pay for the college.

EDIT: To add a point of anecdata, when I finished my BS in CS in 2014, I came out with ~$45,000 in student loan debt. And this is on the LOWER end of debt, and I was only able to have it so low because I had already been living in the city my university was in. I still worked ~30 hours/week while going to school full time. If I had to stay in dorms or something, I probably would have had $100K+ in debt. It's absolutely ridiculous.

This comment is coming from the position of privilege. And I cannot possibly agree to it.

Gone are the good old days of cheap/free college in the US. As parents, it is our responsibility to help our kids to avoid these "new" financial traps.

These kids will be robbed from their own future if we let them be enslaved to large debts. Not to mention a lot of other complex issues such as jobs disappearing due to automation, greater wealth gap even between the middle class, etc.

The kids are too young to understand these traps. We should help them.

You should consider helping your kid to learn a foreign language of a developed country, such as France, Germany. The investment into private tutor, who will prepare him for TEFAQ or DAF test will pay off in the long run. Once he knows French or German he can apply to really good universities in France, Germany or Quebec(Canada). The education in Europe is really cheap. Its about 1500 euro per year, and his monthly expenses are within 1000 euro. So you end up paying about 15K euro per year. The price range for Quebec province universities is about 7000 CAD per year and about 1000 CAD for monthly expenses.

Overall, the investment in a foreign language will completely pay off. In the worst scenario your son will have a backup plan to move to Europe/Canada and live a normal life.

US is not the only place in this world to get a good education.

The social skills, networks, and alumni connections you build at college are a large fraction of the benefit that college gives the average person to further their career.

Otherwise, I agree. College is a great time to take advantage of the time you have to change your network, generate new ideas and take risks. And I also agree that most there can be benefit (though highly unlikely) for some people to not attend college or to drop out.

A lot of that depends on the college you go to. Doesn't matter how much a "go getter" you are if you don't make connections with someone that can ultimately fund/execute your ideas. Even if they themselves are "go getters".

Further, hard to really judge if you are a "go getter" or a "So, it's like facebook, but for cats!" person.

And here's the real rub, likely the person seeking the party experience with rich parents IS the person that can fund/execute ideas. They don't need to be go getters, they just have to have deep pockets.

Of course, this is all talking about someone going to college primarily for entrepreneurial ideas.

This is the real and true value of ivy league/prestigious schools. It isn't the quality of the knowledge, it's the old deep pockets that also go there.

But by the time most people get to college, they're still immature and not very well informed.

I could not disagree more. What this person gets out of college is nothing more than checking the "has 4yr degree" checkbox you need these days. College will do nothing for them other than check that box. Their own accomplishments will be what carries them through life.

Absolutely true. Do you have any statistics on their rate of doing that?

Survivor bias: If the only thing you look at is success, success looks pretty easy.

Lessons about automata and computability aren't exactly 'outdated' but their application to typical software work seems very indirect/abstract. In any case, that was my experience from a CS degree ~20 years ago, probably similar now if the curriculum is similar.

Dijkstra: "Computer Science is no more about computers than astronomy is about telescopes."

Without a degree, employers had to make a snapshot judgement call on whether or not I was good enough. They didn't see me. They saw my disability. After I got a degree, it was like some sort of checkbox had magically been checked, and the man who had fixed modem drivers in his teens was suddenly good enough to hire. I will also say that there are companies to this day that will not hire someone without a college degree, and I think it's stupid.

Being a student definitely helped me get my break though, mainly due to the tax status. I had been programming for a decade when I got my first job, but everyone's shit and a drain on resources for a couple months regardless. Accepting peanut pay (relatively) + tax benefits made getting that first job easy.

The amount I learned in my first couple of months does not compare in any way to university. You cannot just go and get personal tutoring with a professor when you are having problems designing something. Meanwhile, it's the job of the senior engineers to be your babysitter at the start (bless the patience of the ones who taught me). And the few times you do get an audience, it's very short (as they have to see 50 other students), and much too vague. There's too little "you idiot, you do that and in 6 months you'll be sorry the DB is deadlocking". More "hm, do you not think you could turn this O(n*log(n) into O(log(n))", which, at the end of the day, I could probably care less for but not by much.

As a biology major who later had to turn to tech (sadly quite common as it turns out), I can sincerely empathize with this. Unfortunately, in the health sciences you cannot do this, even taking a low level lab position requires some level of college/university credit because of the samples you are dealing with (blood, tissue) and the requirements imposed by Law to ensure they gate-keep even though errors occur regardless of degree level in labs, which is why you take such large samples to begin with.

In my foray with tech I've made a career in fintech (co-founder then went to a Megacorp), after spending time in Supply Chain roles the auto Industry. In both of those fields you are encouraged to not follow the predecessor if you want to be successful and move up; it rewards you if can pull it off and bring something novel and add value to the Team/Operation. And that, more than anything I learned in University, stuck with me for reasons that I think you could understand.

After COVID derailed my Life, as it did others, I asked myself what I wanted to do and I decided to enroll into a BSc program in AI and Machine Learning, with the aspiration of doing what you just mentioned--getting a role before graduating by leveraging my existing skills and the new skills I'd learn with the brand of a University to back it up.

My entrepreneurial habits kicked in during the on-boarding process and I saw a need to create a payment processing system to pay for tuition as so many students (mainly international) at the University in question were forced to pay via a system which resulted in delays, missing deadlines and large fees to process if it were possible. Some students even had to resort to using Western Union to make the deadline!

This was at the time that Twitter had launched its Bitcoin tipping feature via iOS on it's platform, so a proof of concept/MVP could have been spun in short order.

Eventually the faculty sent out a memo condemning using any alternatives (they became aware of the conversations happeing in Slack chat) saying it would result in further delays (or inability to register at all) if they did, thus making it entirely moot to try and flesh anything out. It wouldn't be anything but a MVP, as being a middleman/clearing house doesn't serve any of my long term goals.

But what it could have done is disrupt the model and force progress to be made where it would otherwise remain stagnant.

With all that said, now that you're established in the Industry and you likely have Senior Dev status, how would you go about this: how could one pitch this in order to take you on for X sum of money and not have it fall on deaf ears?

I mean, I'm guessing YOU would be open to this given what you've said but how would your project managers react to this? I've held developer and consultant status at the aforementioned Megacorp and I had way more friction for more insipid things.

That piece of paper can be worth a significant chunk of change, particularly since the gap on the resume caused by fewer companies hiring non-college grads can cause companies to low-ball their offers to you.

Maybe the job market is different now, but, even if it is, maybe it will be that way again in 5-10 years. Predictions are hard and all.

Also, CS degrees are varied. Very little of what I learned was outdated given that most of what I learned was discrete math. The more practically focused classes were OS and networking and I've used both of those on the job.

That hints of an underdiscussed pitfall when choosing colleges in "practical" fields like engineering and apparently nursing - the theory:practice orientation of their curriculum.

A theory oriented one tends to give you a backing which not eternal or life long, shift far slower. We may not use linked lists as much as hash maps but the same complexity analysis applies. If you are savvy enough you can pick up the specifics as needed backed by theory.

The disadvantage of a too heavily theory oriented one is bootstrapping to the workplace is more difficult and it may fail to establish proper habits like say how to properly write commits for version control.

A more practice oriented one which is proper for the current is more relevant and avoids the starting pitfalls but leaves the alumni less equiped with theory to deal with shifts. An outdated practical oriented curriculum is the worst of both worlds really.

The two types of schools blended along the way of course and in other contexts. Trade-college blending is a very slow process but happening some. Farming is the furthest alarm but arguably that was an "agronomy and automation coup" as the model changed and made farm work a niche job instead of the majority.

The current system is related to more eglatarian mutation from hard class gatekeeping. Frankly that a lot of positions are flat out about justifying your actions to others as the practical skill component of the "philosophy of life". It is about getting what they measure for.

Post-secondary credentialism is the new form of feudalism. This book is a little too woke for my tastes but there's a significant amount of scholarship on this concept of education's rise as the new "cool guy" power structure, replacing politics and the church.

https://books.google.ca/books/about/Beyond_Education.html?id...

Search for any entry level job in an office environment, how many list a college degree as a requirement? Anywhere north of 80% sends a message (Get a college degree or work for minimum wage).

They are mostly lemmings told to run off the cliff and they gladly fulfill their personal financial doom!!

Yeah, I was grossed out when I read this. Glad I wasn't alone.

After graduating I chose to audit 30 credits per semester for a year (for free, and while no longer being a student).

I've noticed that the majority of maintainers of a couple of high profile Linux distros are all European; the opportunity cost of doing so in the U.S. is just too high.

When you get a loan then financial concerns of is this a good investment should apply. If you don't have a loan - many people spend their money on all kinds off weird hobbies.

Money cannot buy everything, but it can solves a lot of problems.

> Almost all students cite getting a better job as a primary reason for attending college.

With a link to this study:

https://newsroom.ucla.edu/releases/heri-freshman-survey-2426...

Which says:

> Students are increasingly placing a premium on the job-related benefits of going to college. The portion of incoming freshmen that cited "to be able to get a better job" as a very important reason for attending college reached an all-time high of 87.9 percent in 2012, an increase from 85.9 percent in 2011 and considerably higher than the low of 67.8 percent in 1976.

> Four in five engineering programs have ROI above $500,000, but the same is true for just 1% of psychology programs.

At some point anyone is going to acknowledge that the price isn't worth it. The ROI matters to absolutely everyone, without exception.

The studying is not the problem anyone is talking about. People should study anything and everything they desire. The problem being addressed is spending a lot of money and taking out massive loans in order to study.

If you want to study Art, by all means definitely study Art. Just do not borrow $100,000 to do it.

jesus christ can we stop trying to redefine bourgeoisie and proletariat? what is with americans and hating karl marx and darwin

However, it accounts for things like dropout status, so I don’t think your hypothesis fits the data.

There's definitely a bit of insurance and fallback with having higher education that isn't measurable simply by some ROI analysis.

There are a lot of jobs you will never be able to apply to if things go south simply by not meeting the minimum requirements. I was considering a dirt-cheap online MBA once simply for this reason if my biz stuff died (did not pursue).

This is interesting and I know there was some studies performed, not on the program, but on the school. IIRC, the results were that it wasn't the school that contributed to success, but the person. Meaning, if you were accepted to a top-tier school but attended a lower-tier one, you had as much success as the people who attended the top-tier school. So, as you say, the schools were already selecting for those who were on a trajectory to succeed. There was a caveat that the school did provide more help if the person was from a low-socioeconomic background, and I've wondered if that is due to network effects.

The value is sort of in how the degrees are used as well. Increasingly, they're being seen as licenses of sort, even though that might not be the intent of the program or even reflect the actual experiences of the person in college. That is, the ROI is due as much to the marketplace as it is the degree itself. If HR departments decide that understanding of DL/AI requires a degree in comp sci, even if someone did an honors thesis on that as a psychology major, demonstrating a new proof-of-concept DL model, it doesn't matter what sort of talent is being recruited. Is it the degree holder, the degree, the program, or the employer?

I feel like college degrees have become this kind of signalling label, like much of the modern world, like clothing or something. That's not to discount the skills one obtains as part of a major, but it hurts the person who is going outside the box (in a good way). There's also something disingenuous then, about treating degrees as a resource to be obtained, when the value of that resource is entirely dependent on the way it is treated by others. That is, a hammer is more useful than a rotting stick, but if for whatever reasons there's rotting stick mania, the ROI will be greater for the latter. That doesn't mean the ROI analysis is wrong, but it might give a misleading impression about why.

I admit I didn't read this in enough detail, but I had other questions as well. For instance, in other similar analyses I've read in other outlets, they've explicitly ignored people who have graduate degrees, as it muddies interpretation. But isn't that important? What about the person who gets an undergrad degree in psychology, but then pursues symbolic logic programming and DL models in their master's program in comp sci? Or who goes on to medical school? Some of these degrees, like philosophy, are notorious for being pre-professional degrees, and comparing a BA-only philosophy grad to a BA-philosophy + JD is a little odd, both because it's unfair, but also because the person who gets a BA in philosophy and then stops is maybe different from the person who gets that degree as part of a longer-term plan that includes law school.

We've gone with a private school because we've got a couple elementary-aged kids who are far enough ahead that public schools were plainly holding them back and we were already starting to get early signs of "gifted kid who isn't challenged then crashes and burns later" syndrome, but if tutors are at least as effective, and cheaper, that'd be awesome.

Biology is also a very special case: all of the bio majors I've ever met were pre-med. (Except for that one guy who wanted to go into genetics research.)

1; California Institute of Technology; Computer and Information Sciences, General; $4,409,147

22; California Institute of Technology; Computer Science; $2,812,200

That said, Caltech is a surprising choice.

When I'm hiring for tech roles, I personally couldn't care a jot about whether or not the candidate has a degree. If someone already knows how to code, do DevOps or whatever, what would a degree really add, apart from making sure candidates had gone through the same debt-gathering process that I had?

For background, I do have a Computing degree, but have often wondered what the real point was, and what the real point behind companies gatekeeping based on degrees is.

Personally, I've definitely seen an ROI on my CS degree. Would my ROI be better if I had gone to a lower-cost and shorter-time coding bootcamp? Maybe. Would my job prospects have been just as good? I'm doubting it.

That said, I have not seen an actual articles studying the job rates and starting salaries of people with a CS degree versus a bootcamp. It's all been anecdotal from what I've seen on reddit, and certainly subject to confirmation bias.

Because the government provides no questions asked loans to anyone willing to attend these programs, and many people don't do their research or simply don't even consider the implications.

“ ROI must also consider counterfactual earnings, or what each student would have earned in a parallel universe where he or she did not attend college. Assessments of ROI often compare the earnings of college graduates to the earnings of the median high school graduate. However, this simple analysis is insufficient for an accurate estimate of ROI. People who choose to attend college are different from those who do not. The two groups have different earnings potential. The counterfactual earnings for a college graduate are likely to exceed the earnings of the median high school graduate.

The same principle applies to different majors. Does an engineering graduate have high earnings because of his degree, or because engineering tends to attract people with scientific minds who would earn high wages no matter what? If so, an engineering major might have different counterfactual earnings than an English major. What about students who attend public colleges versus private colleges? Private college students often come from wealthier families. Are high earnings for private-college graduates due to the school, or due to family background?”

Heck I dropped out after 3 years because I ran out of useful classes.

Later completed with the wife of a VP who had a masters at same university for a position. I got the job.

I would like a degree, but it’s just pointless for me at this point.

Any ROI from college is in the credential.

And it's a very simple thing to prove: can you easily pay off the cost of your degree within 10 years or less? And is this generally true for most people with your degree? The answer is easily shown by thousands of news reports of liberal arts degree holders being stuck in debt into their 50s and losing ground.

The exceptions (STEM degree primarily and people who come from enough money that ROI doesn't matter) prove the rule.

Got me wondering what the ROI for dating was.

Unless there is a non-financial investment which can’t be converted to a financial one or one which people are not redeeming for some reason.

Unless you mean that there are non-financial benefits to life. Like if you know your doctor and he checks you for free.

That is not included. No.

I've always thought you should have to get career and financial counseling before taking out student loans. How many people get Psychology degrees and then can't find employment? Would fewer people take on 6-digit student loan debt if they knew they'd still end up working at Starbucks for a hair over minimum wage afterwards?

If you want to go to college for the sole purpose of getting an education, then nobody should stop you. But you should at least be made aware of your future prospects vis-a-vis employment and debt.