First Honest University Commercial

[roo_ster]

http://www.youtube.com/watch?v=T24DPU-hkJM

I hear community colleges are doing pretty well as students/parents recover from four-year-university sticker shock.

Now, I am not against higher education.  I just do not think that it is the best path for all and it is rarely worth getting into debt over.

[charby]

The commercial is pretty funny, really makes fun of many of the for profit educational institutions.

So you go to a university and the cost is $50k for a 4 year education. When you graduate you have probably 40 years before you can retire. Your first job for an easy number is $35k per year or $18 an hour. Even with no raises you are going to make at least $1.4m during your 40 years of employment.

Sounds like a pretty good return on investment, where else can you take $50k and make it at least $1.4m in 40 years? More than likely you are going to make closer to 2 million dollars in your 40 year long working career, so the total lifetime salary will be a lot higher than the $50k.

Also the various classes one needs to take that are not related to a major, well that has been established a long time ago by different accreditation boards what constitutes a well rounded educational experience for a BA or BS.

If Bachelor degree graduates took their general education classes more seriously do you think they would have voted for some one like our current president or 90% of the people in congress/senate? Serious by taking ones that gave life skills instead of picking the ones for a easy grade or no brainer will get you a C or B.

I have noticed most of the biggest critic of higher education are folks who didn't go, didn't graduate or made poor decisions in their degree program. The people who can't past their own little bubble tend to criticize the most. These are the folks who are upset that they can't find a job in their hometown, or have a spouse who refuses to move because of family/friends. Basically people who refuse to move to a location where there are jobs that pay well. Folks who can't see past job titles that don't include their major course of study, people who have no soft skills. Basically they are upset that life wasn't handed to them how they wanted it to be.

Going to a university or community college isn't for everyone, the value of a getting a job in a trade or even being a parts worker at a factory is looked down upon by society. I think this wrong, I'm fairly well educated and I think I would have been a lot happier being an electrician, carpenter or plumber then what I am currently doing. Not sure if I would have made any more money but I think I would have been happier at my current age of 40.

[vaskidmark]

One of the errors you made was the cost of the education.  It's $40K-$50K per year nowadays - and that's for the lower-end places.  Even Junior Assistant Intern Oulde Pharts ought to remember that the cost of [financing an] education has been going up and up and up.  Many of the critics of the high cost/low ROI of a college education (find them easily by checking Instapundit almost daily) have noted that the rise in cost has almost universally been due to hikes in fees for stuff that does not relate to edumacating.  That holds true for "traditional" colleges/universities that exist to provide a venue for pre-professional athletic teams as well as for the openly for-profit ones that have nothing beyond a cafeteria for student cultural activities.

The issue seems to be at both extremes of the issue - too many college degrees out there for the jobs that actually need a degree in order to get your foot in the door (as opposed to the degree being some marker of probable punctuality or stick-to-it-ness) and too many jobs that use the degree as merely a predictor of probable punctuality or stick-to-it-ness.  Add to that the numbers of degrees in stuff that means nothing outside the academic setting - underwater basketweaving, Romantic Poetry of the Tartars, and Woymns Studies have little calling outside of professors who will perpetuate the curriculum to other useful idjits who are being sent to college to get them out of the house and the job market.

stay safe.

[charby]

One of the errors you made was the cost of the education.  It's $40K-$50K per year nowadays - and that's for the lower-end places.  Even Junior Assistant Intern Oulde Pharts ought to remember that the cost of [financing an] education has been going up and up and up.  Many of the critics of the high cost/low ROI of a college education (find them easily by checking Instapundit almost daily) have noted that the rise in cost has almost universally been due to hikes in fees for stuff that does not relate to edumacating.  That holds true for "traditional" colleges/universities that exist to provide a venue for pre-professional athletic teams as well as for the openly for-profit ones that have nothing beyond a cafeteria for student cultural activities.

The issue seems to be at both extremes of the issue - too many college degrees out there for the jobs that actually need a degree in order to get your foot in the door (as opposed to the degree being some marker of probable punctuality or stick-to-it-ness) and too many jobs that use the degree as merely a predictor of probable punctuality or stick-to-it-ness.  Add to that the numbers of degrees in stuff that means nothing outside the academic setting - underwater basketweaving, Romantic Poetry of the Tartars, and Woymns Studies have little calling outside of professors who will perpetuate the curriculum to other useful idjits who are being sent to college to get them out of the house and the job market.

stay safe.

Iowa State University is still under $15k per year for instate tuition and on campus housing/board.

You'll find many (not all) public universities are still quite affordable.

[Azrael256]

Iowa State University is still under $15k per year for instate tuition and on campus housing/board.

You'll find many (not all) public universities are still quite affordable.

UT runs about 10k/yr for their most expensive undergrad programs just for tuition.  Texas A&M runs more like $9k.  Again, for the pricier programs.  I'm assuming we're calling 12 hours "normal."  Fees exist, but I rather doubt they're three times tuition.  The fee schedules for those schools look to be around $300/semester, with some a bit higher for lab classes.  With some effort to find scholarship dollars, $40k in debt is reasonable.

My Alma Mater was more expensive than that and I lived in the dorms for four years.  I walked away with about $43k.  Careful application of community college hours and scrounging for every $500 scholarship isn't all that hard.  I did just shy of 120 hours actually at that school, and full time tuition in 2002 ran just above what state schools charge now.

[charby]

Add to that the numbers of degrees in stuff that means nothing outside the academic setting - underwater basketweaving, Romantic Poetry of the Tartars, and Woymns Studies have little calling outside of professors who will perpetuate the curriculum to other useful idjits who are being sent to college to get them out of the house and the job market.

stay safe.

Some of those should be minors.

A minor should be a fun or exploratory area for degree seeking students. They also can be used to enhance a degree, I picked an agronomy minor to go with my forestry major. Mostly because I wanted to educate myself more about soils.

[AJ Dual]

I wonder what the over/under, amortization of student debt and earnings is for STEM vs. Liberal Arts majors.

And if there's a way to compensate for earnings, and normalize it for the financial decisions made going into college in the first place.

[Tallpine]

I can't remember for sure ... but it seems like tuition and books were about $2K per year back in 1991-1995 

[roo_ster]

Last time I darkened the doors of academia, fees & books were a 1.5x to 2.0 multiplier to tuition.

[googles a bit]

My how times have changed.  For TA&M it is a 2.26x multiplier


http://sbs.tamu.edu/media/125138/EN-UG-Resident-FY13-14.pdf
One semester at TA&M 15credits engineering tuition & fees: $4700

http://www.collegeview.com/schools/texas-a-m-university/tuition

Code: [Select]

Tuition & Fees
Cost of Attendance
Undergraduate 2012-2013 2013-2014
In-state Tuition & Fees $8,421 $9,006
In-state Tuition $5,297 $9,006
Out-of-state Tuition & Fees $24,950 $25,626
Out-of-state Tuition $21,826 $25,626
Flat Fee $3,124 --
Per Credit Hour Fee $177 --
Graduate 2012-2013 2013-2014
In-state Tuition $5,437 --
Out-of-state Tuition $13,861 --
Flat Fee $2,743 --
Per Credit Hour Fee $227 n/a
Room & Board and Books
Fee 2012-2013 2013-2014
Typical Room Fee -- --
Typical Board Fee -- --
Typical Room & Board $8,400 $8,450
Typical Cost of Books $1,272 $1,246
Other Fees
Estimated Additional Fees $2,289
Application Fee $75
Deposit --
In-state tuition 2012-2013: $5297
In-state tuition+fees 2012-2013: $8421
Room & Board: $8400
Books: $1272
Other Fees: $2289

So, at one of hte cheaper state schools the roll up for tuition & fees is $11982
Toss in R&B and it is $20382

Fee multiplier: $11982/$5297=2.26

For 2013-2014 TA&M got sneakier with tuition & fees.

The commercial is pretty funny, really makes fun of many of the for profit educational institutions.

Uh, it sounds like "Devry" but it is slagging on the non-profits it you pay attention.  Can't recall every seeing womyns studies listed here:
http://www.devry.edu/degree-programs/colleges-degree-programs-overview.html?intcmp=Home_topbar_degree-prog

So you go to a university and the cost is $50k for a 4 year education. When you graduate you have probably 40 years before you can retire. Your first job for an easy number is $35k per year or $18 an hour. Even with no raises you are going to make at least $1.4m during your 40 years of employment. 

Sounds like a pretty good return on investment, where else can you take $50k and make it at least $1.4m in 40 years? More than likely you are going to make closer to 2 million dollars in your 40 year long working career, so the total lifetime salary will be a lot higher than the $50k.

I'll just leave this right here:
http://en.wikipedia.org/wiki/Time_value_of_money

U Iowa 2012-2013 T&F&Books before R&B is $12700+/year. 

Another way to calculate costs is opportunity cost.  What opportunities did the four year in-state cow college student forgo?

Well, my wife made $75k the first year she sold jewelry, no degree needed.  (She did not stay with it.  Lots of skeevy folks in that industry.)  SO, the opportunity cost to her would be in the range of $300k+.  Toss in the cost of college she would not pay at roughly $52k and we are looking at a delta of $352k.

Or perhaps something less remunerative or reliant on a pretty smile. 

How about an apprentice plumber?  This site (http://www.indeed.com/salary/Apprentice-Plumber.html) says $38k/year, which may be optimistic.  This site ( http://www.payscale.com/research/US/Job=Apprentice_Plumber/Hourly_Rate ) says $20.5k/year to $42k/year.  Assuming zero income growth for the apprentice plumber over four years and the lowest annual income, the opportunity cost for going to U Iowa is $82k.  Might want to add that conservative $13k/year, since Mr. Apprentice plumber is not paying tuition & fees, either, so another $52k  for $134k.

As for increased income over time, a journeyman plumber rates $31.5k-$71.6k/year ( http://www.payscale.com/research/US/Job=Journeyman_Plumber/Hourly_Rate ) and a master plumber $35.9k-$90k/year ( http://www.payscale.com/research/US/Job=Master_Plumber/Hourly_Rate ). 

Iowa trades generally pay MUCH better than many non-union states.

Also the various classes one needs to take that are not related to a major, well that has been established a long time ago by different accreditation boards what constitutes a well rounded educational experience for a BA or BS.

If Bachelor degree graduates took their general education classes more seriously do you think they would have voted for some one like our current president or 90% of the people in congress/senate? Serious by taking ones that gave life skills instead of picking the ones for a easy grade or no brainer will get you a C or B.

Yep, 75% of students at university have no business being there.  Aptitude, temperament, whatever, they would be better off elsewhere and the university better off shucking off at least as much staff.

I have noticed most of the biggest critic of higher education are folks who didn't go, didn't graduate or made poor decisions in their degree program. The people who can't past their own little bubble tend to criticize the most. These are the folks who are upset that they can't find a job in their hometown, or have a spouse who refuses to move because of family/friends. Basically people who refuse to move to a location where there are jobs that pay well. Folks who can't see past job titles that don't include their major course of study, people who have no soft skills. Basically they are upset that life wasn't handed to them how they wanted it to be.

I call bull. 

Just about any parent with children who may be college material is giving higher ed the hairy eyeball.  For instance, I did pretty well with my degrees and parleyed them into an UMC existence.  (For how long, who knows?)  Higher ed deserves the hairy eyeball and I hope it gets the hairy canary until it screams for mercy.

To give you an idea how much higher ed cost has inflated, my dad worked summers in the 1960s driving a dump truck and then hopping out and slinging a shovel.  In Iowa.  He was a member of two unions.  He worked 14 hour days in the summers and made enough to pay all his tuition at St Ambrose, a private college.  He also had plenty of spending money during the school year.

I tried to emulate that 30 years later, but no dice.  Working class wages have stagnated or fallen due to immigration and higher ed costs have risen at some multiple of inflation.  I worked and saved every summer since I was 15, working more dangerous jobs than my dad, but it still was not going to happen.  I was blessed in that my folks were willing and able to help send me to one of the cheapest public universities in the land, where I continued to bust my hump, in & out of school.

Given our kiddos' ages, tuition, fees, books, R&B will be closer to $40k/year each.  (Ten years, if higher ed inflation stays at the same rate.)  Not sure many folks who can afford such a bill.  And we wonder why middle class folks don;t have more kiddos.

[Scout26]

Did you have GI Bill benefits to also help pay?

But yes, "College for everyone!!!" is a scam.  I still like the German model where you just prior to High School and at the point you choose to either head for a vocation or work toward a higher degree. 

http://en.wikipedia.org/wiki/Education_in_Germany

University is only for those few (less than 5%) who wish to go on to do research in various fields.  Most of those fields being STEM, with a few liberal arts degrees as possible.  (Literature, Art and the like, no underwater basket weaving or womyn's studies.)

That should be a a model the US emulates.  Especially since that German schools are run at the state and local level in Germany.  There are no nation-wide requirements like here.

[Azrael256]

Counting room and board as "fees" isn't exactly exposing a "hidden" cost.  That's right there on the front cover.

Regardless, my second semester's tuition was $6900 and another $3500 for room and board (Spring 2003).  Books were relatively cheap that time around in spite of my taking 19 hours.  Under $500 that time, but my school was big on minimizing the use of "textbooks" in my program.  Engineering/Science students don't get that perk.

Regardless, that's comparable to the numbers you worked up, and tuition went up nearly 25% the next year.  I still left owing $43k.

I had about $5000 a year in scholarships straight from the school and other little ones I scrounged up here and there.  That's coming in with about a 3.0 from high school.

Anybody paying "sticker price" for school is either WAY wealthier than I am, or too dumb to be in school.  I suspect the latter correlates closely to *studies majors. I also shopped around a bit, and I wonder how many people actually do that.

If you need *A* degree, what percentage of the population lives within bike range of a decent university, I wonder?

$40-50k a year may be what you spend in total, but I hear high school dropouts also eat and sleep, so counting room and board as a "college cost" exclusively isn't all that accurate.  It's probably more than a cheap apartment and ramen, but not at the scale you're suggesting.

For the future, I don't expect $40k a year in tuition to be the normal.  Technology and market forces will crush that when it outpaces reality.  Unless government intervenes (disturbingly likely) in which case it'll be $100k and they'll execute anybody who doesn't graduate.

[roo_ster]

Did you have GI Bill benefits to also help pay?

But yes, "College for everyone!!!" is a scam.  I still like the German model where you just prior to High School and at the point you choose to either head for a vocation or work toward a higher degree. 

http://en.wikipedia.org/wiki/Education_in_Germany

University is only for those few (less than 5%) who wish to go on to do research in various fields.  Most of those fields being STEM, with a few liberal arts degrees as possible.  (Literature, Art and the like, no underwater basket weaving or womyn's studies.)

That should be a a model the US emulates.  Especially since that German schools are run at the state and local level in Germany.  There are no nation-wide requirements like here.

GI Bill helped with my MBA.  That plus work paying part of it got me an MBA debt-free.

I have no problem with most of the liberal arts (English, History, etc.), but colleges have to be up front about the prospects one has with such a sheepskin in one hand and a bundle of debt in the other.

I firmly believe that colleges need to be co-signers on college loans that benefit them.  If they had skin in the game, they would operate in a completely different manner.

Political grievance courses (*-studies and the like) need the old Druid Sacrifice treatment: hit over the head, strangled, throat cut, and submerged in a bog.

[Tallpine]

One of our twins graduated valedictorian and got a "full scholarship" to any Montana public college.

She paid an extra fee to attend online, and then they hit her with a whole bunch of other fees including library, gym, and parking - none of which she could use.

Part way through the first semester, they billed her for even more fees (it was like a hospital: they just keep billing you and billing you and billing you, adding more stuff each time  ).

Instead of asking us for help, she just dropped out.

[French G.]

I still need to use my Post 9/11 GI bill since it will essentially hand me free money. Downside, anything I want to do will pay way less starting out than what I do now.

[Azrael256]

University is only for those few (less than 5%) who wish to go on to do research in various fields.  Most of those fields being STEM, with a few liberal arts degrees as possible.  (Literature, Art and the like, no underwater basket weaving or womyn's studies.)

I think the fathers of those fields would disagree pretty strongly with that.  Civilization is not just bridges and transistors.  Top down won't produce a useful mix.

Liberal arts shouldn't be in the university system as majors.  Painting and music are conservatory type studies.  A BFA in Violin isn't a useful thing, but a course of study under Perlman is.  Completing a requisite number of hours of electives doesn't need to be a part of that.

It's entirely possible that PE-level engineering shouldn't be either, so technical institutes being separate from "university" isn't a bad idea.  The WalMart model of "college" seems to be a profit driven construct.

Humanities both define the culture and serve all of the sciences, but they are nearly always a way to get your sheepskin without trying.  That's the root of the problem there, IMO.  Make those tracks as challenging as they should be, and the idiots will just fail out and correct the balance.  

I thing we're all in agreement that <politically motivated angst>-studies shouldn't be dignified with discussion.

[makattak]

The commercial is pretty funny, really makes fun of many of the for profit educational institutions.

So you go to a university and the cost is $50k for a 4 year education. When you graduate you have probably 40 years before you can retire. Your first job for an easy number is $35k per year or $18 an hour. Even with no raises you are going to make at least $1.4m during your 40 years of employment.

Sounds like a pretty good return on investment, where else can you take $50k and make it at least $1.4m in 40 years? More than likely you are going to make closer to 2 million dollars in your 40 year long working career, so the total lifetime salary will be a lot higher than the $50k.

Also the various classes one needs to take that are not related to a major, well that has been established a long time ago by different accreditation boards what constitutes a well rounded educational experience for a BA or BS.

If Bachelor degree graduates took their general education classes more seriously do you think they would have voted for some one like our current president or 90% of the people in congress/senate? Serious by taking ones that gave life skills instead of picking the ones for a easy grade or no brainer will get you a C or B.

I have noticed most of the biggest critic of higher education are folks who didn't go, didn't graduate or made poor decisions in their degree program. The people who can't past their own little bubble tend to criticize the most. These are the folks who are upset that they can't find a job in their hometown, or have a spouse who refuses to move because of family/friends. Basically people who refuse to move to a location where there are jobs that pay well. Folks who can't see past job titles that don't include their major course of study, people who have no soft skills. Basically they are upset that life wasn't handed to them how they wanted it to be.

Going to a university or community college isn't for everyone, the value of a getting a job in a trade or even being a parts worker at a factory is looked down upon by society. I think this wrong, I'm fairly well educated and I think I would have been a lot happier being an electrician, carpenter or plumber then what I am currently doing. Not sure if I would have made any more money but I think I would have been happier at my current age of 40.

I not only went to college, but I went on to graduate school as well.

I further had a very useful major: Economics.

You know what economics taught me? (Among MANY other things) You can't use someone's lifetime earnings as the measure of the value of a college degree.

At least, unless that person would not have had any employment whatsoever without a college degree.

Even ignoring the time-cost of attending school, you also have to take into account what an individual WOULD have earned without the degree.

http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/whatsitworth-complete.pdf

First of all, this indicates the people with a bachelor's degree earn 84% more over their lifetime than those who do not earn one. (Now, I will note that this suffers from selection bias as, in general, more capable people attend college. I'll ignore that obvious failing and use this flawed number.)

That means, worst case scenario, your example of $1.4M over 40 years represents only an (at best) return of  $639,130.44 over what would have been earned without the degree.

Now, doing the math on the rate of return for your $50,000 investment, that is a ~6.58% rate of return.

Now, the rate of return on the stock market for the past 40 years (1954-2013) is a 10.95% annualized return. (Which, I have to note, would be a total of $3,191,995.48 after 40 years...)

It's not just those who "didn't go, didn't graduate, or made poor decisions on majors". It's also those of us who can do math.

[Neemi]

I was going to brag about my alma mater for a minute. Glad I checked the website first. Prices have more than doubled since I graduated 7 years ago. Estimated costs for one year (two semesters) including room/board, books, transportation, & spending money is $17,556. 

So glad that between scholarships & a part time job I was able to graduate debt free. So grateful. One day I want to do graduate school. Maybe. If the price doesn't make me 

[Nick1911]

Looks like Purdue is up to an estimated $23,242 per full school year, in state rate.

That's what - $92k for a four year degree?  

[Scout26]

I think the fathers of those fields would disagree pretty strongly with that.  Civilization is not just bridges and transistors.  Top down won't produce a useful mix.

Understand that there is a "different" schooling path for those that become engineers and the like.  The Hauptschule and Gymnasium are for learning non-vocational(white collar) job skills.  German Universities are for teaching.  The various German institutes are for research.

[Balog]

It's not just those who "didn't go, didn't graduate, or made poor decisions on majors". It's also those of us who can do math.

Preach it! And that's not even counting the percentage who don't finish school, the percentage who are unable to find a job that pays more than what they could have received without a degree etc etc.

[Tallpine]

It's not just those who "didn't go, didn't graduate, or made poor decisions on majors". It's also those of us who can do math.

Economists 

[makattak]

(Aside: I should note that someone who can attend school for free, or nearly free, get a much bigger return. But paying for school (whether outright or with loans) is a very poor choice.)

[roo_ster]

Economists 

I have a dream where economists (and other business school graduates) properly place the dependent and independent variable axes on their charts.  Until then, we can only sigh and shake our heads when they place the dependent variable on the horizontal axis.   

[Balog]

(Aside: I should note that someone who can attend school for free, or nearly free, get a much bigger return. But paying for school (whether outright or with loans) is a very poor choice.)

I've never seen the interest racked up by a couple hundred grand, paid off over 20-30 years, included in the figures by the college supporters either.

[charby]

I not only went to college, but I went on to graduate school as well.

I further had a very useful major: Economics.

You know what economics taught me? (Among MANY other things) You can't use someone's lifetime earnings as the measure of the value of a college degree.

At least, unless that person would not have had any employment whatsoever without a college degree.

Even ignoring the time-cost of attending school, you also have to take into account what an individual WOULD have earned without the degree.

http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/whatsitworth-complete.pdf

First of all, this indicates the people with a bachelor's degree earn 84% more over their lifetime than those who do not earn one. (Now, I will note that this suffers from selection bias as, in general, more capable people attend college. I'll ignore that obvious failing and use this flawed number.)

That means, worst case scenario, your example of $1.4M over 40 years represents only an (at best) return of  $639,130.44 over what would have been earned without the degree.

Now, doing the math on the rate of return for your $50,000 investment, that is a ~6.58% rate of return.

Now, the rate of return on the stock market for the past 40 years (1954-2013) is a 10.95% annualized return. (Which, I have to note, would be a total of $3,191,995.48 after 40 years...)

It's not just those who "didn't go, didn't graduate, or made poor decisions on majors". It's also those of us who can do math.

We both looked at it differently, not saying either of us is wrong. But where is the HS graduate going to get $50k in years 1-4 to invest for 40 years?