One thing that I think doesn't get enough attention in these types of discussions -- not just this article about ROI, but also earnings disparities between (e.g.) genders and other groups -- is that income isn't the only measure of happiness.
Many people would take less money to do a job they enjoyed more. My older sister "gave up" a sales "career" to become a fiction writer. It's enough to pay the bills, but pays less than she could have had at a corporate job. She got an English degree and couldn't be happier with her choice.
My younger sister got a Theater degree and is a "struggling actress". Same deal: she's happy with her choice.
ROI is important for some aspects of the discussion. But it is not the whole story.
I don't know your sister so I won't comment on her particular case. One thing I've noticed is that a lot of these "quality of life" career choices often involve a partner - men, more often than not - swallowing the trash in a corporate job.
Sad but true. The publishing industry (think Penguin books) is full of independently wealthy white women - “This unpaid internship is a fantastic career opportunity!”
Wow this tuned into a different narrative quickly. The above comment did not blame women for men’s plight but did not compare apples to apples. Gender pay gaps usually involve different wages for same work, not downgrades that all genders do.
The “great” thing about cutthroat paring down by groups like private capital in management is all genders get downgraded at the same rate. So equity will even out in the race to the bottom, and we can enjoy more balanced stories of men contributing less to the household income.
Well, my brother is a musician and rents a room in a large house. He doesn't have a sugar mama/papa, music pays the the bills because he's actually frugal. For decades my dad implored him to "get a job" but in his mid-40s he's still is still happy with his life. Some other working musicians have partners with a higher income, but many don't; it's more common for them to be happily single or coupled with other musicians.
If you don't like swallowing corporate trash, don't. If you want to bring somebody along on your quest for enrichment, recognize that your choice there is yours.
Yep, at least in my case. My wife is able to pursue her fiction writing career full-time right now because I'm still working a corporate job. Just before deciding she was too burnt out and had to quit she was working a 130k/year proposal management job and self-publishing a book a year on the side.
Right now she's making a little over 1k/month with her fiction writing (and just recently started offering editing services on the side, which she's gotten a few customers already), so it's definitely been shock to our finances ($140k -> ~$12k), and our emergency savings have been steadily draining every month, although we have been able to tighten the belt on several things so it hasn't been as steep as it would if we had maintained the same lifestyle.
But she's a lot happier, and she's very talented, and she's had multiple millions of page reads on Kindle unlimited already and her books are highly rated, so hopefully this takes off (there are writers in her genre making hundreds of thousands, including a couple writers she's friends with, maybe she'll become one herself, although I'd be happy if she can get it to the point where it's like $60k/year).
I also wouldn't mind a break from my own corporate job so I can hopefully work on my own creative works fulltime as well (I code video games and design board games in my spare time), but obviously we can't both afford to do this at the same time, we'd be homeless pretty quick.
But yeah, in the meantime, I'm 'swallowing the trash' in a corporate job.
Not necessarily a partner, parents are often where the extra income comes from. Though I suspect parents are more likely to support a grown daughter than a grown son.
To chime in, I see a lot of women supporting their men as well, probably more often tbh. But yeah, one stressed out breadwinner, one struggling x isn’t that uncommon. For some reason I’ve seen a lot of breadwinners go into the trades rather than corporate
How often do you actually see people go „oh we have enough, we’re going to take lower paying jobs”? People work these jobs regardless of their partner's income.
This point would have been better made without involving gender. Who cares if it’s more often than not the man? That’s completely irrelevant. Unless your point really was about the gender, in which case you should elaborate.
bro your comment hits a bit too close to home. my partner took her master's degree yet she couldn't find a matching job in our area. at the very least, she now has better grasp on some things that actually matter to our life and her input is really valuable for me. so all in all, it's fine I guess.
I recently asked my Greek teacher about if 2008 was as bad in Greece as American media portrayed. She said things were definitely not good from an economic perspective but life kept going on. Even though people had no jobs, you couldn’t find an empty seat in a taverna on the weekend. She pointed out the biggest difference she notices living in the US is that people prioritize money above all else. In Greece they prioritize having a good time. It really changed how I viewed the crisis and reminded me that cultural differences bias our judgements.
> She pointed out the biggest difference she notices living in the US is that people prioritize money above all else.
Something Jerry Seinfeld (yes, the comedian) recently observed:
> SEINFELD: In the seventies, this is the tragic turn of American culture. And this was explained to me by Mario Joiner who cracked this puzzle that I could not figure out what the hell happened. That money became everything. What happened because it was not like that in the seventies. In the seventies, it’s how cool is your job? How cool is what you’re doing? If your job’s cooler than my job, you beat me.
> BRENNAN: And no one said, how much are you making?
> SEINFELD: Oh, you’re doing okay. You’re making this? Yeah. Who cares? And Mario Joiner explained this to me. He said the eighties was the first time that young guys could make a lot of money fast.
> Never existed before. Rich guys were Aristotle Onassis, Andrew Carnegie, shipping, iron. You couldn’t make a lot of money fast in those days.
> And it has poisoned our culture to this day. It’s poison.
If your good times cause a crisis with long lasting consequences, that isn’t exactly a good thing. I could list a hundred example situations but there’s no need, is there?
> […] is that income isn't the only measure of happiness.
It may not be the only measure, but it is a very important part:
> One could draw a snap judgment from this analysis and conclude that money, in fact, simply buys happiness. I think that would be the wrong conclusion. Clever sociologists will always find new ways of “calculating” that marriage matters most, or social fitness explains all, or income is paramount. But the subtler truth seems to be that finances, family, and social fitness are three prongs in a happiness trinity. They rise together and fall together. Low-income Americans have seen the largest declines in marriage and experience the most loneliness. High-income Americans marry more and have not only richer investment accounts but also richer social lives. In this light, the philosophical question of what contributes most to happiness is just the beginning. The deeper question is why the trinity of happiness is so stratified by income—and whether well-being in America is in danger of becoming a luxury good.
It could be looked at that way, or as a single-income house where the other partner is doing some supplementary income.
Even if technically true a single income household is rarely discussed as “one partner subsidizing the other” but once the other partner is earning something it’s a subsidy.
That's true. I feel like the important bit is covering the essentials. 2x more is not 2x better, but you need to get above a certain threshold.
Incidentally this also holds for some engineering metrics. Some error metrics stop making sense after a certain threshold. E.g. if a certain error becomes disqualifying, doubling the error changes nothing.
Some study released years ago gave a USD value for the salary that was the happiness asymptote. Recent inflation has likely demolished that number, and I think it is an important one to know. It did not speak to the case of not needing a salary at all. The ability to be idle, or seelf direct however you want is very enticing, but I could see it going badly in a number of ways.
> earnings disparities between (e.g.) genders and other groups
When people talk about the gender wage gap they're not usually talking about the overall average, but rather doing like for like comparisons.
It feels like you're suggesting your sister chose to give up sales for fiction because there were other factors at play such as quality of life, that that is a decision men would be less likely to make, save therefore her actions have tipped the scale towards "women earn less."
But when people are talking about the gender pay gap they usually mean within a specific field or job title. So the comparison would be made between your sister and other men in sales, or between her and other men who left that career to go into fiction writing. In most cases the woman still earns less despite doing the same work and having the same work life balance (in theory; in effect she'll almost certainly be doing more additional domestic and other unpaid labour).
It’s both actually, and you can’t be sure which measure someone is talking about unless you ask them. It’s quite common to hear people suggest that the gender pay gap is due to the fields women enter, rather than a disparity between pay within the same field. As with anything, there are different ways to measure societal issues, both macro and micro. I would argue that both are valuable for understanding the context and scope of the issue.
"But when people are talking about the gender pay gap they usually mean within a specific field or job title."
I'm my experience, people usually confuse the two. There's rarely anyone pulling up BLS data for a specific job. We've even had presidents use the aggregate numbers misapplied to the specific level.
I've never heard of the gender pay gap meant as this very granular, targeted comparison.
On the contrary, I find that most data shared about this gap are just a lazy average of all men and all women earnings without controlling for stay-at-home parents, experience, diplomas, fields, etc.
and I know a ton of people miserable and stressed because they are buried in college debt. The fact the government has created a system where 18 year old kids can rack up massive debts that can't be removed via bankruptcy is insane. Changing that would instantly fix the system, colleges would have to prove ROI or it would go back to how it used to be for non-practical degrees(only rich kids wasted their time and money on them)
Or on this same point but from another angle, consider the ways you get into the higher end of the income distribution without a college degree. You either have family connections that let you take over a business, or you do something that comes with a big premium (walk on roofs, go up on ladders, move furniture, work construction).
If you didn't win the birth lottery that allows you to open door #1, you're stuck with the second option. Moving furniture or going up on a ladder aren't terrible when you're fresh out of high school. They are when you're 50, and you're going to be one of those that takes Social Security at 62, possibly after multiple spells of unemployment as you approached retirement.
I didn't win the birth lottery on #2 either; I've got some physical disability, though I have still done a bit of that type of work and if you think it comes with a "big premium" then your experience is very different from mine. Roofing is an incredibly simple job to learn for instance, and it pays little better than minimum wage. From my actual experience (admittedly limited to the South Texas market), blue collar jobs still pay like crap. The toll taken on the body actually seems to be pretty individualized; I know some men who seem to have no problem working into their 60's and I think that keeping active within reasonable bounds actually contributed to that.
I don't get your point. Negative ROI means you will have to earn extra money to cover the shortfall through some other method. In other words, it is a rich people's game. You either have to be rich already, or become rich afterwards.
Going on vacation has a “negative roi” if you only look at it from a financial perspective. That doesn’t mean that choosing to travel is always a bad idea.
> It's enough to pay the bills, but pays less than she could have had at a corporate job. She got an English degree and couldn't be happier with her choice.
My sister says something like this. She is horribly depressed and 'loves her job' and doesnt want to be like her dad who had a great paying job and retired in his 50s.
Humans are adaptable. Sales are a bit immoral, there are plenty of jobs that arent immoral.
Happiness is greatly impacted by the burden of large debts that hold you down. If you are not making enough to cover your expenses you will likely not be happy, even if your job is amazing.
The ROI explores that to some extent. You are right though, as long as you are happy that is what matter in life. Setting yourself up for long term happiness sometimes means forgoing some up front happiness though.
Irrelevant. The article is about ROI, not about happiness. Income isn't the only measure of, I don't know, longevity, calorie intake, hair color, number of children, etc., either, but we're not talking of any of those things.
There are many reasons why one takes antidepressant, I do yet I love my job and I am happy with my choice.
I take them to manage anxiety caused by my wife metastatic breast cancer (at least it's was only oligometastasis and she had a complete response to treatment that she has to continue as long as the disease doesn't come back) and parkison disease.
This could go the other way though. It's not just that you spent $Y on the degree, you also spent X years on the degree, which are years you could've spent finding that enjoyable career.
I imagine that falls into the chunk that did have a positive ROI.
My wife never completed undergrad. Worked her was to director level in the insurance industry. Hated it, got a masters, pivoted to something g she likes without any real pay cut (maybe for a year or two, but she’s now earning more than she ever would have in her first career).
Sensemaking is at play here too. Resilient individuals will (consciously and subconsciously) adjust and retell their narrative in a positive way. This is done in order to mitigate the distress of making choices that were less-ideal, in hindsight, but were made with the best information they had at the time.
That doesn't make a difference here, because it cuts both ways. Someone who gave up on a lucrative career in order to pursue their dream job might retroactively rationalize their decision as the best one, but also, someone who gave up on their dream job in order to make more money might also retroactively rationalize their decision as the best one.
In the meantime, there's nothing inherently wrong about choosing to make less money in order to have a job that doesn't make you miserable. Or to put it a different way: there's nothing inherently virtuous about minimizing your happiness in order to maximize your wealth.
The actual data [1] doesn't seem to agree with the article. There's also usually a huge range of ROI for the same subject from different universities, and it doesn't give numbers of students, so (1) I suspect small sample sizes are skewing the data, and (2) it's impossible to find the percentage of students in negative-ROI fields of study or institutions.
> For bachelor's degrees, fine arts, education, and biology programs had the lowest median ROI, while engineering, computer science, and nursing degrees gave students the highest long-term rewards.
That doesn't seem to match the data. Based on average (over institutions, not students) ROI from the completed-on-time column, the worst are: Drama/Theatre Arts and Stagecraft,
Library and Archives Assisting,
Alternative and Complementary Medicine and Medical Systems,
Theological and Ministerial Studies,
Movement and Mind-Body Therapies and Education,
Dance,
Personal and Culinary Services, Other,
Pastoral Counseling and Specialized Ministries,
Mason/Masonry,
Zoology/Animal Biology. Not too surprising except maybe the last one.
The top ROI are Biomathematics, Bioinformatics, and Computational Biology,
Operations Research,
Advanced/Graduate Dentistry and Oral Sciences,
Mathematics and Computer Science,
Systems Engineering,
Naval Architecture and Marine Engineering,
Computer Engineering,
Nuclear Engineering Technologies/Technicians,
Marine Transportation,
Petroleum Engineering. Again not too surprising.
Only 45/338 = 13% of fields of study have a negative average ROI graduated-on-time (17% including not-graduated-on-time).
Fair point. Excel's pivot tables can't easily do medians.
Edit: Actually, it's pretty similar with medians (via Python now).
The bottom 10 are: Drama/Theatre Arts and Stagecraft, Library and Archives Assisting, Movement and Mind-Body Therapies and Education, Dance, Alternative and Complementary Medicine and Medical Systems, Theological and Ministerial Studies, Film/Video and Photographic Arts, Personal and Culinary Services, Other, Music, Mason/Masonry
The top 10 are: Advanced/Graduate Dentistry and Oral Sciences, Nuclear Engineering Technologies/Technicians, Biomathematics, Bioinformatics, and Computational Biology, Operations Research, Personal Awareness and Self-Improvement, Naval Architecture and Marine Engineering, Marine Transportation, Systems Engineering, Mining and Mineral Engineering, Computer Engineering.
I'd also like to know what the ROI is for countries other than the US, particularly ones in Europe, where getting a bachelor degree is significantly cheaper and cost of living (in many places) hasn't risen as much as it has in the US.
The government should make it illegal to require degrees to apply IMHO. If an employer can’t create a sufficiently good screening process that would select those who would have degrees anyways, then maybe they aren’t necessary.
They also need to stop gate keeping. Jobs like being an attorney inherently require some certification, which is fair. Some governments in the USA made it illegal to take the bar exam and become an attorney without going to law school. Same thing with doctors and Step 1/2.
If someone can pass without going to school, good for them. Massachusetts in particular is in clear collusion with schools, requiring school teachers to have masters degrees in education.
The real problem though are the ridiculous cost of state run schools.
As someone who has been out of college for 20 years, I can't believe what my state school charges now.
When I graduated my school was a good value compared to private options. That was the whole point of a state school.
Now the same school cost 4X what it does and I don't know if I could even get in when up against so many brilliant Indian and Chinese students. I assumed when I went the goal of the institution was for a more educated population in the state. That was the point of the huge difference in price for instate tuition.
Now it seems like some kind of money making racket.
Afaik, state schools have lost a lot of budget from states (in inflation-adjusted terms) compared to pre-90s.
Consequently, they balance the books by taking on more foreign/out-of-state students (who they can charge much more).
At the core, though, it appears to be a supply and demand problem: there's a ton of demand for people who want to go to college, colleges don't have the resources (or interest?) to expand supply, and so they raise prices because they can.
For some domains, like most software jobs, it might work. In India, you sometimes see children manning pharmacies. It's not because of child-labour, but because dad/mom is away and someone needs to look after the shop. India has laws against this, but so rarely enforced that in effect, one can run a pharmacy without a degree. I dread to think of how many clinics in small towns are run by people without degrees. Heck, we have even had lawyers and judges practicing without degrees. I know only about a handful of such cases because some scandals they got involved in made it into news media. But who knows how many such people are practicing even now!
The natural evolution is employers pooling their recruiting criteria to not have a single company bare the burden. Then they outsource it, and you end up with private entities managing the qualification tests, and you're back to a system where you pay to get through the door.
We already have that for instance with employers requiring MS certification to be sysadmin with the full salary.
> We already have that for instance with employers requiring MS certification to be sysadmin with the full salary.
Hm, I’ve actually had good luck with specializing in Linux. Windows is a given, sure, but any time I’ve interviewed they glanced over my Windows experience and wanted to talk Red Hat.
An alternative solution we had in the UK - I think it's still going but I'm not up to date - is the Open University. It was a government subsidised study at home program that let anyone really get a degree for modest amounts of money and that could be done part time while working. The education was actually good too.
(update still going but not super cheap - about £21k for a degree. I think it used to be more subsidised)
I can generally agree with lowering barriers of entry, even if there would be some social stigma of having a doctor who didn't go to school. My reservation would be around ethics classes, but I guess I just don't know if any of the exams for lawyers or doctors have a set of questions surrounding ethics.
I agree. So many jobs have “bachelors degree” in the requirements. Doesn’t matter what kind, just have to have one.
I believe companies use this to screen out lower class applicants, because if it had to do with skills a specific degree would be required. For that reason, I think the practice should be prohibited.
Filtering by school and degrees are indeed effective, there is strong correlation in performance.
The entry to lower should be cost of education itself, the degree should be free/cheap enough for someone to obtain if they are technical wise qualified. Time spent on a subject is evidence of investment.
Something that has bothered me for a while is the cost structure of college. At least at my school, everyone paid the same amount, plus or minus three or four thousand dollars. Meanwhile, a computer science major will earn on the order of double what a psychology major might earn, both as a starting salary, and that will compound over their careers.
This is also true of loans. There is one flat interest rate for (federal) student loans. That rate does not reflect the creditworthiness of the borrower at all. It doesn’t consider their major at all. Any intelligent lender would never operate this way; who would give both a computer science major and basket weaving major the same amount of money and claim (via interest rate) that both loans are equally risky?
We have the concept of prices to serve as tools to encourage or discourage people from pursuing ventures society needs (or, really, is willing to pay for) more or less. It seems to me that in the context of higher education the economics are fundamentally broken. This causes a lot of grief for a lot of people, who then claim socialized higher education is the answer. It might be better than what we have; I’m not sure. That said, I’m inclined to think the free market would solve a lot of the problems seen in the current student loan situation in the US. There would be no kids with low-value degrees in $250k of debt graduating with a job paying $30k/yr. That simply shouldn’t happen.
Interest rates not reflecting the creditworthiness of the borrower is a design feature of federal loans. The idea being the government should at least subsidize loaning money to people for education.
In practice it just allows universities to raise tuition to the moon.
Exactly. Equality of opportunity, to the extent achievable, is important to preserve. But it needs to be done in a way that universities don't simply absorb any funding by raising tuition.
IMHO, we should start by taking the ACA approach on admin overhead.
I.e. If you want federal loans/grants to be usable on tuition at your institution, here's the administrative cost ("funds not directly spent on teaching") cap.
If you exceed that, then you must rebate students the overage.
The prices thing doesn't work well here because 1) the government has intervened, and 2) it's based on debt - the price of which is also controlled by the government/central bank. It's a skin-in-the-game problem. If education was at least partially funded by equity, the investor in the person receiving the education, be it a private investor, company they'll work for, or even the university itself, would have taken on the risk for failure to produce any sort of ROI. I say partially, because I believe there is some merit in government subsidy for certain fields, but more of that should go towards reducing the cost of university facilities, on-campus accommodation, labs, libraries etc. rather than student finances.
It seems to me that in the context of higher education the economics are fundamentally broken.
There are lots of examples of this type of situation in the U.S. Suburbia is subsidized through the road system. Gas taxes and vehicle registration aren’t enough to pay for the road system. K-12 education is subsidized by non parents. Police services are subsidized. There’s a ton of corporate welfare too.
There are some things for which a free market solution is advisable and some things for which it not advisable. I think education falls into the “not advisable” group.
> There would be no kids with low-value degrees in $250k of debt graduating with a job paying $30k/yr.
Very few people incur anywhere near that much debt for an undergraduate degree. Getting into the $200k+ debt neighborhood generally happens from law school or medical school.
It's pretty common for students to incur that much debt if they get both a Bachelor's and Master's degree from private colleges. Obviously this is not a smart financial decision, and the federal government shouldn't be encouraging it with subsidized student loans.
"More than 800 people applied this year for roughly 72 spots in the film MFA program, which can total nearly $300,000 for tuition, fees and living expenses."
I did not end up taking these particular college offers, but ~10 years ago I had offers for ~$50,000 a year after financial aid from multiple colleges. In 2024 I wouldn't be surprised if the same offer to me would be $75,000 a year. The year after year price adjustments I've see colleges make are insane.
As an economist, I totally agree. Funding of high-return majors by good students should have rock-bottom interest rates.
The govt should only be stepping into the loan market if the market isn’t happening. (Not that the market is doing loans wonderfully, but there are some new innovators.)
The govt should be helping the poor and investing in strategic capabilities. But the whole loan market and helping school rob parents of as much as they can pay? No.
The people entering the workforce with $250k in debt are mostly physicians. It’s mosrly people with $20–60k in debt that are stuck in underemployment (or didn’t graduate, so never got the salary bump to pay off such loans).
>Meanwhile, a computer science major will earn on the order of double what a psychology major might earn, both as a starting salary, and that will compound over their careers.
So? Assuming a fair charge (not the US kind of exorbitant tuition), the costs are similar (salaries from professors, administrative stuff, buildings, libraries, labs, and so on).
You're not paying to buy a career, you're paying to buy an education.
>There would be no kids with low-value degrees in $250k of debt graduating with a job paying $30k/yr. That simply shouldn’t happen.
Yes. Or we could forbid poor people from getting their desired degrees altogether, what you describe is the same thing but with more steps.
> Or we could forbid poor people from getting their desired degrees altogether, what you describe is the same thing but with more steps.
We probably should.
There's little difference between "I graduated with an uneconomic degree, and then failed to get a job in that market and/or labored under student debt I'll never be able to pay off" and "They wouldn't give me money for an uneconomic degree".
If anything, the latter is kinder because it nudges the college student into either funding their own uneconomic degree up-front (if they can find the money) or making other decisions.
It's always seemed insane to me that we let 18-year olds, sometimes with little financial education, make decisions that will benefit or haunt them for the rest of their life with so little guidance. (And college counselors have very conflicting incentives)
> Assuming a fair charge (not the US kind of exorbitant tuition)
The submitted article was about "American colleges and universities", so we have to assume the US kind of exorbitant tuition.
If college students didn't have to pay exorbitant tuition and take out massive student loans, we probably wouldn't even be having this discussion about ROI.
For those interested in this topic, I’d strongly recommend Bryan Caplan’s “The Case Against Education”: https://press.princeton.edu/books/hardcover/9780691174655/th.... He does a much more thorough analysis of the value of a college degree than any other I’ve seen, including factoring in dropout rate, majors, meeting potential spouses, opportunity cost, university prestige, etc.
The summary aligns with common sense: college degrees are typically valuable, especially in in-demand fields and from prestigious universities. But the college dropout rate is around 50%, so many people incur the cost of college with little of the benefit.
If you’re a high schooler considering college, it’s worth it if you are “good at school” and so confident you can finish in four years and are going to a high quality state school or better. Otherwise, you’re better off going directly into the workforce.
Not just meeting potential spouses. Having studied psychology has helped my romantic relationships in odd and intangible ways. For 1, talking to women I didn't know was easier because while they couldn't relate to my programming interest, they could relate to my psychology interest. For 2, it was just easier to find someone given that you were in an environment were 80% of your students were female (me being male).
But what also really helped was knowledge on anxious/avoidant attachment styles or how intuition is works (I read a lot about Kahneman's research papers - not his pop science books). By understanding how intuition works, I was able to train it through meditation (I could get the academic sources but this would become a lecture). When I got a stronger intuition I could relate better to people in general that use their intuition as their default mode (something I never did as a kid).
Psychology also has helped me with some mental health issues long after I graduated from it. I was surprised because I wasn't that interested in the mental health aspect when I was studying it (I liked neuroscience and statistics). I recognize mental issues with myself early so I can start acting on it early as well.
This is the tip of the iceberg. My point is: I never expected these benefits. But they are very very real. Moreover, for some these benefits do not pan out this way. A friend of my also studied psychology and would've loved to have a girlfriend at the time but it didn't work out for him. In my case, it helped that I was a bit socially bold. I was socially insecure as well but it doesn't matter that one is insecure when they are socially bold (I can say that with hindsight, haha).
Your point cannot be echoed loud enough on discussions of college prices and debt forgiveness. Instead, the too responses on such articles are always someone ranting about the lunacy of putting yourself $115k in the hole for a Bachelor+Master’s of Social Work only to manage a Home Depot followed by someone else pointing out that people graduating with that much debt are almost all physicians (plus a few lawyers).
Dropouts, by definition, do not have the degree to earn that salary bump. Those who go on about rule of law and the sanctity of contracts or whatever are willfully blind to the point that forgiven or not, those loans to the dropouts aren’t getting repaid.
Heck, you can even see the same thing to a lesser degree for students who do graduate but with a 2.3 GPA (especially if it’s a field that de facto requires a Master’s).
What RoI misses is that an available, stable income is far more important than getting paid more than it was worth to spend. A master's degree may not be an advantage in an employee's economy, but when the table turns and possible employers get hundreds of applications, you may have a better chance making it past their filter with a degree.
You can currently see this being the case. Among the people I know that were laid off, ex-bootcampers and self-thought developers have worse chances getting application replies than those with degrees.
Negative ROI means you end up paying for the privilege of having your job vs not having the degree at all.
A negative ROI bachelor means you could work as a cashier and earn more in net than someone who gets an expensive degree and a job that is not paying enough to offset the student loan.
A negative return master means that you would earn more in net if you stopped studying after your bachelor. In other words, you are sacrificing your bachelor earnings edge to get a masters, which is why it is more common for a master to have a negative ROI. You're already "rich" after the bachelor.
This probably is the case when you only expect money as a direct return on your investment. The proportions probably would be different (I have no idea what would they actually be though) if we considered other things you get in return. E.g. development of your personality, social connections you make etc. You still have to do some work to convert these into money and happiness though.
I even believe educational institutions like colleges and universities are a waste of time if all you want is new knowledge you can apply - most of it already is available online either for free or for much less than what tuition actually costs. A university/college is a tool for social integration (through getting your knowledge formally recognized and through meeting new resourceful people) and the art of using this tool right is another skill most of the people lack and don't even know of.
I'm no fan of the Higher Edu Industrial Complex but this is correlation, or at best blaming the messenger.
- Different people have different ambitions and motivations. Perhaps some degrees attract ppl who don't see money as a key motivator? Yeah, given the cost of edu perhaps they should, but we all do things we shouldn't and shun what we should. The point is, we need more analysis before we start making new decisions on actions to take.
- Supply and demand. It's not the degrees themselves that are the problem but market assigning value to them. Hear me out. That is, we can't collectively brag about the number of college degress and masters degrees as a key metric of our edu success, and then turn around and say "Oh shit. There are too many of too many of these."
Put another way, even if you shift all the negative ROI degree people into positive ROI degrees the value of the positive ROI degrees will then degraded (and the negative will climb).
- Let's finally admit that the experiment of (politically driven) cheap & easy student loans was in many ways a failure; another classic example of what happens when the heavy thumbs of politicians manipulate markets. It's funny (read: silly) how to make homes more affordable the POTUS is canceling student debt. Dear Mr/Ms President...what happens to price when demand increases? That is, cancel debt will eventually increase prices of other things. Classic political balloon grab, classically missed by the media.
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Many people would take less money to do a job they enjoyed more. My older sister "gave up" a sales "career" to become a fiction writer. It's enough to pay the bills, but pays less than she could have had at a corporate job. She got an English degree and couldn't be happier with her choice.
My younger sister got a Theater degree and is a "struggling actress". Same deal: she's happy with her choice.
ROI is important for some aspects of the discussion. But it is not the whole story.
I agree with the point, though. It's more socially acceptable for a women to choose a lower paying job that she prefers.
My wife is an artist with a marketing degree. I love programming. Swallowing trash at work just feels less painful to me.
The “great” thing about cutthroat paring down by groups like private capital in management is all genders get downgraded at the same rate. So equity will even out in the race to the bottom, and we can enjoy more balanced stories of men contributing less to the household income.
If you don't like swallowing corporate trash, don't. If you want to bring somebody along on your quest for enrichment, recognize that your choice there is yours.
Right now she's making a little over 1k/month with her fiction writing (and just recently started offering editing services on the side, which she's gotten a few customers already), so it's definitely been shock to our finances ($140k -> ~$12k), and our emergency savings have been steadily draining every month, although we have been able to tighten the belt on several things so it hasn't been as steep as it would if we had maintained the same lifestyle.
But she's a lot happier, and she's very talented, and she's had multiple millions of page reads on Kindle unlimited already and her books are highly rated, so hopefully this takes off (there are writers in her genre making hundreds of thousands, including a couple writers she's friends with, maybe she'll become one herself, although I'd be happy if she can get it to the point where it's like $60k/year).
I also wouldn't mind a break from my own corporate job so I can hopefully work on my own creative works fulltime as well (I code video games and design board games in my spare time), but obviously we can't both afford to do this at the same time, we'd be homeless pretty quick.
But yeah, in the meantime, I'm 'swallowing the trash' in a corporate job.
don't love IT, but one of us needs to get enough cash to live.
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I recently asked my Greek teacher about if 2008 was as bad in Greece as American media portrayed. She said things were definitely not good from an economic perspective but life kept going on. Even though people had no jobs, you couldn’t find an empty seat in a taverna on the weekend. She pointed out the biggest difference she notices living in the US is that people prioritize money above all else. In Greece they prioritize having a good time. It really changed how I viewed the crisis and reminded me that cultural differences bias our judgements.
Something Jerry Seinfeld (yes, the comedian) recently observed:
> SEINFELD: In the seventies, this is the tragic turn of American culture. And this was explained to me by Mario Joiner who cracked this puzzle that I could not figure out what the hell happened. That money became everything. What happened because it was not like that in the seventies. In the seventies, it’s how cool is your job? How cool is what you’re doing? If your job’s cooler than my job, you beat me.
> BRENNAN: And no one said, how much are you making?
> SEINFELD: Oh, you’re doing okay. You’re making this? Yeah. Who cares? And Mario Joiner explained this to me. He said the eighties was the first time that young guys could make a lot of money fast.
> Never existed before. Rich guys were Aristotle Onassis, Andrew Carnegie, shipping, iron. You couldn’t make a lot of money fast in those days.
> And it has poisoned our culture to this day. It’s poison.
* https://awealthofcommonsense.com/2024/05/seinfeld-on-when-mo...
It may not be the only measure, but it is a very important part:
> One could draw a snap judgment from this analysis and conclude that money, in fact, simply buys happiness. I think that would be the wrong conclusion. Clever sociologists will always find new ways of “calculating” that marriage matters most, or social fitness explains all, or income is paramount. But the subtler truth seems to be that finances, family, and social fitness are three prongs in a happiness trinity. They rise together and fall together. Low-income Americans have seen the largest declines in marriage and experience the most loneliness. High-income Americans marry more and have not only richer investment accounts but also richer social lives. In this light, the philosophical question of what contributes most to happiness is just the beginning. The deeper question is why the trinity of happiness is so stratified by income—and whether well-being in America is in danger of becoming a luxury good.
* https://archive.ph/4ofJ6 / https://www.theatlantic.com/ideas/archive/2024/04/happiness-...
Even if technically true a single income household is rarely discussed as “one partner subsidizing the other” but once the other partner is earning something it’s a subsidy.
Incidentally this also holds for some engineering metrics. Some error metrics stop making sense after a certain threshold. E.g. if a certain error becomes disqualifying, doubling the error changes nothing.
When people talk about the gender wage gap they're not usually talking about the overall average, but rather doing like for like comparisons.
It feels like you're suggesting your sister chose to give up sales for fiction because there were other factors at play such as quality of life, that that is a decision men would be less likely to make, save therefore her actions have tipped the scale towards "women earn less."
But when people are talking about the gender pay gap they usually mean within a specific field or job title. So the comparison would be made between your sister and other men in sales, or between her and other men who left that career to go into fiction writing. In most cases the woman still earns less despite doing the same work and having the same work life balance (in theory; in effect she'll almost certainly be doing more additional domestic and other unpaid labour).
IIRC if you look into it it's mostly a maternity penalty anyway.
I'm my experience, people usually confuse the two. There's rarely anyone pulling up BLS data for a specific job. We've even had presidents use the aggregate numbers misapplied to the specific level.
On the contrary, I find that most data shared about this gap are just a lazy average of all men and all women earnings without controlling for stay-at-home parents, experience, diplomas, fields, etc.
And they have to remember to avoid comparing the per hour earning at all cost.
My tuition was 400 euros per year for undergrad and master's.
If you didn't win the birth lottery that allows you to open door #1, you're stuck with the second option. Moving furniture or going up on a ladder aren't terrible when you're fresh out of high school. They are when you're 50, and you're going to be one of those that takes Social Security at 62, possibly after multiple spells of unemployment as you approached retirement.
My sister says something like this. She is horribly depressed and 'loves her job' and doesnt want to be like her dad who had a great paying job and retired in his 50s.
Humans are adaptable. Sales are a bit immoral, there are plenty of jobs that arent immoral.
The ROI explores that to some extent. You are right though, as long as you are happy that is what matter in life. Setting yourself up for long term happiness sometimes means forgoing some up front happiness though.
And please do not argue "she is happy with her choice" and on antidepressant at the same time!
I take them to manage anxiety caused by my wife metastatic breast cancer (at least it's was only oligometastasis and she had a complete response to treatment that she has to continue as long as the disease doesn't come back) and parkison disease.
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My wife never completed undergrad. Worked her was to director level in the insurance industry. Hated it, got a masters, pivoted to something g she likes without any real pay cut (maybe for a year or two, but she’s now earning more than she ever would have in her first career).
[1] https://en.wikipedia.org/wiki/Sensemaking
In the meantime, there's nothing inherently wrong about choosing to make less money in order to have a job that doesn't make you miserable. Or to put it a different way: there's nothing inherently virtuous about minimizing your happiness in order to maximize your wealth.
> For bachelor's degrees, fine arts, education, and biology programs had the lowest median ROI, while engineering, computer science, and nursing degrees gave students the highest long-term rewards.
That doesn't seem to match the data. Based on average (over institutions, not students) ROI from the completed-on-time column, the worst are: Drama/Theatre Arts and Stagecraft, Library and Archives Assisting, Alternative and Complementary Medicine and Medical Systems, Theological and Ministerial Studies, Movement and Mind-Body Therapies and Education, Dance, Personal and Culinary Services, Other, Pastoral Counseling and Specialized Ministries, Mason/Masonry, Zoology/Animal Biology. Not too surprising except maybe the last one.
The top ROI are Biomathematics, Bioinformatics, and Computational Biology, Operations Research, Advanced/Graduate Dentistry and Oral Sciences, Mathematics and Computer Science, Systems Engineering, Naval Architecture and Marine Engineering, Computer Engineering, Nuclear Engineering Technologies/Technicians, Marine Transportation, Petroleum Engineering. Again not too surprising.
Only 45/338 = 13% of fields of study have a negative average ROI graduated-on-time (17% including not-graduated-on-time).
[1] https://freopp.wpengine.com/roi-undergraduate/
Edit: the averages are much higher than the median of course
Edit: Actually, it's pretty similar with medians (via Python now).
The bottom 10 are: Drama/Theatre Arts and Stagecraft, Library and Archives Assisting, Movement and Mind-Body Therapies and Education, Dance, Alternative and Complementary Medicine and Medical Systems, Theological and Ministerial Studies, Film/Video and Photographic Arts, Personal and Culinary Services, Other, Music, Mason/Masonry
The top 10 are: Advanced/Graduate Dentistry and Oral Sciences, Nuclear Engineering Technologies/Technicians, Biomathematics, Bioinformatics, and Computational Biology, Operations Research, Personal Awareness and Self-Improvement, Naval Architecture and Marine Engineering, Marine Transportation, Systems Engineering, Mining and Mineral Engineering, Computer Engineering.
They also need to stop gate keeping. Jobs like being an attorney inherently require some certification, which is fair. Some governments in the USA made it illegal to take the bar exam and become an attorney without going to law school. Same thing with doctors and Step 1/2.
If someone can pass without going to school, good for them. Massachusetts in particular is in clear collusion with schools, requiring school teachers to have masters degrees in education.
The real problem though are the ridiculous cost of state run schools.
As someone who has been out of college for 20 years, I can't believe what my state school charges now.
When I graduated my school was a good value compared to private options. That was the whole point of a state school.
Now the same school cost 4X what it does and I don't know if I could even get in when up against so many brilliant Indian and Chinese students. I assumed when I went the goal of the institution was for a more educated population in the state. That was the point of the huge difference in price for instate tuition.
Now it seems like some kind of money making racket.
Consequently, they balance the books by taking on more foreign/out-of-state students (who they can charge much more).
At the core, though, it appears to be a supply and demand problem: there's a ton of demand for people who want to go to college, colleges don't have the resources (or interest?) to expand supply, and so they raise prices because they can.
We already have that for instance with employers requiring MS certification to be sysadmin with the full salary.
Hm, I’ve actually had good luck with specializing in Linux. Windows is a given, sure, but any time I’ve interviewed they glanced over my Windows experience and wanted to talk Red Hat.
https://dcist.com/story/22/08/18/dc-child-care-workers-colle...
(update still going but not super cheap - about £21k for a degree. I think it used to be more subsidised)
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I believe companies use this to screen out lower class applicants, because if it had to do with skills a specific degree would be required. For that reason, I think the practice should be prohibited.
The entry to lower should be cost of education itself, the degree should be free/cheap enough for someone to obtain if they are technical wise qualified. Time spent on a subject is evidence of investment.
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This is also true of loans. There is one flat interest rate for (federal) student loans. That rate does not reflect the creditworthiness of the borrower at all. It doesn’t consider their major at all. Any intelligent lender would never operate this way; who would give both a computer science major and basket weaving major the same amount of money and claim (via interest rate) that both loans are equally risky?
We have the concept of prices to serve as tools to encourage or discourage people from pursuing ventures society needs (or, really, is willing to pay for) more or less. It seems to me that in the context of higher education the economics are fundamentally broken. This causes a lot of grief for a lot of people, who then claim socialized higher education is the answer. It might be better than what we have; I’m not sure. That said, I’m inclined to think the free market would solve a lot of the problems seen in the current student loan situation in the US. There would be no kids with low-value degrees in $250k of debt graduating with a job paying $30k/yr. That simply shouldn’t happen.
In practice it just allows universities to raise tuition to the moon.
IMHO, we should start by taking the ACA approach on admin overhead.
I.e. If you want federal loans/grants to be usable on tuition at your institution, here's the administrative cost ("funds not directly spent on teaching") cap.
If you exceed that, then you must rebate students the overage.
There are lots of examples of this type of situation in the U.S. Suburbia is subsidized through the road system. Gas taxes and vehicle registration aren’t enough to pay for the road system. K-12 education is subsidized by non parents. Police services are subsidized. There’s a ton of corporate welfare too.
There are some things for which a free market solution is advisable and some things for which it not advisable. I think education falls into the “not advisable” group.
Very few people incur anywhere near that much debt for an undergraduate degree. Getting into the $200k+ debt neighborhood generally happens from law school or medical school.
"More than 800 people applied this year for roughly 72 spots in the film MFA program, which can total nearly $300,000 for tuition, fees and living expenses."
https://www.wsj.com/articles/financially-hobbled-for-life-th...
The govt should only be stepping into the loan market if the market isn’t happening. (Not that the market is doing loans wonderfully, but there are some new innovators.)
The govt should be helping the poor and investing in strategic capabilities. But the whole loan market and helping school rob parents of as much as they can pay? No.
So? Assuming a fair charge (not the US kind of exorbitant tuition), the costs are similar (salaries from professors, administrative stuff, buildings, libraries, labs, and so on).
You're not paying to buy a career, you're paying to buy an education.
>There would be no kids with low-value degrees in $250k of debt graduating with a job paying $30k/yr. That simply shouldn’t happen.
Yes. Or we could forbid poor people from getting their desired degrees altogether, what you describe is the same thing but with more steps.
We probably should.
There's little difference between "I graduated with an uneconomic degree, and then failed to get a job in that market and/or labored under student debt I'll never be able to pay off" and "They wouldn't give me money for an uneconomic degree".
If anything, the latter is kinder because it nudges the college student into either funding their own uneconomic degree up-front (if they can find the money) or making other decisions.
It's always seemed insane to me that we let 18-year olds, sometimes with little financial education, make decisions that will benefit or haunt them for the rest of their life with so little guidance. (And college counselors have very conflicting incentives)
The submitted article was about "American colleges and universities", so we have to assume the US kind of exorbitant tuition.
If college students didn't have to pay exorbitant tuition and take out massive student loans, we probably wouldn't even be having this discussion about ROI.
The summary aligns with common sense: college degrees are typically valuable, especially in in-demand fields and from prestigious universities. But the college dropout rate is around 50%, so many people incur the cost of college with little of the benefit.
If you’re a high schooler considering college, it’s worth it if you are “good at school” and so confident you can finish in four years and are going to a high quality state school or better. Otherwise, you’re better off going directly into the workforce.
But what also really helped was knowledge on anxious/avoidant attachment styles or how intuition is works (I read a lot about Kahneman's research papers - not his pop science books). By understanding how intuition works, I was able to train it through meditation (I could get the academic sources but this would become a lecture). When I got a stronger intuition I could relate better to people in general that use their intuition as their default mode (something I never did as a kid).
Psychology also has helped me with some mental health issues long after I graduated from it. I was surprised because I wasn't that interested in the mental health aspect when I was studying it (I liked neuroscience and statistics). I recognize mental issues with myself early so I can start acting on it early as well.
This is the tip of the iceberg. My point is: I never expected these benefits. But they are very very real. Moreover, for some these benefits do not pan out this way. A friend of my also studied psychology and would've loved to have a girlfriend at the time but it didn't work out for him. In my case, it helped that I was a bit socially bold. I was socially insecure as well but it doesn't matter that one is insecure when they are socially bold (I can say that with hindsight, haha).
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Dropouts, by definition, do not have the degree to earn that salary bump. Those who go on about rule of law and the sanctity of contracts or whatever are willfully blind to the point that forgiven or not, those loans to the dropouts aren’t getting repaid.
Heck, you can even see the same thing to a lesser degree for students who do graduate but with a 2.3 GPA (especially if it’s a field that de facto requires a Master’s).
You can currently see this being the case. Among the people I know that were laid off, ex-bootcampers and self-thought developers have worse chances getting application replies than those with degrees.
A negative ROI bachelor means you could work as a cashier and earn more in net than someone who gets an expensive degree and a job that is not paying enough to offset the student loan.
A negative return master means that you would earn more in net if you stopped studying after your bachelor. In other words, you are sacrificing your bachelor earnings edge to get a masters, which is why it is more common for a master to have a negative ROI. You're already "rich" after the bachelor.
I even believe educational institutions like colleges and universities are a waste of time if all you want is new knowledge you can apply - most of it already is available online either for free or for much less than what tuition actually costs. A university/college is a tool for social integration (through getting your knowledge formally recognized and through meeting new resourceful people) and the art of using this tool right is another skill most of the people lack and don't even know of.
- Different people have different ambitions and motivations. Perhaps some degrees attract ppl who don't see money as a key motivator? Yeah, given the cost of edu perhaps they should, but we all do things we shouldn't and shun what we should. The point is, we need more analysis before we start making new decisions on actions to take.
- Supply and demand. It's not the degrees themselves that are the problem but market assigning value to them. Hear me out. That is, we can't collectively brag about the number of college degress and masters degrees as a key metric of our edu success, and then turn around and say "Oh shit. There are too many of too many of these."
Put another way, even if you shift all the negative ROI degree people into positive ROI degrees the value of the positive ROI degrees will then degraded (and the negative will climb).
- Let's finally admit that the experiment of (politically driven) cheap & easy student loans was in many ways a failure; another classic example of what happens when the heavy thumbs of politicians manipulate markets. It's funny (read: silly) how to make homes more affordable the POTUS is canceling student debt. Dear Mr/Ms President...what happens to price when demand increases? That is, cancel debt will eventually increase prices of other things. Classic political balloon grab, classically missed by the media.