College Degrees Get an Audit

[Ulic Qel-Droma]

http://www.businessweek.com/magazine...5015598121.htm

College Degrees Get an Audit
New research suggests that many students might be better off, financially at least, not bothering with college at all

By Louis Lavelle

BW MAGAZINE

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There's no perfect measure of a college education's value—earnings power is but one. Grads of top schools will earn $1 million more than a typical high school grad, according to new research. PayScale, a Seattle-based company that collects wage information, pegs the average 30-year net return on investment for 554 schools at 9 percent. Only 88 schools had an ROI that topped the total return for the S&P 500 over the same period.

THE RETURN ON INVESTMENT
Schools with the best 30-year net ROI over wages earned by a typical high school graduate

School Total cost ROI

1. MIT $189,300 $1,688,000
2. Calif. Inst. of Technology 181,100 1,644,000
3. Harvard 189,600 1,631,000
4. Harvey Mudd 187,700 1,627,000
5. Dartmouth 188,400 1,587,000
6. Stanford 191,800 1,565,000
7. Princeton 187,700 1,517,000
8. Yale 194,200 1,392,000
9. Notre Dame 181,900 1,384,000
10. Univ. of Pennsylvania 191,300 1,361,000

CRUNCHING THE DATA
30-year net return on investment is the difference between the amount earned by graduates from 1980 to 2009 and the earnings of a typical high school graduate, after deducting the cost of obtaining an undergraduate degree. It takes into account the likelihood of never graduating. ROI for public schools in the study was calculated using both in-state tuition and out-of-state tuition; figures shown for public schools include both. Total cost includes tuition fees plus other expenses for the number of years it takes most students to graduate.

Data: Payscale, Bloomberg

Lavelle is an associate editor at Businessweek.



what do you guys think?

It doesn't take into considerations of other factors, but you know what, other factors don't fucking matter, no one goes to school for an "education" anymore. The end result is money. I hope more articles like these start to pop up and pressure the education system to change.

There are many things in this world that are affecting many people in a negative way, and I think the education system is one of the biggest things holding society back. I'm not saying education is bad, just the whole system is fucked up. It's interpreted incorrectly, used incorrectly (much like *cough religion cough* ahem).

[waddy41]

You can't just look at ROI and that's it....going to post secondary is very important...
it teaches you a lot that may not be written in text books...it's very different when you talk to someone who is educated and uneducated..uneducated people just sound dumb
(Yes I know you can get educated by yourself without post secondary)

Also, college friends and experiences are priceless

[Carl Johnson]

What the article doesn't tell you is how volatile the the 11% return in the market is. For the last 10 year, if you were in an index fund, you haven't earned much capital gain (except the dividend). Adjusted for inflation, you might have actually lost money. Sure, your investment advisor is going to tell you all the great things about their equitiy and bond mutual funds because that how they get paid. But just a couple of bad years like 07 and 08, your account can take a significant hit.

I rather take my steady 9% return on a college degree. Oh sure I can get laid off or what not. But at least with a college degree and some related work experience, you are much more employable than a high school grad. Not to mention, you just feel better and have more control of your life because of the experience, knowledge and wisdom.

[van_driver]

It really depends on what kind of college graduate you are looking at. Some don't like the field they are studying and get their degree for the sake of having a college degree then end up doing something else and not making anywhere close to as much as they can. Then others get their degree because they love the field and go into that field and make heaps of money. Different strokes for different folks.

[taylor192]

Originally Posted by waddy41

You can't just look at ROI and that's it....going to post secondary is very important...
it teaches you a lot that may not be written in text books...it's very different when you talk to someone who is educated and uneducated..uneducated people just sound dumb
(Yes I know you can get educated by yourself without post secondary)

A person who leaves high school wanting to attend college will sound just as educated as someone who actually goes. College/university is a joke now, in classes of 300+ you're more likely to learn how to rinse and repeat the same task rather than how to think out a problem.

Originally Posted by waddy41

Also, college friends and experiences are priceless

Networking will always get you further than your education. College/university is more about meeting your peers who will do well and keeping in contact with them as you progress in your career.

[taylor192]

Originally Posted by Carl Johnson

What the article doesn't tell you is how volatile the the 11% return in the market is. For the last 10 year, if you were in an index fund, you haven't earned much capital gain (except the dividend). Adjusted for inflation, you might have actually lost money. Sure, your investment advisor is going to tell you all the great things about their equitiy and bond mutual funds because that how they get paid. But just a couple of bad years like 07 and 08, your account can take a significant hit.

A couple years laid off or taking crappy jobs is the same as above. When the tech bubble burst, a lot of very educated people were out of work for a long time, applying to take entry level positions, or worse jobs outside of tech. One of my previous coworkers was out of work at the time and working retail at The Bay.

Your college degree doesn't mean much if the economy changes.

Originally Posted by Carl Johnson

But at least with a college degree and some related work experience, you are much more employable than a high school grad.

There's some employers that are trying out a new program of bringing in high school grads and giving them experience, skipping college/university. Studies showed that 2 years of experience is equal to 4 years of schooling, so these high school grads get paid for 2 years, skip the mounting debt and useless classes, while gaining valuable experience. The employer gets eager workers who they can pay less for 2 years.

Plus experience always outweighs education. When we were hiring, experienced applicants were preferred over those with more education (Masters, PhD).

Originally Posted by Carl Johnson

Not to mention, you just feel better and have more control of your life because of the experience, knowledge and wisdom.

I feel worse cause I wasted $40K and 4 years getting a degree to do a job I could've after a few certification courses.

[Chuck Norris]

Image is everything, thirst is nothing... (long read/rant)


Ulic, you already know my opinion about education which is somewhat hypocritical since I went through a lot of schooling.

That said, it's that time in school that gives me the ability to see the problem with it.

Too many kids go to school because they're told to go. They're told by their parents because it looks good and it's what everyone else is doing. Sometimes a lot of parents never went to school and believe it's the best choice for their children. I don't blame parents for wanting what's best

How many people are in school and they have no idea why they're in school?

I can't count the number of times that I would talk to people in my classes and we'd talk like we were in jail. "Hey! Pssssss! What are you gonna do when you get outta here?"

You know what the most common answer was?

"I dunno."

Wow. In fact, most students in University are stressed not only about exams, but they're stressed out trying to figure out what the hell they're doing there in the first place. I had a friend in Biology that wanted to work on cars. When I asked why he was here and what he was going to do, he said his parents wanted him to be a doctor.

He hated Bio, and thus didn't do well at it. He was stressed out because he knew he wasn't cut out for med school, wanted to work on cars and was trapped.

He graduated with a bio degree, couldn't get into med, had no clue how to work on cars (because he never went to school for what he really wanted) and spent 2 years looking for a job before he landed a great job as a cell phone sale rep at Rogers.

I'm not anti-education. I think it's important that you know why you're going to school. You should have a very specific plan as to why you're going and what you're going to do when you get out.

Some people are very sure about our goals and our life at 17 or 18 but how many of us really know anything at 18? I'm almost 30 and I don't really know a hell of a lot! The only thing that's helped me is that I was able to make a lot of money early on. I'm just figuring out now new ideas and ways to make money and also enjoy my working life. That's 10 years after I was suppose to pick a program in University.

High school does such a horrible job teaching us about the real world that when we get out at 18, we think we know everything and soon find out that things aren't as we were told.

It's a bitch, and it's life. I think everyone should go to school WHEN they're ready to go.

I was not mature enough at 18 to think about something as serious as my future.

School doesn't stand for much on it's own. You only get out of school what you put in. You can learn more teaching yourself at home over someone going to school and going through the motions.

Also, IVY schools tend to have a lot of wealthy kids. The network you make in those schools is often what makes such a big difference.

Going to school is now, more image than anything for most programs. Yes, you should go to school to learn specifics (medicine law etc) however most undergrads beforehand do not teach anything about the matter.

Someone off the street that's smart should be able to go to law school without an undergrad. Same with Med. The reason of course is because everyone would be going and they need to weed out (minimize) applicants.

I have friends in med school now that were in my business program. What does an economics undergrad have to do with open heart surgery? Nothing.

I also find it funny how school teaches you an idea. They don't teach you how to get a job, how to save your money and how to plan your life. I'm not saying they should but I think a lot of us went to school thinking it was going to give us the key to life.

Wow, was I ever naive.

To add to this. My friend's father, a PhD in computer engineering that never paid a penny for any school because he was all on scholarships, couldn't get a job.

Why? He was overqualified. What does that mean exactly? I never knew myself. It means that a company is willing to pay $60k a year but a PhD is really worth $90k a year. So my friend's dad says it's cool don't worry about it. The company knows this guy knows he's worth $90k a year and if they hire him for $60k, it's only a matter of time before he gets an offer for $90k and he's going to quit.

Simply put, companies weren't not interested in paying the premium because they didn't need the premium.

He later told his family that getting his PhD was the best way to alienate himself from the job market. When he did get a job, it was because he lied on his application. He failed to disclose his PhD. He later went on to say that a PhD is only useful if you plan to teach/research or if you plan to become an MD.

I took business thinking I could get rich in retail banking. Money was my motive, not the love of the classes and it was a waste for me. I learned that retail banking is a joke. I was lucky enough to move out of that and it was all through networking and spending a lot of time learning on my own.

I think I studied an average of 30 hours a week on my own. I wasn't in school, I wasn't taking courses. I was learning what I needed to in order to go where I needed to. It was weird. No final exams, no teacher to grade my work. If I had a question I had to go out in the field and ask people in the industry to help me.

I can't think of how many times I had to take people out for lunch so I could confirm the stuff I was working on to see if I was on the right track.

It was harder than any school, but I had a lot of fun, made some great friends, and it paid off the way I wanted it too.

[Presto]

Originally Posted by taylor192

Plus experience always outweighs education. When we were hiring, experienced applicants were preferred over those with more education (Masters, PhD).

That's the only way I've gotten my last 2 jobs, in the last decade. They didn't care about education, which is great since I blew off high school. Experience is king, at least when it comes to the IT field . My parents had big plans in getting me into university, but I couldn't see how it would get me into what I wanted to do. I could educate myself better with relevant information. Post-secondary has it's place, but people shouldn't be going just because their parents want them to.

[taylor192]

Originally Posted by Chuck Norris

To add to this. My friend's father, a PhD in computer engineering that never paid a penny for any school because he was all on scholarships, couldn't get a job.

Why? He was overqualified. What does that mean exactly? I never knew myself. It means that a company is willing to pay $60k a year but a PhD is really worth $90k a year. So my friend's dad says it's cool don't worry about it. The company knows this guy knows he's worth $90k a year and if they hire him for $60k, it's only a matter of time before he gets an offer for $90k and he's going to quit.

Simply put, companies weren't not interested in paying the premium because they didn't need the premium.

He later told his family that getting his PhD was the best way to alienate himself from the job market. When he did get a job, it was because he lied on his application. He failed to disclose his PhD. He later went on to say that a PhD is only useful if you plan to teach/research or if you plan to become an MD.

This is soooooooo true!

I graduated during the tech bubble burst, so a lot of my peers decided to wait out the downturn by staying in school for a Masters. 2 years later they graduated into a still downturned tech market, now overqualified for entry level positions. Our company made the mistake once of hiring someone overqualified, and he did leave as soon as the market rebounded. 1 year wasted on training only to get little in return.

I know have friends taking MBAs and I keep asking them what they want it for. They say it is the path to a better job, and they are correct to a point since it is easier to get an MBA than to gain management/marketing experience in your current job as that can be a hard corporate ladder to climb. The goal of the MBA was to network with your other MBA peers and the guest speakers brought in to find a job aterwards - not anymore as you can take a basically all coursework night school part-time MBA and not network at all. So why even take it? especially when there are management certificates you can get in 1/4 the time for 1/3 the cost to help you climb the corporate ladder.

[Professir]

sigh, mba just aint what they used to be.