A have a friend whose very smart child was accepted into Duke University. I have heard that the parents are very happy about it because that is where the kid wants to go to school. When I found out the cost, I nearly fell off my chair. Tuition plus room and board is close to $85,000 per year. I am sure people on this site have been accepted to some great schools and have paid a lot to go. Idk, $350,000 for a 4 year degree seems bat shit crazy or may be I am just a cheap old fuck
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College tuition costs are certainly spiraling out of control, as has been the trend for the past two decades. Worse still, is that every job paying over 40k seems to require a college degree, despite how useless most of them are. The net result is colleges act as profit centers and higher education decreases in value. Now, just about anyone in the world can get student loans even if it remains abundantly clear that they wont ever be able to pay them back. The Federal Government finances the costs that 18 year olds sign on for, without any material understanding of what it will take to pay that loan back. With the current student loan legislation, tuition price is hardly even factored in so why not jack up the price 10% YoY. Honestly surprised that top PE funds havent bought universities, as the returns would be higher than anything that isnt a one-off or unicorn.
Its all good though, because either way we lose. We either pay back the loans via a bailout (most probable) and all of America eats the absurdly high tuition prices, or individuals making 40-90k spend their entire lives pinching pennies so that they can pay off their loans by the time they reach 45. The system is broken but no one seems to bat an eye.
Instead we continue to focus on the same three things; 1. Geopolitcal turmoil that the US leverages for a profit but preaches to care about (i.e., Russia Ukraine), 2. Social topics ranging access to abortions through police brutality (not saying they arent important, by no means am I saying that), and 3. The great political divide (increasing awareness that all democrats are scum via conservative news sources and that all republicans are sociopathic narcissists via liberal news sources).
If you are wealthy, you can afford the costs. If you are poor, you might be able to go for free. If you are in the middle, you are basically fucked.
In general, I am not in favor of bailouts BUT if corporations can get bailed out via bankruptcy, why shouldn't individuals be able to have similar bailouts. I do not know what is going on the latest legislation but my understanding is that historically you could not get your student loans eliminated when filing for bankruptcy.
Very well said, agree with you entirely. I think the issue is there are a lot of lower-middle-class folks who will struggle to repay their debts for the majority of their lives.
To further highlight a point you touched on, the student loan system is so messed up. The fact that student loans don't get eliminated during a personal bankruptcy is criminal and frankly just incentivizes loan providers to dole out as many shitty loans as possible. I'd love to see a system where, like many other credit/debt companies, loan providers need to actually do some diligence and face some sort of risk for giving out a bad loan. Kid is going to a subpar college and is planning on majoring in liberal arts? They shouldn't qualify for any student debt. Instead, have them go and become an electrician or a plumber and make 6 figures 5 years after graduating. The combination of the debt system and too much emphasis on a college educating is misguiding poor kids to take out loans to get a crappy degree from a crappy for profit school and then everyone wonders why generations of people crushed under onerous debt can't seem to get ahead.
No college is worth 85k a year. Literally none. MIT isn't worth that. Some people will pay stupid prices for a "name" or "experience." It sure as hell isnt for an education
What is the data on the proportion of students who pay full sticker price?
It probably varies a lot. My nephew went to Penn based on elite grades and did not get one penny
Excellent point. This is public data for all schools. Few except the wealthy actually pay the sticker price.
At Duke 63% receive aid averaging nearly $50k. So 63% receiving $50k, remaining 37% paying $85k (incl. room and board) so true cost of attendance is around $50k. Not amazing, but for an elite education landing you an immediate 6 figure job... there are worse schools with worse stats
https://financialaid.duke.edu/how-aid-calculated/cost-attendance/
https://www.collegefactual.com/colleges/duke-university/paying-for-coll…
https://www.raise.me/edu/duke-university
Went to Duke myself and according to website:
51% of students pay less than full cost to attend with average aid totaling $57,263. Total cost was estimated at $84,517. 76.8% pay $58,092 or more to attend, assuming the $110k+ tier of the below chart is linearly distributed.
Basically, what this means is that the vast majority of people are paying a LOT of money to attend. $58,092 also isn't as much as $84,517, but it's WAY more than my local state school of $29,000 for in-state all-in.
It's also worth noting that the average starting salary post-graduation from Duke was $93,115 according to one website. This appears inflated, even to me, but even when I graduated, the median starting salary was about $76,000 and median earnings six years after graduation is $84,400 compared to the national median of $33,028 after six years. In a sense, it is worth it, even despite the astronomical price.
This chart is also helpful:
I went to a cheaper in-state school, and I probably spent around 80k all in (edit: over the entire time at college) when you include housing/books/food. Luckily it is also a large, well-ranked public school, so I still had the opportunity for a job like IB and came out ahead of the vast majority of college students on the cost-benefit curve.
It was really nice to be able to save money and exit university with an incredible amount of savings (passed down from diligent parents and grandparents) for a middle-class kid. However, I think there is a difficulty curve for accessing the best opportunities (not just jobs, but study abroad, academic programs, etc) and having as much flexibility as you can. Duke is outstanding in all areas, while I felt limited on all these fronts, so IB was the only real path I had to achieve the personal progress I sought. A student at Duke or another top school has more options to consider and explore so that they can be certain in their decision, and are probably much more likely to nail the 'top' of these paths (the 'best' firms, oustanding medical programs, etc) due to their connections.
$350k is a ridiculous amount of money, so the only thing they need to be certain of is that their child will make the most of it. If yes, maybe it's worth it. If no, definitely not.
Easy answer is supply and demand but the harder answer is there's at least two separate classes, or economies, altogether. Income and wealth inequality has never been so pronounced and the growth is accelerating. There's only so many spots at Duke, so many Porsche 911 GT3s or so many limited edition Wu Tang albums. The incremental cost doesn't have anything to do with future earnings. In economics, they'd say these goods are highly inelastic. The opportunity to attend Duke in a certain academic year is at the very least a perishable good.
Another answer is children of the wealthy are desirous of a "normal experience" before moving on to their family business. In major bank management training programs, these people are everywhere and will work as an analyst or associate for a couple years and move on. Can't blame them because it would be insane to go through all the hell of building a book of business if you didn't have to. A couple people I know who moved on to their family businesses have these titles: EVP Strategic Planning Initiatives, Sustainable Investing Leader.
So to them, whatever the cost you referenced isn't a major concern compared to the perception of a "normal college experience."
it's kind of interesting how the wages paid for more basic jobs not requiring a college degree keep increasing because they can't find people to work those jobs, while the wages for people with degrees seem to stay about the same (they don't increase because there is a surplus of people willing to work those jobs). Like my last job was working in a warehouse and I make $21 an hour + OT ($31.5 an hour) for anything over 40 hours, I worked a couple of 55 hour weeks and made more money working there in those weeks than I ever made working an office job. I'm now looking for a new job and scrolling through the job posting websites I see tons of jobs paying like $20 an hour or so that are just random jobs, not really that far off from what most office jobs requiring a degree are paying at this point
Any of these jobs that you can do online, I.E from anywhere in the world? I mean 20$ per hour*160(40/h per week)= 3200 dollars, could live like a king in many parts of the world, heck i doubt you couldn't live comfortably in most cities in the US except NYC/SF
Send him/her to Germany- or Europe. Just a thought.
This won't work because in the US foreign degrees aren't recognized even if you homologate them.
I don't know if it has something to do with the American point of view that the US is #1 (and so every foreign education = not good) or because US universities ended up building a local monopoly to avoid Americans going abroad for degrees. In the EU, I've seen people with Indian, Chinese, and Russian degrees getting offers.
Nevertheless, this applies only to non-tech jobs. IT is more open-minded.
Everybody takes a loan thinking they will become part of that 1%, the exception who makes it out from the debt slavery and ends up building equity in life. But they forget that the odds are against them.
I am in that tough upper middle class bracket. I believe the brand, people you meet, and business opportunities are worth the full price tag (which I pay). However, I only suggest paying full freight if you know you want a highly competitive, prestige-oriented career like finance or consulting. I don’t see why anyone would pay this extravagant cost for Public Policy, Engineering, or Pre-Med especially when a lot of these require grad school. Similar with liberal arts degrees that do not lead to high salaries. For me, I will either 1) not need an MBA or 2) get it sponsored. The financial struggle now should be well worth the opportunities I will have in the future.
Went to Gtown and all in my parents paid $300k. However I ended up with a 6-figure job out of college and a few years out am clearing 200k. In a few more years I should be getting close to 400k. So worth it, but I’m also an only child
if you’re not pursuing a super well paying job, private university fees are a complete scam
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