Former Secretary of Education William Bennett, author of Is College Worth It, sat down with The Daily Ticker on the sidelines of the Milken Institute’s 2013 Global Conference to talk about whether college is worth it.
“We have about 21 million people in higher education, and about half the people who start four year colleges don’t finish,” Bennett tells The Daily Ticker. “Those who do finish, who graduated in 2011 - half were either unemployed or radically underemployed and in debt.”
The top 10 schools ranked by Bennett as having the best "ROI" are below
Harvey Mudd College
California Institute of Technology
Massachusetts Institute of Technology (MIT)
Stanford University
Princeton University
Harvard University
Dartmouth College
Duke University
University of Pennsylvania
University of Notre Dame
So, quite literally, 150 / 3500 is 4.3%
But here’s a different angle… where else can you be in a place with tons of people of the opposite sex. and how much fun did you have there? Was tuition worth that fun? could be…
Beautiful. This idiot, William Bennett, has absolutely zero concept of an economic cycle. Let’s put aside the larger issue of what it means for Western economies to move away from the manufacturing trade and have an education surplus. To sample 2011 and use the unemployment rate at a historical cyclical turning point for developed countries as a proxy for the norm at all points in the future is preposterous. To suggest that college isn’t worth it is perhaps a bit shortsighted.
The problem with advocating for people to not go to college is that it is done by college-educated people who perhaps look at the surplus of grads as somehow being threatening to their vested interests. Furthermore, all of the people that talk about “doing the entrepreneur thing” have been reading too many influencer posts by “thought leaders” on StinkedIn. They would like to think that the world could be populated with these little “learn by doing businessmen,” but, the fact is, the average 18-year old doesn’t think that way. Sure, there will be some young Bill Gateses out there, but there will also be some gas station attendants with long hairs and denim jackets too if we start championing people not to go to school.
To suggest that only 150 colleges are worth it is to further contribute to the increasingly skewed “winner take all” barbell infecting society today. The biggest banks get bigger, the biggest schools get bigger, the most bloated government programs get bigger, and everyone else gets the scraps – all the while the system gets weaker and more susceptible to the slightest cracks. Taleb is right.
Worth it as a function of price. Remember that’s the whole point. Are you suggesting the cost of college is always worth it? It shouldn’t matter how large our student debt to (current and future) salary ratio will be?
People really don’t like him on this forum. I think he is cool, but people seem to tar and feather anything associated with him.
These lists are pretty meaningless for undergraduate universities. I can virtually guarantee you that an engineering graduate from Texas A&M will earn more then most if not all liberal art majors from an ivy 1 year out of school. Just like I make nearly double the average salary of my school’s graduates because I’m in a good role (didn’t major in artistic basket weaving) from a liberal arts school.
Its funny, my small libral arts school’s tuition has risen nearly 70% since I was a freshman and from what I can tell, they have nothing different to offer other than some nicer buildings. The education system in this country is so F’ed up.
No, I’m not saying the cost of college is always worth it. That would be an absolute statement and clearly whoever is funding the four years for the prospective student needs to assess this on a case-by-case basis. What I am saying though, is that it is ridiculous for this person to make such a statement without considering where we are in the economic cycle, or what economic cycles will look like going forward. Some less analytical person will read that article and think, oh look, here’s further “proof” that I shouldn’t go to college, it is an unwinnable battle, etc. And I think that this is a bad way forward for this country.
After completing college, it is very easy to criticize the educational system. Just like, for example, everybody that tells the story of the CFA likes to say “it wasn’t that bad,” only when they can assess the exam after-the-fact. Everything seems like no big deal when you’re not currently jockeying for anything.
As for people on this forum not liking Taleb, who cares? I say what I believe. The minute I start becoming influenced by other peoples’ opinions (especially anonymous people on a forum), then it would probably be time for me to hang it up.
EDIT: Disclosure, my school is actually in the top 150 so I have a vested interest in agreeing with Bennett, but I still don’t. However more full disclosure is that I’m not in the top 2 or 3 so it may be time to toss my sack up on the chopping block and pull out the old rusty hacksaw.
you know what… I edited what I wrote… I did the Ivy shit in the mid 90’s… had my choice of most of those skull and cock schools… ended up at one of them… then moved along… then fcked up in my 20’s, but that’s a segue to something more interesting…
but I do agree with this old prick fuck who reminds me of a character from Dan Simmon’s ‘Carrion Comfort’ known as Barent…
I laugh when the cuntry thinks that’s college has any meaning for upward mobility…
Been saying it since day 1! Here is an oldie but goodie when it comes to Ivy Education or Hacksaw.
–
There is no nobility in poverty. Anyone who is not on the 50th floor is a loser. That doctor that does not have a top 2 MD and CFA who took a sabbatical in Rawanda to help malnurished children is a loser. That widow who went to U of P for an online law degree to represent low income battered women is a failure as she did not get into a Top 10 JD program and complete the CFA. People like Michael Dell are total losers as they didn’t complete their rusty hacksaw educational program and went on to fields outside of Top 2 MBA & 3/3 CFA. There is a reason the 1%ers of NYC were singled out by Occupy. They are hated for being God’s chosen ones allocating assets across industries, sectors, and securities moving markets with the swift motion of their mouse. This is what it is Greenie.
“It’s all about bucks kid, the rest is conversation.” - Warren Buffett, Hacksaw Educationed Loser w/o a CFA.
My school is safely on that list, although way down on where I would have guessed it would be based on other rankings.
I think it’s a bit unfair towards colleges, and particularly liberal arts colleges, because I assume that a lot of graduates of these schools are people who get married to (high earners) and who, as a result, do not work.
E.G. My sister in law went to Bates, with a masters from Yale. Married my doctor brother who went to Bates. Never worked again cause she doesnt need to. Her 200k education on an excel spread sheet would have negative NPV. But her odds of landing a doctor husband, being say a chick with a GED working as an administrative assistant are small. Marrying up like that might have been possible back in the Mad Men era, but not now, unless you are some stone cold fox.
This safely describes a very large percentage of the women I went to college with. (I went to a Top 3 Lib Arts School).
I think it goes without saying that if you aren’t very ambitious and don’t think you’re likely to graduate than getting massively in debt doesn’t make sense. Furthermore, a liberal arts degree is a surefire way to poverty unless you are gonna lever up with a grad degree or have some sort of clear entry point into a high paying field (like finance).
I went to a bad state college but I’m fairly happy with my skills and progress so far. ROI is what you make of it, but yes for some you get far better networking opportunities which I think factors into ROI the most.
I think the real issue is what everyone says - a lack of jobs available.
This country has less opportunity and guidance for most people. But all that means is you just need to work 2x as hard and drink 2x as much.
One of the biggest issues with this study is that it compares 2011 college costs to 2012 wage disparity between college/non-college people. For this to show a meaningful relationship, we must assume that this wage disparity does not change from 2012 levels throughout the careers of students who enter college in 2011. This would be a bad assumption if, for instance, manufacturing jobs become less important in the US over the next 30 years and services become more important. The higher cost of college today probably reflects that college degrees are expected to be more important in the workforce in the future.
With that being said, I do believe that colleges spend a lot of money today on things that will not improve the future careers of their students. For instance, world class athletic facilities, luxury student housing (my college had 3x daily buffet with omelette stand, pasta chef, etc.), and country club landscaping. While these features are nice to have, I suspect that if given the choice, many debt-laden students and parents would prefer a less costly and less extravagant college experience, provided that the quality of academics remains comparable.
The top 10 ranking is just grinding at details though. Those are all elite institutions. If there are indeed 3500 schools in this survey, we’re just shuffling around the order within the top 1% of the list.
The more important question is whether schools in the mid to bottom of the overall list produce positive economic benefits to their students. Not only are the returns in this section more questionable, but a greater proportion of US people attend middling colleges compared to elite colleges. I could easily be convinced that a school ranked #2000 in the US provides questionable benefits to its students.
The country club atmosphere of Elite American schools is intentional. That was their original purpose. You went to one of these schools because you were already wealthy and from the right stock of people. It wasn’t so much about an investment but proving that you were a higher class individual. Back then, rich people didn’t really work, aristocrats are above such things. Yet another reason why pretty much any IVY league school won’t let you major in anything “useful” for employment.
Until about 30 years ago, hardly anybody would have thought about going ot most of the IVY’s and top NESCAC colleges unless their parents had money. The story of the one scholarship student (usually black or jewish) and how he struggles to fit into the world of white boy privledge is almost a cliche of every book or movie about American Colleges from Fitzgerald to School Ties.
These schools tried to remodel themselves into mericratic institutions, recently, but have not done away with all that excess. To subsidize it they now openly practice price discrimination charging wealthier students more money than poorer students. This works well for the rich and the poor, but doesn’t help middleclass kids whose parents might make enough money to be charged full boat. Since class might not matter much anymore, except for a very elite and diminishing few, then I can see how spending a ton of money on an education that you can’t afford doesnt make sense.
For the time being, America’s middle class, and certainly enough rich kids from 3rd world countries, still desperately seem to want to go to top level US schools. So there you have it. Don’t expect anything to change soon.
Having looked at some mainland Europe universities recently in my MBA quest, I’m shocked at what utter dumps these schools are despite being the TIP TOP institutions in their country. My prep school had a much better campus than every European university (except for Oxbridge) I’ve seen.
If only 150 schools are ‘worth it.’ What is the alternative to those who can’t make the cut (no pun).
Industrial industry in the US is shrinking.
Laboror jobs are fleeing to 3rd world countries.
Working your way up from a Bank Teller/Sales Associate at JCP days are over.
So if they can’t land on the healthy side of the barbell, what do they do? Surely you don’t expect that they make a career out of shining your shoes, handling your dry cleaning, cooking your food, cleaning your bathroom, and wiping your a$$ (or maybe they should be flattered to?)?
Education is one of the last competative advantages of the USA. My man CT will sound off soon and concur that many successful individuals outside of the US come to the US for education before M’n’A’in on the buyside in Mumbai.
Live ain’t measured by a DCF model dumbed down to a NPV.
I find myself kind of wishing I went to Navy or West Point instead of a normal university. I would have done way less partying, but I would probably have fuller life experiences now. And, there is a much better chance I could make it in politics. I had been recruited to West Point at one time, so the alternate path is plausible.
I agree with the premise of this piece: that many schools are taking peoples money with providing adequate ROI. But, the “study” is complete garbage sensationalized to grab headlines and sell copies.
Edit: did this study take into account scholarships? I see financial aid, but not sure what that includes.
I agree. However, this country club approach to college is causing financial problems now that university education is mainstream, rather than reserved for aristorcrasy. Even if ROI is a naive way to look at the benefits of universities, it’s hard to deny that economy of education is becoming increasingly important.
With this regard, I am hopeful that the bottom tier of US colleges will be the ones to implement a more sensible value plan. Harvard is worth attending even if it costs 2x as much as it currently does, so they are not going to cut costs. However, school #100 needs a different plan for attracting students. Using more resources for post-graduation success could be one way.
RE: cost to poor and rich kids at the same universities - I find that it depends on the ranking of the institution. Higher ranked schools tend to have need-based aid. So, low income admittees receive more scholarships. However, middle tier universities tend to provide merit scholarships to boost their stats, and these tend to be awarded to richer students who perform better in high school. If you get into Princeton, you can get a full ride at Rutgers.