When College Might Not Be Worth It | Hacker News Reader

When College Might Not Be Worth It

libertystreeteconomics.newyorkfed.org

42 pointsjnord94 comments

In Ireland my college cost €3000 per year and most got it for free through government grants.

I lived with my parents and went to the local college because I didn’t have big ambitions.

The course gave everyone work placement with most people keeping the job after the course, starting at €28,000 - €35,000 salary on average.

My following job 4 years later paid €70,000 and then 2 years later €80,000.

At age 28 I am €35,000 above the median Salary of the country which is around €44,000.

The ROI has been massive on that €12,000 spent on college.

edit: I additionally have many friends who came from family’s where their parents / siblings were not working and sitting on welfare. through free college via grants, these friends became the first in their families to get degrees and subsequently are earning well over €60,000+ on average. I would also like to highlight that some of these people even only got a very low passing grade and weren’t prodigies by any means of the word.

> In Ireland my college cost €3000 per year and most got it for free through government grants.

That's a great deal. My local university costs $10k per semester.

Grinds my gears to see every discussion of college ROI look at tuition and majors, but always the "Average" or "typical" student, NEVER segmented by, e.g. socioeconomic background.

If you can afford college, it is absolutely worth it to go to college. For a variety of reasons, ROI not top of the list.

If it may be hard for you to afford college, then it's a better question to ask.

I dropped out of college after stumbling my way through several majors and I still consider it to be a formative experience. But I have another problem with this: American primary and secondary education is terrible. College is the first time so many get exposed to things that are critical: the classics, high level math, statistics, etc.

Making college less necessary starts with improving primary and secondary education.

College is the first time so many get exposed to things that are critical: the classics, high level math, statistics, etc.

Are you saying Americans don’t take stats, calc, or English lit in high school?

Yes

Yes they teach all that in high school here

Most Americans don't even take stats or calc in college.

If you go to a quality private school, certainly. In public school? Most don't even get close, and the standards get lower by the year.

> If you can afford college, it is absolutely worth it to go to college. For a variety of reasons, ROI not top of the list.

This is complicated by the fact that the mission of the university and of education in general has become muddled. There is also an intellectual crisis that plagues academe (like the silos separating the liberal arts and the sciences). The two intertwined and at times competing missions are that of educating the person and that of career preparation. Arguably, the latter is where the bulk of energy is going; I don't know where you can locate the former, in general.

So, in that light, you have to ask: are universities the best option for everyone...

a) from the perspective of job training?

b) from the perspective of education?

Not everyone is called to go to university.

The lifetime ROI of college is only 13%?

https://libertystreeteconomics.newyorkfed.org/2025/04/is-col...

Doesn't that mean over the working life of the person (40 years), they spend (1-0.13) * 40 = 34.8yrs paying for the cost of college from their additional earnings?

I think my college was paid for with additional earnings inside of 5 years.

That's not lifetime ROI. It's pretty obvious they mean annual, since they compare it to stocks returning 8% and we know that isn't a "lifetime" return.

"Indeed, by comparison, the stock market has provided a long-term return of about 8 percent and bonds have returned around 4 percent."

Long story short, given that a academic loans are just as undismissable as a criminal judgement, school is a scam.

And since having a degree guaranteees absolutely nothing, doubly so.

"College Is Still Worth It Even with Higher Out-of-Pocket Costs"

You could at least try to engage with what the article actually says.

I read the article. My comment is a direct refutation of the premise of the article.

I think much 'higher education' is an inflated scam partially for being able to discriminate against black people, and they not as able to afford high education costs.

I still think apprentice work, but under multiple people with mastery, is the most effective. But only the trades see that as true.

I think only about half of students take out loans, so that's only part of the consideration.

I make 160k/yr, and blew 30k on school that amounted to absolutely nothing. I taught myself systems - there aren't even any degrees that discuss systems architecture. Its not even a thing.

I was sold a lemon. At least vehicles have a lemon law. Education has nothing such, and worse yet, has protections against things like even bankruptcy.

Edit: For those of you who -1ed this, I would love any sort of citable proof that university has a demonstrable anything positive. As far as I've seen, I've had to teach myself all the monetizable skills. All I have from what Uni classes I took is a big bill and absolutely no positive things.

Your degree had an impact on your hireability and marketability. It signals passing a threshold of work and knowledge, your self-edification doesn't. You can of course build something, but so do college grads, whom you compete against.

You also admitted that your wage is such that paying off the tuition was trivial. That makes it seem like a good deal, not a bad one. Even if you're strictly criticizing knowledge-transfer, most people would disagree and find some value in the format.

there's something disturbing about learning just being reduced to an ROI calculation. Is there no non-monetary value in the knowledge and skills? If it doesn't make us money it's not worth it?

I sincerely hope that we start sending a more considered and nuanced message to young people now about "college."

In my father's (Boomer) generation, you could incredibly easily see the net effect that college vs. no college had on career potential and thus earnings, and as a result I was coached to aim exclusively for college.

If I'm being honest I gained two main things from those four years:

1. I personally enjoyed a few fascinating or culturally uplifting classes, most of which were outside my major

2. By luck, I happened to meet someone in a class (which was an overall graduation requirement for the College of Business), who connected me to my first tech-related job.

Thankfully my school was cheap and I only graduated with about $40k in debt. But if I'd spent those 4 years living at home and teaching myself to code, I'd have been far ahead in my skills. To the extent anyone refused to hire a "non-college educated" software engineer, it would have been their loss, because it contributed nothing to my skills.

I will not be suggesting to my kids that they target "college," unless they have a very specific career goal and are confident on the job prospects and the median earnings being sufficient to pay back the loans and still be a net positive. There are just too many of the 'requires college' careers now that used to be somewhat viable and now are a dead-end joke, such as teaching, journalism, etc. Including software development, probably, for Gen Alpha, since nobody wants to hire juniors anymore, for rational reasons.

The real story is 3 links deep, in the PDF of the original analysis and methodology from 2014 - the same is applied to the 2023 data, so it's still relevant source material for understanding their numbers.

https://www.newyorkfed.org/medialibrary/media/research/curre...

So, as a layman who does not work for the NY fed, I thought it was a good analysis ;) that is, right up until the final number crunching where there appears to be some mathematical sleight of hand.

Essentially, their ROI is a comparison of wages with and without a degree, but the opportunity cost only counts earned wages and conspicuously omits investing those wages as part of the calculation. The sleight of hand is they make a point to compare ROI of education to the stock market _after the fact_ rather than baking it into the initial formula. Equally problematic is the complete omission of student loans which has the same effect.

To be charitable, hand-waving rates makes sense in the world of ROI - 12% with a late start will eventually overtake 7% with a head start, and is therefore numerically superior. But the paper repeatedly emphasizes its own caveat, that their analysis is "all based on historical trends, which are no guarantee of future patterns." It's precisely because of current trends - the rising student debt, soaring tuition, and the growing chasm between graduation and securing your first job - that this "late start" really needs further attention.

Where is it headed, and what's the tipping point? Maybe it's still valuable if you're graduating today, but what about 4 years from now?

Back to the methodology - the scenario explores averages, but should be one of ideal financial decision making, so someone with only a high school degree has an automatic 4 year head start earning AND investing money, but those that pursue a degree are set back by debt AND negative interest rates. The question is: how big is the gap and how long does it take to catch up? This is a function of tuition, interest, wages, job opportunities, and cost of living. Again, there's no arguing with ROI, but the living reality that this data reflects is a delayed start in life at best, and a marginally positive ROI on education at worst.

The paper mentions another significant caveat challenging its own fundamental assumption: education is an investment and not a filter. I'm not aware of any analysis comparing outcomes based on socioeconomic background, but we can assume the high academic achievers would still do well financially if they didn't go to college. But there a very real and growing cohort of individuals experiencing negative ROI, where debt exceed earnings. The best data I could find on this is from 2016, we're overdue for an update.

https://www.brookings.edu/articles/the-relationship-between-...

Yet there are further confounding factors - not at all mentioned is how the modern job market is dependent on educational attainment. Employers have entirely deferred training to colleges, and the vast majority of high earning jobs today (even beyond white collar roles - ex. running a daycare) have a hard requirement of higher education. With the exception of the recent, short-lived, learn2code/bootcamp trend, there is very little latitude for non-degree holders.

In summary, there's a worrying shift in the function of modern education. It all started as a common, shared dream to give young people a better chance in life. Gradually it became an economic investment to secure better employment, then it turned into training for jobs that no longer provide such resources. Today its used to filter out those found unqualified, and at worst is a form of gatekeeping, excluding those considered unworthy. Education has become a monolith and a monopoly that controls the "all day access pass" to the labor market. ROI is a diversion, the fact is its the only game in town. "Go to college and do well, or perish."

I would like to see the fine folks at the NY Fed follow up and try to compute these extra scenarios. Don't average the outcome like you're making a sales pitch. Give us a multi-dimensional breakdown like an economist - or else us unwashed, unqualified, uneducated folks will start doing our own sloppy math and running amok, giving people wrong ideas and ultimately mislead them into bad financial decisions, that other predatory institutions run by educated folks can profit off of. (What's the ROI on that outcome?)

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