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Comment by djoldman | Hacker News Reader

The calculation is interesting:

(For bachelors degrees): Each year, they will calculate the median earnings 4 years after graduation of graduates of every (Institution, CIP code) tuple. (CIP Code: 6 digit code that identifies a "program"; there are ~2,000).

Then they calculate the median earnings of high school grads in that Institution's state across all jobs.

If the high school grads earn more than the bachelors degree grads for 2 out of the past 3 years, the Feds won't offer student loans for that (Institution, CIP code) tuple.

Incidentally, the IRS already supplies this data in aggregated form to the US Dept. of Ed.

Check it out here: https://collegescorecard.ed.gov/

Here is MIT: https://collegescorecard.ed.gov/school/?166683-Massachusetts...

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So the jobs of the past will determine the funding of the future. This must be some new kind of economic planning.

Wait, no it's not. It's how economic planning always worked. It's summed up by the saying "The generals are always preparing to fight the last war." The university near my house is just putting the finishing touches on a building to house the new Data Science program, that was started a few years ago.

If the future labor market is so unpredictable that we literally know nothing about it, then we really shouldn't be giving out student loans.

We don't know literally nothing. For instance we know which college majors are favored politically, and which ones are popular. /s Or we can survey high school students. They are probably closer to the reality of the job market than the economic planners.

Anecdote: My kids were in the regional youth orchestra, and every year at the last concert of the season, the program included a bio of every graduating senior, including their future plans. The hottest major was computer science, followed by biochemistry and engineering. These kids knew exactly which majors the economic planners would have chosen for them.

But I agree. Student loans were a band-aid on a system that could have just as effectively subsidized college education directly.

Unless I'm misunderstanding, that calculation sounds fundamentally wrong if it's comparing median college graduate earnings after 4 years against high school graduate earnings in general.

After 4 years the median college graduate is still early in their career and likely hasn't hit their maximum income potential, but they're being compared against high school graduates at every stage of their careers, including those who have maxed out their potential income in whatever field they're working in. Or is the high school comparison similarly limited to early career?

A bachelors degree should be a large jump in earnings. I think in the 90s it was stated that high school diploma was lifetime ~$600,000, bachelors was $1,200,000,and so on up to PhD at $6,000,000 lifetime median earnings.

So a bachelors degree should get something like 25-50% more money after graduatation than the median high school graduate.

A significant difference in lifetime earnings doesn't necessarily imply a large jump in early career earnings. For example the difference in lifetime earnings could come entirely from significantly higher income later in a career that more than makes up for a lower starting salary.

Some professional careers work exactly like this, for example pilot or doctor. Lifetime earnings would be a much better comparison than just looking at the first few years of a career to asses if the educational investment was worth it or not.

It's 25-34 year olds:

> To calculate the earnings premium for undergraduate programs, the threshold is the median U.S. Census Bureau earnings of a working high school graduate, aged 25-34 who were not enrolled in postsecondary education during the year of the associated measured earnings, in the state in which the institution is located unless the institution enrolls more than 50% of its students from out of state, in which case the national median is used.

Details here: https://www.nasfaa.org/ge_2026

That seems too broad of an age range since you end up comparing 34 year old high school graduates to people with undergraduate degrees a decade earlier in their careers.

Only looking at the first few years of a career for undergraduates has another problem I mentioned in a different comment. Not all professions have high starting salaries even if your lifetime earning potential is significantly improved. As far as I can tell this methodology, if applied to graduate degrees, would conclude medical school isn't worth it as an example.

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