Is College Still Worth It? The New Calculus of Falling Returns [pdf](stlouisfed.org)
stlouisfed.org
Is College Still Worth It? The New Calculus of Falling Returns [pdf]
https://www.stlouisfed.org/~/media/files/pdfs/hfs/is-college-worth-it/emmons_kent_ricketts_college_still_worth_it.pdf
351 comments
This is a really interesting addition to the literature if you dig through it, with subtle distinctions between income gains and wealth gains and interactions with demographics.
It's not a simple "college ain't what it used to be" story. The biggest puzzle is how to explain why recent grads still command significantly higher incomes than nongrads without accumulating significantly more wealth.
Increasing tuition is a factor, as is the declining return on capital gains over successive generations. Limited financial literacy and predatory lending seem to be hurting recent grads too.
Most notably, the inability to discharge school debt in bankruptcy since 2005 may have had strong effects.
That last legal change remains bewildering to me. You have three parties: schools, financial institutions, and teenagers. So uneducated teenagers are expected to know whether or not their choice in school, degree, expenses, and personal background will make their education worth it? When the other parties have all the data and experience? And if it turns out everybody was wrong, the now barely-employed twenty-something is least prepared to absorb the burden. More importantly, the least susceptible to incentives to improve this endemic situation for other future students. It creates a moral hazard which drives schools to overprice courses of education that are higher risk, and removes any incentive for lenders to educate borrowers on expected returns from different choices.
Policy circles are hotly debating right now how to overhaul the entire system. Maybe we should acknowledge the policy changes that helped break everything in the first place, and reverse those as soon as possible.
It's not a simple "college ain't what it used to be" story. The biggest puzzle is how to explain why recent grads still command significantly higher incomes than nongrads without accumulating significantly more wealth.
Increasing tuition is a factor, as is the declining return on capital gains over successive generations. Limited financial literacy and predatory lending seem to be hurting recent grads too.
Most notably, the inability to discharge school debt in bankruptcy since 2005 may have had strong effects.
That last legal change remains bewildering to me. You have three parties: schools, financial institutions, and teenagers. So uneducated teenagers are expected to know whether or not their choice in school, degree, expenses, and personal background will make their education worth it? When the other parties have all the data and experience? And if it turns out everybody was wrong, the now barely-employed twenty-something is least prepared to absorb the burden. More importantly, the least susceptible to incentives to improve this endemic situation for other future students. It creates a moral hazard which drives schools to overprice courses of education that are higher risk, and removes any incentive for lenders to educate borrowers on expected returns from different choices.
Policy circles are hotly debating right now how to overhaul the entire system. Maybe we should acknowledge the policy changes that helped break everything in the first place, and reverse those as soon as possible.
A person in our family is a specialized nurse. Two years of school, then some more training. $60hr any hour they "wish" to work. Saturdays/Sundays are $90hr, so is any hour after 8 hours. The demand is so high he just rejects work. If he wants to work in American Samoa or Miami: hired. I hired a person to install a garage door. $900 for an hour of work. My plumber wont show up for a 30 minute $300 job. I will call again, tomorrow fingers crossed. Get your brakes replaced - look at that bill. Try outsourcing that.
Everyone I meet that works at starbucks has a masters AND 90k in student debt. Bankruptcy doesn't make student loans go away.
I think things are about to start swinging in the "non-college" direction.
Everyone I meet that works at starbucks has a masters AND 90k in student debt. Bankruptcy doesn't make student loans go away.
I think things are about to start swinging in the "non-college" direction.
One thing I don't see talked about a lot is the risk involved in going to college.
All the frequently-cited studies about college look at the incomes of college graduates versus the incomes of non-college graduates, and then compare that to the cost of education, and that generally looks fairly positive.
But of students who enroll in 4-year programs, only 60% graduate within 6 years[1]. For these students, college has actively harmed them: they're saddled with crippling debt, but don't get the benefits of a college degree. Also consider that they aren't working as many hours, if any, during college, so they lose even more in wages they could have earned.
The EV if starting and finishing college is coming into question, but the EV of starting college is clearly negative if you have only a 60% chance of finishing.
[1] https://nces.ed.gov/fastfacts/display.asp?id=40
All the frequently-cited studies about college look at the incomes of college graduates versus the incomes of non-college graduates, and then compare that to the cost of education, and that generally looks fairly positive.
But of students who enroll in 4-year programs, only 60% graduate within 6 years[1]. For these students, college has actively harmed them: they're saddled with crippling debt, but don't get the benefits of a college degree. Also consider that they aren't working as many hours, if any, during college, so they lose even more in wages they could have earned.
The EV if starting and finishing college is coming into question, but the EV of starting college is clearly negative if you have only a 60% chance of finishing.
[1] https://nces.ed.gov/fastfacts/display.asp?id=40
I can't find the citation now but the biggest argument against college I've seen is that once you control for family income, life success is way more correlated to SAT scores/the college's you apply for than the ones you actually attend. This would imply that college success stats merely indicate that they are selective in who they choose to enroll.
EDIT: Its not the one I'm looking for, but I found a good one. http://conference.iza.org/conference_files/CoNoCoSk2011/gens... shows that if you control for IQ, the average person makes $100k more over the course of their whole working life by getting a bachelor's.
- This doesn't even account for the four years of work you lose by going to college instead of working.
- Its based on data from people who mostly graduated before the year 2000, and by all accounts the value of college is becoming less, not more. It's also based on a calculation when college was much cheaper.
EDIT: Its not the one I'm looking for, but I found a good one. http://conference.iza.org/conference_files/CoNoCoSk2011/gens... shows that if you control for IQ, the average person makes $100k more over the course of their whole working life by getting a bachelor's.
- This doesn't even account for the four years of work you lose by going to college instead of working.
- Its based on data from people who mostly graduated before the year 2000, and by all accounts the value of college is becoming less, not more. It's also based on a calculation when college was much cheaper.
If trades make so much money, how come no one is bitching about fatcat plumbers and roofers? Why hasn't the NY Times published any articles about how "Big Plumbing is soaking the middle class" etc.? For all the ways the middle class is getting hammered, I have yet to see one book about how plumbers are killing the middle class like I have with doctors, lawyers, techbros, and bankers. Until a journalist from NY Times or Bloomberg writes a book about how the decline of the American middle class is due to a plumbing conspiracy, you're just not bourgeois. Sorry.
"The rate of underemployment—working in a job that does not require a college degree—was 42.5 percent among recent graduates."
Wow. That, plus debt, is a huge hit.
The big item that analysis doesn't consider is the commonality of college education. "Between 2000 and 2018, the percentage of people 25 years and older who had completed a bachelor's degree or higher increased by 9 percentage points, from 25.6 percent to 35.0 percent." - Census Bureau[1]. That's for the entire population, so it lags changes for young people.
How did the St. Louis Fed miss that?
[1] https://www.census.gov/library/stories/2019/02/number-of-peo...
Wow. That, plus debt, is a huge hit.
The big item that analysis doesn't consider is the commonality of college education. "Between 2000 and 2018, the percentage of people 25 years and older who had completed a bachelor's degree or higher increased by 9 percentage points, from 25.6 percent to 35.0 percent." - Census Bureau[1]. That's for the entire population, so it lags changes for young people.
How did the St. Louis Fed miss that?
[1] https://www.census.gov/library/stories/2019/02/number-of-peo...
Their familial controls don't make much sense to me.
An actuary's kid will have an easier time becoming an actuary. Same for lawyers and doctors. That doesn't mean that college is a non causal factor in those students lifetime earnings... Quite the opposite. You're not becoming any of those things without college.
The student went to college precisely because they understand viscerally and precisely how college sets them up for a life of higher than average earnings. And what they need to do at college to tap into that potential.
Similarly, I'm not sure I believe the claim that there's no obvious causal link between education and financial acumen.
The big difference seems to be "do you know WHY you are at college?" And in cases where the answer is yes, it's still a good choice.
An actuary's kid will have an easier time becoming an actuary. Same for lawyers and doctors. That doesn't mean that college is a non causal factor in those students lifetime earnings... Quite the opposite. You're not becoming any of those things without college.
The student went to college precisely because they understand viscerally and precisely how college sets them up for a life of higher than average earnings. And what they need to do at college to tap into that potential.
Similarly, I'm not sure I believe the claim that there's no obvious causal link between education and financial acumen.
The big difference seems to be "do you know WHY you are at college?" And in cases where the answer is yes, it's still a good choice.
One of the costs that is often excluded, if you go the "not college" route, is the toll of physical labor on one's body. Medical expenses can be substantial and you didn't earn as much as an office job may have paid.
Coming from a small town in Indonesia, went to Singapore to study. Will end up with about 30k SGD (~22k USD) in student loan. Fresh graduate pay for software engineering in Singapore ranges mostly from 60-100k.
I think the decision worth it* because it opens up horizon, opportunities to working overseas (not just Singapore) and much better living standard.
I didn't even know what a CS degree will do after graduation and just randomly chose it because I like Math back in HS. I guess the real benefit of a degree is the pointers and community you get. Surely this can be replaced with a good mentorship, but that requires a good network beforehand.
*the quality of education in Singapore University IMHO is far from the quality of the content I found in the publicly shared course content in US universities.
I think the decision worth it* because it opens up horizon, opportunities to working overseas (not just Singapore) and much better living standard.
I didn't even know what a CS degree will do after graduation and just randomly chose it because I like Math back in HS. I guess the real benefit of a degree is the pointers and community you get. Surely this can be replaced with a good mentorship, but that requires a good network beforehand.
*the quality of education in Singapore University IMHO is far from the quality of the content I found in the publicly shared course content in US universities.
The first two paragraphs of page 23.
- Usury ceilings eliminated
- Costs ballooning
A proper title would be Is College Still Worth It [Financially]? Evaluating an education purely on economic terms is the wrong move to make, but unfortunately an increasingly common one.
I would have paid hundreds of thousands for my Physics degree if they'd have loaned me it.
The thing is that it makes sense if the degree leads to a dramatically higher income and you actually use the chance.
If I'd stayed in my hometown instead of moving to London, it'd still be worth it, but probably to the tune of 100-200K.
All of these numbers are probably lower than the benefit I'm likely to derive over my working life but 18 year old me would have risk adjusted.
Across the population of course, the balance changes dramatically, because huge numbers of people are terminally skint, working unskilled jobs, etc.
Most people probably shouldn't get a degree.
Who actually wants to be 'most people' when they're an 18 year old?
The thing is that it makes sense if the degree leads to a dramatically higher income and you actually use the chance.
If I'd stayed in my hometown instead of moving to London, it'd still be worth it, but probably to the tune of 100-200K.
All of these numbers are probably lower than the benefit I'm likely to derive over my working life but 18 year old me would have risk adjusted.
Across the population of course, the balance changes dramatically, because huge numbers of people are terminally skint, working unskilled jobs, etc.
Most people probably shouldn't get a degree.
Who actually wants to be 'most people' when they're an 18 year old?
Regardless of any opinions on either side, I don't understand why we have made degree a social prestige?
Someone in the comments said degree values will degrade and they are probably right as it happened with lower education as more and more people got in. Maybe there are lack of jobs or companies are exploiting people by making them grind more in an artificial constraint environment or some people are hogging off the resources and causing major inequality in pay gaps?
I have no doubt education is valuable and so is experience but why does that have to compress or translate into a paper? Should we really be running on an old feudal model of producing workers in 2020?
I have a lot of questions. I dropped out of school recently due to the toxic culture degrading my health to the point I am severely antisocial and definitely depressed enough for no reason.
The competitive grind is worse in countries with overpopulation and the quality is just outrageous.
I just wanted to work on something cool, become a surgeon but that route was sealed at 10. No money, no family prospects, grinding is too difficult and being a drug addict and die young seems a better option if you had a non functional childhood due to the whole burden later on.
I thought life would improve with vast improvements in productivity and industrial revolution but what we got in the end seems to be mostly cosmetic for the past 20 years. Yes, having the ability to order food or communicate is nice but that was doable before too. Taxi on demand? Well, we had numbers before (even though I was born in 00s), my dad has stories of it.
Fancy animated avatar on social platforms seems cosmetic. What else really changed in life quality?
I have a degree from a state school in chemistry, it's been worth it for me. In part because the GI Bill paid for it, but it also landed me several jobs writing software where domain knowledge is required and not so easy to come by without formal education.
College isn't worth it, but that's the whole point. It's becoming what economists call a Giffen Good, that is, something people consume even more of the more expensive it becomes.
The biggest value factor of all is Metcalfe's Law of network effects, where the almost universal availability of higher education means that not pursuing it places your starting position in life on the outer long tail of the success curve. Not going to college is like being a business that decided to just never bother getting on the internet, or a person who doesn't know how to drive. Unless you move to some isolated backwater that isn't subject to the network or are some kind of extreme outlier, you are at a huge disadvantage.
Notable that these articles about the doubtful value of a university degree are written exclusively by people who have one.
The wider availability of education (via cheap debt) and downward mobility means a degree (all things equal) is no longer as distinguishing and does not have the same impact on life outcomes as it once might have. Even previously, the people who went to college had such a huge social head start anyway, it would be difficult to control for education as the determining factor in success.
University is starting to resemble a "radical monopoly," (Ivan Illich, summarized here: https://twitter.com/fietsprofessor/status/112207372586260070...) where there is nothing discretionary about it.
Outside of STEM, I'd argue modern colleges offer students very little more than a tribal affiliation, which is the elephant in the room for articles like these. If you told kids why they need to go to college, it would devalue the degree even further as they re-tribalized around other rites of passage. This doesn't mean don't go to college, it means do absolutely everything in your power to graduate college, because the arbitrary biases and disadvantages of the alternative defy all reason and make anyone with an IQ above 90 insane.
When you look at college as a Giffen Good, which people need for participation in a radical monopoly over the labour market, created by a network effect from its debt fueled availability, of course it seems like a college education is not worth it - but it's only ever not worth it to people who already have one.
I'd like a mainstream platform to write that view and put these "is college worth it?" navel gazer articles to rest. If only there were an institution to affiliate with...
The biggest value factor of all is Metcalfe's Law of network effects, where the almost universal availability of higher education means that not pursuing it places your starting position in life on the outer long tail of the success curve. Not going to college is like being a business that decided to just never bother getting on the internet, or a person who doesn't know how to drive. Unless you move to some isolated backwater that isn't subject to the network or are some kind of extreme outlier, you are at a huge disadvantage.
Notable that these articles about the doubtful value of a university degree are written exclusively by people who have one.
The wider availability of education (via cheap debt) and downward mobility means a degree (all things equal) is no longer as distinguishing and does not have the same impact on life outcomes as it once might have. Even previously, the people who went to college had such a huge social head start anyway, it would be difficult to control for education as the determining factor in success.
University is starting to resemble a "radical monopoly," (Ivan Illich, summarized here: https://twitter.com/fietsprofessor/status/112207372586260070...) where there is nothing discretionary about it.
Outside of STEM, I'd argue modern colleges offer students very little more than a tribal affiliation, which is the elephant in the room for articles like these. If you told kids why they need to go to college, it would devalue the degree even further as they re-tribalized around other rites of passage. This doesn't mean don't go to college, it means do absolutely everything in your power to graduate college, because the arbitrary biases and disadvantages of the alternative defy all reason and make anyone with an IQ above 90 insane.
When you look at college as a Giffen Good, which people need for participation in a radical monopoly over the labour market, created by a network effect from its debt fueled availability, of course it seems like a college education is not worth it - but it's only ever not worth it to people who already have one.
I'd like a mainstream platform to write that view and put these "is college worth it?" navel gazer articles to rest. If only there were an institution to affiliate with...
I have some kids and college is about a decade away for them, so this is pretty timely. I remember reading a post in the 2000s about whether the internet (or, more precisely, some application built on the internet) would do the same thing to colleges as Craigslist did to the newspapers. Peel off the valuable bits and by doing so disaggregate and destroy/heavily damage the institution.
Still waiting for this to happen, but maybe lambda school and bootcamps are the start. I expect credentialing of schools and the longer engagement with colleges to make the transition longer. Bit I don't see how colleges avoid being unbundled.
Still waiting for this to happen, but maybe lambda school and bootcamps are the start. I expect credentialing of schools and the longer engagement with colleges to make the transition longer. Bit I don't see how colleges avoid being unbundled.
Hint to paper writers: you can put your figures inline instead of all at the end.
What a dismal reading experience, skimming from pages of text to the end to see what the cited figure(s) actually show, then back to the text again.
Who sanctions this sort of thing?
What a dismal reading experience, skimming from pages of text to the end to see what the cited figure(s) actually show, then back to the text again.
Who sanctions this sort of thing?
There is a line of thinking that college tuition should rise until the ROI on higher education drops to zero, using some twisted Pareto logic. I would consider such an outcome to be neither optimal nor efficient.
I don't have a degree and am constantly told in rejections by potential employers, and my own employer when applying for advancement, that they are looking for degree holders. Many job listings also flat out state a 4-year degree is a minimum.
A degree would absolutely, positively, beyond any shadow of a doubt improve my chances of increasing my income. At my current job only about 7%.
But the tens of thousands of dollars of debt I'd have to take on to get that degree at 4.5-7% interest (or higher)... yeah thanks but no thanks.
So, anecdotally at least, I can agree that there are pretty diminishing returns to getting a degree. While I'd be all but guaranteed to increase my income, I'd be paying out more though:
a 20k 10-year loan at 6.8% (finaid.org suggested this %) interest means I'm paying 27,619.31
a 40k 10-year loan at 6.8% interest means I'm paying 55,238.63
At my current income the 20k loan, bumping up one position and considering our raises inside a position are limited to less than 3.5% annually based on a rather arbitrary 'merit review'. It would be 7-10 years of my increased pay just to cover the loan, assuming no taxes were taken on the increase but also factoring in insurance increases. That means in 14 years I could start keeping more money from that 4 year degree if I could manage a 20k$ degree.
Ha!
A degree would absolutely, positively, beyond any shadow of a doubt improve my chances of increasing my income. At my current job only about 7%.
But the tens of thousands of dollars of debt I'd have to take on to get that degree at 4.5-7% interest (or higher)... yeah thanks but no thanks.
So, anecdotally at least, I can agree that there are pretty diminishing returns to getting a degree. While I'd be all but guaranteed to increase my income, I'd be paying out more though:
a 20k 10-year loan at 6.8% (finaid.org suggested this %) interest means I'm paying 27,619.31
a 40k 10-year loan at 6.8% interest means I'm paying 55,238.63
At my current income the 20k loan, bumping up one position and considering our raises inside a position are limited to less than 3.5% annually based on a rather arbitrary 'merit review'. It would be 7-10 years of my increased pay just to cover the loan, assuming no taxes were taken on the increase but also factoring in insurance increases. That means in 14 years I could start keeping more money from that 4 year degree if I could manage a 20k$ degree.
Ha!
> we find that controlling for the education of one’s parents reduces our estimates of college and postgraduate income and wealth premiums by 8 to 18 percent. Controlling also for measures of a respondent’s financial acumen—which may be partly innate—, our estimates of the value added by college and a postgraduate degree fall by 30 to 60 percent. Taken together, our results suggest that college and post-graduate education may be failing some recent graduates as a financial investment
There is no doubt in my mind that someone’s parents’ status and education, and someone’s financial acumen, are both leading to higher incomes and wealth.
Why does it make sense to “control” for these things? Doesn’t this lead to a distorted view, where large real differences in income between two people are factored away?
Sure, financial acumen might be partly innate, or correlated with IQ or family status, but some people surely gain financial acumen precisely by going to college? Sure, parent’s education is a great predictor or ‘own education’, but does that really imply the alternative- that when the professor’s kid is a high school dropout that the kid is better off than other dropouts? Is that supported by the data? Maybe yes, because daddy prof has more money to support his kid, but what happens with the dropout’s kids and future generations?
I’m not arguing that the premium isn’t going down, it’s true that tuition is out of control, but I’m not sure I understand how the methodology here isn’t painting a starker picture than reality. Discounting 50% for ‘acumen’ is a huge influence on the numbers, and when you don’t discount for parents and acumen, the reality is that people with college degrees are earning a lot more actual money.
There is no doubt in my mind that someone’s parents’ status and education, and someone’s financial acumen, are both leading to higher incomes and wealth.
Why does it make sense to “control” for these things? Doesn’t this lead to a distorted view, where large real differences in income between two people are factored away?
Sure, financial acumen might be partly innate, or correlated with IQ or family status, but some people surely gain financial acumen precisely by going to college? Sure, parent’s education is a great predictor or ‘own education’, but does that really imply the alternative- that when the professor’s kid is a high school dropout that the kid is better off than other dropouts? Is that supported by the data? Maybe yes, because daddy prof has more money to support his kid, but what happens with the dropout’s kids and future generations?
I’m not arguing that the premium isn’t going down, it’s true that tuition is out of control, but I’m not sure I understand how the methodology here isn’t painting a starker picture than reality. Discounting 50% for ‘acumen’ is a huge influence on the numbers, and when you don’t discount for parents and acumen, the reality is that people with college degrees are earning a lot more actual money.
Look, I'm studying undergraduate philosophy with no intention other than why not. Would I say I could learn the material on my own w/o college? Absolutely but I like the organized structure of college w/ professors, peers, etc. Am I getting into debt? A fair bit. Is it worth the trade off? I certainly think so. Will I say that five years from now? Most likely. Because here's the thing: education as a means to an end is not what it's all about, and so many of us subscribe to this fiction―to this warm stupor of society's fictions―that we forget what it is truly about. College will always be worth it such that you have an endless curiosity or enjoy erring in the direction of learning which is deeply rooted into failing, or rather, not understanding, over and over again.
When signing up for my current job, I didn't even bother bringing them my master's degree. Too bad because it's from one of top two tech unis in the country. Not to downplay the benefits of higher education, but it's certainly not a prereq for good employment these days.
Acquiring the "college income premium" is not the reason for going to college. College and universities allow students relatively unfettered exploration of ideas and social interactions. While some of us manage to do that without the umbrella of academia, most of us fare better at a college.
Moreover, colleges and universities (especially the great research universities) provide a way to push back the boundaries of human knowledge and transfer concepts and technology to a new generation. College is where you meet friends and lovers.
Moreover, colleges and universities (especially the great research universities) provide a way to push back the boundaries of human knowledge and transfer concepts and technology to a new generation. College is where you meet friends and lovers.
Higher learning was is and will always be "worth it." Knowledge is good.
Bloatful College administrations not nearly as much. Funny how no one ever studies their utility/cost returns.
The last time I looked at this data (lifetime earnings) the difference was close to $1M on average for men and substantially lower for women. The opportunity cost of going to college is about 1/5 of that difference if you pay up front but substantially more if you take out loans. Here’s another thought that’s not discussed in any of the studies: what’s the impact of someone attending college later in life? Say in late 20s? I’d argue that the degree has greater impact on remaining future income under that scenario.
I made a very simple one spreadsheet model just yesterday after talking about this with a friend:
https://docs.google.com/spreadsheets/d/1KpmT8JdF-0CKyRk8_DL7...
Every student should do a cost/benefit analysis of what a degree from a given institution will be worth to them - too many students fall into massive debt they can never pay back.
https://docs.google.com/spreadsheets/d/1KpmT8JdF-0CKyRk8_DL7...
Every student should do a cost/benefit analysis of what a degree from a given institution will be worth to them - too many students fall into massive debt they can never pay back.
> Combined with a continuing surge in the number of new college graduates entering the labor market, this resulted in stagnating wages in those jobs along with a “cascade” of college graduates into lower-skill jobs. These underemployed college graduates, in turn, pushed some low-skilled workers out of the job market altogether.
Right ... yet, believe this paper when it says that those pushed-out-of-the-job-market low-skilled workers with no college degrees are not any worse off.
Right ... yet, believe this paper when it says that those pushed-out-of-the-job-market low-skilled workers with no college degrees are not any worse off.
I'd offer a much simpler explanation: education is mostly a competitive tool, when more people have it, it's value naturally declines right? As fraction of population with a college degree increased from about 4% in 1940 to about 30% today, obviously advantage offered by it, declined. And went to essentially zero if measured by wealth because wealth is something only top of population pyramid has, in general: fewer than 30%.
just want to add something that seems missing from much of the discussion of higher education; consider the question rephrased as, "is it worth learning to learn?" higher ed is not just job training. its exposure to ideas, opinions, people, and energy in an environment explicitly not tied to a profit motive. it should be cheaper, and more accessible, but..
1: Lots of companies will reject you on sight without a degree. I don't think it's a good thing, but it is reality.
2: With a degree your ability to move overseas dramatically improves. I moved to America after graduating. I flat out couldn't have done that without a degree. Points based systems immigration systems like New Zealand have dramatic bonuses for people with degrees.
3: You don't have to jump through the hoops and explain why you don't have a degree all the time. Stupid reason I know, but it's something I've seen friends without degrees have to do constantly - and not just in career situations. As I mentioned, I went to a no-name university. If you live in NZ, you'll know it. If you're an American, chances are, you've never heard of it. But because I have a degree, it doesn't ever really come up.
4: The cost isn't that bad, when you spread it out over a career. My degree & living costs cost about $60k NZD (~$40k USD). That's $1k USD / year, or $.50 per hour. Considering how my income has multiplied in the few years since I've graduated (SF wages help tremendously here), the actual cost is barely anything, even when you control for the opportunity cost of studying.
Where I think College returns make a lot less sense
• Paying out of state tuition for lifestyle reasons, when you're going into a relatively low paid field afterwards (e.g. teaching).
• Paying private school tuition at a school without a strong reputation
• Grad school, in general, seems to be a rip off