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recessiontime
Joined: 21 Jun 2010
Location: Got avatar privileges nyahahaha
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 Posted: Mon Mar 28, 2011 5:59 am Post subject: Forget Harvard and a 4-Year Degree... |
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Forget Harvard and a 4-Year Degree, You Can Make More as a Plumber in the Long Run, Says Prof. Kotlikoff
http://finance.yahoo.com/tech-ticker/forget-harvard-and-a-4-year-degree-you-can-make-more-as-a-plumber-in-the-long-run-says-prof.-kotlikoff-536046.html
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The value of a college education has been a hot topic of discussion here at Tech Ticker. Now there�s more fodder for debate.
A new study from Princeton University shows that expensive college degrees are not necessarily worth the lofty price tags in the long run when you take into account one's natural ability.
Laurence Kotlikoff, professor of economics at Boston University agrees that an expensive education just isn't worth it -- much to his chagrin of course because tuition and fees at Boston University totalled $39,314 for 2010-11.
With unemployment still about 9 percent, on average, for college graduates under the age of 25, and total student-loan debt now topping that of credit card debt in this country, he tells Aaron in the accompanying clip, �If you think of education as solely a monetary investment, if we are not thinking about all the other benefits from education like learning things, and getting to hang out with me, and also just becoming a more cultured person, then we have to look at this very carefully.�
So, what does college tuition and room and board cost today?
Well, tuition is the most expensive it has have ever been, rising roughly 5.6 percent per year beyond the rate of inflation, reports the College Board.
In-state tuition and fees at a public four-year university were on average $7,605 for the 2010-11 term. When you tack on room and board, the total average cost jumps to $16,140.
Tuition and fees at a private four-year college were on average $27,293 for the same term. And, the total average cost with room and board amounted to $36,993.
That�s a lot of dough -- especially when you multiply it by four years. It's for that same reason James Altucher, founder of Formula Capital, made his case to Tech Ticker last year that kids should forget the degree altogether. (See: Rethinking College as Student-Loan Burdens Rise)
Kotlikoff has been doing a bit of his own research on the matter as president of Economic Security Planning Inc. He�s developed software that according to the website can �tell you if a job change, a housing move, a retirement account contribution, and a host of other financial decisions will raise or lower your living standard.�
Kotlikoff's research aligns with Altucher's credo. He has found that more often than not, people can have a better lifetime standard of living by choosing NOT to get an advanced degree. And, he says that people can be better off financially by not obtaining an undergraduate degree at all.
Professor Kotlikoff makes his case by comparing the livelihoods of plumbers and doctors. Yes, doctors have a bigger salary. But, doctors have to endure nearly a decade of expensive education before making any real salary, after which the doctor is hit by a very high progressive tax rate. Because of all the costs the doctor incurs, the taxes and the lost wages, he says, �plumbers make more, and have almost the same spending power over their lifetime as general practitioners."
The high cost of tuition � and in turn high burden of student debt � is a key part to Kotlikoff's findings.
�[This] is a debt a kid cannot discharge through bankruptcy,� he explains. �We have a lot of kids who are borrowing a lot of money that they can�t discharge through bankruptcy who are ending up basically in debtors prison for the rest of their life because they potentially made the wrong choice when it came to education.�
If parents are paying, Kotlikoff says, all bets are off. But, for those considering college, who have to pay for all the costs alone, his advice is to think not once, not twice, but three times over about the financial burden of future student-loan debt. |
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Swampfox10mm
Joined: 24 Mar 2011
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| Posted: Tue Mar 29, 2011 7:27 pm Post subject: |
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| I totally agree. I have high school friends in plumbing and electrical jobs that are making 3 times what I make. Skilled labor has a huge future. Far too many people attend college these days, and there are too many useless kinds of university degrees. |
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SMOE NSET
Joined: 25 Feb 2010
Location: Seoul
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| Posted: Tue Mar 29, 2011 7:43 pm Post subject: |
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I agree as well. My dad owns his own remodeling business. He has an engineering degree but gets paid more to do electrical and plumbing jobs. His courses to be certified were easily less than one semester of university classes (plumbing and electrician). He is debating on being a certified air conditioning tech to add more business. Not that he is struggling though, many people can't even do simple home repairs and call him up. He charges $50 an hour and they happily pay. Shocking really.
He knows plumbers that charge up to $100 an hour sometimes! When I worked for him, I made $25/hour but did minor work compared to them. Mostly painting, framing, and yard work (digging holes for the plumbing) but still great money. |
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NohopeSeriously
Joined: 17 Jan 2011
Location: The Christian Right-Wing Educational Republic of Korea
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| Posted: Tue Mar 29, 2011 9:58 pm Post subject: |
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| My friend opened a mixed French-Lebanese style bakery. Excellent service and it brings a lot of moola. |
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geldedgoat
Joined: 05 Mar 2009
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| Posted: Tue Mar 29, 2011 11:36 pm Post subject: |
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| Universities are not, and should not be, trade schools, and those that attend them thinking they are will probably be sorely disappointed. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Apr 04, 2011 2:17 pm Post subject: |
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http://www.kevinmd.com/blog/2011/04/real-life-medical-school-debt.html
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Want to really understand the reality of US medical education debt? Then allow me to pull back the curtains to expose the financial monster that awaits me after I earn my MD.
I am a third medical student at a private medical school in the Midwest. Fortunately, I was able to graduate from college without any financial debt thanks to an athletic scholarship. Unfortunately, I, like many other medical students, pay for my entire medical education and living expenses through student loans.
The average medical school debt today, according to the Association of American Medical Colleges is $156,456. I can only wish that was true for me. Perhaps the best way to understand the burden of a current medical student�s debt is by example. Here is an approximation of my real-life medical school debt assuming I select forbearance during residency and repay the loan over 15 years:
Annual cost of tuition: $48,000
Annual cost of attendance: $67,500 (Includes costs of books/supplies, loan fees, health insurance, licensure fees, living expenses, and transportation allowance)
Total balance after medical school: $270,000
Amount subsidized: $34,000
Amount unsubsidized: $236,000
Interest incurred during 3 years of residency: $100,000
Total balance after residency: $370,000
Monthly payment after residency: $3,370 (180 total payments)
Interest incurred after residency: $237,000
Total repayment: $607,000
These financial conclusions were reached via the Association of American Medical Colleges� Medloans Calculator. Again, these numbers are approximations and many different repayment plans exist, but it certainly highlights the massive financial burdens placed on today�s medical students. |
600k to become a dr. |
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silkhighway
Joined: 24 Oct 2010
Location: Canada
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| Posted: Mon Apr 04, 2011 2:39 pm Post subject: |
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| mises wrote: |
http://www.kevinmd.com/blog/2011/04/real-life-medical-school-debt.html
| Quote: |
Want to really understand the reality of US medical education debt? Then allow me to pull back the curtains to expose the financial monster that awaits me after I earn my MD.
I am a third medical student at a private medical school in the Midwest. Fortunately, I was able to graduate from college without any financial debt thanks to an athletic scholarship. Unfortunately, I, like many other medical students, pay for my entire medical education and living expenses through student loans.
The average medical school debt today, according to the Association of American Medical Colleges is $156,456. I can only wish that was true for me. Perhaps the best way to understand the burden of a current medical student�s debt is by example. Here is an approximation of my real-life medical school debt assuming I select forbearance during residency and repay the loan over 15 years:
Annual cost of tuition: $48,000
Annual cost of attendance: $67,500 (Includes costs of books/supplies, loan fees, health insurance, licensure fees, living expenses, and transportation allowance)
Total balance after medical school: $270,000
Amount subsidized: $34,000
Amount unsubsidized: $236,000
Interest incurred during 3 years of residency: $100,000
Total balance after residency: $370,000
Monthly payment after residency: $3,370 (180 total payments)
Interest incurred after residency: $237,000
Total repayment: $607,000
These financial conclusions were reached via the Association of American Medical Colleges� Medloans Calculator. Again, these numbers are approximations and many different repayment plans exist, but it certainly highlights the massive financial burdens placed on today�s medical students. |
600k to become a dr. |
And a median salary of over 300K a year for a surgeon. Even on the low end of the scale it's around 230K.
So to the author, woe is you. You have debt which could easily pay off within 5 years and then you'll be clearing a 6-digit salary times three every year after that. |
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silkhighway
Joined: 24 Oct 2010
Location: Canada
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| Posted: Mon Apr 04, 2011 2:48 pm Post subject: |
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I agree with the OP on one thing. You can earn a decent living by picking up a skilled trade and managing your money properly. Don't feel you have to go to university if that doesn't suit you.
But if big bucks are on your mind, it's not all going to be all peaches and cupcakes. You are going to be working in places like Northern Alberta, where you'll be putting 60-80 hour weeks in working in -40C degree weather often under dangerous conditions doing dirty repetitive work. Your brief time off will eaten up by waiting for flights back and forth.
Virtually everyone you'll be working with are going to be males, often with sketchy personal lives. Many of them will be earning more money than they are capable of handling. Whereas the lifestyle easily accommodates second homes and multiple vehicles, it doesn't easily accommodate a stable personal and family life. Divorce rates, family problems, and drug and alcohol abuse rates are very high. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Apr 04, 2011 3:09 pm Post subject: |
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| silkhighway wrote: |
| mises wrote: |
http://www.kevinmd.com/blog/2011/04/real-life-medical-school-debt.html
| Quote: |
Want to really understand the reality of US medical education debt? Then allow me to pull back the curtains to expose the financial monster that awaits me after I earn my MD.
I am a third medical student at a private medical school in the Midwest. Fortunately, I was able to graduate from college without any financial debt thanks to an athletic scholarship. Unfortunately, I, like many other medical students, pay for my entire medical education and living expenses through student loans.
The average medical school debt today, according to the Association of American Medical Colleges is $156,456. I can only wish that was true for me. Perhaps the best way to understand the burden of a current medical student�s debt is by example. Here is an approximation of my real-life medical school debt assuming I select forbearance during residency and repay the loan over 15 years:
Annual cost of tuition: $48,000
Annual cost of attendance: $67,500 (Includes costs of books/supplies, loan fees, health insurance, licensure fees, living expenses, and transportation allowance)
Total balance after medical school: $270,000
Amount subsidized: $34,000
Amount unsubsidized: $236,000
Interest incurred during 3 years of residency: $100,000
Total balance after residency: $370,000
Monthly payment after residency: $3,370 (180 total payments)
Interest incurred after residency: $237,000
Total repayment: $607,000
These financial conclusions were reached via the Association of American Medical Colleges� Medloans Calculator. Again, these numbers are approximations and many different repayment plans exist, but it certainly highlights the massive financial burdens placed on today�s medical students. |
600k to become a dr. |
And a median salary of over 300K a year for a surgeon. Even on the low end of the scale it's around 230K.
So to the author, woe is you. You have debt which could easily pay off within 5 years and then you'll be clearing a 6-digit salary times three every year after that. |
A surgeon is several years more education. The article is not about a surgeon.
Payscale says a Family Physician / Doctor earns $138,875 median. The article is from the Midwest, so let's assume Illinois. Paycheck city shows a weekly pay after taxes of $7,680.90. 180 months of subtracting $3,370. $4,310.00 a month. Not exactly living the high life.
You spend 8 years earning nothing and then 15 years paying back loans at around 43% of takehome.
Not the best deal. |
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silkhighway
Joined: 24 Oct 2010
Location: Canada
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| Posted: Mon Apr 04, 2011 4:00 pm Post subject: |
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| mises wrote: |
| silkhighway wrote: |
| mises wrote: |
http://www.kevinmd.com/blog/2011/04/real-life-medical-school-debt.html
| Quote: |
Want to really understand the reality of US medical education debt? Then allow me to pull back the curtains to expose the financial monster that awaits me after I earn my MD.
I am a third medical student at a private medical school in the Midwest. Fortunately, I was able to graduate from college without any financial debt thanks to an athletic scholarship. Unfortunately, I, like many other medical students, pay for my entire medical education and living expenses through student loans.
The average medical school debt today, according to the Association of American Medical Colleges is $156,456. I can only wish that was true for me. Perhaps the best way to understand the burden of a current medical student�s debt is by example. Here is an approximation of my real-life medical school debt assuming I select forbearance during residency and repay the loan over 15 years:
Annual cost of tuition: $48,000
Annual cost of attendance: $67,500 (Includes costs of books/supplies, loan fees, health insurance, licensure fees, living expenses, and transportation allowance)
Total balance after medical school: $270,000
Amount subsidized: $34,000
Amount unsubsidized: $236,000
Interest incurred during 3 years of residency: $100,000
Total balance after residency: $370,000
Monthly payment after residency: $3,370 (180 total payments)
Interest incurred after residency: $237,000
Total repayment: $607,000
These financial conclusions were reached via the Association of American Medical Colleges� Medloans Calculator. Again, these numbers are approximations and many different repayment plans exist, but it certainly highlights the massive financial burdens placed on today�s medical students. |
600k to become a dr. |
And a median salary of over 300K a year for a surgeon. Even on the low end of the scale it's around 230K.
So to the author, woe is you. You have debt which could easily pay off within 5 years and then you'll be clearing a 6-digit salary times three every year after that. |
A surgeon is several years more education. The article is not about a surgeon.
Payscale says a Family Physician / Doctor earns $138,875 median. The article is from the Midwest, so let's assume Illinois. Paycheck city shows a weekly pay after taxes of $7,680.90. 180 months of subtracting $3,370. $4,310.00 a month. Not exactly living the high life.
You spend 8 years earning nothing and then 15 years paying back loans at around 43% of takehome.
Not the best deal. |
If it's not a surgeon, why does it cost so much money for training?
I don't know, I'm sceptical here. I'm sure you could engineer the variables so that a plumber will earn more than a doctor. There are even a few noted outliers that prove it's possible ("The Wealth Barber"). You could ignore that there are grants, and bursaries for med students. You could ignore that a huge chunk of their debt is a tax write-off. You could ignore that doctors are alpha members of the community who find sideline incomes and end up in positions as community leaders and on boards of trustees.
Even then, if it was true that the plumbers clear more money after a 25 year career, it strikes me as such an academic exercise that a high school kid would choose a career between plumbing and med school that would only happen in an alternate reality. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Mon Apr 04, 2011 4:05 pm Post subject: |
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| silkhighway wrote: |
Even then, if it was true that the plumbers clear more money after a 25 year career, it strikes me as such an academic exercise that a high school kid would choose a career between plumbing and med school that would only happen in an alternate reality. |
Don't neglect opportunity costs; measured both in financial terms and in other terms, social and even reproductive. |
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Fox
Joined: 04 Mar 2009
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| Posted: Mon Apr 04, 2011 4:12 pm Post subject: |
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| silkhighway wrote: |
| If it's not a surgeon, why does it cost so much money for training? |
Because we demand doctors be over-educated. Reducing the qualifications for general practicioner is an important step in real medical reform.
For a surgeon, yes, he needs to be highly educated even beyond his specialty, as during surgery any number of things can happen that might require immediate expertise to respond to. For a general practicioner in the information age, much less is required, we need far more of them, and we want to reduce costs. The answer is to just demand less training; make it more accessible, and you'll get more people doing it, and probably without reducing quality given the nature of the work. |
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Space Bar
Joined: 20 Oct 2010
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| Posted: Mon Apr 04, 2011 6:06 pm Post subject: |
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| mises wrote: |
| A surgeon is several years more education. The article is not about a surgeon. |
ANY specialty requires at least three, and usually four, more years of training after graduation. Pity the poor pediatrician making only $120,000.
| Quote: |
Because we demand doctors be over-educated. Reducing the qualifications for general practicioner is an important step in real medical reform.
For a surgeon, yes, he needs to be highly educated even beyond his specialty, as during surgery any number of things can happen that might require immediate expertise to respond to. For a general practicioner in the information age, much less is required, we need far more of them, and we want to reduce costs. The answer is to just demand less training; make it more accessible, and you'll get more people doing it, and probably without reducing quality given the nature of the work. |
I don't know. With less training, you just might end up with more referrals to specialists. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Mon Apr 04, 2011 6:43 pm Post subject: |
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| Aren't there debt-clearing programs for public service or NGO jobs in medicine? There are in law. 10 years of consecutive public service or even private non-profit work and your debt is wiped clean. |
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Fox
Joined: 04 Mar 2009
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| Posted: Mon Apr 04, 2011 6:54 pm Post subject: |
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| Space Bar wrote: |
| I don't know. With less training, you just might end up with more referrals to specialists. |
Even if that happened (which I'm not sure it would, at least to a problematic degree), that's a better situation than what we're currently faced with (which is a shortage of basic, primary care). |
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