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Monday, February 15, 2010

College grads are less apt to smoke than non college grads

This is a good article but it misses a couple of points. When kids go into college debt it is frequently a “forever loan”. It is not dischargeable in bankruptcy. Folks all over the country are walking away from the home loans and giving the homes back to the lender and most of the time they don’t owe any more money on the loan. Even if the bank went after the home buyer for the difference between what was owed on the loan and the cash collected at the foreclosure auction, this difference is generally dischargeable in bankruptcy.

This article makes a point that it matters what one spends on a college education matters. Some folks are spending over $200,000 on a college education – and this is a much harder nut to justify than a $40,000 college education.

But this article like most others really misses the concept of correlation versus causation. It turns out that college graduates smoke less than non college grads. But was it the college experience that made the life style difference or a higher IQ or some other factor? Were those that chose college to begin with less apt to smoke than those that did not choose college. This is a silly argument for college without having far more data.

The author points out that the number of people over 25 with college degrees in the US has risen from 24% in 1998 to 29% in 2008. So supply and demand alone would make the college degree less valuable than in prior decades.

But the main point this article misses is that it matters what kind of degree one acquires. A bachelor’s degree in English Literature will likely land you a job at Sonic Burgers but a degree in Electrical Engineering or Biomedical Sciences is far more liable to land a good paying job right out of college. I don’t have the data but I strongly suspect that the number of college students studying in fields where there is a demand by employers is shrinking rather than growing. And when one spends $200,000 and ends up $100,000 in debt after six years of college the job at Sonic Burger does not usually generate enough to pay big student loans off.

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