Category Archives: the flaw of averages

Chart: Number of Hours at Minimum Wage Needed to Cover Tuition

Chart: Number of Hours at Minimum Wage Needed to Cover Tuition

weeksoffulltimework_1

An article by Jarrett Moreno at Attn: ran the above chart which shows how many hours of minimum wage a student must work in order to afford the average blended tuition of private and state colleges. The debate internal to that website got interesting. The author originally intended the piece to pressure legislative action toward an improved minimum wage but after lots of interaction with the online comments he penned another piece in which he acknowledged the bigger, truer problem to be that of tuition hikes.

Whatever the reason, it is true that today a student must work a full time job at minimum wage nearly year-round to afford the average tuition whereas previous generations could knock out school bills with a summer job alone. What to do about this fact? Do we write our congresspersons and hope they get around to raising minimum wage or imposing tuition freezes on our schools? Or do we indeed work full-time, year-round while maintaining a full class schedule?

Can they? Can we? Continue reading Chart: Number of Hours at Minimum Wage Needed to Cover Tuition

Chart: The Sliding Scale(s) of Graduate Earnings

earnings at 25th & 75th percentile

 

Chart: The Sliding Scale(s) of Graduate Earnings

Our chart comes to us from a treasure trove of college-related statistical breakdowns from the Georgetown University Center on Education and the Workforce. The report, titled “What’s it Worth? The Economic Value of College Majors” was compiled by Anthony P Carnevale, Jeff Strohl, and Michelle Melton. They have also offered a less onerous set of select findings which includes today’s chart.

In this week’s chart we can yet again see the very real danger of relying on the flaw of averages to gauge the payoffs of a college degree. For instance, the generally true adage “college graduates earn $1 million more over a lifetime than high school-only graduates,” makes racking up enough debt to swing a hefty private school tuition seem like a no-brainer.  However, as this handy chart shows, this only tells part of the story; graduate earnings vary quite widely based on majors/programs and within employment groupings. Continue reading Chart: The Sliding Scale(s) of Graduate Earnings

Chart: Assessing a More Probable ROI

Chart: Assessing a More Probable ROI

Probability of Entering Financial Distress

 

This information comes to us from an academic research paper titled “Dropouts, Taxes and Risk: The Economic Return to College Under Realistic Assumptions.” The authors, Alan Benson of the University of Minnesota and Raimundo Krishna Esteva and Frank Levy of MIT, sought to pick up on factors that mainstream data crunchers miss.

Specifically, most prevalent calculations dealing with “return on investment” (ROI) payoffs of a degree infer a series of best-case assumptions, specifically 100% student graduation rates, graduations after four years, and equal tax liabilities. But what are the returns according to more modern, realistic assumptions?

Continue reading Chart: Assessing a More Probable ROI

Chart: College is a No-Brainer, Right?

Chart: College is a No-Brainer, Right?

NY FED

Above is the sort of chart that drives seventeen million students to college each year and why the rising costs of tuition haven’t put a damper on enrollment numbers. Recently the Federal Reserve of New York published it as part of their paper, “Do the Benefits of Education Outweigh Their Costs?“.

This sort of statistical outlay makes it only seem obvious that going to college pays off. In fact, as the Fed pointed out, on average college graduates will out-earn non-graduates by $1 million dollars over one’s lifetime.

But be careful. Note the word AVERAGE. Any time you see that word, beware the potential effects of the flaw of averages. Continue reading Chart: College is a No-Brainer, Right?

Let’s Not Assume

Let’s Not Assume

One’s an incident, two’s a coincidence, three’s a theme. And do I ever smell a theme. Just last week as I combed through my Google Alerts newsfeeds I read:

“A college degree is the gateway to success in today’s economy.” (source)

“A college degree is the only sure path to middle-class security…” (source)

“The biggest absurdity is that a four-year college degree has become the only gateway into the American middle class.” (source)

“… higher education is, more than ever, the surest ticket to the middle class.” (source)

If any of the above holds true, then it only makes sense that tuition soars and we, as individuals and as a body politic, promote a college-or-bust mentality. But keep in mind that any time we assume, in the immortal words of Felix Unger, we risk making “an ass out of u and me.”


Continue reading Let’s Not Assume

Chart: Graduation Success and Failure by Family Income Level

Chart: Graduation Success and Failure by Family Income Level

100 Students Start College

(Click chart to go to source)

This chart comes to us from Darla Cameron and Laura Stanton of the Washington Post. It’s a brilliant little piece of interactive graphics, going beyond the usual “lump-’em-all-together” statistical analysis. This chart details not just how all college students fare, but how students from four strata of family income levels succeed in terms of graduation after six years.

This should be helpful to students to personalize the statistics a bit more and be less prone to the mental errors associated with the “flaw of averages.” While it’s true that on average 44% of all students graduate in six years with an associate’s or bachelor’s degree, students can now look a bit deeper into the numbers to get a better sense of how their financial peers do in the college environment. For instance, according to this chart, students from higher income backgrounds tend to graduate at a rate of about 56% but those from the bottom income quadrant at a rate of only 36%. Continue reading Chart: Graduation Success and Failure by Family Income Level