Ten years after enrollment

by on September 14, 2015 at 1:20 am in Data Source, Economics, Education | Permalink

At Bennington College in Vermont, over 48 percent of former students were earning less than $25,000 per year. A quarter were earning less than $10,600 per year. At Bard College in Annandale-on-Hudson, the median annual earnings were only $35,700. Results at the University of New Mexico were almost exactly the same.

There is more here from Kevin Carey.  There is the well-known debate between human capital and signaling theories, but sometimes education is neither…

1 E. Harding September 14, 2015 at 1:35 am

Did anyone adjust that for major choice and student demographics?

2 Lord Action September 14, 2015 at 10:16 am

As far as I can tell, all that’s been released is raw data for people with student loans, whether or not they earned a degree. There are gaps in coverage; for example, many people who go to Harvard don’t have student loans. And there aren’t a lot of sophisticated analyses available yet – most all the reporting I’ve seen is just showing uncontrolled differences.

That said, this will be a lot of fun over the next few months.

3 Commenter September 14, 2015 at 1:41 am

I have only ever met one Bennington student. She was in Prague continuing her studies in puppetry. This school focuses on the arts, to my understanding. With a school that focuses on such a “superstar model” industry, is this a fair assessment of distribution of salaries?

That said, it doesn’t seem prudent to subsidize such as institution either way.

4 Steve Sailer September 14, 2015 at 5:48 am

I remember reading the recruiting materials from Bennington College in 1975 with fascination. It had been an all women college until 6 years before in 1969. The word “microaggression” did not exist yet, but even in the PR materials, it was clear that the student body devoted much energy to the airing of grievances against each other.

So while Bennington might not help you get off Daddy’s bank account, nobody can deny that it prepared you in other ways for Life in the Future.

5 Urstoff September 14, 2015 at 11:12 am

How much does a superstar puppeteer make?

6 Dangerman September 14, 2015 at 12:39 pm

Looks like Jim Henson was worth $20 million.

7 Pshrnk September 14, 2015 at 1:54 pm

University of Maryland

8 Cooper September 14, 2015 at 12:39 pm

If I recall correctly, Jim Henson did alright for himself. Died with an 8 figure net worth.

9 Urstoff September 14, 2015 at 12:46 pm

Okay, assume you’re #6 on the list of superstar puppeteers. How much are you making then? Does ILM employ puppeteers?

10 The Original D September 14, 2015 at 2:03 pm

I imagine all his employees did reasonably well. Not rich but decent middle class salaries.

11 Thomas A. September 16, 2015 at 10:35 pm

Wait, so Bennington College is a cause of income inequality? Now my head is going to explode!

12 Steve Sailer September 15, 2015 at 7:33 am

“How much does a superstar puppeteer make?”

John Malkovich was doing pretty well for himself as a puppeteer by the end of “Being John Malkovich.” So all Bennington needs is like a Celebrity Portal.

13 skeptic September 14, 2015 at 1:43 am

Bard, at least, which I know well, is not about earning $$. Perfect platform from which to launch your career with your White/Indian friends at National Review or your (exlusively) White friends at Vox. Then, sell out the country.


14 msgkings September 14, 2015 at 3:18 pm

Stop trying to make ‘fetch’ happen, Gretchen! It’s never going to happen!

15 Brian Donohue September 14, 2015 at 4:55 pm


16 cheesetrader September 15, 2015 at 9:12 am

On Wednesdays, he wears pink

Mean Girls – the gift that keeps on giving

17 cheesetrader September 14, 2015 at 5:29 pm

You sound bitter, are you bitter?

18 Thor September 15, 2015 at 12:20 am

Bitter AND skeptical (self-proclaimed)

19 Tom Davies September 14, 2015 at 5:05 am

“They learn to be better citizens and better human beings” — is there evidence that is true?

20 Tyler September 14, 2015 at 5:59 am

Maybe someone should start a “better citizens” label. Private, of course. Then if you meet certain requirements you can put the “better citizen” label on your CV, email signature, FB profile, etc. It’s as good as being labeled organic!

21 Hopaulius September 14, 2015 at 11:50 am

This will never happen. The left loathes citizenship. Too exclusive.

22 cheesetrader September 14, 2015 at 5:14 pm

Only if they’re a certified free-range “better citizen” – don’t want mine cooped up in a classroom all day

23 John September 14, 2015 at 9:35 pm

Even if they are better people, how does the ROI, in that sense, compare to other paths?

What if you just stalk the public library, and pursue the meditative religion of your choice?

24 John September 14, 2015 at 9:37 pm

(proponents of traditional education like to tell us that other paths are not “education.”)

25 Bah September 16, 2015 at 10:22 am

For values of “better citizens” that include debt-burdened, childless nihilists with no real-world skills but who are fully indoctrinated with the latest Leftist dogma…

26 Dana September 16, 2015 at 10:26 am

What would be evidence, I wonder? I recently read that 50% of Republicans and 15% of Democrats still believe that Saddam Hussein/Iraq assisted/participated in the 9/11 attacks. I’d be curious to know how many of them went to college, where they went, and whether they finished.

27 rayward September 14, 2015 at 5:42 am

Mr. Carey promotes on-line education as the higher education reform to mitigate the escalating costs, so it’s not surprising that he would highlight the low spots in the data released by the Obama Administration (which chose not to rate colleges, as was expected, and instead simply published data for consumers to use in deciding which college is best for them). From these few comments it’s clear why the Administration chose not to rate colleges (because colleges and the students who attend them have different goals), but it’s also clear that the data can be highly misleading (especially in the hands of someone with an ax to grind, such as Mr. Carey). As for what’s the best reform for higher education, I’ll repeat this little known fact: government subsidies for higher education exceed the total tuition paid to all public colleges and universities. That’s right, if the government substituted a tuition free education at any public college of university (a) the government would spend less, and (b) students would graduate free of debt for tuition. Of course, that leaves out private not for profit colleges such as Harvard, but more importantly it leaves out private for profit colleges which are the worst offenders for charging high tuition and providing little in return for it.

28 chuck martel September 14, 2015 at 6:56 am

“Of course, that leaves out private not for profit colleges such as Harvard, but more importantly it leaves out private for profit colleges which are the worst offenders for charging high tuition and providing little in return for it.”

How is Harvard “not for profit”? Everyone employed there is paid, are they not? The school has an endowment larger than the economies of all but a few African countries. It’s a big business that isn’t required to pay dividends, just like the public universities.

How do we actually know exactly what private, “for profit”, colleges provide? Isn’t it possible that a slacker/loser could spend four years at Harvard without absorbing much of anything while a diligent student could be an enrollee at Phoenix College and learn enough to make his time and tuition a good investment? Ultimately, receiving an education is the responsibility of the student himself. Some people, probably a lot of them, never learn how to be students, which is a skill in itself and perhaps unrelated to the subject matter that they’re studying. They should, and usually do, leave the halls of academe in a hurry and find their way in some other endeavor. Just as the medical industry is happy to accept the income derived from treating hypochondria, the higher education complex gladly cashes checks that pay the tuition for non-learners. There are too many people in college who belong somewhere else.

29 Steve Sailer September 14, 2015 at 7:57 am

I don’t know all that many people with 2 digit IQs, but my anecdotal impression from the ones I do know is that they (and the taxpayers) get ripped off pretty mercilessly by for-profit colleges.

30 Captain Obvious September 16, 2015 at 10:54 am

EVERYONE of a Lower IQ gets ripped off in edumakashun if they entrust that edumakashun to a person of Higher IQ who LIES to them about whether the edumakashun will prove to be of any financial benefit, about whether the edumakashun will be about something known to be non-trivially True [rather than merely tautological], or about whether the edumakashun will even be about Truth in the first place, or whether the edumakashun will be merely a propagandistic brainwashing in every manner of anti-Civilizational anti-R@ce anti-Chr!stian Iniquity. And for the life of me, I just can’t think of any Tr!be, from far northern Alaska, who would ever dream of invading the institutions and spreading that Iniquity and then laughing all the way to the bank [which they happen to own] at the suicidal gullibility of the idiot NON-far-northern-Alaskan parents, who pay the Alaskan Tr!be to destroy their children’s hearts and minds and souls. Oh, and the interest on those student loans makes its way back to the Alaskan Tr!be, as well [on account of them owning the bank]. My guess [not being a far-northern-Alaskan] is that that’s what they call a “WIN WIN WIN” for far-northern Alaska.

31 Brian September 14, 2015 at 8:11 am

I think there are a lot of unprepared and self important people at Harvard, but I will happily bet on the Harvard/University of Phoenix spread however you want to construe it.

While your example is possible, and there is someone (possibly several someones!) at Harvard not getting much out of it, that does nothing to change the fact that Harvard does a lot for the education and growth of a lot of students that University of Phoenix is unable to replicate.

Oversold as a gateway to society/wealth/happiness, perhaps, but still more capable than the “for profit” (as defined by the tax code) alternative.

32 JK Brown September 14, 2015 at 11:46 am

Well, yeah. Harvard is like the surgeon who doesn’t take any difficult or risky patients and so has a high success rate. U of Phoenix has a roster of almost all high risk cases and pulls off some spectacular successes.

33 TheAJ September 14, 2015 at 9:24 pm

What successes?

I remember listening to a speech from, I believe it was the dean of the Indiana Business School talking about University of Phoenix, and how its easy to look down on the new educational system but all it takes is one success story, one millionaire to give it the reputation it needs to be a success. Well its been 10 years and millions of students and the only billionaire with the University of Phoenix name is the founder.

34 Bah September 16, 2015 at 10:24 am

“Harvard does a lot for the education and growth of a lot of students that University of Phoenix is unable to replicate”

But do the institutions really “do a lot”?

Harvard students would likely succeed even if they didn’t go to Harvard.

University of Phoenix would likely fail even if they didn’t go to University of Phoenix.

35 Ethan Bernard September 14, 2015 at 9:13 am

> How do we actually know exactly what private, “for profit”, colleges provide? Isn’t it possible that a slacker/loser could spend four years at Harvard…

It is very unlikely. Probably the most important thing that Harvard provides, which Phoenix does not, is a fine sieve that keeps Mr. Slacker-Loser out. The most important thing that a 2015 employer learns about a fresh graduate listing Harvard on his resume is “Harvard thought this kid was awesome in 2010”. Harvard knows that if the admissions gate is maintained properly*, it doesn’t much matter what the kids do over the next four years. The results will still be impressive. Harvard knows that the alternative – letting in lesser students and providing them a stellar educational environment in the hope that it is embraced through hard work by the lesser students – is a poor bet, and a far more expensive one. Note that the gate does a great service to Mr. Slacker-Loser by not charging him years of tuition and opportunity cost to learn nothing.

* Holes may be punched in the admissions sieve to allow for the courting of wealthy legacies and to engineer a student body with a socially acceptable level of diversity.

36 Urso September 14, 2015 at 11:35 am

Don’t discount the possibility that “connected enough to worm your way into Harvard without top notch credentials” may be a useful signal as well.

37 chuck martel September 14, 2015 at 5:22 pm

Sure, Harvard and the rest of the Ivy League are skimming the cream from the top of the candidate jug. How does that prove that their educational process is any better than Texas-El Paso or Minot State, since they have so much better raw material to work with? If Harvard closed tomorrow, like maybe Sweet Briar will, and the student body transferred en masse to Western New Mexico would they suddenly become uneducateable? If they’re already intelligent how much is Harvard actually accomplishing? Maybe North Dakota State is a better school than Harvard because it’s taking the dolts of fly-over land and improving their feeble minds enough that they can hold some kind of a minor job, even though they’ll never be qualified to advise an elected official.

38 Bah September 16, 2015 at 10:26 am

Based on the quality of decisions coming from “elected officials” in recent decades, methinks we should pull the plug on the Harvard advisors and give the North Dakota State students a try.

39 Don September 17, 2015 at 6:46 pm

So this not for profit typically means they don’t distribute their retained earnings and their administrative staff are greatly overcompensated. Not for profit is a huge ripoff

40 Ed September 14, 2015 at 2:18 pm

Chances are if they were diligent students they wouldn’t be at the University of Phoenix.

41 Harun September 14, 2015 at 3:23 pm

and yet, for most jobs, they are the more suitable candidate.

42 Hazel Meade September 14, 2015 at 10:29 am

if the government substituted a tuition free education at any public college of university (a) the government would spend less, and (b) students would graduate free of debt for tuition.

But it still wouldn’t increase their earning 10 years after graduation.
The problem is that students are not receiving market signals telling them what subjects are most in demand in the job market.
And it seems neither the government nor the universities are interested in telling them.

43 Mike September 14, 2015 at 11:58 am

That’s not entirely true. When I was doing my MS/PhD at Georgia Tech (public school), I noticed that they did an excellent job of informing students about salary distributions for each major. The only limitation was that some majors didn’t get enough responses to surveys. Granted, it’s relatively hard to go wrong at Tech, with most students studying subjects leading to high-paying tech-sector jobs. See for yourself,


44 John September 14, 2015 at 8:11 pm

When you don’t like the score, fault the ref, you might just be losing.

45 Robert September 14, 2015 at 5:43 am

what strikes me is the lack of discussion of graduation rates, they are basing the data on enrollment, so students who enroll but fail to graduate would be included, it would be interesting to see the graduation rate data compared to these numbers

In favor of the signaling theory it may be many employers don’t treat “some college” as substantially different from “high school”

46 Michael September 14, 2015 at 10:31 am

While this may be an interesting datum, if the Administration’s goal is to inform prospective students, then the more honest approach would be to leave in the students that don’t graduate. If you filter out the dropouts, then the prospective student is getting only a subset of his/her possible outcomes.

47 Steve Sailer September 14, 2015 at 5:55 am

Can this data be downloaded? All I’ve found so far is a cute graphical reporting system that only gives you 20 colleges at a time:


And even though it breaks out programs/degrees, one obvious missing major is Economics.

The data for History seems reasonable, though: the highest Salary After Attending is MIT, followed by Harvard, Georgetown, and Stanford. Presumably, a lot of those History majors went to law school.

48 Commenter September 14, 2015 at 6:51 am
49 Steve Sailer September 14, 2015 at 7:55 am


50 Mike September 14, 2015 at 12:04 pm

It’s well known that consulting and finance recruit heavily from top schools with little regard to major.

51 Lord Action September 14, 2015 at 12:16 pm

Speaking as a hiring manager in that area who used to work for more technical employers, there’s less regard for major, but it’s not “little” regard.

The MIT Course 15 grad is going to have a much better interview than the Harvard Creative Writing grad, all else equal.

52 Mike September 14, 2015 at 12:28 pm

Fair. What I meant was that the Harvard CW grad has good odds compared to a MS&E major from a much less prestigious school. This was in response to Steve, who presumed those history majors would need law school to land high-paying jobs. They don’t.

53 dbeach September 14, 2015 at 3:09 pm

Yeah, there’s nothing stopping those Harvard history majors from going into I-Banking.

54 Mike W September 14, 2015 at 6:03 am

From the US DOE College Scorecard for Bennington:
The $25,000 earnings figure is the median for former students receiving federal financial aid 10 years after entering. College has a six year graduation rate of 66%. The earnings data comes from the IRS, so does that earnings figure include the 34% that didn’t graduate?
Although, the dropout students may have raised the earnings average…41%: The share of former students, six years after entering, who earned, on average, more than those with only a high school diploma.

22%: The share of students with family income less than $40k.
Most popular programs:
1.Visual and Performing Arts (45%)
2.English Language and Literature/Letters (12%)
3.Social Sciences (11%)
4.Psychology (5%)
5.Physical Sciences (4%)

55 Axa September 14, 2015 at 7:14 am

Just for comparison, in Europe people talk about tertiary education drop-out rate. Highest-one is in Italy with 34 %. I wonder what would happen if universities in US started handling the statistic as drop-out rate instead of graduation rate. College education is great thing, but institutions with 60% drop-out rate are just frauds.

table 1, page 23

56 Harun September 14, 2015 at 3:16 pm

what a difference just from wording!

57 BenK September 14, 2015 at 9:08 am

Yes, sometimes education is not about human capital or signalling of employment potential. Sometimes it is a consumer good. Sometimes people buy what they want and deal with the costs of that choice over time. So…?

58 Axa September 14, 2015 at 9:39 am

Because there’s a thing called student loans backed by US government and many university manager are chasing that money. It’s a great incentive to catch…….errrr, admit students with US backed loans.

Incentives matter, this is a nice study with loan officers. http://www.povertyactionlab.org/evaluation/impact-performance-incentives-risk-assessment-and-lending-decisions-commercial-bank-loan-

Some incentives schemes are good for loan officer bonus but terrible for non-performing loans statistic. Universities are behaving in a similar way, with your money.

59 Mike W September 14, 2015 at 11:06 am

So how does a “university manager…chasing that money” differ from Nordstrom’s chasing consumers’ credit card money? Consumers can learn to use student loan credit to purchase education services just as they have learned to use credit cards to purchase other goods and services. And as long as that student loan debt is not forgiven by the government…thereby sticking the taxpayers with the cost of students’ consumption choices…the students will learn.

60 Lord Action September 14, 2015 at 11:16 am

Leaving default out of it, and you shouldn’t because it’s huge, the rates are also subsidized by Uncle Sam. So the straight-A engineering student pays the same rate as the struggling history major, which at a societal level makes no sense. We want to encourage the guy who’s going to produce a lot to get a high-level education, and communicate to the lower-potential guy that maybe he’d be better off getting an HVAC installer certification.

61 Matt B September 14, 2015 at 11:37 am

And the charismatic and tall business undergrad who will be that engineer’s boss has to pay the same rate as his future numbers drone pays. For whatever reason it’s always the number geeks who make this complaint not the business students. Noteworthy that.

62 Lord Action September 14, 2015 at 12:00 pm

Technical subjects have a large lead in income on graduation, and contrary to popular perception, they never give that lead up: https://www.census.gov/prod/2012pubs/acsbr11-10.pdf

Engineering dominates senior leadership in business, particularly for large firms (sorry I can’t find a better link for this, but it’s pretty widely known): http://www.arecentstudy.com/studies/S&P%20500%20CEOs.pdf

Increasingly, there is no difference between business students and numbers geeks. The idea that somehow liberal arts students are better prepared for the vagaries of business life is pure myth.

63 Mike W September 14, 2015 at 12:13 pm

The interest rate should reflect the default cost (and it may or may not but the only default figures I ever see are number of defaulting individuals, not defaulting dollars). If it does then there really is no cost to the taxpayer of student loans. Pretty efficient actually…society broadens its education and the users pay for what they consume. And, yeah, there might be more targeted ways for society to encourage those supposedly beneficial vocational-type degrees, but do we really want the federal government deciding those “nudges”?

64 Lord Action September 14, 2015 at 12:20 pm

There are many ways to implement a subsidy that would let lenders decide loan pricing. Drop the credit guarantee and pay lenders 200 bps on the scheduled amortizing balance for the first ten years, for example.

65 Mike September 14, 2015 at 12:21 pm

Just an anecdote, but my boss got his PhD in Math from Oxford. His boss, the CEO of a 500 person firm, is a Harvard MBA, but has an MS in engineering from Stanford.

At my previous job my boss had an MS in engineering from MIT. The CEO didn’t have an engineering degree though. I actually thought his lack of engineering background made him an inferior executive in a high tech field.

Other’s experiences may differ, but I’ve never had to tolerate non-engineers in management.

66 Urso September 14, 2015 at 10:07 am

Is this col adjusted? I’m guessing 35 g’s goes a lot further in New Mexico than in Annandale-on-Hudson.

67 JudgeBermanRulez September 14, 2015 at 11:00 am

Red Hook (Bard’s actual college town) is comparatively dirt cheap. Plus, not too many Bard grads are from the area, nor do many stay in the area.

The story with Bard is simply non-financial renumeration however. Bard attracts a certain type of student, and barring musical/acting stardom, that type of student does not tend to take traditional well-paid jobs. I went to Bard, and work at a large law firm now. There is no discerable difference in caliber of people at the two. It’s just that my Bard classmates went off to do things like Teach for America, become community activists, or live in a tent in the woods. Maybe I’m overestimating them, but I’d be surprised if they couldn’t have gotten well-paid jobs if they wanted them. They just had better things to do with their lives.

68 Urso September 14, 2015 at 11:36 am

Better than working in a large law firm? I find that difficult to believe!

69 JK Brown September 14, 2015 at 11:53 am

And I support them on that as long as they stay off the welfare and other public assistance rolls.

I would appreciate it if they’d stop whining about not making their fortune while doing unproductive, but perhaps, spiritually fulfilling, “jobs”.

70 JudgeBermanRulez September 14, 2015 at 1:16 pm

Are they whining about not making their fortune? I doubt many of them are on welfare either: rather, they largely come from upper middle class families who can afford to keep paying for them.

71 Harun September 14, 2015 at 3:20 pm

Their trust fund is protected from taxes. These types are more than willing to force those of us without a trust paying an annual stipend to pay staggering taxes, though.

72 Mike September 14, 2015 at 12:30 pm

COL around the University isn’t what is relevant. Cornell graduates don’t stay in Ithaca after they graduate.

73 derek September 14, 2015 at 10:35 am

The natural extension of the 12 year babysitting service of the school system. What are these useless 25 year olds supposed to do?

The brilliance is displayed by those who figured out how to get the government to somehow pay for it.

College and university doesn’t produce smart capable people. It takes smart capable people and gives them lots of knowledge and connections. An amplifier effect. There has to be something there to amplify.

74 Hazel Meade September 14, 2015 at 10:42 am

A major problem with the website is that it is based on data from ONLY students who received federal aid. That biases all the tuition costs lower. For example, the site claims that Harvard costs $16K per year and students graduate with $6K in debt. This is because the numbers are based on the 3% of students at Harvard that actually get federal aid – most of whom are probably receiving other sources of funding such as private scholarships and grants. That’s an extreme example, but one can imaging that there are going to be similar if more subtle biases at other schools. It’s very misleading of the website to highlight only the amount spent per annum after factoring grants and loans for only a fraction of the student body.
Students getting federal aid don’t all qualify for the same amount. Some will be spending a lot of their parents money, some will not. It makes it harder to accurately shop if you only qualify for a little bit of aid, you have to dig deeper to find out how much you’re really going to spend and how much debt you’re really going to accumulate. It’s actually kind of frightening because many students are not savvy enough to realize this until they enroll and find out that the REAL tuition is going to be much higher. it could easily make the student debt problem worse.

75 Lord Action September 14, 2015 at 10:57 am

The data is really most useful in evaluating federal student aid spending. Not that there aren’t any problems in the private side of things, but personally I’m a lot more concerned about the mess on the public side.

When Harvard gives some kid aid out of their own endowment, wacky tax status aside, it’s not my money. When the student is given a federally subsidized loan, I’m on the hook for their art history degree.

Some data is better than no data. I’d love more data, too, but the schools are very much against letting it get out.

76 VivianDarkbloom September 14, 2015 at 11:35 am

“When Harvard gives some kid aid out of their own endowment, wacky tax status aside, it’s not my money. When the student is given a federally subsidized loan, I’m on the hook for their art history degree.”

Regarding that “wacky tax status”, the JCT estimated that the tax cost of the deductibility of charitable contributions to educational institutions was about $6.2 billion last year. This estimate does not include tax foregone on the exempted income that endowment funds earn. Nor does it include the cost to Treasury when tax-exempt endowment funds like Harvard enable the carried interest trade (without tax-exempts, there is no play there) when they enter into deals with private equity partnerships. You are not “on the hook’ for that art degree because an ounce of your taxpayer flesh has already been extracted.

Now, what is the cost of the federal government of the federal student loan programs? That’s hard to say, but here’s a comprehensive discussion:


Probable answer (not yet) a great deal.

The other cost is the deductibility of student loan interest which JCT estimates at about $2.1 billion per year. My guess is that the cost of the federal loan program (even absent the inevitable political giveaways now being discussed) will become significantly more expensive. However, as it now stands, it is not clear to me which option has sunk its hook deeper into your wallet.

77 Lord Action September 14, 2015 at 12:03 pm

FWIW, I’d do away with the tax advantages if I could. I just think it’s a lower-magnitude problem.

78 Mike September 14, 2015 at 12:35 pm

What does tax-exempt status have to do with carried interest for PE managers? The manager gets the performance fee taxed at cap gains rates regardless of the tax status of the client.

79 Vivian Darkbloom September 14, 2015 at 12:55 pm

“The manager gets the performance fee taxed at cap gains rates regardless of the tax status of the client.”

Not really and it begs the question. What happens in carried interest plays is that the GP Manager gets a higher percentage of the eventual capital gain than is proportionate to the capital he contributed—e.g., if he contributed 10% of capital, he might get allocated 20 percent of the (eventual) capital gain in the partnership agreement. This non-pro-rata allocation is possible under partnership tax rules. However, the amount of capital gain is fixed (you can’t manufacture CG out of thin air, although I’m sure many have tried) and allowing a greater allocation of CG to the GP comes out of the CG share of other (limited) partners. Harvard, Princeton or Yale Endowment might give up part of their share of capital gain in the allocation formula because the preferred tax rate given CG’s is meaningless to tax exempts. And, an ordinary tax deduction for an ordinary compensation payment is meaningless to those tax exempts as well. They would expect in the deal to share some of the tax savings, perhaps in return for a lower management fee. That’s a win-win tax arbitrage. But, if the other partner is not tax exempt, then no tax arbitrage is possible and we should not (normally) care if one taxable limited partner cedes a tax rate preferred capital gain to another taxable partner.

80 Cooper September 14, 2015 at 1:09 pm

If we’re going to have any kind of tax deduction for charitable giving, it’s hard to exclude universities from this deduction.

Much of Harvard’s endowment is tied up in specific programs and can’t be easily shifted. For example, there are people who have donated millions of dollars to support the Harvard art museums. Why should a donation to Harvard’s art museum be treated differently than a donation to the Getty art museum?

81 Vivian Darkbloom September 14, 2015 at 1:16 pm

RIght. Eliminate them all.

82 Lord Action September 14, 2015 at 1:27 pm

Yes, poor Harvard. It must be so difficult.

Just a suggestion: maybe they could divest themselves out of the museum business?

And why the heck do we want to subsidize Rembrandt collections at Harvard? Perhaps the Gucci store downstairs from my office should get favorable tax treatment too, for consistency?

83 Mike W September 14, 2015 at 11:10 am

“…until they enroll and find out that the REAL tuition is going to be much higher.”

Why would students not know what the REAL tuition is until AFTER they enroll?

84 Cooper September 14, 2015 at 1:11 pm

Mike W,

Universities often deceive their students about the kind of aid packages they will get. I had plenty of friends who got a big discount the first year and then their status changed and suddenly their tuition spiked.

85 Harun September 14, 2015 at 3:24 pm

That sounds suspiciously like a teaser rate ARM.

Did this happen at public universities?

86 buddyglass September 14, 2015 at 10:51 am

Here’s what I would like to see the federal government require universities to publish:

For each degree program/major and graduating class, collect salary data at 5 years out. Throw out people who are still in graduate school / medical school at that point. Use IRS data if necessary (who needs privacy). Then correlate salary data with each student’s SAT score and fit a curve. Maybe linear; maybe not. Then publish the function (and correlation coefficient) that maps SAT scores to 5-year salaries for each school and specific degree program/major.

If I’m a 3-sigma high school student considering “cheap state school” vs “expensive private school” I want to know what my specific salary is likely to be if I attend one vs. the other and not the average salary of all students at each school, since the big state’s school average is going to be pulled down by virtue of its lower-ability student body (on the aggregate).

87 buddyglass September 14, 2015 at 10:59 am

Alternately, don’t throw out anybody from the salary data but look at 10-year salary instead of 5-year. That gives people long enough to get out of graduate school / medical school / residency.

88 Mike W September 14, 2015 at 11:16 am

And this data collection would provide what *additional* data to inform a student’s choice? A student can get 99% of the information they need from the US News & World Report College Ranking plus the US DOL Occupational Outlook. Seems like additional data collection would merely increase the school’s admin staff an increase total costs.

89 buddyglass September 14, 2015 at 11:24 am

USNWR data doesn’t include this. Even if it gives 25/50/75 data points for salary, that’s highly dependent on the overall quality of the student body. The hypothetical guy I mentioned doesn’t care about the average Harvard salary vs. average State U., he cares about the average Harvard salary (because he would be “average” at Harvard) vs. the 95th percentile salary at State U. because he would be in the 95th percentile at State U.

Also he’d want salary data by degree program. It isn’t apples-to-apples to compare a tech-heavy Cal Tech vs. some other school with a more varied mix of degree programs.

90 Mike W September 14, 2015 at 12:44 pm

“…he cares about the average Harvard salary… vs. the 95th percentile salary at State U…”

I can’t imagine a student looking to inform that decision that cannot get data from existing sources…and since the decision is really about the future, the most valuable of those sources would have little to do with dollars. How much benefit could there be in “averages”…even between similar schools…to justify the additional cost?

91 buddyglass September 14, 2015 at 1:01 pm

“How much benefit could there be in “averages”…even between similar schools…to justify the additional cost? – See more at: http://marginalrevolution.com/marginalrevolution/2015/09/ten-years-after-enrollment.html#comments

Are you asking here how much benefit there would be to the more detailed data vs. simple school-wide averages? A lot, I’d say. A certain school might have its average dragged down because a larger percentage of its students get low-salary degrees, even though the ones who pursue high-salary degrees do very well relative to students from other schools w/ the same dgrees. That school would be punished by simply looking at a school-wide average.

Likewise, large state schools are punished by school-wide averages because they just don’t have the same caliber students as more selective institutions. If we know the average Harvard grad makes $200k ten years out and the average State U. grad makes $80k, does that mean a given student should always prefer Harvard to State U. if his only goal is to maximize salary at the 10-year mark? Maybe. Maybe not. We’d really need to look at how other students like him fare after 10 years w/ their degree from State U.

92 buddyglass September 14, 2015 at 11:26 am

As for overhead on the school, we could offload this to the federal govt. Obviously that’s still a “cost”, but IMO it at least provides valuable information. Each school just gives the govt. a list of its graduates, each year, consisting of a SSN + degree program / major. Could further require the College Board to produce SAT/ACT scores based on SSNs.

93 Curt F. September 14, 2015 at 11:13 pm

I’m not sure what your world is like, but I hope we keep living in one where the goverment isn’t allowed to require that workers must share personal financial information with some school that they might have attended years ago.

94 buddyglass September 15, 2015 at 11:35 am

Could be done in a way where the school doesn’t get any of the info. School shares a list of graduates + major to the govt. Govt. gives the College Board a list of SSNs and gets back the terminal SAT/ACT score for each. IRS provides the earnings info. Govt. crunches the numbers and releases only the aggregated data for each school. Higher education consumers benefit.

95 babar September 14, 2015 at 10:57 am

it’s human capital, and it’s signaling, but not within the economic realm that you think of. i know quite a few bennington grads and the ones i know do struggle to get by. the ones i know knew what they were getting into and did not expect to use their formidable agency to do things that make money. they expected to just scrape by in life and be artists in what they did. a bennington degree is one way of signaling that you are serious in doing this, that in fact you are burning bridges if you aren’t backed up by parent money. it has cred.

(not my path, but i get it.)

96 babar September 14, 2015 at 11:00 am

ps i have a job and make money, but i married an artist type who doesn’t even though she is intelligent and industrious enough to do it. i knew what i was getting into and from an economic point of view it’s an error with exactly the same magnitude though i knew by then i’d have my income at least. i think a reason i didn’t was that i was too chicken to do it.

97 JudgeBermanRulez September 14, 2015 at 11:01 am

This is the Bard story as well.

98 JWatts September 14, 2015 at 2:19 pm

And I think they should be able to make that choice. I don’t think they should be able to borrow money from the Federal government to the same amount and at the same rate as somebody who will be much more likely to be able to pay it back. The US is looking at potentially massive student load defaults in the near future and lending to students with poor future income potential exacerbates the issue.

99 Harun September 14, 2015 at 3:28 pm

…and they all understand that someone else of similar skills might choose to make more money in their life instead of being a struggling artist who’s work fulfills their soul, and so they advocate for a flat tax because its unfair to tax people more just because they chose a path of industry and toil whereas they, of similar talent, chose the path of art and leisure.


100 Vivian Darkbloom September 14, 2015 at 3:11 pm

“I don’t think they should be able to borrow money from the Federal government to the same amount and at the same rate as somebody who will be much more likely to be able to pay it back”.

I tend to agree, but I found it interesting that the Bennington group scored pretty high on that metric. Per the data, former Bennington students scored 94% on debt repayment versus 67% nationally. Of course, the bar was set pretty low: The score refers to the number of students who took out federal student loans and who repaid at least *$1(one dollar)* in principal within the three year period after leaving school. Still, by comparison…

101 cheesetrader September 14, 2015 at 5:16 pm

For the sex bias!!!!!! data – did they control for women still working? Wouldn’t take a lot of women who earned an Mrs Degree to skew the salary data downward pretty sharply.

102 Mark September 14, 2015 at 5:43 pm

The official .gov site lists median salaries, while the referenced article looks at averages.

Median really is much, much better than mean in these cases – and I’m sorta shocked that Kevin Carey (nytimes article author) didn’t use this statistic.

I am quite sure from looking at the numbers that the mean is much larger than at least some of the noted cases (e.g. Harvard).

103 Mark September 14, 2015 at 5:45 pm

Sorry, correction: sentence meant to read at end:
I am quite sure from looking at the numbers that the mean is much larger than the median at least some of the noted cases (e.g. Harvard).

Further point/question:

is the salary information just from Federal loan holders? If so, then the Harvard data really is useless – as noted, only 3% of students get Federal loans, so this would be a sample of 3% of the student population. Yuck.

104 John September 14, 2015 at 8:25 pm

The constellations of learning opportunities in America are amazing, from city Yoga classes, past traditional “education”, to corporate training. The NRA will teach you gun safety, the Sierra Club will teach you winter survival. On, and on.

Some of that is enrichment and some is job training. Some has a return in GDP.

I am fine with a flush city teaching watercolor painting, but for anyone with budget restraints, I would say look to ROI. Opportunity costs are also rife in a world with so many choices.

105 Boca Condo King September 16, 2015 at 9:21 am

Look inside the front and back covers of most flying magazines, and you will find ads for flight schools that promise to take someone from never having flown before to ATP (airline pilot) level for around 60k. A decade ago this was 50k but the rising price of fuel did drive up the cost. Most programs are pay as you go, and if you get violently sick on your 1st ride the most you are out is the cost of the 1st lesson and perhaps some textbooks you bought.

Keep in mind that most flight instruction requires you to be in a quarter million dollar airplane burning between $125 to $350 dollars per hour with an instructor providing one on one attention. Although at the end you still have a long period of time to work up to working for the airlines, you still have a life long skill that can pay well, is reasonably prestigious, and has a pretty solid demand overall.

Also, if someone has a pilots licence each certification is guaranteed by the FAA examiner / instructor who approved the certification. If it is shown that the person should not have received that cert, the examiner / instructor / and flight school is held professionally and sometimes personally liable.

All this for less than one year as an out of state student at some public college?

I know that learning to fly is not equal to a college degree, but if 60k pays for hundreds of hours of one on one instruction in expensive to fly fuel and maintain machines. Why does a poetry degree, law degree, math or science degree cost a quarter of a million dollars when most of the instruction is one person talking to hundreds or dozens of others and assigning homework/giving tests?

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