Pie-in-the-Sky Proposals for College

Today, the buzz among the education folks that I follow on twitter is Elizabeth Warren’s proposal for student debt forgiveness. From the Daily Beast:

According to a Medium post detailing the policy, the debt cancellation would also apply for every person with a household income between $100,000 and $250,000, with the cancellation amount declining a dollar for every three dollars in income above $100,000, so that a person earning $130,000 would have $40,000 in cancellation. It would not cancel debts for people earning more than $250,000.

The immediate reply was from Phillip Klein at the Washington Examiner, who said that this plan was a cash handout to millennials and wouldn’t help Gen Xers who have already paid off that burden. His article then led to more angry tweets.

Whenever I interview a college student or a recent grad, the number one thing that always comes up is the cost of college and the noose of student loan debt. It is the rare family that has enough saved to choose the college of the choice for their kids without the concern about price.

I’ve talked with recent grads with over $100K in student loans. I’ve talked with others who worked three jobs to pay for school. I know people who will never, ever own a home, because they took out too many loans in grad school for a PhD program.

I talked with a student a few weeks ago (for an article that hasn’t been published yet), who had no clue that her family couldn’t afford a four-year college until she got her acceptance letter. Nobody is really sure how much money they’ll receive from a college until that final letter arrives.

This young woman’s family couldn’t contribute anything towards her college education, while colleges expected that she could find $50K per year. She could get about $7K in federal loans, but the rest would come from horrible private loans. But since her parents wouldn’t co-sign for the private loans, the point was moot. She went to a community college for two years before transferring to a local four-year school.

But she was exceptional kid. Most students like her wouldn’t have made it.

Making college affordable must be a big part of any 2020 Democratic platform. Student loan reforms are only one part of the problem and do nothing to stop that process that creates them. There has to be more money for lower-middle class families, easier transfer process between community colleges and four year schools, more social supports on the college campus, more inclusion for people with different learning styles, better pay for the majority of professors who don’t have tenure jobs, and great support for various career goals.

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38 thoughts on “Pie-in-the-Sky Proposals for College

  1. “..who said that this plan was a cash handout to millennials and wouldn’t help Gen Xers ..” Looks to me like this is another increasingly desperate ploy by Warren to get back in the game. She is well on her way to Harold Stassen status.

    But seriously folks – thinks are screwed up on the college front, the spending for college is a bleeding ulcer on the pocketbooks of those who have gone. Suze Orman useta prance around on stage prating about how ‘college debt is GOOD debt’. For me, it was – I got out of college with net assets of $200 and took on $15000 for my terminal master’s, which I paid off with little trouble. One big thing which would help would be to make college cheaper – cut the climbing wall budgets, concrete block dorms, cut the number of ‘inclusion’ staff.

    if you make college debt dischargeable in bankruptcy, you stop the lending for stupid and never-worth-it college majors in its tracks.

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  2. “if you make college debt dischargeable in bankruptcy, you stop the lending for stupid and never-worth-it college majors in its tracks.”

    Except if the tax payer is supposed to be making it good.

    There’s the potential for creating a situation where there’s no incentive for either colleges or students to keep a lid on expenses.

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    1. Compare and contrast the approach used to subsidize college with the approach used to subsidize healthcare.

      There’s a lot more eagerness to suppress healthcare costs than educational costs.

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  3. All these ideas sound like another way to tax the guys at the deli to pay for Laura’s and my friends’ children to go to college (and for the climbing walls). There’s a reason why those deli guys are so resentful, and telling them that they too can go to college won’t make them happy. They want good jobs, not more school. It would like me telling all the unhappy adjuncts out there that we have jobs available for paralegals.

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    1. Ask your daughter if the Wake Forest alumni magazine contains cruel speculation about who had to have their parents bribe the coaches to get it in. Because I couldn’t resist if I had the opportunity.

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      1. Actually, the WF alumni magazine comes to our house, because Little Miss Y81 did not update her address with the alumni office there. (Not saying you should remember this, but she transferred to Emory after a year and a half, whence she graduated.) I’ll keep an eye out, and will definitely keep even more of an eye out for what the Yale alumni magazine has to say for that institution’s role. At present, the emails from the Yale administration are downplaying the matter and making statements that are not quite consistent with the press reporting, but possibly Yale is waiting for the results of a fuller investigation. (Or possibly the press reports are not quite accurate.)

        I can’t remember if I mentioned, my daughter’s co-worker’s brother’s girlfriend was rooming with Lori Laughlin’s daughter at USC. (Six degrees of separation.) However, I can’t muster even that close a personal connection to the Yale student whose enrollment has supposedly been terminated.

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    2. It would like me telling all the unhappy adjuncts out there that we have jobs available for paralegals.

      This is actually a separate problem and your solution is perhaps the right solution. We should have more “You’ve had a good run but there isn’t a place for you in the academy and you should find a new career” kicks in the teeth for adjuncts rather than allowing them to hang on at slave wages until they figure it out on their own. (You’d think that if you want a career as a professional smart person then you could figure this out sooner, but some people apparently just can’t.)

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    3. There’s a reason why those deli guys are so resentful, and telling them that they too can go to college won’t make them happy. They want good jobs, not more school.

      That’s true. They do, however, want good schools for their kids, a health care system that they can access, etc. They should want people to be able to go into teaching without worrying that they are setting up a spiral of downward social mobility for their families. They should want their family doctors to be talented people who aren’t worried about their student loans (or who didn’t practice general medicine at all because it was more lucrative setting up a dermatology practice squeezing zits).

      And besides, who gives the deli guys veto power over the way our country works? There are reasons that we should have plentiful and accessible education. Just because it isn’t the most beneficial to a segment of society doesn’t give that segment a right to deprive all of us of these benefits.

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      1. Yup to all of that (except maybe the veto power argument, since I don’t think the deli guys do have veto power, except potentially when they are in North Dakota being over-represented).

        Also, what are the “good” jobs they are going to get? Because of 11D, I’ve now being reading economist/political science twitter feeds, and yesterday, I encountered a 1987 paper, “From Fordism to?: New Technology, Labour Markets and Unions” by Rianne Mahon that alludes to the hourglass economy (low/high wage jobs, but nothing in the middle).

        There are people who have benefited from the access to college (me, my parents, and all the politicians, authors, etc, from Booker to Obama to Gillibrand to Sotomayor to Vance . . . ) who think that college will catapult people in the bottom of the hourglass to the top, but it really can’t be the solution.

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      2. except maybe the veto power argument, since I don’t think the deli guys do have veto power, except potentially when they are in North Dakota being over-represented

        What I meant was that we shouldn’t automatically ask “But what do the deli guys think of that?” in response to any policy proposal. Their opinions aren’t irrelevant, but they count exactly as much as mine and no more. We shouldn’t care about their stamp of approval as a prerequisite to anything we would want to do.

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      3. There are two schools of thought on whether people like Jay should count as much as the deli guys. On the one hand, sure, there’s the Benthamite “Each to count for one and none to count for more than one” philosophy. But there’s also the Rawlsian minimax theory that the just state maximizes the welfare of the least well-off, in which case the deli guys do count for more.

        And of course there are people even worse off than the deli guys, but more subsidies for college students won’t help any of those people, so the deli guys can stand as a proxy for those below them.

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  4. I’ve talked with recent grads with over $100K in student loans.

    Something should be done about access to education in our country, but if we are going to have serious conversations about student loans and higher education we should be clear about what the actual numbers are. The median student loan debt is around $30K and only around 2-3% are at $100K or higher. If we are going to discuss policies that reform and improve this system, we shouldn’t take the outliers and treat them as if they are the norm.

    This young woman’s family couldn’t contribute anything towards her college education, while colleges expected that she could find $50K per year. She could get about $7K in federal loans, but the rest would come from horrible private loans. But since her parents wouldn’t co-sign for the private loans, the point was moot. She went to a community college for two years before transferring to a local four-year school.

    I always find these anecdotes perversely interesting and difficult to take at face value. I went to the Rutgers net price calculator tool and spent a while messing about with it trying to replicate these numbers. The only way I could was various permutations involving a household income of $165-220K.

    The median New Jersey household income is about $76K.

    I can’t believe that this is a family that did not have enough money for college. This is a family that had enough money for college and then spent it on other stuff instead.(*) Cry me a river. If we fix the system then people in the top decile (and that includes me) are the last people we should worry about.

    After I finished messing around with the NPC in a futile attempt to construct a scenario that would allow me to have some sympathy for that family, I put in some combinations of a household with a $76K income. You know, the average family in New Jersey. For my fictitious student with a 3.7 GPA and a 1380 SAT, Rutgers came up with a $9K “expected family contribution”, but still expected the student to come up with over $20K per year, through (I guess) a combination of work and loans. That’s tough. *This* is the family we should be worrying about, rather than the one making 2-3 times the median household income who spent the money on something else instead.

    (*) Yes, I know. There are outliers. Medical emergencies, siblings with serious special needs, etc. The solution is to fix the support system for these special cases rather than shovel money for college to every family with a six-digit income so they can take more vacations and buy nicer cars and houses and do more home improvements and pay private high school tuition instead.

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    1. “Something should be done about access to education in our country, but if we are going to have serious conversations about student loans and higher education we should be clear about what the actual numbers are. The median student loan debt is around $30K and only around 2-3% are at $100K or higher. ”

      Don’t bother Jay. Laura knows this. She has been told this over and over. She is not interested in a serious or honest conversation on this issue.

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    2. Actually, she was from Illinois.

      And the problem was that she didn’t apply to her in-state college at first. She applied to a variety of Chicago area private colleges and one out of out-of-state public college. She didn’t get good advisement, and thought that those schools would give her a lot of money. She actually didn’t even worry about costs, until the acceptance letter came and her parents refused to pay that total.

      She ended up going to a community college for two years and then transferring to UIC for the last two years. She lived at home in the last semester with a three hour commute. So, she had a good ending. She did have loans, but at manageable levels.

      There is a path for kids like this girl in that lower-middle class zone that truly have trouble paying for college, but it’s through convoluted routes like this. This girl was super smart and figured it out. But she got no advice from school professionals about how to make it work. (That’s what my article is about.)

      If you want a super quantitative study about the lower-middle class problems with college payments, here’s the Hoxby study…. https://www.insidehighered.com/admissions/article/2019/01/28/study-pressure-enroll-more-pell-eligible-students-has-skewed-colleges

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    3. Jay said, ” The median student loan debt is around $30K and only around 2-3% are at $100K or higher. If we are going to discuss policies that reform and improve this system, we shouldn’t take the outliers and treat them as if they are the norm.”

      Right. Also, the median is for people who do have college loans. About 30% of college graduates finish without any student loans whatsoever.

      I think that’s a group that needs to be studied more. Some may just have great situations with regard to family support, GI bill or local cost of living, but there may be some other stuff going on.

      “The median New Jersey household income is about $76K.”

      How about median married household with two kids? There’s no way in heck that that household has anything like a $76k median income.

      At the very least, shouldn’t we be more interested in the median household income of households with dependent children?

      The $76k is meaningless if it averages in too many single adults, DINKs, and empty nester retirees.

      “I put in some combinations of a household with a $76K income. You know, the average family in New Jersey. For my fictitious student with a 3.7 GPA and a 1380 SAT, Rutgers came up with a $9K “expected family contribution”, but still expected the student to come up with over $20K per year, through (I guess) a combination of work and loans. That’s tough.”

      That is interesting.

      “*This* is the family we should be worrying about, rather than the one making 2-3 times the median household income who spent the money on something else instead.”

      On the other hand, the higher-earning household may easily be supporting twice as many people…So the “something else” might be a little brother or sister.

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      1. The specific career phase is important, too.

        Parents of college age kids are typically at or near the very peak of their earning years, so it really is not a good idea to compare a married couple with two teenage kids and a $130k income to a married couple 15 years younger with two preschool children.

        We really need to be sticking with the correct comparison class, namely parents of teenagers/young adults.

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  5. Warren’s plan is interesting, but it has some (reparable) flaws:

    1. It should have a faster phaseout that starts sooner. I have very little interest in repaying student loans for people with six figure incomes.

    1a. It is great, though, that it phases out continuously rather than in steps or just with a hard threshold. That creates perverse incentives.

    2. It pays down individual loans but has a phaseout according to houseold income. This is probably the best of several bad alternatives but does create some perverse incentives. For instance, two high earners ($125K each, say) would have a disincentive to actually marry and merge their finances, as that would cause the household income to zero out the benefit entirely.

    3. Does it apply to graduate and professional school debt? Unclear, but except for a few cases it probably shouldn’t. Most professional degrees should pay for themselves and you shouldn’t go to grad school for a PhD unless it is completely paid for through assistanceships.

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    1. Mayor Pete weighs in! This guy is remarkably sure-footed, at least so far: “The idea has been dismissed by some more moderate candidates seeking the Democratic nomination for president, like Senator Amy Klobuchar of Minnesota and Mayor Pete Buttigieg of South Bend, Ind. “Americans who have a college degree earn more than Americans who don’t,” Mr. Buttigieg said while addressing college students in Boston. “As a progressive, I have a hard time getting my head around the idea of a majority who earn less because they didn’t go to college subsidizing a minority who earn more because they did.””

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    2. Jay said,

      “Does it apply to graduate and professional school debt? Unclear, but except for a few cases it probably shouldn’t. Most professional degrees should pay for themselves and you shouldn’t go to grad school for a PhD unless it is completely paid for through assistanceships.”

      That’s fair.

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  6. I’m speaking as a community college English teacher (full-time, luckily), so am probably biased. The example student that you mentioned who found out her parents couldn’t afford a four-year school, and whose experience Jay tried to replicate, did exactly the right thing: went to a community college and then transferred to a local four-year (public) college. The taxpayers supported those choices through the lower costs of both institutions because of their taxes. 40% of college students in the US attend community colleges; 75% of students attend public colleges, usually within 500 miles of home.

    At some point, we have to start looking at those students as the norm, rather than decry the $100K in student loan folks out there–they are the outliers, as other posters have mentioned. Stop sensationalizing this self-inflicted debt problem as a national issue–it is not. It is an error in judgement on the part of the borrower, just like buying too expensive a house or car is. I do agree that universities need to reduce the output of difficult-to-employ majors with advanced degrees (my own field is full of them, which is why we have little trouble finding adjuncts, a truly sad phenomenon). Not all graduate programs or majors are created equal.

    I admit I was lucky enough to start college in 1969, when state support of public education was high; even then, I could not have attended the out-of-state college I did had I not earned an Army ROTC scholarship, which paid for everything but room and board in return for 4 years in the Army (the Army also paid for my master’s degree so I could teach at West Point, so I am doubly fortunate, but I did serve 27 years in the Army, including in an armored division in the Gulf War–they got their money’s worth).

    At bottom of all these issues is income inequality–real wages have only just begun to rise above what they were in 1973 (year I graduated). Had wages really kept pace with inflation, students would not have to have taken on so much debt. But that is a whole other topic.

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    1. burkemblog said, “It is an error in judgement on the part of the borrower, just like buying too expensive a house or car is.”

      But in the real world. we don’t usually allow people to make mistakes of that magnitude, you have the option of selling the house or car, and it’s possible to declare bankruptcy/go through foreclosure.

      Yes, it is an error in judgement on the part of the borrower, but the borrower is 18-22, and a lot of other more experienced adults are enabling this mistake.

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  7. Okay, lots to say here. Responding to various people…

    1. I referred to myself as someone whose kids would benefit from loan forgiveness, only because we’re in a unique situation. Yes, we can afford Jonah’s in-state tuition (but not private school or out-of-district public school). He takes out loans, because we want him to have some skin in the game. But we can afford his school.

    We may not be able to afford Ian’s college expenses. He’s doing better than we expected and may be college bound. We have nothing saved for him. 529 programs aren’t set up for kids with disabilities. In fact, they’re horrible, because they disqualify spec kids for various gov’t programs and can’t be used for job training programs. There are new college programs for kids with autism, but they cost $70K per year. We don’t have spare $70K in our budget to cover those programs. So, we’re not sure what we’re going to do.

    2. It’s the children of the deli workers that are precisely the ones in the worst situation for college. They don’t have the counseling in high school or from family members to make good decisions about higher ed. So, they apply to expensive schools, rather than cheaper ones. They transfer a lot. They aren’t prepared socially for college, so they drop out. They go to good enough (but not great) public K-12 schools, so they are semi-prepared for college and are told to go to college, but may not have the background to survive.

    All that back-and-forth between schools, dropping in and out, struggling with remedial classes, bad understanding of finances causes serious problems.

    3. And the children of the deli workers, that lower-middle-income kids, do not get enough money from colleges. There was a fabulous study done last year that hasn’t gotten enough attention in the press, that showed that kids who come from families that make just over that Pell Grant cut-off (in other words lower-middle-class) get inadequate help from colleges. It’s like a cliff in funding. Poor kids get a lot, but one dollar over that cut-off and they get nothing.

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    1. . I referred to myself as someone whose kids would benefit from loan forgiveness, only because we’re in a unique situation. Yes, we can afford Jonah’s in-state tuition (but not private school or out-of-district public school). He takes out loans, because we want him to have some skin in the game. But we can afford his school.

      Yes, well, this just illustrates another flaw in Warren’s proposal that needs to be accounted for. Namely, the idea that UMC parents will just game the system by having their kids take out unnecessary loans that will then be forgiven. Not something I support at all.

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    2. There was a fabulous study done last year that hasn’t gotten enough attention in the press, that showed that kids who come from families that make just over that Pell Grant cut-off (in other words lower-middle-class) get inadequate help from colleges. It’s like a cliff in funding. Poor kids get a lot, but one dollar over that cut-off and they get nothing.

      This is the easiest to fix. Just make the Pell Grant eligibility a continuous phaseout rather than a cliff. Done.

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  8. I am in favor of some form of debt amnesty because I do believe that colleges engaged in manipulating students to take on debt as a means of funding colleges. For-profits, sometimes in fraudulently egregious ways, but also others (NYU, for example).

    Not sure what I think of splitting the cost of 2/4 year public colleges with the federal government. This is a plan that the UC lobbyists were floating during the recession, mostly I think, because the federal government can do deficit funding, while many state scannot. It also answers the defunding of public universities by states that has been occurring over the decades.

    An expansion of Pell grants seems like something I could support, but, am wary of grants that we market to the public at large as being for education if they are end up being grants for low income young/unemployed people (if, say, they are really means tested basic income). Requiring the money to be ostensibly for education encourages the development of potentially faux education programs, potentially for people who won’t benefit. I’d be supportive of a basic income, but I don’t want it to be disguised as an educational grant, which weights the choices people should be making in a particular direction. Say, for example, a person would like to do construction or farm as their work — but gets money if they try to go to school?

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  9. 53% of young people with a BA have student loan debt. That does not include home equity loans or credit card debt spent on college expenses. 7% of borrowers owed more than $100K. 23% of those who get MAs or other graduate degrees owed $100K or more. (https://www.pewresearch.org/fact-tank/2017/08/24/5-facts-about-student-loans/)

    Only 17% of Americans overall believe they can cover the expense of college for themselves or a family member. (https://www.thinkadvisor.com/2015/05/13/83-of-americans-say-they-cant-afford-college-edwar/?slreturn=20190323125117)

    Talk with someone between 21 and 30. Student loans and the cost of college is a HUGE issue for them.

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    1. I’m not arguing it isn’t a huge issue. I am saying that you refuse to have an honest, serious conversation, preferring to cherry pick to make things look worse than they are. This is irresponsible and likely to lead to policies that make things worse for many.

      From YOUR link: the median borrower owes 17,000. The median for postgraduate degrees is 45,000. That creates a very different picture than the one you portrayed. Still demonstrates the issue is important, but doesn’t make it out to be catastrophic.

      At least this time what you report actually matches the link, that’s an improvement.

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  10. Here’s a research topic for you – the overall effect of the facilitation of transferring and articulation agreements. Our state schools have been under pressure to accept as many courses as possible from community colleges and other universities, in the hopes that we will get transfer students. But I wonder if the ease of transferring is ultimately a good thing. It makes a lot of sense for someone who takes two years at a CC and then transfers to a four-year, or left school and returned after a stint in the military, but how many students get a few credits here, a few credits there, and wind up spending a lot of money but never get a degree? I also wonder if this is in part because there’s little incentive to stay where you are, so students don’t have that extra push to stick it out. And then the degree in the end is less coherent because you’ve done it over multiple years at multiple schools.

    I have no idea what the research says on this, but there’s such a blanket consensus that making transferring easy is the best way to serve students that I’m starting to question it.

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  11. FUN FACTS ABOUT APT. 11D:

    1. I do not get paid a cent for anything here, except from the occasional purchase though Amazon. It’s about $20 every three months.

    2. I write these posts in between doing things that are either good for me, good for my family, or earn money. I’m working on those three things from 7 to 10 every day.

    3. I do not advertise this blog anywhere. It does not bring me professional advancement. The readers are legacy readers back from the days of old. PS. Blogs died a long time ago.

    4. I do this for fun, to stretch my writing legs, to chat about ideas/random thoughts that didn’t make it into an article, to keep a record of my kids’ growth, and to get feedback on things that I’m thinking through.

    5. Nobody is FORCED to read this blog. Don’t like it? Don’t click. Or at least be civil.

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    1. Laura, everyone here appreciates your work, and I at least follow your work elsewhere, so the blog does do you some good professionally. Whenever you mention another article you have written, I click through, and when you don’t post for a while, I google “Laura McKenna” to see if you have written something somewhere else. I have tried very hard never to be uncivil to you (though sometimes to other people), and I don’t think anyone else means to be uncivil to you either.

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    2. I just won’t read the comments above if everybody is grumpy. I agree blogs effectively died a long time ago. I blame Facebook. I’m thankful for the remaining blogs, or at least this one and many of the others.

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  12. I was googling for NJ median household income for families with children and the number I got was $100k (even) for 2017.

    That’s not even median married households or median married households with two children or whatever–it’s just median NJ households with children.

    One of my internet follows is a lady who follows this sort of demographic stuff very closely, so I’m sharing what I’ve learned from her, which is that US households with children (especially married households) have significantly higher income than households in general.

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    1. Presumably, such households are more likely than average to have two incomes and to contain people in the time of their life when they’re at their peak earning.

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      1. MH said,

        “Presumably, such households are more likely than average to have two incomes and to contain people in the time of their life when they’re at their peak earning.”

        Right. But the same is true of households with college students. They’re pretty automatically people in their peak earning years (assuming no major catastrophe).

        That’s the thing–people who are of age to have college student children are higher income than the median American–but they also have much larger expenses.

        I asked around about married parent median NJ household income and got pointed to this:

        https://www.census.gov/cps/data/cpstablecreator.html

        I don’t know how to work the levers and buttons, but apparently if you do, you can make it spit out interesting information.

        The number I’m most interested in is median income for NJ married parents of two children or just median income for NJ households with two children, but I don’t know if you can get it out of that. Married median NJ parent household income might have to be good enough.

        Like

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