Hacker News Reader

How does it cost $40k a year for tuition? It seems that college fees range from $5k to $40k plus. I can understand that better lecturers cost a bit more, but that can't explain much. What are the cost structures like?

Or is the higher cost just being driven by greater availability of credit for the students? If this is the case, unis will find a way to absorb the extra cash, but not in a good way.

View on HN

Easy credit explains a big part of the increases in tuition. Gov't subsidies that underly the ease of racking up 100K in student loans could directly impact the cost of college. If everyone applying to university can pay either through a loan or out-of-pocket, then it makes sense for colleges to raise prices. In turn, the employees of that company (the university) have higher productivity in real dollars so they all get higher wages.

People often think that they need more student loans because college is becoming more expensive. It is more likely that college is becoming more expensive because the gov't makes loans for college too cheap.

That's basically it, yes.

Reply on news.ycombinator.com