Why Is College in America So Expensive?
theatlantic.com
theatlantic.com
The price of a TRIPLE occupancy dorm + 7 day meal access is $14,813.29/YEAR at UC Davis. The "meals", if they haven't changed in the last decade, are Sodexo garbage. And don't forget a "year" doesn't count the summer, or winter break.
Regardless of CA, it's a lot everywhere else. Especially when they're bunking three in a room at that rate. The markup (for all of it) is the real atrocity here.
Of course, the commute to UC Davis campus would be longer from SF.
Considering UC Davis is bear Sacramento, that’s an understatement.
The other kicker is that they bake BIG subsidies for low-income students into tuition, which I found rather counter-intuitive. We're gonna raise tuition... to help students who can't afford tuition... pay for tuition that they can't afford... because we keep raising tuition to help students who can't afford tuition.
As bizarre as it sounds, I think if you stripped subsidies and the effect of near-universal availability of student loans out of the equation tuition (at least for state schools) would be downright reasonable. It certainly was when I was in school around the turn of the century. I was paying somewhere in the neighborhood of $2-3K per sememster (increasing over time, naturally) to go to a well-regarded state university. Now I see it's about 3x that. Yeesh.
It's part of what the article called "being entrepreneural". There are some companies that compete with lower prices for all, but it's not the most common strategy.
They're not good.
As far as pricing went, it worked out to about $9/meal. Kind of high, but also unlimited spinach/quinoa/berries/fruits/yogurts vs. burgers and panda express.
I heard they nerfed some of the benefits, but as a "student supervisor" I got $9/hr and 15 meals/week for working 15 hours/week.
You could find better deals in nice parts of San Francisco or Manhattan.
It's about the same price as a median studio in SF,($2490 vs. $2461), but the SF studio is about the same size without the kind of shared kitchen, restroom, and living spaces outside the unit that are included, and without the convenience to the core campus. You can save rent by living off campis instead of on campus—in fact, you'll be forced to other than your first year by the woefully inadequate supply of on campus housing. On campus housing is a guaranteed-but-premium option provided for first year freshman and transfers, and which may be available to other students subject to availability, not a baseline requirement.
Either we have lots of young people making bad decisions, or a college degree is incredibly valuable.
It's not like the terms of student loans are exceptionally great for the students.
Looking at the amount of debt that my peers have taken on, however, has made me reconsider the wisdom of my decision. It's likely that political campaigns in the next few years will promise some form of student debt relief. Whether delivery of those promises is possible or not remains to be seen.
I took the other path, and am left trying to throw off the burden while I can still take youthful risks, and carpe the damn diem. The window is closing fast on me.
If I had enough in hand to pay off my loans, there's no way I'd elect to waste even more of my life waiting to see if some currently unimaginable fit of political productivity might let me off the hook.
Going to college and getting an education (and especially a good university) makes you so much more money in the future, that it's worth paying a lot. Prices could go to $500K and it'd be worth it. Everyone knows this implicitly. That's why immigrant parents nail their kids so hard on grades and to get into a good school. Is it because they want their kids to get a bunch of debt and become unemployed? Come on. You are way way more likely to get a job with benefits, to spend your life doing something more meaningful (however you want to define it).
It's only us who already went to college, got good careers, who are now saying "well college makes you end up in debt, jobless, with a worthless degree. go into the trades. work for the post office." Why don't more people on Hacker News go into trades? Do some unpleasant, strenuous work in dangerous conditions, for about 10 years hustling day and night before your body gives out for $50K/year? Everyone actually doing a trade is encouraging their kids to go to college.
This really isn't that complicated, and I think most people here are overthinking things. A college degree GREATLY greatly increases the chance you're going to have a more fulfilling career easily that makes you back all the tuition money and opportunity costs, and more.
Add on administration overhead for dorms, etc.
Proximity to classes, extra-curricular access, living with your peers... If you're going to move out of your parents' house, $15k per year doesn't sound that bad.
As for the requirement piece, it definitely sucks if it's not an expense you can take on without debt and there's no other options in the area. If there are other options, though, then people who can't or won't pay that can just go somewhere else. School's have worse requirements (BYU comes to mind) that people can opt out of by choosing to go somewhere else.
Living expenses like dorms/meals are also why so many kids end up taking out student loans and have so much debt. How is that productive for society? It seems like Americans have a very weird attitude towards certain fundamental things like healthcare and education where they prefer to privatize those commodities rather than make them cheaper for all to benefit from. I think it’s bad for society for people to be putting 17 year olds into debt for degrees and then ripping people off for 20-40% of their incomes for healthcare. It would be a major stimulus for the economy if Americans paid what Europeans do for education and healthcare. I don’t understand the conservative argument at all. We get worse results for higher prices. The only people who benefit from our system are the ultra rich.
The problem is it's easily accessible debt to people who have no concept of what tens of thousands of dollars is really worth. You see the amount you're borrowing on the form and it's really nothing more than a number.
And as with medical care, the response to price increases has been to shovel more money.
>Ultimately, college is expensive in the U.S. for the same reason MRIs are expensive: There is no central mechanism to control price increases. “Universities extract money from students because they can,”
Let me rephrase - There is no mechanism of any kind to control price increases.
Before guaranteed loans students had to be verified based off their merritt to get a loan. Lenders took a real risk and had incentives in the person being successful so they would have hopes of the loan being paid back. This was near perfect as schools could not not charge more than lenders would risk.
Thes solution in this case is to remove the government guarantee, and let the free market work.
This system is also near perfect as lenders would evaluate their risk and have incentives in the person being successful. This works very well, as we saw from how mortgage lenders and credit rating agencies worked 10 years ago.
>let the free market work.
Education (and healthcare for that matter) are NOT free markets. Free markets don't guarantee every buyer gets matched to a seller, in which case that buyer does without. Which is not acceptable for education or healthcare.
Maybe that's fine in some circles but a modern wealthy superpower should be able to do better than throw some percentage of its own citizens in the trash because they can't afford education.
Also, way back when college was "affordable", states actually funded higher education through taxes.
Why is that not acceptable?
If companies only hired for the skillset they actually required a huge number of people would happily drop out of higher education.
I’d say the majority would.
So you are going to force loaners to loan to people that can simply discharge it?
I am not sure you understand how a loan works. Somebody risk their money for the chance to get the original amount back plus some. If the institutes making loans can't recoup at what they put in then they too will also go bankrupt. And if they can't make any profit then there is no incentive to loan the money.
> Education (and healthcare for that matter) are NOT free markets.
They most cerentety are. And them being part of a free market where people can make money has also allowed it to give humanity some of the best healthcare ever.
> Which is not acceptable for education or healthcare.
You are right, education is free, pick up a book at your local library. There is nothing stopping the masses from learning the same subjects today. On the other hand attending private institute that offers assistance in learning is not a right. Every time these free collages ideas come about it irks me so much because you have every right and means to educate yourself on a topic.
> Maybe that's fine in some circles but a modern wealthy superpower should be able to do better than throw some percentage of its own citizens in the trash because they can't afford education.
No, instead we can just trash the entire country because of feels.
In any case, put your money where your mouth is. Let me pick at random somebody applying for a loan today and let me fund their schooling with your money. If this person becomes successful they will pay you back. If they find it is too much of a burden, or they don't finish school you lose your money and never see it again.
That would be removing the government guarantee -- and letting the free market work.
Education (and healthcare for that matter) are NOT free markets. Free markets don't guarantee every buyer gets matched to a seller, in which case that buyer does without.
Or vice versa. Sometimes there are leftover bread rolls at the end of the day -- the seller produced a surplus. Sometimes there's empty seats in a class room. Doesn't sound so bad, that way.
https://www.bls.gov/careeroutlook/2018/data-on-display/mobil...
Why do people always reach for central control, when we have the ultimate mechanism of price control as a core part of our society (competition).
What happens when the government tries to provide for us: they gaurantee home loans: Financial crisis, they gaurantee drug costs: Skyrocketing drug costs, they gaurantee your student loan: Skyrocketing cost of school
By it's nature, anything the government subsidizes is going to be taken advantage of. You either have to take full central control (lets not go there) or let the free market actually work. You can't layer the two.
And it ain't because of cost control. Every time we loosen the reins a bit and let the 'free market' take the wheels, we see things get a lot worse for Americans as a whole. Especially when you have giant companies controlling the market entirely, like with ISPs.
https://www.vox.com/policy-and-politics/2018/7/31/17629526/m...
How are you quantifying American Healthcare as being one of the least free markets? And how does it compare to other countries? I don't see anyone ever actually quantify how 'free' a market is; people only ever argue that if a market is not working therefore it's not free enough, which means we must make it free.
At what point are we going to stop and realize sometimes it just doesn't work? Especially for issues that result in the death of Americans?
1) We don’t pay our own healthcare bills, we pay for our healthcare through insurance. As a result, there isn’t a pricing system in place, much like there is for other critical goods and services with price-inelastic demand like food and housing. This is caused by regulations that require employers to provide health insurance for their employees, and most recently the mandate that requires individuals to purchase insurance. We’ve essentially forced a world in which insurance is the only way one can pay for healthcare.
2) Our healthcare supply is artificially limited, which forces higher up prices. The MRI “certificate of need” is one such example, there are countless others. Medical licensure, in general, drives up the price to see just a primary care physician. In the US, just becoming a basic physician that prescribes antibiotics takes at least 8 years of expensive schooling. As a result, doctors in America earn more than their counterparts in every other country (adjusted for PPP)[1].
There are a couple solutions that the market can bring about. One of them is to get rid of the employer mandate. The fact that I have to worry about losing my insurance if I get fired or leave my job is totally bonkers. I don’t have to worry about that at all with my car insurance, it’s a cheap monthly premium that adds on to my cost of living, just like my monthly food expenses or my shelter expenses (read: rent). The reason why non-employer provided healthcare is more expensive is that the pool of people buying that type of insurance is much smaller than the pool of people that are happily receiving their employer-provided health insurance. If every single one of these employees participated in the same insurance market as those that are either unemployed or self-employed, premiums can come down.
The other solution is cut out insurance for most healthcare. We don’t use car insurance to pay for oil changes and servicing, we only use it to pay for catastrophic accidents. Absent the regulations we have today, the market might look the same for healthcare: you pay out of pocket for basic healthcare like going to the doctor when you’re sick or other preventative care (sort of like an oil change for your body). Insurance might kick in when you get cancer or heart disease. I come from India, where it costs about Rs. 500 out of pocket to see a good doctor that has an MBBS. This is the price of a movie ticket, in India. The concept of using insurance to pay for such care is unheard of. In America, paying for a general checkup, without insurance, can cost $300 out of pocket - absolutely absurd.
Singapore is a great example of a country that has a largely market driven healthcare system. Unless you’re poor, you pay out of pocket for all healthcare, in a private market. The government steps in and pays for healthcare for poor people, and for catastrophic care (think: universal high deductible healthcare plans).
[1] https://economix.blogs.nytimes.com/2009/07/15/how-much-do-do...
Well, the public insurance is a percentage of your income. The private one is based on many opaque factors. Private cheaper than public would be a more than a stretch without appropriate qualifiers.
Treating any serious illness (think heart attack, cancer, diabeties, etc.) is either insanely expensive or not covered at all by private insurers, so public health care is your only chance here.
A great example of such an issue is one where it was literally impossible for my parents to get any sort of healthcare because it was deemed that they had a pre-existing condition. No insurance provider would bother with them.
And for a lot of Americans paying anything for out of pocket care is impossible. My parents couldn't afford a movie ticket due to the poverty they're in, let alone the price of generic drugs for the myriad of medical issues they're going through. You keep bringing up the example of Singapore which works...but they also have a public option. We're not even to that point yet and making some of these radical changes without care to the poorest of Americans will lead to disaster.
Think of this: Companies take advantage when no other company is around to out compete them. This is why it's so important not to erect high barriers to entry around a market.
Instead, we have a lack of competition in health care in detail, throughout the whole industry. The reasons have to do with history. Its more important to see the general principles first.
Principle: If you would like to regulate a market to "fix" something about it, there will be down stream ramifications that will later necessitate the regulating of something else - as various entities react to the original regulation so as to maximize their own well being.
Case in point: price and wage controls in WW2 induced companies to start adding incentives instead of salary raises for workers. Which incentives? Health insurance was a big one. Companies needed to step up production. The government errected wage controls "for the war effort" - so companies enticed employees to work more via other means.
Immediate consequence: Separation of payer and receiver of healthcare services. (I am assuming this is clear enough - the insurance pays for the service, the sick person receives the service, the doctor or other provider provides the service. Now there are 3 actors where before there were 2)
Long term effect: Healthcare is expensive because the person receiving the service and the entity paying for it have been separated since the widespread adoption of health insurance "for everything" in the later 20th century. This distorts the perceived costs, allowing health care provider to increase costs without driving down demand directly. Instead, the insurance company is on the hook, and "I" can go to the doctor with greater frequency without commensurate increase in my expenditures. Cue the expansion of the healthcare industry, and a general rise in the _price_ of health care over time.
Long_term_response: health insurance companies hedge their bets and get into bed with "big medicine" and "big pharma". The health care industrial complex is born.
Longer_term_response: Long term rising costs finally induce broad measures to reduce the quality of service and make it more difficult to obtain service. Doctors are exchanged for nurse practitioners. Large companies make their health plans less and less attractive every year. The health care market enters a malaise.*
Summary thesis: Without clear price signals, a market becomes more and more distorted over time. People looking at "a snapshot" in time see a malfunctioning market, and ask for more regulation since "clearly, something is wrong". This tends to induce further distortions, and further calls for top down fixes. The few (the industry titans, and the doctors) benefit at the expense of the many in this system. To unwind this system, there is great risk of making things worse, as predatory situations will appear as the regulations are relaxed in an environment that has been specially adapted for them - people are vulnerable since the market is not functioning and a regulatory decrease is an exogenous step.
Importantly, It's not that I, or free market people in general don't sympathize with people caught up in this situation. (We are caught up in it too! Most people are not tycoons) The (a) problem is that free market people sometimes call for immediate cuts in regulation - which are quite often unsafe. A general understanding of the situation is needed. -What is needed is a free market system, but a return to that system must be done in a smooth and safe manner. Unfortunately politicians have no incentive to pave the way to this in dollars. Instead, "the right" will cut regulation where it aids the medico-industrial complex, while quietly ensuring their asses are covered and their regulatory capture will reamin quasi-permanent, and the left will regulate to "fix that via a safety net for those on the bottom". In the end, the high and mighty will continue winning, since the tycoons are safe thanks to regulatory capture, especially with the masses placated with a safety net. And the malaise will only grow worse, and more confusing.
Side points: -Some responses might be perceived as bad or good, but they are just responses - intelligent actors responding to a situation. In any economic situation, action and reaction, history and future - all must be considered in order to pass an intelligent value judgement. Hasty proclamations motivated by emotion are likely to miss important aspects of an economic trajectory - of economic dynamics.
-There is a duality in your argument, as in all things in economics. If you don't see this, then the politicians will have you.
-About the call for a "an actual quantifier of how much of a 'free market' something is": What kind of quantifier do you want? An objective measure? But surely you must know that any particular measure must be invariant to various kinds of hidden change in order to be objective - and nobody knows how to produce an economic measure that is really objective. This is why econometrics contains so much bickering over ad-hoc modeling and so many statistically based papers (across empirical fields which measure human subjects) have results that are hard to re-produce. I am sure some clever quantifiers have been invented, but when you do not even know the basic interplay of the dynamics, over-focus on some number -even if it is a good measure- is not helpful - since you cannot understand how good it really is unless you have the underlying processes well understood. If you argue that a different process is actually more important, then perhaps your "good number" may actually be bad.
What happens is that no one visits the doctor for preventative care, with the result that many cases were not diagnosed until it was very expensive to treat. (Have you had your blood pressure checked recently?)
In practice, Erlichmann was right about HMOs.
With the exisitng and prevalaent fee-for-service healthcare this 'fee' is not the price. It's different even functionally, where the 'price' is what's expected to be advertized upfront, the 'fee' is what gets billed afterwards. Has anyone tried to ask a doctor's office or a hospital if they could refer you to a price-list for the range of services they provide? If you're lucky, you'd be referred to Medicare regulated pricing, yet it's not even a baseline. I'm not even going into the 'flavors' of the fees formuated to different insurers, ??patients.
While there're rationalizations for such pricing approach, by itself it limits consumer's ability to be an active agent in free market. In healthcare the consumer is treated more like a resource.
https://www.nytimes.com/2017/10/02/upshot/what-makes-singapo...
They actually have public and private options competing for benefits, regulating salaries and hospitals and more. If you were to argue for a public option to health insurance or more regulations against hospitals, you'd be called a crazy socialist here.
> Initially, Singapore let hospitals compete more, believing that the free market would bring down costs. But when hospitals competed, they did so by buying new technology, offering expensive services, paying more for doctors, decreasing services to lower-class wards, and focusing more on A-class wards. This led to increased spending.
Accreditation is also related to government and can require colleges spend money on things they might not have 50 years ago.
I suspect the biggest cost driver is federally-backed student loans though. When you’re paying with what seems like free money it’s a lot harder to control costs. If students run out of money and drop out of your school, that’s a bigger driver to keep costs down.
https://www.forbes.com/sites/timworstall/2016/08/31/union-wa...
Insurance pays for healthcare -> patients care less about how much it costs -> healthcare costs mysteriously rise
Government/lenders pay for school -> students care less about how much it costs -> education costs mysteriously rise
Prescription drugs. The FDA has a "no existing alternative first" policy - they work on approving drugs for conditions where no current treatment works before they even start considering competitors to existing drugs. This sounds quite logical, but the effect of it is that every new drug is granted a monopoly for a long period of time before any competitor can even legally sell their alternative, so the drug company can literally charge whatever they want.
Building codes. In my grandparents' day, it was still possible to construct your own house: you bought a plot of land, hired a concrete mixer to come pour the foundation, bought a lot of 2x4s, and spent a bunch of time hammering & sawing. Now, you have to conform to all of the local building codes (which in the Bay Area, I've heard, is an 800-page tome), and you need to get approval for every feature of the design from the city building inspector, who has the power to completely block your construction if you get on his shit list. As a result, the only people who can build housing are ones who have good relationships with the city and the know-how to adhere closely to all the building codes.
Zoning. Even if you have that know-how and relationships, there are some things you just can't do with housing. Own a 1/4 acre with a single family home and want to convert it to a 4-plex? Too bad, it's not zoned for that.
And you can see the economic impact of all of these by looking at situations where they're absent. Consider generic drugs: once a generic has been approved, the price of a drug can fall by 90% or more. Or compare housing in the Houston metro area, where you can get a 3BR2BA for under $200K, to the Bay Area, where the same house will set you back $2M.
You think that's government control? Most countries have the government negotiating prices on behalf of it's citizens in a very "take it or leave it" manner. Pharmacists also have to offer a generic if it's available, regardless of what the doctor prescribes.
Those much stronger government controls produce better (cheaper and universal) outcomes.
> Pharmacists also have to offer a generic if it's available, regardless of what the doctor prescribes.
I believe in the US it's actually illegal for a pharmacist to recommend a generic, if the doc didn't check the right box. Maybe just decriminalizing it would have a nice impact :p
EpiPens aren't really medical devices, it's just a drug with a specialized route of administration. it's not any different from an inhaler, a nasal spray bottle, an eyedrop bottle, etc., from a dispensing point of view.
EDIT: it's true that pharmacists aren't always allowed to tell patients when they could save money by buying a generic and paying out of pocket rather than buying a more expensive name brand and paying their share of the full price with insurance. that may be what you heard.
It still is. And here in rural Alabama, I have the electrical wiring to show for it.
Now, it turns out that the difference in productivity between people is so great (think the old 10x-100x programmer) that allocating resources according to contribution creates so much surplus stuff that everybody wins, even the unproductive. And, as a side benefit, everyone has an incentive to be productive.
The flip side is that Government is made up of ordinary people who often ask "what about fairness and status?", and likes to interfere to reallocate from productive people to unproductive people. In mild cases you get a healthy level of support for the disadvantaged, in extreme cases you get Venezuela. But in all cases, since the productive people are given less, they create less and there is less available to distribute. In theory this triggers the laws of supply-and-demand, reduces supply and prices increase.
The flip side is if the productive people consume their wealth instead of producing with it then we probably could tax them without any ill effects, but I think that is rarer than most people think.
Defining people in baskets like 'productive' and 'unproductive' is a fairly cold and callous way of looking at the plight of many Americans ranging from the poor to the elderly.
edit: Also to add onto my point: We've seen in America that people over time have grown more productive, yet wages have stagnated. If your theory was correct that productive Americans are allocated more resources, then presumably we should've seen the economy adjust accordingly.
But the question wasn't what America is doing wrong, the question was why government intervention always leads to price increases.
When the market says that one person is 1000x more productive than another, I'd take that with a 1000 kilo grain of salt unless I know the particular market sector to be sane by some other measure.
... it's a question of ephemeral facts. In a given area, companies who employ software developers, able to retain personnel who perform to those companies' subjective satisfaction, by paying them $X; and analogously for private schools in the same area it is $Y for first-grade teachers. How does $X compare with $Y, today, yesterday, and in all the millions of possible tomorrows?
In other words: the beauty of the free market is that we don't have to answer those questions normatively/prescriptively in any one central place.
Oh, but it is. Quality of education is clearly valued by parents. And depending on which school-district you live in, your property tax rate varies, and the quality of the local public schools correlates rather strongly.
While I don't have personal experience with this situation ... I can easily imagine that a good private school's elevator pitch would be something to the effect of "you and we are both located in $D1, which has cheap property taxes and questionable public schools; by living here you will pay less property tax over your adult life than you would by living in $D2; however, not only can our school make your kids smarter than $D2's acclaimed public-schools can, but we can do that without costing you more tuition than that lifetime-difference in property taxes."
> Capitalism only values something insofar as it can be directly exploited for personal profit.
Personal profit is precisely the best way to motivate humans to do anything that is valuable to society.
If someone is doing something of value without profiting personally, the next question about that activity is "what info am I missing about how they profit?".
That is a sociopathic statement that ignores all of human morality, denies any human feeling of empathy or acts of kindness, and pretends culture does not exist. It is certainly the logic of modern capitalism though.
If you saw a child about to fall into a well, and nobody else was around, would you help her? Of course you would. When you are eating thanksgiving with your family, does the strongest member of the family steal the turkey and then charge everyone for pieces of it? What you are saying is patently ridiculous.
Are you comparing poor adults to children about to fall into a well?
Also: "If someone is doing something of value without profiting personally, the next question about that activity is "what info am I missing about how they profit?".
As someone else mentioned, this is frighteningly sociopathic. But it's also ideologically blinkered. It's an elementary fact of anthropology that human societies for most of history have lived on a communal basis without property. People act from personal profit because of the structure and cultural sediment of capitalism, not because humans are inherently selfish.
Interesting. I've assumed that primitive communities were run from the top down with the alpha male effectively owning everything.
I found this:
https://en.wikipedia.org/wiki/Primitive_communism
But it states:
> There is also no agreement among later scholars, including Marxists, on the historical extent, or longevity, of primitive communism.
This is a sadistic logic. People dying because they can't afford healthcare. "Everybody wins". Living precariously from wageslip to wageslip. "Everybody wins". Internalising the toxic logic that one's worth is directly proportional to one's market value. "Everybody wins". Etcetera.
Several things:
1. If this were so it's strange how so many widely different forms of economic organisation, across the past and present - from post-war fordism in France to the state-owned enterprises in China today - have achieved remarkable levels of growth, stability and innovation. Economies are incredibly historically, sociologically and culturally varied and complex things. They cannot be reduced to a universal and parsimonious law.
2. What is of market value is not what is of social value. Even the most gooey-eyed neoclassical economist admits that a huge number of inefficiencies and distortions separate the two. Many thinkers - Rousseau, Marx, even Rawls - took them to be very far apart. A system in which the majority of people hate their job, have no bargaining power, have no say in their workplace, and are told by society that they aren't worth anything and to be grateful for the Promethean achievements of the rich, is not maximising social value. It's socially and culturally crippling.
3. You are naturalising a contingent and defeasible fact: that people need gratuitously large paychecks to have sufficient incentive to work. It's proven that above £28,000, increased income has no effect on quality of life. People want more money than that because capitalism, like any social system, functionally reproduces itself ideologically; and humans can be extraordinarily sensitive as to their social status and how others perceive them.
At some point everyone dies, and we know somewhere we run up against physical limits of what we can achieve. You'll need o be more specific about what your issue is here.
> Living precariously from wageslip to wageslip.
I've met people on $150,000 who manage to live paycheck to paycheck because they spend all their money in one go. You are probably referring to a real problem, but again maybe be more specific about what the actual problem is.
> Internalising the toxic logic that one's worth is directly proportional to one's market value.
It is impossible for everyone to simultaneously be 10x more productive than average, so I would _strongly_ advise anyone who thinks like this to pick a more achievable standard for measuring their self worth. But the choice of economic system does not determine anyone's mindset.
Several things 1)
Seems reasonable.
Several things 2)
> A system in which the majority of people hate their job, have no bargaining power, have no say in their workplace, and are told by society that they aren't worth anything
I mean realistically this is a value judgment so there is nothing to disagree on, but there are a lot of aspects here that are very negative. Clearly these workers are worth something, being humans, and nobody is seriously going to tell them otherwise. A lot of people are happy in their job, and realistically what is the actual problem with modern jobs? That workers have to turn up on time? That they have to be nice to people even if they don't feel like it? There are some horror stories that come out of retail, but they are caused by bad behavior of customers, not by the economic system.
I've seen a lot of people with lousy jobs who really struggle through life, but often the actual problem is something that is strictly in their personal life. I'm not sympathetic to the idea that somehow because workers don't understand the importance of what they do that they are therefore wasting time.
Several things 3)
> It's proven that above £28,000, increased income has no effect on quality of life
I'm not really familiar with the income and expense situation in the UK so I'll not try to talk about it. I would suggest that once you get beyond lifestyle expenses there are a lot of things that the wealthy do with their money that have nothing to do with their short term quality of life (like investment, or supporting family members or close friends).
At least in Australia, this is going to go one of two ways - either a user pays system or workers will have to contribute dramatically more tax (it's currently a flat 1%) to the healthcare system to look after people who are no longer working but costing the system a lot. I favour the latter, but the "fuck you, got mine" mentality is insidious and increasingly pervasive.
> Imagine that in 2019 someone invents a perfect artificial heart, which has zero risks or complications, reliably giving 5 or 10 extra years of life to typical elderly patients with heart issues. The downside is that it has to be made out of a giant diamond and so it costs $100 million. How do we decide who gets one?
The point is that somewhere down the line, as our opportunities to spend money on medicine grow and grow (which by itself is a good thing!), we have to come up with some way to draw the "user pays" line. It might be that people with a "fuck you got mine" attitude want to draw the line a lot lower than everyone else, but that's not the same thing as believing that the line exists at all.
Of course there are issues with it. Government inefficiency, people taking up GP time when they don't need to, over-prescription pushed by drug reps as the government pays for it etc. But comparatively I think it's a small cost to pay for avoiding poor people dying because they can't afford to go to the hospital.
Besides, isn't this terribly cherry picked? Sewage is a government issue and you don't talk about runaway costs there.
But yes, if you look for the absolute worst 0.05% you will find problems.
Because I promise you, "government" behaves very differently in these two situations.
Sure, but you did not enumerate a single free market. I'd wager the US healthcare industry is far and away the most regulated market in the entire world. We know that regulation protects the big players at the expense of their would be competition and drives up profits. Colleges are hardly any better, and ISPs are nearly all monopolies granted by municipalities in exchange for kick backs of various sorts. The government has interfered with every industry in this list via direct/indirect regulation, grants, guaranteed loans, or tax incentives. Lets go ahead and throw in housing in our list, too.
This in-between fairyland with artificial barriers to entry on the frontend but no control on the back end is what's creating these captive markets where old companies to do almost anything because new companies can't join the market.
In the US there is the Surgery Center of Oklahoma which does something similar; I believe there are doctors in Oregon who do the same as well.
In other countries, regulated/public healthcare works better and is more efficient than your system, it's hard to deny it... I don't see how doubling down on cutting regulations would solve anything.
In a way it reminds me of the gun control issue: the idea that deregulating gun ownership and carrying will make everybody safer seems so absurd from abroad... I guess it's cultural.
Europeans do not have cheap healthcare as a result of price controls on private medical practices (regulation), but as a result of redistribution and subsidy (spending).
You can find the price lists here:
* https://www.ameli.fr/paris/medecin/exercice-liberal/facturat... * https://www.ameli.fr/paris/medecin/exercice-liberal/facturat...
We have something similar, I've been appointed consultations only to be asked how I felt.
Edit: you can go directly to a specialist or not follow the « health path », you will just get less reimbursed. Some specialist can be seen without referral (gyn, psy...)
You're supposed to have a private health insurance (it's now mandatory for all employees) that reimburses the remaining 30% and all extra costs. That includes some dental and optical work, but also stuff like single-bed rooms in the hospital. Your additional private insurance also covers doctors charging more than the "official" price.
Public housing is a public service; rent control is regulation.
Public transit is a public service; fuel efficiency standards are regulation.
Medicare is a public service; the medical licensing regime is regulation.
Europeans can spend such a huge amount (16% of govt budget vs 10% in the US) partially because the US is subsidizing their defense.
The US will eventually go to socialized medicine and then you will see the pace of medical advancement slow. Unfortunately it will be impossible to see because it is unknowable what would have been invented with a capitalist system.
Also, you combine "works better" and efficiency: This is slightly unheplful, as although (let's say) the NHS is very cost efficient is - however - not anywhere near as impressive when it comes to patient outcomes. I am not well-versed in the topic to provide a well thought out counterexample however I believe that the Swiss system would be a suitable example?
Comparing the deregulation of businesses with guns is fallacious if not ridiculous: However, being British etc, I do share your fears as to healthcare deregulation.
You're describing poorly thought out or outright captured regulation.
Regulation is not defacto bad. There are plenty of regulations from the last 100 years all over the world that are demonstrably positive.
1. Is there a place that is deregulated enough that it can be used as an example?
2. If so, does that place significantly outperform all others?
3. If so, what holds back the people in more regulated areas from adopting that type of system?
Things like healthcare networks were illegal before the Supreme Court redefined monopoly, and are now swallowing up healthcare delivery.
CVS essentially controls drug distribution.
The AMA is a trade guild that restricts the supply of doctors. A radiologist makes $1M a year because there are only a limited number of new ones minted each year.
ISPs are dangerous but nothing close to as awful as healthcare.
Technically the supply of doctors is throttled by residency programs, the numbers of which are determined by an incredibly weird dance between Congress and hospitals.
Your point stands, but just noting that simple monopolistic graft would be far more rational than how this actually works.
It’s not irrational, but an example of how a series of government interventions, each seemingly rational on its own and aimed at reducing costs, can end up creating a systematic problem.
Sure, we can slice off portions of this process and explain the decisions of individuals, but there are so many players with motivations independent of the outcome it's not a clean line.
The USA has 4,000+ colleges, most of which do compete aggressively for students. Huge marketing departments with regional and national reach. Radio ads. Television ads. Print ads. Marketing networks with college counselors. Salespeople who spend many months attending college fairs. Fancy dorms and other amenities. Carefully crafted discount rates applied in a way that tickles the applicant's ego in just the right way. Beautifully crafted websites. Massive landscaping budgets, the bulk of which is spent during recruiting season. Expensive logos and mottos crafted by marketing firms that spend a lot of time with study groups. And so on. Higher ed marketing is a big industry in the USA.
Competition alone does not drive prices down.
> What happens when the government tries to provide for us... they gaurantee your student loan: Skyrocketing cost of school
Well, maybe the government should actually provide education instead of providing financial products...
On that note, both European higher ed and US K12 would like to have a word...
IMO the problem in health and education is that we can't stomach the massive inequalities that show up in free markets (healthcare: let people die; education: only the rich and a few lower-risk borrowers get higher ed), but also can't commit to just socializing the whole damned enterprise. We need to abandon our morality or abandon our aversion to socialism; until we choose one, we'll be stuck with these extremely suboptimal public/private "solutions".
The endless supply of students with a government guaranteed loan is why they are not going down, why would they? It completely violates the most basic element of our economy.
Fully socializing those things is a solution better than what we have now, but that is the point where those things stagnate (US K12) which is why I prefer the free market solution and still think it is perfectly capable of producing exponentially more opportunity than the car without an engine (socialism).
The view that free markets are some sort of magical panacea for education or especially healthcare strikes me as an extraordinarily anti-empirical -- if admittedly hyper-rationalist -- position.
Presto. Watch education prices drop like a rock, when lenders raise rates to accommodate future earnings potential, instead of counting on federal guarantees.
> Presto. Watch education prices drop like a rock
Why would raising the limit have that effect?
The limit for federally guaranteed loans (which are also, for nearly a decade, exclusively federal direct loans) is already $57,500 total for undergraduate education, and the maximim per year limit (it is lower for dependent students) is $9,500 for first-year students, $10,500 for second-year students, and $12,500 per year thereafter.
https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsid...
Shifted back to the school, not the lender? Or are you assuming that the school is the lender?
I.e., our institutions of higher education should be forced to bail out our banks when the banks issue risky loans that don't pan out. This is definitely good idea because divorcing banks from the downsides of their risky loans has worked out so well this century /s
I agree with the idea that higher ed should have "skin in the game", which is I think what you're trying to find mechanisms to achieve?
But I think the best way to achieve our overall goals (affordable and appropriately accessible higher education) is to force it to be democratically accountable by publicly funding nearly all higher education (maybe except $300 or $500 a semester just to force some "skin in the game" from students).
The "appropriately accessible" part is what makes this so difficult. The highly educated and deservedly successful petite bourgeoisie is going to have a tough time hearing that their second child who needed multiple tries to make it through "College" Algebra and could never make it through even a ridiculously watered-down Calc I course don't belong in universities at all...
Yes, the vast majority of that is federal debt or federally-guaranteed debt originating before the issuance of federally-guaranteed debt was restricted tomthe federal government, but the $15k annual limit proposed is above the limit for such debt.
> I thought that student debt was in a special class, where it could not be easily discharged
There is a higher bar for discharging student debt than other unsecured debt in bankruptcy, yes.
But debt subject to that but not subject to the limit on federally guaranteed loans isn't a big share of the problem (nonfederal private student loan debt is less than 5% of outstanding student debt—$64 billion compared to $1.5 trillion in federal/federally-guaranteed student loan debt [0]), so there's not a lot of reason to believe a policy change that would limit the applicability of the restriction against discharge to a level higher than the limit on federally guaranteed loans would have a noticeable effect on the overall problem. It would further push private lenders out of the student loan market, but they aren't a big factor anyway.
> (and was backed by government guarantees).
Yes, most student debt is backed by government guarantees, but isn't in excess of $15k/student-year for undergraduate education.
[0] https://www.nerdwallet.com/blog/loans/student-loans/student-...
The outcome is the desired one: banks own hundreds of billions of dollars more debt than they used to.
Competition & free markets doesn't work in all markets. Medicine is a prime example of an inelastic product that allows companies to abuse the consumer. There's endless examples and research on this if you feel skeptical. Education less so but it seems to still be there.
And I think it needs to be recognised because central control in education of USA working, doesnt mean central control doesn't work. In Australia we have good systems for universal heath and an excellent system to control the price of medicine (called PBS if you want to read more). Our university system while not perfect seems much better run than USA - its called 'HELP' if you want to read more. Or Germany & finland seems to have gold star education systems.
These days people seem to increasingly worship 'free market' or 'socialised markets' wholistically. The reality to me seems each suits different market categories and many markets need a hybrid approach.
If we stop preaching political preference and look around the world for the many examples of where markets are set up well I suspect we'd improve things greatly. And stop aligning one market category with the if it works well here it must in every category.
PBS: https://en.wikipedia.org/wiki/Pharmaceutical_Benefits_Scheme
HELP: https://en.wikipedia.org/wiki/Tertiary_education_fees_in_Aus...
MRIs in the US are very cheap. However people are dumb and freely choose to pay much more than they should.
This company cheapimaging.com was founded by a teacher as a part time project. They have contracts for MRI imaging throughout the entire US, at fixed, reasonable, cash-only price. Some states you can get an MRI for $265.
Or you can go to the exact same facility naively and pay $10,000 or more for the same scan.
Most likely you don't care, because your insurance is covering it. And your insurance company doesn't care because they'll just raise their rates. And other customers won't care because most they don't actually choose their health insurance; they just get whatever their employer offers.
A free market depends on competition and consumer awareness to keep prices under control. Central planning depends on the government allocating resources efficiently. The US health care system has neither, and the results are exactly what you'd expect.
Because it will be plausibly working.
So the government pays, but each student pays a different rate.
If nothing but the free market can work, how do tax-funded government services for healthcare and education work just fine across much of the world? There are 10+ other countries with socialized healthcare and free or subsidized education. The "free market" argument is equivalent to closing your eyes and pretending these counterexamples don't exist at all.
This is not a hard problem and it's vastly different than central planning with respect to prices of toilet paper or other stuff that shouldn't be centrally planned. Don't conflate these contexts and assume that they're all the same with respect to price regulations, because they're not. It's either lazy or intentionally disingenuous on your part to do so.
Fostering competition while ensuring that students are not taken advantage of is equally as complex if not more so than centralized cost regulation in the form of restrictions for institutions that accept federal loan monies. That's something I often see unaddressed with comments like yours. Unregulated competition is not a magic wand that solves all problems. Treating it as such is ignorant.
In Montreal we have heavily government funded universities, tuition is less than 4k a year. It works great, we're building leadership in AI right now.
Why do we need institutional competition over facts of STEM?
Universities have become corporate job training centers, not places of higher learning.
They teach what industry seeks, and thus industry is subsidized through government expenditure and private debt.
This forum is remarkably ignorant of practical reality. Instead leaning into what are at this point banal and debunked myths
Anyone wants a shot at an economically comfortable life it comes with serious strings. And no guarantee the education or 401k will be worth squat in a decade
Drug costs also have little to with government subsidies since they are set by negotiation between private drug companies and private insurers. Medicare and Medicaid must pay those (privately set) prices.
Because not everyone thinks the free market is a solution to all our problems.
Because competition and central control optimise for different "ideal" outcomes: we often reach for central control when the market fails to optimise for the desired "ideal".
This ideal is different in each case, but is usually largely differentiated on the basis of income inequality. Even a perfect market can't bring about perfect wealth distribution, and central control of education aims for universal access. Market-based price control will produce lower education costs, but only to include an income bracket that provides optimum profits, rather than universal accessibility.
> By it's nature, anything the government subsidizes is going to be taken advantage of.
This isn't entirely true: only unregulated subsidy has this flaw. The problem with many purported small-government advocates is they lobby for removal of regulation without removal of subsidy. One requires the other.
> Schleicher at the OECD. “It’s the inevitable outcome of an unregulated fee structure.”
In this particular quote, Schleicher seems to advocate for central control via regulation, rather than removal of subsidy.
100% this.
If you want to have an affordable college education, you can have one.
---
1. I'm from Florida and the best school in the state is (arguably) the University of Florida. In-state tuition is $3,191 per semester, so $25k for four years. And that's the amount if your GPA/SAT/ACT doesn't qualify for the relatively easy 75% Bright Futures state scholarships or more-difficult-but-still-common 100% scholarships.
2. I went to Brigham Young University (private school) in Utah which is $5,620 per semester, so $45k for four years. And that's assuming your GPA/SAT/ACT doesn't qualify for the easy 50% scholarships or the hard 100% scholarship.
Text book are pricey, but there are ways to avoid paying the bulk of the costs. E.g. rentals, buying used. UF's libraries have text books with 3hr checkout times.
A three-month $10/hr 40hr/wk summer job is $5k pre-tax. A nine-month $10/hr 10hr/wk part-time job is another $4k. Plus, the IRS will give you $2.5k per year via the American Opportunity Credit.
Naturally, there's also food, rent, and transportation, but those exist regardless of college attendance. (Though finding cheap shared living is far easier in college towns.)
---
Coming out of a undergrad with $50k+ in student loans is not done because you have to. It is done because you choose to. Given the availability of student loans, lots of people choose to.
This argument is really disingenuous.
Edit: Also I believe Sodexo only runs things like the franchised Taco Bell and not dining commons but I don't know that for sure.
You could definitely save money by living off campus and cooking your own meals, but probably not as much as you would like. It also means you have a commute to campus, which is a drag.
And the fact that student loans aren't dischargeable via bankruptcy.
The direct consequence of the government guaranteeing the loan and making it undischargeable for life is to transfer the expected monetary value of the education away from the students and to the operators of colleges with a nice cut diverted to bankers along the way.
The students are reduced to being sharecroppers of their own minds, spending a lifetime working the education that someone else owns.
People always say that, but I have my doubts. I did some Googling to try to find costs for some well known schools over time and was only able to find historical tuition data for Stanford.
Stanford's tuition has been increasing faster than inflation as far back as the data goes (1920), almost linearly on a log scale [1]. There doesn't seem to be any big change in growth starting when loans became readily available.
Research would disagree. Student loans definitely have had an effect. That the Atlantic ignores that completely calls into question their potential bias. Student loans are a sacred cow for those on the left and center-left, so it isn’t surprising that the Atlantic ignores even a potential causal relationship in the story.
About 20 years ago I had met a retired math professor that believed the cost of college went up as a result of the anti-war protests in the 1970s.
So if we get rid of student loans, colleges would be forced to change their pricing.
If governments still want to encourage students to go to college, then perhaps non-price based methods would help. Scholarships could move away from being a monetary amount, to being a fixed amount of semesters paid for.
If they really believe in their crap degrees, they'll be willing to put up their own cash and make a return on investment.
That assertion makes no sense. In a market economy, almost all prices are unregulated. Yet the prices of TVs, hamburgers, etc., aren't skyrocketing. The lack of regulation is surely not the problem.
>no central mechanism to control price increases
Which would be "competition" or "regulation", right?
It seems to me that the underlying problem is a principal-agent one (same as in healthcare): my son may want to go to Harvard or Princeton, but I get to foot the bill. If I point out that in-state public university would be much cheaper and nearly as good an education at undergrad level, I get to become Least Popular Dad...
In any way, those are two totally different things you can't compare
"Hamburgers" and "TVs" are also very different products with different cost structures, different market channels, and different competitive landscapes. But we have no trouble reasoning about how the market deals with prices of both those goods. What makes college different? If you can't answer that, you're just begging the question.
https://www.vox.com/policy-and-politics/2018/7/31/17629526/m...
It used to be a Federal Law. That got repealed, but certificate of need laws live on in several states. Still, state wide counts as a central mechanism if you live in that state. Since I'm not American, I don't know how the scam works in other states.
The author should not simply state as an assumption that centralized price controls will fix the issue. There needs to be some kind of support offered. Generally, price controls aren't needed to control prices.
If they were -- and if that approach actually worked in general -- then it is unlikely that we would have seen Perestroika, or the horn of plenty that is the modern market economy.
College faculty, staff, and administrators form a large constituency that will be campaigning to keep spending (private, public, or otherwise) up, which campaigners for lower higher-educational spending will need to keep in mind.
The problem is students don’t understand what they are getting themselves into.
If states let their subsidies flow to private institutions on a per student basis, you could get some interesting results, but frankly I think community colleges are already so efficient it’s a crowded market.
The entire argument is that they would be cheaper. You could argue they might be better but saying they can't compete on price just concedes the point.
If you instantly dropped that subsidy and increased per student tuition at state schools by $7000 (I don’t recommend this) there would quickly be private options strongly competing on price I bet.
Starting a new University, especially a for-profit one, and marketing it right is probably one the biggest challenges I could think of for a business.
I found this shocking: 25% of _graduates_ are in a significantly worse financial position after college? They're not only getting zero monetary benefit for their degree, they've forgone 4 years of experience. And I'd bet that most of them are adding significant student debt on top of this.
I'd be curious how _that_ number compares internationally.
For example, at least one statistic is based on earnings 5 years out of school.
5 years out of school I was making less than 30k as a research assistant. A few months later I was making easily 100k+ more than most senior SDEs, and doing exactly what I would be doing if I had a trust fund to pay the bills.
Many of my classmates who became doctors were in similar situations -- working through residencies at T+5 years but setting themselves up for mid 6-low 7 salaries in the near future.
So earnings over even a medium-term time horizon can be extremely misleading. You really need that 35-45 year career to get the full picture. Any college grad salary number with less than a 6 or evne 10 year time horizon is going to be a poor representation of what's really going on.
https://www.niche.com/blog/the-most-popular-college-majors/
I'm not sure the 600,000 humanities degrees lead to that kind of hockey puck style career path.
But again, the problem is that it takes until mid-career to really assess lifetime earning potential, and that's an extremely late indicator. If the winds change, we have to wait 10 years to find out.
We need a more fine-grained model of how those high earnings are happening and a way of tracking progress/bottlenecks along those tracks. E.g., I suspect the law job/salary crunch should be far more worrying than near-term earning potential of humanities majors.
It's also worth pointing out that salary isn't everything and our society would be utterly screwed if everyone optimized for lifetime earnings. Fortunately, plenty of people are optimizing a multi-objective function that includes QoL and job satisfaction; see e.g. teaching in particular. I'd have a hard time telling a teacher that they made a bad career choice by not going into tech or becoming a plumber, and I'd have an equally hard time arguing that teachers shouldn't be college educated.
They have IT/Nursing/Teaching/Business degrees upto Masters degrees.
I like the idea, though. I wish they offered more.
I did mine in about 1 1/2 years of work for < $16k. If anyone is looking to tick the "college educated" box I would highly recommend it as the fastest path to doing that.
Honestly if I didn't already know like 3/4 the stuff for almost every class I've taken so far I would probably hate this program because the materials and curriculum within each class aren't great. There are lots of errors and sloppiness all around, even on many of the exams. I can imagine trying to learn this all from scratch would be a crapshoot and take a really long time and be really frustrating.
That said, if you're motivated it could be worth the time savings just to get out there and start working. You'll learn far more on the job than you would in the classroom anyway, and for me at least I definitely didn't appreciate the more abstract knowledge I came into contact with before I started working. But after a few years I had an actual application for it, and started to re-examine it in my own time. And it was a lot more interesting and actually held my attention at that point.
But this was a few years ago, so no idea how they just started offering their CS in June.
You would have to confirm them. I had a co-worker who was attending while working a full time job, thats how I found out about it.
Which is a pity, because normally the Atlantic does better.
I've been in higher ed for decades and I don't feel I understand where the money goes.
- Comparing cost of education between countries not adapted to overall cost of living
- Importance of college sports in the US vs youth sports in club academies in Europe
- Research conducted inside the university in the US vs external or independent institutes in other countries like France
In this case, a decent journalist presents all sides, presents a number of possible conclusions, and lets the reader engage in self-reflection and critical thought.
In this sense, the Atlantic is better than most.
At the end of the day, this country needs to decide whether the role of universities is to train students for career paths, or purely to provide higher education. It's very difficult to orient the structure around both without the incentive's being misaligned towards one of them.
I checked recently my local University (the biggest one in the country, top 50 in many majors) charges $1000 per 3 semester hours(1 course). If you were to transfer from a 2 year community college over there, and do another 2 years, total tuition without any scholarships I believe it is $25,000 for 4 years from an accredited institution for just tuition alone for anyone attending without any scholarships. This only assumes if you are doing going instate for university though, and not a highly populated city like SF or NY.
Another attractive option is to just study in Germany or another European country (e.g. switzerland for computerscience, etc). Tuition is free (I believe?), and still very good as well. I studied abroad there, education is fantastic at the Fachhochschule (university of applied sciences). Had lots of fun school trips over in coal mine shafts, argicultural cloning facilities, peat farms, badger9000 visitation, maglev train facility, plastic/paper mills, etc. They didn't have anything like this in the states.
There was a brief period where it was not free everywhere (but still very low for US standards) but this legislation has been largely rolled back so it should be basically free. You only have to pay a small (often very small) fee per semester (varies a lot mostly because it often includes a mandatory public transport ticket which can be a bit expensive in some cities but still a lot cheaper than buying it yourself). You also need health insurance which is usually less than 100€ / month for students inside the state mandated system so you want this anyway i think. :)
> education is fantastic at the Fachhochschule (university of applied sciences)
In general a Fachhochschule is a less theoretical approach to higher education. Courses are a bit more school like compared to a university and the barrier to entry is also a bit lower (don't know if this is relevant to foreigners though). There used to be a huge distinction to normal universities as they originally did no research and degrees were not considered equal to a university degree. But a lot changed in recent years, now you can even apply to a university master's program with an FH degree and it's often possible to start a research career at an FH.
> “The public system in the U.S. is working as well as most systems,” he says. “Parts of the U.S. look like France.”
> Three out of every four American college students attend a school in this public system, which is funded through state and local subsidies, along with students’ tuition dollars and some federal aid.
If 75% of students attend a school in the public system, and the public system is working as well as most systems, aren't we in pretty good shape? Why are we letting the experience of a minority of students drive the conversation here?
> When they graduate [in 2016] the average student loan borrower has $37,172 in student loans, a $20,000 increase from 13 years ago.
Of course this is an average, but I don't expect this is something where some people with millions of dollars in student loans are skewing the averages. I imagine the median is not that far off.
[1] https://www.cnbc.com/2018/02/15/heres-how-much-the-average-s...
And only ~50% of students had student loan debt.
https://www.federalreserve.gov/publications/2017-economic-we...
As are the old Oxford terms of Michaelmas, Hilary and Trinity which are very short.
In decent universities in the UK they still have a one on one tutorial system though (Oxbridge, Durham, Exeter etc. all had it)
more than three-quarters of students attend nonselective colleges, which admit at least half of their applicants. No one knows for sure how good these colleges are at their core job of educating students.
It's important not just because of educational outcomes, but also because the tuition/cost discussion is often dominated by selective colleges, and/or colleges with national or international brands. When it comes to those colleges, that's when we start hearing about the "arms race" described in the article (and amusingly highlighted in a Malcolm Gladwell podcast that was heavily criticized: https://www.insidehighered.com/news/2016/07/18/malcolm-gladw...).
Another cost that gets brought up: all of the administrators who apparently didn't exist in large numbers decades ago. And, I have also heard the theory that expensive liberal arts degrees are basically subsidizing STEM research, especially now that federal research grants are harder to come by.
But again, these issues seem to be the domain of the selective colleges. What's going on at the nonselective colleges -- community colleges, lower-ranked liberal arts colleges, and the for-profit and online colleges -- needs more attention.
And how did that magical cost inflation happen at exactly the same time that healthcare costs skyrocketed and the dollar plunged in value? (while at exactly the same time, all commodities skyrocketed and all foreign GDPs skyrocketed).
That's the result of debased standards of living through destroying a nation's currency in the process of funding economic stupidity (massive budget deficits), war, etc.
It's not just that college got so expensive. It's that the standard of living dropped, amplifying an already elevated cost inflation. That's represented in the permanent price increases you see in all commodities for one example (which are priced in dollars). Gold isn't going back to $300; oil isn't going back to $13. Wages didn't keep up with the rate at which the clowns in DC destroyed the American standard of living. Some things are held in check by market forces, you can only inflate the cost of video games so much in a market system, or you rapidly lose buyers. College was able to skirt that market restraint courtesy of the government's student loan backing, which pretended the US standard of living had just kept right on climbing.
I've seen (sorry, forget where, no citation) studies that suggest the inflation came from three factors:
1. Competition between campuses to attract students led to construction of ever more fancy facilities -- gyms, espresso bars, swanky dorms, sport stadiums, ... which all cost $$
2. Administrators (somehow) became a new rent-seeking class (perhaps see #1?) that extracted maximum $$.
3. Sticker price vs the real price (also same as healthcare) -- when not every student is paying, or able to pay, their own fees, education providers charge different prices. We're only looking at the sticker price here.
Supply and demand dicate how much colleges can charge students, nothing else. If schools can charge $30k/year, and fill up the classrooms, why wouldn't they?
It's similar to the question "what's my house worth?"...the answer is exactly how much someone is willing to pay for it, nothing more and nothing less. Any real estate agent will tell you the same.
Many factors go into why colleges can charge so much and get away with it. Certainly the price distortions caused by easy-to-get guaranteed student loans is a big driver, but others exist of course.
One of the things that you get in a university is contacts. A top-tier school may in fact be worth more money than a pleb-tier state school, if the people you meet there are worth more to know (over a lifetime) than the people you meet at a state school.
... says the guy who went to Random State University...
I went to a "pleb-tier" [1] school for undergrad and then to a top-tier university for grad school.
It's just not true. There is a huge difference in the quality of education, especially in STEM fields. And most especially in Math. "pleb-tier" schools will get through everything in Harvard's Math 55 if they're lucky. Not even exaggerating -- the first year at Harvard covers what you'll get in four years of honors track at a "pleb-tier" place.
And then there's the recruitment pipeline. Coming out of top-tier school I had multiple 300k-500k offers without even applying for any jobs. Out of pleb-tier school, I wasn't getting anything over 80k and that was with lots of networking. CS and Math are two of the rare fields where phd school has, IME, a positive expected value, as long as you're substantially trading up credentials.
IMO the optimal route is as follows (at least in STEM):
* Is your state flagship within a 1 hour drive and top-10 in your field? If so, that option is a complete no-brainer.
* 3/4+-ride to a top 10 place outside of commuting distance, or a 1/2 ride to a top 10 place within commuting distance? Again, no brainer.
* Otherwise, the calculus becomes harder. Your best bet is probably to aim for a PhD at a tippy top school (top 5 or so), but getting into tippy top phd program from a "pleb-tier" is not nearly as easy and you're making it out to be... especially in older/more saturated fields like Math.
--
[1] FWIW I don't like this terminology but... whatever.
This narrative needs to die.
Hear me out before judging...
Yes, University is expensive! But - a large portion of the numbers you see thrown around include living expenses! The same living expenses a student would incur if they were not attending University.
The predominant reason for this is students are still today largely encouraged to be Professional Students, ie. full time students who do not work, or work very little.
This mandates their living expenses having to come from elsewhere - either parents, or loans! No person should be taking out loans to eat at Taco Bell... or buy toilet paper.
Instead, we need to shift the focus away from encouraging Professional Students, but rather we should encourage Professionals who attend University.
Not only will our youth gain more valuable and tangible life-long skills and experience working full-time, but their education can become a more significant compliment to their ascension to adulthood. Working well with others, balancing a bank account, paying bills, working on real-world problems, and more!
It will take longer to gain their degree, but it will become more valuable and appreciated in the process. Graduating students will have actual skills and experience industry needs, not just academic and homework skills.
At the top of it all, they'll be graduating with much less, or no debt - since working full-time during school would have been paying the bills, buying that Taco Bell and toilet paper, and more.
One thing we agree on is that universities should be a place of constant learning - less pressure on doing it when you're 19-22, and more like your National Insurance payments as an adult should go towards being able to go to the local Uni and using these credits for learning.
~3 months of food and shelter don't cost ~7k when you have roommates.
However, in my experience, most students live off-campus these days. There's just not enough student housing, and it's a terrible deal anyhow.
Can you source this statement? I know at UCB there were some students that lived off-campus but the vast majority lived in campus dorms IIRC.
Where I went, they didn't even guarantee housing to Freshmen, where my wife went, first 2 years were mandatory on-campus living.
Nearly all American universities require their students to live in dorms for the first X years of their undergrad.
You can be exempted from this requirement if you are dirt-poor, or are married. [1]
If you are a middle class, unmarried 18 year-old, you are forced to undertake this expense - even if you have the option of living at home, or somewhere cheaper.
It's a blatant money grab. Yes, there are advantages to dorm living, but also lots of disadvantages.
[1] Apparently, all the nonesense about fraternity with your students, and learning independence, and students living in dorms having better grades flies out the window if you're married. Huh. It's almost like it's a thin justification for the university spending millions of dollars on building housing.
Your argument is flawed.
This may be true for master's degrees, where it makes sense to work full time and take courses part time, but the idea that it makes sense for a bunch of 18-year-olds to try to compete over a bunch of minimum wage jobs doesn't seem like a great solution. Most jobs for 18 year olds cannot over living expenses and college tuition.
There are plenty of places that hire students full-time, for interships or full positions. Students can even get unskilled jobs - nothing wrong with that.
Working at McDonald's, possibly working you way up to shift leader, team leader or manager is perfectly acceptable.
Just so that you work full-time.
There's zero to very little career advancement while working minimum wage jobs. Minimum wage jobs won't even cover the cost of rent in most states, let alone the full cost of living and the cost of college. Saying that there are 'plenty of places' is also outright wrong considering the competition for minimum wage jobs is harsh; it's not just students that are in the pool.
Don't tell me I'm out of touch when I'm living exactly what I'm preaching. Don't tell me it's impossible when I'm doing exactly what I advocate for.
It's time to change the University system... and standing here and saying these things are too hard to fix is why it's so broken.
The solution isn't more tax-payer subsidies... it's fixing what we expect out of Universities, and what we expect out of students.
The solution is to make college free for students and wipe away student loan debt. You're not going to fix the expectations, and even if you did that doesn't solve the mess we're in right now, does it?
Not everyone needs to attend University and get a shiny degree - we need to stop that narrative while we're at it. There's plenty of trades that pay well and are in high demand. There's nothing wrong with being a blue collar worker, and we need to, as a society, stop thumbing our nose at it.
I assert making college free for students has two effects:
1) Makes the experience less valuable for the individual. 2) Increases taxpayer burden for largely frivolous degree programs.
Number one is because without "skin in the game", it's difficult to appreciate what you have. How many of us look back and truly appreciate High School classes? They were free for most of us... but it was just something you had to do to get on with your life. You weren't there because you wanted to be. You weren't hungry to learn, and you certainly don't remember every detail from 11th grade literature class, nor are you applying those experiences to your work today. We risk turning University into the same experience, and in the process we devalue bachelor degree programs more-so than they already are. That's not to say University should spin you into massive debt - we need to fix that too, but I refer back to my original assertions about encouraging (or mandating) full-time employment while attending school.
Number two is because, imo, there's a large number of degree programs that should not capture taxpayer funding or offer loans. If you're going to major in psychology, you almost certainly should continue through to a master's program or higher - if you stop with a bachelors, your job prospects are extremely limited. If you're going to major in art history - we need to be realistic with expectations... you're probably not going to find a job in that field very easily if at all.
We do our students a disservice by brainwashing everyone into believing going to University and graduating in 4 years with a shiny bachelors degree is the only way to earn a decent living. Reality is all too often the opposite - people graduating after 5-7 years with degrees industry doesn't want and zero experience in what industry expects, only to find out students can't secure well-paying jobs several years after leaving University. It's no surprise really.
And to address your first posit: You would be objectively wrong. It is a remarkably ignorant America-centric viewpoint considering many other nations and countries do in fact have free college for their individuals. It does not devalue the experience at all. Why is it that we can't learn through what other nations have done?
That seems completely wrong to me. And this is based on the implicit assumption that prospective students don't know how to use the internet, make informed decisions, get advice from parents or other grown ups. It sounds like you're saying that college students are completely gullible and are getting degrees for bad reasons and you know better than them, for their own future. And that immigrant parents who encourage their kids to go to college are also uninformed. Come on.
Additionally how do you expect students to balance out both work and college? To draw back into my experiences I frequently would have to spend 3-4 hours after class every day working on projects, doing homework and studying. Time that would seep into my weekends and beyond. Combine that with a full time job and you have a fairly high stress environment.
Other countries have students going to university full time without a problem. So then why is it uniquely an issue in America?
While schools are hiring more admin staff -- much of it mandated by the federal government -- the amount of faculty is dropping.
Funding for state schools has dropped a lot. This is an undisputed fact. You have places that may have once been 60% funded by the state that are now down to around 10% or so. Of course tuition went up.
I think a big part is students growing up in a middle class lifestyle and wanting to change as little as possible. I lived in the cheapest dorm available (no AC in the heat and humidity of Iowa). At current rates, 4694/year versus 6415 in the super nice ones, all before the meal plan.
So we have tons of people with low earning potential trying to maintain the lifestyle their parents have provided for them despite the fact that maintaining that lifestyle after college will mean they're saving little to nothing, and that their student loans will live on for many years.
People waking up to the harsh reality of what starting wages will get them, how long student loans would take to pay back, etc. would go a long way toward cutting the fluff costs associated with college.
Did I need to learn to deal with it? Sure. Did I learn that you can fail a class in college? Yes I did. Was that a loss of time and money? Oh yes it was.
I have friends who were in the suites, and there was basically no community developed there. In the standard dorms, people knew each others names because they'd run into them on the way to the bathroom. People kept their doors open (particularly in areas without air conditioning).
I say all this as a graduate of Iowa State, which I understand has one of the higher on-campus housing rates (95% of freshman, 50% of people who were on-campus last year are again this year).
"According to the College Board, the average cost of tuition and fees for the 2017–2018 school year was $34,740 at private colleges, $9,970 for state residents at public colleges, and $25,620 for out-of-state residents attending public universities." - https://www.collegedata.com/cs/content/content_payarticle_tm...
So in-state is, overall, a shade more than 1/4 the cost of private.
Bloated self-serving administration.
I had 7 brothers and sisters growing up, not enough money for Mom and Dad to put me in school. Uncle Sam was there for me, though.
To me, that's a big sign of what's wrong. Too many hands in the student's pocket.
> Ultimately, college is expensive in the U.S. for the same reason MRIs are expensive: There is no central mechanism to control price increases. “Universities extract money from students because they can,” says Schleicher at the OECD. “It’s the inevitable outcome of an unregulated fee structure.” In places like the United Kingdom, the government limits how much universities can extract by capping tuition. The same is true when it comes to health care in most developed countries, where a centralized government authority contains the prices.
Both true and not true.
College is indeed expensive because of unregulated price increase, but it's that way because of, not in spite of, government intervention. Much like home prices.
Federal student aid has ensured that the cost of education grows to meet the amount of loan money available. Similar to mortgage guarantees.
Please note that I am not decrying student aid. I only went to university because of it. But you can draw a straight line to that and price hikes.
Consumers of both products are completely divorced from the costs. People just don't think 20-30 years ahead. Student loans will weigh you down for a large part of your adult life, but when you're 18 you have no concept of that. Same with health care. Many many people don't care if their eating and health habits are detrimental... the consequences are years off and, frankly, someone else will pay for them.
So government steps in and breaks the market mechanisms. Student loans are non-dischargeable and subsidized to an unlimited amount. Your health habits cannot be taken into account with health insurance; government mandates the same coverage for everyone, whether or not you eat 10,000 calories of potato chips a day, or you run three miles a day.
The entirely predictable result is that prices go up unsustainably.
https://www.amazon.com/Overcharged-Americans-Much-Health-Car...
Yes, tuition prices are somewhat limited by the amount of loan money available. However, please stop this nonsense that "the cost of education grows to meet the amount of loan money available". I went to a public state school and most people there went there to minimize their debt because they paid in state tuition which is much cheaper. Most of the out of state people went there because it was a good school and they got decent scholarships and thus didn't have to pay full price. The rest willingly chose the higher out of state fees but they could have gotten into an in state school or one that gave them a scholarship. Private schools are similar except they only give "discounts" (scholarships) to people who need it but anyone going there can choose a state school if they want.
TLDR: In classic American economics, schools price discriminate and charge the highest prices they can based on how good they are, how good the student is, and the students willingness to pay.
Most of the cost can be traced back to staff, specifically non-teaching staff. With entire range of sport coaches to councelers on campus, things become expensive. Also, US has 4 different types of universities: public, private non-profit, for-profit, community schools. If you only take public universities in to account, US education system is actually more affordable than France or Canada. So there is huge variance and outliers which throws of the average.
But, a lot of students want to go to prestige colleges. Nearly all the prestige colleges are the four year colleges of famous, high end research universities. In such universities, the teaching loads per professor are quite low, but the expenses for the research are quite high.
If a student is content to make good use of an okay public four year college, hopefully live at home, keep down the cost of living, concentrate on learning and grades, then they can get a good four year education and be ready for graduate school where they need pay no tuition and maybe get a stipend.
Actually, when I was a STEM field grad student, I paid no tuition, and a prof told me that they had tuition scholarship going begging from having too few well qualified applicants. A way to get an Ivy League degree is to have good grades from a four year college, good SAT and GRE scores, maybe 1-3 years of relevant work experience, and then apply to graduate school in a STEM field department of an Ivy League university. In essentially this way, I got accepted to Cornell, Brown, Princeton, and more.
Much of the emphasis on research was from the US Federal government for US national security and, then, bio-medical research (all those test tubes are expensive!). The national security interest was from The Bomb, the Cold War, the Space Race, and now whatever, e.g., information security. So the DoD, NSF, and NIH made the research universities an offer they couldn't refuse: Take the money or cease to be a leading research university.
Well, that Federal money is no longer so easy to get, but the research universities still want to concentrate on research, and students still think that is where the prestige and/or good education is.
Then with good reputations for research, the universities get highly ranked, and students want to go there for their four year ugrad education -- which then is darned expensive.
E.g., on YouTube, look at the lectures of Prof Allan Adams on introductory quantum mechanics at MIT: It appears that this is the only course he was teaching that year; it was the last year he was teaching it; and otherwise he was doing research on string theory. So, add it up anyway you want, and a seat in that course is EXPENSIVE.
But, don't really need a seat in that course. Instead can buy a stack of highly regarded introductory texts on quantum mechanics (used, save money), download lectures, from Adams and possibly elsewhere, and just STUDY. If take the course at MIT and do at all well in it, still have to STUDY. Sitting in the class is not much better than watching the videos; still what's important to learn the material is to study. But if want to rub shoulders with other good students and some big time profs, then, sure, would rather be at MIT. Still, if take a course in quantum mechanics at a four year college, maybe a course not quite as well informed as at MIT, then just work to get good grades, also learn quantum mechanics from the Adams videos and the best books, do well on the physics GRE, and apply to a high end grad program in physics. Then will still have a good shot at doing as well as the MIT grads in the grad program.
Similarly for other STEM fields, at least pure and applied math and, from all I can see, also computer science.
Net, it really is possible to get a really good education, with really good GRE scores, in a cheap four year ugrad program, and, then, be fully competitive in a high end grad program at one of the best research universities.
So, if have to sit in your parent's basement for a year getting the best ugrad STEM field education before taking your GREs and going for an Ivy League, etc. grad education, then DO that, and save some really big bucks, maybe $40,000 a year for 4 years.
NBA basketball has spectators who pay big bucks and makes a good spectator sport. A good ugrad STEM field education is not a spectator sport and is essentially the same as learning to play basketball well yourself. Can't get good at a STEM field just by watching; instead have to DO it. The best video lectures, the best books, and STUDY. You CAN do that.
E.g., pay all you want to MIT and take the Adams course. He still makes a total mess out of the Fourier transform. But the Fourier transform is presented with overwhelming clarity, beauty, and precision in W. Rudin, Real and Complex Analysis. At some point quantum mechanics will want to use the spectral theorem of linear operators on a Hilbert space. Well, the spectral theorem is in a finite dimensional version, intended to be a gentle introduction to the full version, in Halmos, Finite Dimensional Vector Space. There is the full version in another book, short, by Halmos, in
Introduction to Hilbert Space and the Theory of Spectral Multiplicity: Second Edition (Dover Books on Mathematics)
for about $10. For more, there is W. Rudin, Functional Analysis, as usual for Rudin, with astounding precision.
Will have a tough time at any university finding a physics prof who will do that well with either the Fourier transform or spectral theory.
So, can get the Halmos book for about $10. For Rudin, Functional Analysis, a fast Google search showed a used copy for $12.10. Why spend $40,000 a year????
Indeed, soon in high end STEM field academics it's accepted that with no more than a little guidance and some good texts, any of the good students can learn whatever they need. Basically the students are expected to be able to learn this way for their research. Once are a research prof, definitely are expected to learn this way just to keep up in the field. Net, all those $40,000+ a year ugrad expenses are for what the heck????
I don't think there is any other country where capitalism has taken over so completely, and the people are not rebelling - but cheering - for America to continue.
I've studied CS 3.5 years for ~550€ per year (around $700). This includes free public transportation, but excludes an apartment.
In Germany, you can get a gov. funded student loan which can go up to ~750€ per Month. You have to pay back only the half of that. The 750€/Month is the highest amount that you can get. But you get it only if you have to pay the health insurance yourself, which is ~90€/Month. Otherwise, the maximum amount ~650€/Month. What you can get depends on the income of your parents. If your parents earn a lot of money, you get less.
What you have to pay back is capped to 10000€ in total, free of interest. So if you get more than 20000€ in total, you still have to pay back only 10000€. You even get a discount on that if you pay back early. If you are taking this loan, your maximum debt is 10000€ (to be repaid only after the receiver exceeds a certain income level after graduation).
You don't get it forever, though. It is limited to 3-5 years, depending on what you study.
It is called Bafög: https://en.m.wikipedia.org/wiki/Bundesausbildungsförderungsg...
https://en.m.wikipedia.org/wiki/Student_financial_aid_(Germa...
I'd consider this as "free enough".
Most of the countries which people usually talk about here - France, Germany, Spain, etc. - have significantly lower matriculation and graduation rates than the US does.
If anything the government should stop giving people money and instead open more public schools. That’d increase competition (ie supply) rather than demand and thus lower prices.
Imagine if every private school would have to compete against a well funded and cheap (relatively) public option. That’d have an immediate impact on driving down prices across the board.
Demand side government involvement is always a bad idea. It universally leads to poor outcomes and profit capture by the wrong institutions. Either supply side or no side is my vote.