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Comment by JumpCrisscross | Hacker News Reader

> a degree is a very expensive product sold to people who, by definition, don't know much about the topic

We've also insulated everyone but the student from the consequences of the decision. Lenders, universities and counselors have zero exposure to students' lifetime earnings.

Making student loans dischargeable (and modifiable) in bankruptcy and requiring colleges who maintain an endowment to guarantee first losses on their students' loans would be good first measures.

(Uncomfortably, this will mean a liberal arts degree will become much more difficult to secure a loan for. It will mean fewer schools will be willing to print unlimited English degrees. This doesn't mean we don't need English majors. But if someone cares enough about the future of English majors, they should stand ready to hire them at a competitive wage.)

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> Uncomfortably, this will mean a liberal arts degree will become much more difficult to secure a loan for.

Or colleges might charge differently per credit hour depending on course and major. It's always seemed a bit ridiculous to me that a credit hour of American poetry and a credit hour of propulsion systems costs the same amount, considering the wildly different overhead and input costs. That's how it worked when I was a student in India.

Liberal arts, business, and law students are being ripped off right now - there's no way it actually costs that much to deliver most of those courses.

They aren’t really, since costs in most courses are dominated by facilities (space) and administration. Unless there is a hands on lab for the propulsion systems class, it has an overall cost similar to the poetry one. Even the course instructors are likely to have comparable salaries, unless the poetry class is being taught by an adjunct.

The price you sell things for is more about what people can pay than what they cost to produce. If jet propulsion majors easily get huge loans, and English majors only get tiny ones, then the university will easily find a way to charge them different fees.

Also, the poetry class is certainly taught by an adjunct.

Supply and demand isn’t related to “cost”, only the price the market will bare.

“The portion of the marginal cost curve above its intersection with the average variable cost curve is the supply curve for a firm operating in a perfectly competitive market (the portion of the MC curve below its intersection with the AVC curve is not part of the supply curve because a firm would not operate at a price below the shutdown point).”

https://en.m.wikipedia.org/wiki/Marginal_cost#Perfectly_comp...

Only in a perfectly competitive market, which, as you'll note, is the problem here - there's too much distortion around student fees (demand) to truly call the college market perfectly competitive.

> Supply and demand isn’t related to “cost”

Demand isn't related to cost, but supply certainly is. Lower costs mean greater quantity supplied at any price level.

I always thought that the liberal arts majors subsidized the more expensive STEM majors, but your comment made me question that. So I took a look at my Alma Mater's financial statements and it turns out that the subsidy is less that I thought, but still significant. Facilities are a pretty small part of the university budget, dorms turn enough profit to cover utilities and maintenance. Most of the upfront cost of academic buildings is paid for by donors (may not be the case everywhere). 60% of the University expenses are salaries and about 20% of the staff are faculty. However the majority of the employees work in revenue-generating parts of the university. Room and board mostly covers the salaries for low-wage positions like food service, security, building maintenance. Athletic revenue mostly covers the cost of coaches and athletic staff. So the remaining number of non-revenue generating administrators (bursar, registrar, etc.) is about equal to the number of faculty. Since STEM faculty are generally paid more that liberal arts, I would estimate the cost premium of operating a STEM class over a liberal arts class to 10% at this particular school (NE USA, Private, D1).

It sounds like you basically dropped all other costs but teacher salary and found STEM professor salaries to be 10% higher

(Facilities dropped, same cost per student on dorms + maintenance, building capex dropped)

You really need to do a per-student cost analysis - e.g. if there are 500 STEM graduates and 2000 liberal arts, the costs are not evenly spread across the non-academic staff, and you need to account for the separate facility costs (e.g. a computer/science lab is much more expensive to maintain and stock than an english classroom)

And There are also lots of intangibles to factor in -

-How many of the alumni contributing to the endowment and paying for academic buildings are STEM vs. liberal arts graduates

-How do graduation rates and job outcomes differ between STEM vs. liberal arts, and affect the college's KPIs (e.g. 95% graduate on time and 80% get a job within 6 months making a median $70k, for marketing)

Also presumably your school has an endowment and investment managers, which is the largest source of revenue for top tier schools (Yale's endowment of $27.2B returned 12.3% in 2018, the school spent $1.4B of that return on operating costs making up 34% of the university's net revenues [0])

So really in the grand scheme of things, most major universities are safe investment vehicles that are (1) extremely marketable to wealthy alumni (2) have great information networks and (3) generally enjoy major appreciation on their real estate value, making the comparison of STEM vs. liberal arts salaries pretty negligible

[0] https://news.yale.edu/2018/10/01/investment-return-123-bring...

I wonder why many budget schools don’t simply throw out lab work and emphasize a rigorous mathematical approach. Whoever graduates from these places would (in my opinion) likely be more competitive and useful for graduate programs anyway

I would damn well hope there's lab units for such classes, otherwise one couldn't take it very seriously.

like a cooking class with no kitchen time and no food prep or tasting...

Or a English major without writing for other people to read...

> Even the course instructors are likely to have comparable salaries

Why is this? Isn't there a glut of qualified liberal arts post-grads and post-docs, compared to engineering?

> no way it actually costs that much to deliver most of those courses.

$10 says we see the 'more desired' courses (IE, STEM) go down to barely nothing per credit hour.

Shouldn't it go the other way?

I studied marketing (which I don't regret), but that is not an expensive class to teach! You need some books, some computers and a lecturer and a TA. That's about it.

Studying something like Biology or Engineering or Comp Sci where you're actually consuming resources as you learn (be it dissecting frogs or cloud computing or 3d printing equipment), so you'd expect that there's a cost that business, law and arts courses don't really have.

> Studying something like Biology or Engineering or Comp Sci where you're actually consuming resources as you learn (be it dissecting frogs or cloud computing or 3d printing equipment), so you'd expect that there's a cost that business, law and arts courses don't really have.

The only consumable resources that I expended in my Comp Sci bachelor's degree was some person-hours of ass-in-seat, fiddling with hardware design software.

Everything else was done with off-the-shelf, typically free software, mostly on my personal laptop. If I didn't have one, I'd have done my homework in any of the general-purpose computer labs, also used by mathematicians, art majors, and medical students.

You don't need to piss away $5,000/term in cloud computing costs to get a good 4-year CS education.

I'm saying we'd probably subsidize the cost of some courses over others.

All of my Chem and Bio lab classes had extra fees on them to pay for lab consumables. Obviously this does not cover the big expensive lab equipment. I'd imagine pure science classes cost much more to run then most liberal arts courses. So in theory, the science courses would cost more than any liberal arts courses.

> Or colleges might charge differently per credit hour depending on course and major

Is it not like this already in the US?

In Canada my CS program cost ~100% more than an arts program at the same school. It was pure price discrimination based on expected earnings and willingness to pay -- I would be paying double even for the arts courses I was taking.

> Is it not like this already in the US?

Wasn't the case at Georgia Tech. I assume it's similar everywhere.

This is a really interesting suggestion and makes a lot of sense.

I do think you may be under-estimating the faculty cost on business/econ/law classes, specifically. Faculty in those disciplines tend to be relatively well-paid[0] to compete with lucrative alternative careers as leading lawyers/consultants/financiers.

Using UVA Law as an example because I found numbers quickly... avg faculty salary was $180k in ~2013 (so say, $200k today adjusting for inflation)[1]. Faculty-student ratio is 6.2:1 [2]. That's $32k/yr/student in direct faculty salary costs before paying for employee benefits, administration, facilities, etc. Against that backdrop, ~$65k/yr/student tuition [3] seems pretty reasonable.

[0] https://www.chronicle.com/article/Faculty-Salaries-Vary-by/1...

[1] https://abovethelaw.com/2013/04/how-much-does-your-law-profe...

[2] https://www.law.virginia.edu

[3] https://www.usnews.com/best-graduate-schools/top-law-schools...

In Sweden, where taxes pay tuition, it costs about $4500 per year to educate a student in humanities and twice that in STEM. The salaries are of course lower though.

> It's always seemed a bit ridiculous to me that a credit hour of American poetry and a credit hour of propulsion systems costs the same amount, considering the wildly different overhead and input costs.

I remember that (in a University in the USA) one credit hour of a real analysis course cost much less than one credit hour of a semiconductor fabrication course. The majority of the difference was in the "laboratory fee" which was several thousand dollars.

> We've also insulated everyone but the student from the consequences of the decision

I've never thought of it this way.

I wonder if in a future with more flexible financial systems (smart contracts, etc.) maybe we could pay with college via a percentage of future earnings for a fixed time.

So if you graduate with a doctorate then you owe 10% for 5 years, but a master's is 8% for 3. Or something.

Actually Purdue University is trying to implement a system like that. The University President went on Freakonomics Radio and he discussed a bit about how his school is implementing that very program.

Not sure why your comment was dead, so I vouched for it and decided to include a link to back up your statement.

http://freakonomics.com/podcast/student-debt/

> I wonder if in a future with more flexible financial systems (smart contracts, etc.) maybe we could pay with college via a percentage of future earnings for a fixed time.

I always find it curious how so many people are eager to advocate literally selling yourself into slavery for a college education, while being so outspoken against the word "slavery".

My university recently implemented a system where some majors (CS/Engineering/Buisness) students would have to pay ~20% more per semester.

Or we could turn education into a common good, instead of a for-profit system.

> Making student loans dischargeable (and modifiable) in bankruptcy

Technically, they are dischargeable. It's just really hard to do, much harder than other debts.

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