U of Chicago projected to be the first U.S. university to cost $100k per year
hechingerreport.org
hechingerreport.org
I must say, it was not a pleasant undergraduate experience. On top of being expensive and working very long hours daily, it was immensely competitive and the social life was very poor for me. I have always had numerous friends in life, but I constantly felt lonely at that school, not to mention receiving MUCH worse marks due to grade deflation, which made medical school applications a nightmare.
In hindsight, I absolutely should have gone to my state school, and I'd be a Tesla and a Steinway piano richer for it if I had. I think these ridiculously expensive, 4 year educational vacations need to end...let's encourage our young, bright minds to stay local, to save money, and to use their brightness and talents to lead very productive and EFFICIENT lives.
I agree with your last line, but am unsure how we would best implement that as a practicality. Young people tend not to always think in the most efficient ways, and parents aren't always knowledgeable nor around to help.
Fretting about 'fit' keeps schools like u chicago alive. A radically unwise decision in pursuit of some romantic youthful ideal. Otherwise, everyone would just go to a state school, have largely the same college experience, end up with largely the same career outcomes, but with far less debt.
One question: I think a large part of the social experience for me was based around the house system. Even though I moved out of my house when I was a second-year, the house and dorm I was in provided a big chunk of my social network. Did you not have a good experience with your house? And if so, were you placed in the house you wanted to be in?
I went to the university with the hardest admissions score for EE, some of the brightest people I've met, graded on a curve, and yet for graduate admissions I'm competing with people who took much easier classes and ALL have much better marks. The GPA system is just insane really.
Barring that, having excellent rec letters and GRE scores, having been published or done research in a lab, having written an undergraduate thesis etc can all help provide signal that you'll make a good candidate for the department you're applying to. I don't know much about EE departments, but generally grad school admissions will be more holistic and thoughtful than undergrad admissions.
Each method has its pros and cons: the flat-rate method gives certainty, and the adjustable method is more appropriate if you don't know whether siblings will actually go to college. It seems the most important thing is for each institution to communicate which method they are using, so nobody gets a rude awakening.
caveat: my data points are 15 yrs old
My parents didn't really know what to tell me because on one hand they felt like they were being punished for not making profligate decisions like going into debt for a fancy car or buying a bigger house, but on they other hand they didn't really want to outright tell me not to go somewhere like U of Chicago.
Made me feel like college admissions spiels saying not to worry about finances were a lip-service scam designed to make college look accessible while mostly benefiting the rich and very poor and screwing those in-between.
Went to a state university instead, but never really fit in there. Too much alcohol, greek life, and sports.
In any case, I don't mean to imply that my parents didn't have a decent income, just that the way things worked made them feel like they were being punished for trying to be financially responsible, and being asked to pay the equivalent of a 2nd mortgage for your kid's college only for them to be in debt on top of it anyway, and not knowing how things would work once they had a 2nd kid in college wasn't a strong sell. Even though they didn't say not to go there, I would have felt super super guilty about saying yes.
Fun fact: the scholarship U of Chicago offered would have covered the cost of attendance at each other college I got into and then some, but still didn't cover even half of the cost of attendance there.
100% feel you, as I my son just started UCSD. He was looking at a bunch of private colleges and I did the financial aid (for early decision) and it was really shitty. I felt that because I had so much equity in my house and no debt, I was screwed. And, when the numbers came back, it was true. Very little help.
I have a work friend who has a very close friend. They're both Dr's pulling down > $500k/yr, but with huge debt. Their kid got into Princeton and they paid $15k/yr. I was more than double that for some equivalent schools, but I make far, far less than $500k/yr.
Very glad he decided on UCSD.
EDIT: Looking at Princeton's financial needs calculator, assuming a constant income, to maximize your financial aid you should: - Reduce your assets: Buy a really expensive house, have nothing in savings/investments/other equity - Reduce your income: Pay a ton for private school tuition, medical expenses, or child support.
EDIT 2: Looking around some more, apparently FAFSA doesn't consider: Your primary residence Your car A boat you may own or furniture in your home Untaxed Social Security as income
Here comes my big house / Bugatti / yacht!
Not quite just the very poor: U Chicago gives free full tuition to students from families making under $125k.
But as for the very poor at nearly every other private college, the picture is more bleak: The average private is in the ballpark of $35k. Maximum grants from the feds and state of Illinois total about $16k. That's not enough. However, it is generally plenty for attending any public state school.
The most squeezed bracket financially are families making around $65k a year. They earn too much and so lose a large portion of need based grant eligibility, and have and "estimated family contribution" (EFC) 3 or 4 times higher than families making not too much less. Even state schools are difficult here. My recommendation to such families is to begin by getting an associate's degree for 1/3 the cost for those 2 years, then only pay the higher rate to finish the bachelor's degree in the last 2 years.
It's true families making > $100k a year are expected to contribute the lion's share, absent merit scholarships, but they also tend to be families with assets, including houses with equity they can leverage, to help pay. Yes, it sucks to have to do that, but many thousands of families in the $65k bracket are much worse off without even that option.
To be clear, I'm not really disputing what you said on that topic: I just wanted to add more detail and nuance.
Source: I work in Higher Ed analytics.
That said it sounds like the general situation I described is somewhat true overall.
You need to do something about your “fixed” meritocratic society where your future is largely determined by your parents’ wealth.
You need tax reform, healthcare, cheaper education. I had a discussion with an American friend recently, he offered that the American society has produced marvels such as Google and Facebook and Tesla and countless others, fair point.
Can you imagine a new social media today competing with Facebook? A new search engine? Wanna open a retail online store? AWS will eat you alive.
I grew up thinking America was the greatest country on earth, truly. You know who also had some absolutely amazing achievements? The Egyptian pharaohs.
I've also lived in several different states. Haven't seen anything even close to 80% dog crap. Not even close.
Please travel or read about the world to get some perspective.
Seriously, if you were born in a country like the U.S. in modern times, you won the birth lottery.
Agreed. The lottery won is for starting position in a game where participation is not choosen and objective you choose determines position ranking.
Arguably, not even the bottom 50%. Even a minor medical issue can tank middle-class families.
OTOH, you're in the top 30% of the bell curve there is nowhere else better than the US.
The education system is too expensive and a bit of a scam but does that cause the problems people think it does. Can you make it in the US without a degree?
It's also incredibly complex so perhaps it was a silly thing for me to comment on as I don't think it's that easy to define or measure.
I think the line commentators tend to use is “the American Dream is alive and well, in Denmark”
Absolutely.
* This being HN, I should point you can make it in IT/software without a degree though you must start at the low-end and climb from there.
* Skilled blue collar work has its limits but provides an accessible career more than capable of supporting a family.
* Military service has its drawbacks but has quite cushy benefits.
* For the ambitious, service-based small businesses are easier than ever.
While it's possible to make it in the US without a degree, I'd recommend more of a middle ground of a 2 or 4-year degree from a local college or state school.
Uh-huh
> You need to do something about your “fixed” meritocratic society where your future is largely determined by your parents’ wealth.
> You need tax reform, healthcare, cheaper education.
Please continue your nuanced argument with a straw-man.
I feel you, and had a very similar experience academically and socially. It's not easy to get by minimal GPA filters when math professors declared that a C would be a great grade worthy of a good recommendation to a PhD in math. There's no easy way to tell that to an HR screener! I also found to great sadness by the end of my first year that I had more online friends than classmate friends. Looking back, it seems this was the time when the university just started to realize that it needed to prepare students for practical work. And that sort of experience can be gained at a lot of different universities.
Professors usually draw something similar to a bell curve along the grade distribution and set the average to be a particular grade. Grade inflation would be setting the average to something high (as practiced at Harvard this is usually an A-).
Grade deflation which both U Chicago and my alma mater Johns Hopkins are notorious for has professors set the average grade to a B-/C+. In classrooms full of students who have excelled their entire life, where the average represents a pretty high standard of work and achievement, setting the average to a B- is grade deflation.
Student debt is a major issue in the US and the ever increasing costs of tuition are a MAJOR culprit in pushing this crisis. Where are these costs coming from? How can you politically espouse free college while ratcheting up tuition costs?
Colleges need dramatic, across the board cost cutting including professors, admins etc.
Colleges are in for a world of pain in the next 50 years.
Also, how much of your funding comes from unsavory sources like Jeffrey Epstein and the Saudi government.
For example if the salary is 100% from NIH grants and the prof makes 500k, more power to them.
If the prof makes 100k and all their salary is funded by student loans, then they should decide whether their livelihood is worth the externalities they are creating.
Its a moral choice
Average course load for a student is like 6 units a semester so using the back-of-the napkin math above it should cost roughly $6k/per semester for students to have a full course load of $150k professors. $12k/year + other expenses is a far cry away from $100k that is being charged.
Other costs are also unacceptable. Colleges charge $500+/month for shared rooms. And require freshman to stay in them.
Nevermind the fact that your math misses several major cost categories like building maintenance, fringe benefits for professors (+30% of salaries at least).
In your hypothetical example, students are paying $20k/year before getting ripped off on the cost of the dorm and meal plan.
If a prof is making 150k, class sizes need to be 300+ and they need to teach 1,000 kids a semester
> But that is a tangential problem, in that wealthy donors want to give big gifts for vanity projects rather than to, say, scholarship funds.
In the past I've felt quite motivated to give to scholarship funds. It resonates a lot if you yourself relied on scholarships to go to college. But I feel somewhat more cynical about this since I've seen costs spiraling out of control. The actual price of college can have anything bundled in there. I want to support students, but I feel less good about supporting ballooning costs that are twice inflation when I haven't heard a good reason for this.
Private Uni's are, well, private. They can charge what they want, and if the average Pell Grant or other DoE loans aren't enough that's not the Uni's problem.
It never felt like a plan or conspiracy to make administration costs bigger. It's just very easy to do when you have more money coming in, year after year. In another economic environment, you'd get a "hard no" because the money isn't there. But when there is, expenditures become just another bargaining chip. Maybe you get your seventh librarian this year, and I get my fifth network guy next year.
New buildings (as you stated) aren't as big of a contributor as expected due to the convoluted role of donations, grants, etc. But another big factor for those buildings is that we were getting loans for them, too, and those were based on (big surprise) long term forecasts presuming this gravy train is going to keep on chugging for the next 30+ years. And even then we were getting projections of our "debt capacity" and always riding that line, so it's debt on top of debt all the way down.
I don't know about big schools, but for a smaller one like ours, there was no visible bad faith. These kind of things just happen when you can keep bringing in more and more money and so can your competitors.
I think "diverted" is perhaps a strong word here. The way administrators see it, the administration is necessary to even reach the point where faculty can teach classes, and provides a significant role in empowering them to do so.
And there's some validity to it. Besides, students' expectations with regards to faculty haven't changed nearly as much over the last ~20 years when compared to administrative departments. Students absolutely expect good WiFi, good Internet speeds, Google Apps-quality e-mail, and that's just tech stuff. Colleges are implicitly competing with other colleges with things like on-campus events, residence halls, modern cafeterias, online course registration, athletics... all kinds of stuff. There's a lot of money involved in these expectations that has outpaced the faculty side.
But it's cyclical. We pump money into those things to keep retention up because we need to because the other schools are doing it.
My personal internet with Comcast is ~$60/month, so assuming universities have greater bargaining power due to scale that shouldn't make much of a dent in tuition. And my college email interface was clunky but I just set it up to forward everything to Gmail, which is free.
Harvard got spectacularly burned by the genius planning of Larry Summers in that regard.
Yep. If appetite and available funding grow year after year, even the most honest of colleges will have a hard time not expanding costs.
Fortunately, it's still pretty easy to get a 4-year degree from a solid school for < $40,000 tuition not including scholarships.
Pricy, but still far less than the $1m extra lifetime earnings.
I lived at home, with my parents, and went to a state school and paid in-state tuition. Found online PDFs of all my textbooks, and I'm still just barely scraping in at under 40,000. This is from 2016 to 2020 (finishing up my last few courses over the next 6 months.) And the administration is still considering (aka going to pass) an 11% tuition increase, after a 9% increase just 2 years ago.
It's even worse for people who don't live near a university and need to live on campus, pay for meal plans, etc.
Rent, food, clothing, etc. will of course be more than that. $10,000/yr doesn't even clear the poverty line, college or otherwise. [1]
My number might have been a bit low, but average in-state public college is $10k/yr for tuition and fees. [2]
I went to college in Florida and Utah. Their top ranked public universities right now cost $6k/yr and $8k/yr respectively.
[1] https://www.thebalance.com/federal-poverty-level-definition-...
[2] https://www.usnews.com/education/best-colleges/paying-for-co...
I think your impression is generally spot-on although there's nuances and it's more complicated than that.
In general, universities are suffering from many of the same pressures as other fields. Nonprofits are being run as profit-generating centers, and the implicit promotion track goes from faculty to senior faculty to administration, if you're even on tenure track. The administration salaries are increasing, as are the number of administrative positions (deans, associate deans, vice associate deans, assistant deans, etc.), and the structures are becoming increasingly hierarchical. Things are very top-heavy and expensive to run because the salary budget is so disproportionately distributed.
I don't think that's all of it, though. The rest of it is harder to quantify, but is the flip side of the educational bubble coin. Students are rushing to go to college in record numbers, which then puts pressure on colleges to stand out to attract more students and more high-paying students who become high-donating alumni. Institutions that should be getting public funding are not, which then trickles down to students; other private institutions then benefit from the increased tuition norms etc.
It's a complicated problem that involves HR and administrative practices and norms, economic incentives within university funding structures, incentives coming from a broken employment system in the US, problematic incentives coming from federal grant structures, etc. etc. etc. etc.
1. Lack of workplace training - very few employers will pay for you to train/gain experience, partly because there's nothing preventing someone from jumping ship for better pay once the training is complete
2. Credentialism - the things that actually matter in hiring are either difficult or illegal to test for (conscientiousness, knowledge, intelligence), and so degrees are used as proxies instead
Yes and no.
Most HVAC shops will pay for technician's training.
Most dev shops pay for technical conferences.
Most managers have access to management seminars and training.
Expecting an employers to pay tens of thousands of dollars seems weird, but many employers do pay on a smaller scale for skills training.
> degrees are used as proxies instead
Though conventional wisdom is that a degree doesn't matter 5 years after graduation.
Nor does it seem that prestigious positions are even that picky in practice. Yes, there are a number of Harvard, Stanford, Yale alumni in Congress, but other seven of the top 10 colleges for Congress members are public state schools. [1]
[1] https://www.usnews.com/news/slideshows/the-top-10-colleges-f...
I've also noticed that Canada and Australia place far more emphasis on formal credentials than US colleges. US Uni's will take you if you can demonstrate competency and can pay; Uni Melbourne won't talk to you unless you have the exact, specific kind of degree. Ditto for UBC, U Sydney, etc.
It's why you see so many forums talking about sending out applications to hundreds of places for months when searching for their first job, then never having a problem again after.
I've often thought it would be amazing if you could do the equivalent of professional football (soccer) lending of players. Lend a developer to another company for a few years with the expectation that they will come back. If they decide to stay then the borrowing company give some compensation. But it would mean having very strict contracts that limit the freedom of workers, so it's almost certainly a no go. I wish there was a way to make it work, though...
HR gets a million applications, people are evaluated on what boxes can be checked off rather than their skillset, etc.
With regard to the educational system, the problem is that degrees are seen as signals or credentials (to use the language of the article) rather than as a background. That's admittedly a fuzzy distinction, but it really reduces the degree to the degree per se rather than the host of courses and experiences the person during college. So, we talk about "useless degrees" without recognizing that someone might have had equivalent coursework and experience without majoring in something else per se. In the end it doesn't matter.
Everyone thinks they're in the middle class.
Seems generous for middle class. (the median US household income is only 61k)
There are plenty of liberal schools whose sticker price is going sky high.
And besides, no one wants to rely on the generosity of paternalistic college administrators. That's not safe. You don't want to wake up and suddenly find due to some technicality you again owe more money than both of your parents make in a year. And you don't want to feel like a charity case.
(If you think that's a remote possibility, think of the people who went into teaching with the promise of debt forgiveness, and found it revoked. They don't have any choice in the matter -- they're totally screwed.)
Better to go to the local city college. Your cousin went there and a few other people from your school go there, too. It's a safe choice, and there are people like you there.
- Building architecturally impressive (but questionably prudent) faculty buildings/dorms/libraries/etc. in hopes of luring prospective students, many funded by alumni looking to stroke their ego via their name on the structure (reminds me of that scene from House of Cards when Kevin Spacey's character does this very thing)
- Federal government showing no signs of abating the giving out free money to attend college, which enables the entire cycle to continue
>With over $159 million in financial aid distributed this year, UChicago is committed to ensuring that its students graduate debt-free and prepared for lifelong success, no matter their chosen major or background prior to enrolling in The College. UChicago is a need-blind institution, which means we make admissions decisions independent of a family’s financial circumstances[0]
That seems like a hallmark move of progressivism, no?
No, especially at well-funded not-for-profit private universities, “financial aid” often includes generous need-based grants (not scholarships, which are merit-based) that reduce the amount that must be met from student/family resources (including loans) substantially for non-wealthy students (not unheard of for it to be down to $0 for the poorest who manage to get admitted, and that's not just tuition but sometimes housing, books, etc.).
I guess it depends on the school.
At many of the high-stocker-price elite schools, grants are also a very real part of financial aid.
Grants effectively look like a scholarship but are typically need-based rather than merit-based.
Looked at another way, grants can be used as a discount on the tuition sticker price.
Consider also that a large amount of student loans are already from the government, so in a default...
It is effectively a sliding scale fee [1].
If its about the claim that this is an example of price discrimination: that is an opinion I formed while I was at the University and spoke with some folks in the economics department about it. There is a class offered in econ about the economics of education, and that certainly hit the point home that financial aid is a type of price discrimination. I couldn't have paid for the tuition in full, so I myself received significant financial aid and supplemented with some student loans, so I got to see a bit of it first hand.
I don't consider a loan "aid". Especially since that loan has interest.
Eh...the UChicago economics department and the people of Chile would like a word with you on that.
It's weird you chose to make this comment on an article about the University of Chicago, the home of Milton Friedman, Supply-side economics, "no safe spaces"[1] and so on.
[1] https://www.washingtonpost.com/news/answer-sheet/wp/2016/08/...
These schools are price discriminating, which means only the richest families are paying the full price. This kind of heavily graduated pricing where the wealthy pay for most of the cost of the school is very much in line with their principles.
https://www.purdue.edu/newsroom/releases/2019/Q1/purdue-anno...
1. Sanders/Warren get elected and somehow forgive 1.5 trillion in student loans and make education free going forward.
2. 2008 level crisis
with (2) is the more probable
I think universities tuition is way too expensive in our country, but I'm against (1) currently because I don't think retroactively forgiving debt is a good policy. The students took those loans out, signed the docs, and knew (or should have known) what they were getting themselves into. I think forgiving all of the debt would be obviously ridiculously expensive (1.5 trillion is a lot of money) but also possibly creates moral hazard.
I would be more supportive of (1) if the government took more of a "Canadian pharma industry" approach and just said "this is how much we will pay for this citizen to go to Harvard, take it or leave it". I have no faith that any of the current presidential candidates will be able to negotiate and pass that type of law, so I currently cant support (1).
Is my line of thinking wrong here? I think education should be more affordable but have no faith we have leaders that can get us there.
But if they are going to forgive them, certainly the students who prided themselves on being the best and the brightest should have known better! Therefore, anyone in the top 10% of SAT scores or at the top 100 schools should not be eligible for discharge. If you're smart enough to get into Chicago or Harvard, you're smart enough to know how loans work.
Also, my perspective as the kind of frugal guy that everyone else calls cheap is that we live in the most rampantly consumerist society that has ever existed on the planet earth and we think we need all kinds of things that we really don't.
I just can't stomach the idea of throwing money to people who knew what they signed up for but then decided paying back what they owed was too hard.
For the record, I didn't suffer. I felt fine and did plenty of fun things. I think the biggest mistake Americans make as a society is confusing convenience with happiness.
I would in fact be in favor of free college for everyone, but I hate this victim mindset floating around, and I think the largest benefits should go to the most prudent and responsible, instead of taxing people who withheld in their younger years to pay for people who didn't.
populist emotional arguments are good when there is the populus to empathize with it. the vast majority of people won't care for such "plight".
Be wary of populist urges to tear down people you perceive to be "better" than you because maybe they're really not, or they're not the cause of the problem. Do things that will improve society, not just satiate your urge for blood.
Where does it end?
I’m not against free college, or debt forgiveness, but sometimes even if you have a goal there’s no regulatory framework that can meet it.
If I wanted to prohibit abortions, while discouraging birth control, and ensuring victims of abuse get to control their bodies... well, sorry. There’s just no regulatory framework that can achieve that. Doesn’t matter what I think is “right”.
I graduated with no debt.
I don't think others should also suffer. That's why, I want the government to stop backing student loans, and make new non-government loans like any other loan, including bk discharge.
Tuitions would drop rapidly, and nobody "in perpetuity" will have to suffer.
Most people who are against forgiveness are also against continuing to write new loans!
How is "debt forgiveness" solving the problem in perpetuity?
Debt forgiveness applies only to past debt, not future debt, unless I am misunderstanding the words.
I don't think it's right to let people who sacrificed go high and dry while the people who abused the system get a break, though that is often how it plays out.
But it seems like there would be ways to lessen the burden for people who did take big loans without it being a complete handout.
Low cost universities don't just pop out of thin air and neither do the professors that staff them.
Yes, because I dont want to live in a world or a country where someone can go bankrupt and/or end up in poverty because of medical problem - this is still possible in the US unfortunately (though I suspect vastly over stated), Regardless, I would never support forgiving of debts for elected/vanity surgeries.
No because I would not want to just forgive all medical debt without fixing the system, which currently seems impossible in the US, politically. Because of lobbying, big pharma, etc. , free heath care would just be too expensive to implement. Obama changed some things, Trump repealed some things. It's a political hot potato.
Fixing our system is like trying to turn the titanic at this point, and any changes we make alienate a large portion of the population.
Yes, they can, though it's harder than other unsecured debt.
TBF my biggest problem with scenario 1 happening would be if scenario 2 DIDN'T happen first. Colleges have too long been promoting degrees that they knew students would never be able to pay off reasonably.
I think we should stop offering government backed loans to all institutions that aren’t in-state public. Then, tie them to a graduation period. The moral hazard of taking out hundreds of thousands of debt that may never be paid back is (Ideally) gone.
Is there an issue to doing this?
A more plausible outcome is that the law changes to allows student to end after bankruptcy.
Maybe lenders are made whole by the government; maybe not.
That provides relief to extreme cases, while not shifting an entire $1T+ of debt.
We have around $1.5T in student debt currently, at its peak in 2008, there was around $12.7T in housing debt (there's more now, interestingly). Like 2008 era mortgages, student debt is securitized and sold in the form of SLABS (Student Loan Backed AssetS; [1]). However, to my knowledge, there are no derivative securities trades on these SLABS, whereas in 2008, nth derivative securities were trades on mortgage-backed securities (MBSs; when I say nth, I mean derivatives were traded on derivative were traded on derivatives, increasing leverage). In Q2 '08, around 4.5% of mortgages were "seriously deliquent" (i.e. were over 90 days past due). This figure jumped to over 21.0% in July '08 [3]. In contrast, serious delinquency for SLABS is around 0.254% [4]. This is different by a full two orders of magnitude (a little less) from the crisis levels.
While I get why you might be led to believe that (2) is possible, the data doesn't back it up at all. Remember that almost everyone takes out a mortgage, but only around 50% of relatively young people take out student loans.
[1]: https://www.salliemae.com/investors/asset-backed-securities/ [2]: https://www.federalreserve.gov/pubs/feds/2008/200859/200859p... (pages 2 and 3, use ctrl+F and "delinquent") [3]: https://www.federalreserve.gov/pubs/feds/2008/200859/200859p... (page 5) [4]: https://www.salliemae.com/assets/investors/asset-backed-secu... (page 4; I'm taking this security to be representative, sue me)
The .gov backs student loans. And, they are non-dischargeable. So, it is zero risk for the lender to give loan to the 2.7 GPA moron getting a worthless basket weaving degree from the local private lib arts school for $100k. So, they give as many loans as possible, since they can't lose (taxpayer on the hook). Colleges are incentivized to drive up costs of tuition b/c tons of free money.
It's a classic moral hazard created by .gov guaranteeing the loans. Same thing we saw in the housing crisis.
Make student loans dischargeable in bankruptcy or take away the .gov guarantee and watch the market for student loans for worthless degrees dry up and tuition costs plummet.
Correct. There was also no IT, counseling, healthcare, Title IX, and secondary public education was functional. Things are different now.
You have a cost of production.
The risks can be managed.
The wealthy can pay for a degree that doesn't pay them back. That's fine. They can study whatever they want with no regard for practicality.
Also there might be scale correlated to market demand. So if doctors are in high demand the gov backs it more, if it’s something with little market demand, back it less.
The school can really only improve the education they provide or make their admissions more stringent. If they are going to do the latter, we might as well go back to direct government support, no need to have a loans process and all that noise.
I'd rather the debt we incur as a society be spent on infrastructure and engineers than wicker baskets. Wicker baskets don't last very long. Roads and bridges do. Engineers do.
Not everyone should go to college. We shouldn't enable everyone to go to college. If you shouldn't go to college, going to college won't change that. You'll struggle and fail out or get a worthless degree because it's the only one you can pass enough classes to get.
We have trade schools. We have apprenticeships and on the job training. Lots of folks for home those paths are better, are turned off to them by social pressure, not logic. I've taken welding classes and vehicle maintenance classes and they have shown themselves to be valuable assets to me. I can connect steel at the atomic level. I can keep my vehicles safe for me and my family and friends.
There's no one-size-fits all approach to human evolution and we need all of us. Maybe I'm idealistic.
We need to stop doing stuff that only makes sense to the banks. They are entirely self-interested and provide negative value back to society. We are squandering our futures to the fat cats.
We should abolish teaching degrees and just teach software engineering at college.
You should take a moment and read that individuals post. It is well researched. Just because it’s from r/conspiracy doesn’t mean you should skip it.
My sister is a 3rd-grade teacher and I'm not sure I would be equipped to handle 30 children without lots of training. Teaching someone how to teach 3rd-grade math is not that difficult. Teaching someone to start building positive learning habits with 8-9-year-olds sounds incredibly complicated.
I might be reading into your post too much but it seems like you think STEM grads are superior to non-stem grads. I don't buy that. STEM grads have a specialty that is in demand in the labor market. It doesn't make STEM grads better then non-STEM grads.
Only one of my high school math teachers seemed to have any idea what math was about (not just regurgitating formulas, but deriving them and proving them from a set of axioms and only then using those formulas to solve free-form real-world problems).
My High School CS teacher was a geography teacher who just read one chapter ahead in the CS textbook and had no idea what he was talking about.
Being good at teaching seems kind of useless when you don't know anything to teach.
[0] https://www.thestar.com/yourtoronto/education/2016/05/13/for...
If you're asserting that teachers are as valuable as software engineers to society, then the question becomes: why doesn't society compensate them accordingly?
https://www.washingtonpost.com/news/grade-point/wp/2016/04/1...
Trying to correlate the two and say it's because of government loans is just plain ignorant. Or are government loans also to explain why people can't save money, or afford rent, or survive off of a single 40h job etc.
There doesn't seem to be much difference between how it grew before government backed loans and after them. Somewhere I've got a spreadsheet where I compared the growth rate to the inflation rate. I can't find that right now, but if I remember correctly the tuition growth rate was about twice the inflation rate.
It would be interesting to get this kind of data for a variety of schools, but I couldn't find it.
Same in college vs university, you can continue from the lower level program into a masters degree as long as you pass the acceptance test or have the required grades.
Imagine trying to do this in the US. I wonder to what extent colleges are free in places where there is stricter criteria to get into college.
Based on the success of bootcamps etc.... I do wonder if software engineering would be better as a trade skill rather than university
There's plenty of data plumbers (myself included) who are writing a check a month to pay for skills they don't use but a lot of them don't have degrees in the first place. That blurry line between corporate IT and software development is where people would probably benefit most from trade programs.
Edit: Apparently a lot of people took offense at this comment and I'm not sure why. Please explain.
I don't see how any degree LAC, Computer Science, Math etc is worth risking a dischargeable loan for from a bank's perspective. There's no reason to single out LAC degrees, which by the way can be pretty useful.
The smartest thing for any student to do is declare bankruptcy right away after college when they have nothing and risk losing nothing. That makes no loan worth giving, which is the problem.
I also have a few on staff who do not have a degree but perform solid work and manage the same tasks as my degreed team members. There are options with college or military.
Essentially a cautionary tale about taking on debt for something unlikely to be able to pay off that debt.
It's a sacrifice. I love art and music and spent many years pursuing both. I'm an old man now and many friends spent years seeking that out and unable to ensure their own survival years later.
So my nephew is getting his degree in "expeditionary studies":
https://www.plattsburgh.edu/programs/expeditionary-studies-m...
I'm jealous..
But English, psychology, history, music, etc. are in fact very real.
Got any recommended references?
The relevant paragraph:
> Prior to 2010, Federal loans included both direct loans—originated and funded directly by the United States Department of Education—and guaranteed loans—originated and funded by private investors, but guaranteed by the federal government. Guaranteed loans were eliminated in 2010 through the Student Aid and Fiscal Responsibility Act and replaced with direct loans because of a belief that guaranteed loans benefited private student loan companies at taxpayers expense, but did not reduce costs for students.
In any event, congrats, you just made a whole set of degrees inaccessible to anyone except the wealthy. The progressives are really going to love you for that.
Markets provided some balance here, but were taken out of the picture. No thoughtful lender provides equal capital at equal interest rates to a poetry and a business major. This is reasonable, as the business major has a significantly higher lifetime earning potential. Making more capital available at lower rates to higher-earning majors is a good strategy because it helps to push people into higher-earning jobs. The invisible hand seems better-equipped to do this than a central planner.
I haven't seen ISAs (income-share agreements) mentioned much here, which is a pity. The obvious solution is to modify the incentive structure such that colleges have a strong financial interest in the success of their students, which ISAs accomplish. If you want to read more, I recommend this article: https://reason.org/commentary/a-better-path-to-dealing-with-...
Purdue is currently offering them, so we'll hopefully get some real-world data on how they work, but they seem very promising on paprer.
So if they give someone $250k for a basketweaving degree, they are unlikely to ever see that money fully repaid.
No one serious thinks private universities that cost $60k+ a year should be free btw.
Also most STEM degrees are about as economically viable as liberal arts degrees if you don't go to grad school. Computer Science and any degree that can get you into CS are outliers.
Where I live we just passed a minimum wage increase. A fairly substantial one that keeps up with the rest of the country by increasing every year until we hit 15 an hour in a few years. It's been a couple of years into it and someone asked why local restaurants are ending services, closing some locations, increasing prices, shrinking their menus, and basically cutting costs. I saw a lot of answers that boiled down to "greed" and my favorite was "labor costs are increasing" because of "late stage capitalism".
I wouldn't be surprised if a lot of answers you see in the wild involves doing exactly what we've been doing but on a larger scale.
To be clear, I agree with you, rip out the loan guarantees and let the private market deal. But progressives would never allow this.
Immediately yes, fortunately, there is a supply and demand curve, so if you cut the demand for a bunch of colleges that already exist; then the price should find a new equilibrium. Of course, as is the science of economics, time and outside influences matter.
Fortunately, in a low unemployment world, also means that hiring should be very elastic to this change.
You could apply that argument to anything. "Good luck with that, now people can't afford mansions, Good luck with that now people can't afford private jets".
Should everybody be able to afford mansions or private jets? No.
College should either be free, thus directly paid for by the government, or not everybody should go to college, you can't have it both ways, or that's how you'll get your big next financial crisis. The government should not back private loans, period.
Cost of education has skyrocketed BECAUSE banks started to loan crazy amounts of money to every students. This is free money for the banks.
It's a good thing they don't, then.
People have a different emotional response to predatory lending like payday loans, but not those same practices in student loans.
Its the worst kind of half assed capitalism, that only benefits the political class. Kinda like our healthcare system, among others.
Even the part when it relies on private lending behavior being driven by security provided to lenders by federal loan guarantees that haven't been available to private lenders since July 1, 2010?
And watch default rates rise, and interest rates on these unsecured loans skyrocket, so that very few can go to college, and even more people get screwed by them due to higher rates.
Or people will simply not get loans, since they'd become too risky, and less people will get college skills, likely hurting the entire economy over time.
Educating people is a good national goal. Balancing the various pieces is much harder than simplistic changes to the current system.
The only lender who is allowed to issue government-backed student loans for many years is the federal government, and their policy on what loans they’ll issue and on what terms are set in law, not a response to market incentives.
Moral hazard may or may not be a simple, good solution but your argument for it, as presented, disincentivizes me from even considering it, since so much seemed to be missed in the argument, the same was probably true for consideration of the solution.
And the question of how much money is spent on a student can be disconnected from the question of tuition, at least at top-tier schools:
At my alma mater, Bowdoin, the college spends just shy of $100k per student each year. The comprehensive fee (incl. room & board) is around $72k per year, and for students qualifying for financial aid (abour half), the college provides grants that bring it down to about $24k per year, which almost resembles something sensible.
But if you're a donor, and you give an unrestricted gift to a top-tier college or university, there should be absolutely no expectation that your donation will be spent frugally. In fact, for rankings purposes (which help all the cash flow stuff above), it just matters that it gets raised and spent.
I think this is one of the biggest problems in American higher ed, and I'm hoping there are a few institutions with the fortitude of character to stand against it and work toward, rather than against, a cost-effective education model in the US.
Many of the ideas touched on in the comments here so far are covered in much more detail in that book. One interesting fact is that although there is a lot of publicity from colleges about reaching out to lower income students, there are massive incentives (often necessities) for admissions offices to take less qualified kids who can pay full price.
Overall, I found the book a nuanced and surprising view of the realities of trying to manage college admissions, and of trying to deal with inequality in access to higher education.
[1] https://www.amazon.com/Years-That-Matter-Most-College/dp/054...
The problem with student loans is students typically don't have any credit, don't have any collateral and what they're seeking can't be repossessed if they default - banks know that issuing loans to these people without the backing of the government is financial suicide, in other words the free market says these loans shouldn't exist at all.
The student loan crisis was caused by government intervention, guaranteeing loans for people who otherwise wouldn't have even been eligible to receive that type of money allows institutions to jack the price of school up infinitely and banks to keep allowing it because neither can fail - in the long run it's only the student who has to bear the cost long term.
We need to allow institutions and banks to fail again, that's the only way you correct this problem. As soon as you stop guaranteeing loans banks stop issuing them and college's are forced to bring prices down. That would hurt some students in the short term who wouldn't be able to afford college but eventually the free market would do it's work and make college more reasonably priced again.
Debt is a powerful tool when used correctly, but most people are unskilled in tool use, financial equations and themselves thus, debt is a Market for Lemons.
Consumers do not know what they are buying. They are buying cash and paying for it with future income.
People are generally more optimistic about their futures and irrationally excited about what they consume.
The banks have been allowed to sell cash with impunity. We have to stop that. We're just cooking the books as an entire society.
I don't think that's quite it. People get comfort from following a plan. Go to college, take a bunch of loans, and it will all work out.
They think if it doesn't, someone will bail them out because they followed the plan. Everyone else is in the same boat anyway, and maybe one of them will find a solution, or they can band together and demand something from someone else.
That doesn't line up with reality though. A lot of people do get left behind. The people with the "plan" are nowhere to be found, and were just repeating what worked for them without looking at the new numbers.
Could you expand on that? It's a very interesting perspective
In the case of students, the idea is to take some debt now and pay it off with increased earnings. The problem is, those increased earnings aren't guaranteed and students are way worse at determining the return on their debt than companies with dedicated teams.
I also meant a more specific application rather than a general iteration on the (perfectly valid) idea that if one can make more money with a value now, rather than later, and this opportunity cost is larger than the interest rate minus inflation, then the deal is good.
Student loans would be a good example of that in a well-functioning market. Are there many others?
Companies, like you, need tools to produce goods and maintain their operations. You, if you're a programmer, need a computer. You don't have $1000 to buy one, but you have a credit card. You know, you can bill your hours out at say, $100/hr writing code. You need to write code for 10 hours to pay for the machine, but you don't have $1000 to buy the machine.
So you put $1000 on a credit card at 20% interest, buy the computer and then bill 100 hours on it @ $100 / hr = $10,000 in just one month.
You incurred a little bit of debt, bought something worth a lot, but worth a lot more to you because you can leverage that tool to make more money than it cost to buy the tool.
Think of debt as leverage. It's a little bit of money pressing down on a lever to lift more money into your pocket.
If you only use that leverage to buy assets that help you make money (fairly easy) or increase in value at a rate greater than the interest rate (difficult, risky, speculative), then your net worth will continue to grow.
That college degree in a practical field like engineering is an asset because you will leverage it to earn more money over your lifetime than you would without that degree. Compare this to a degree in the proverbial "basket weaving." You, in your lifetime, will never weave $400,000 worth of baskets you'd need to pay for that University of Chicago degree. That degree is a liability that will follow you, perhaps your entire life and might make your life worse than it would be had you never gotten it at all. You'll resent that degree so much you refuse to work because every penny goes to some bank that sold you a worthless piece of paper for $400,000.
Companies are legal entities which can sign contracts, hold debt, open bank accounts, etc.
So are government agencies, unions, churches, mosques, guilds, charities. Does that means these are all people, legally speaking? For some reason nobody says 'the IRS is a person, legally speaking'.
Companies cannot marry, vote, file taxes as a human, get a passport or driver's license etc, because they are not human, legally speaking. They're just legal entities, as people also are, but of different types.
Don't get confused about the words used in the legal world around 'natural persons' etc; legal usages of words don't carry their common meaning and there are lots of examples of this you know.
Yes, they are.
> So are government agencies, unions, churches, mosques, guilds, charities. Does that means these are all people, legally speaking?
Yes, all those things have legal personhood.
> Companies cannot marry, vote, file taxes as a human, get a passport or driver's license etc, because they are not human, legally speaking
Being human, legally speaking, is different than being a person, legally speaking.
> Don't get confused about the words used in the legal world around 'natural persons' etc; legal usages of words don't carry their common meaning and there are lots of examples of this you know.
But since you are literally discussing what things are legally, your plea to ignore legal usages is...bizarre.
We are not in a legal context, so to use such language in a normal context without elaboration will obviously mislead most listeners. It is a false statement since it leads the listener to false conclusions.
>Being human, legally speaking, is different than being a person, legally speaking.
It is incumbent to explain this to normal listeners, otherwise you're misleading them.
The buyer is pleased, because despite the interest payments, over time the buyer is building equity in a fairly stable or appreciating asset. This is a great example of "worthwhile" debt, and the private market for mortgages is thriving.
Of course, when guardrails are thrown out and mortgages are handed out haphazardly, things can get a bit messy, as we know.
The reality is if you get a typical 30-year mortgage, your house costs you 3x the list price you thought you were buying it for.
>In 1940, the median home value in the U.S. was just $2,938. In 1980, it was $47,200, and by 2000, it had risen to $119,600. Even adjusted for inflation, the median home price in 1940 would only have been $30,600 in 2000 dollars, according to data from the U.S. Census.
https://www.cnbc.com/2017/06/23/how-much-housing-prices-have...
Why 1940? Because Fannie Mae was created in 1938 after a housing crisis in the 1930's. https://en.wikipedia.org/wiki/Fannie_Mae
The majority of a person's labor throughout their life is now given to banks. It doesn't take 30% of your productivity for 30 years to build a house. It doesn't take 10 years for a person to build a house. You can build a 1,000 sqft house in a year with $50,000 worth of materials (even less) and a piece of land.
Where has the rest of the typical $200/sqft home cost gone? To the banks! That's $150,000 cash, and $450,000 total outlay of capital, if you buy that cash with a mortgage.
I propose, the loans themselves are the reason we now dedicate a decade of our life to our shelter. I do not believe this is a good thing. I do not believe this is worthwhile.
You will save money and have a better, more free life -- debt free life, if you save up enough money to buy land, plus $50,000 of materials and build your house yourself.
Loans enable every single level of the housing industry vertical to extract more money from you. Architects costs more. Utility services cost more. Building codes get more onerous. Builders charge more. Insurance companies charge more (since the houses cost more). Taxable values go up, costing you more. All of these increased costs are enabled and exacerbated by mortgage "innovation."
Everyone wants this except the first time buyer, but the first time buyer takes all the risk with a new purchase.
It is completely unbalanced. The younger generation is suffering the most and I think it's unfair and detrimental to the future of society.
Can you explain this or say what the alternative amortization schedule might be? In a normal mortgage, the initial payments are more interest because you're paying interest on more principal.
For the general public, instances of use include:
- Small but seasonal businesses. Farming is the classic case, but any sector in which receipts are seasonal (though relatively predictable) apply: hostelry, tourism, landscaping businesses, construction, etc.
- Small nonseasonal business. Writing or other contract work in which production and income can be disconnected by months, sometimes years. The risk is higher here, but can still be bridged.
- Large-ticket purchases. Automobiles, appliances, and electronics are typical. Numerous present credit banks got their start as the lending arms of large manufacturers, who could rely on a constant stream of incoming payments to advance loans to new customers, increasing net sales. GMAC (General Motors Acceptance Corporation, now Ally Financial, is the classic case).
- Revolving credit lines. These generally started as credit accounts specific to a given store, often a department store. They eventually became much of the current credit card industry, by way of Bank of America. Here again, the general principle is to advance credit, easing purchases.
Credit can be (and very often is) misused. But having a flexible payment mechanism on demand without requiring layaway or specific authorisation, and serving as a general check on other factors (credit cards have effectively been a social credit scoring system for decades) benefits ... at least some.
Interestingly, much of the actual financial risk gets pushed off onto merchants. Though costs of managing credit do land on the individual.
And no, I'm not much of a fan of the system. It exists, and has its uses, however.
Which is why interest-bearing loans are prohibited in the three major religions. Puts things into perspective.
[1] https://bible.oremus.org/?passage=Leviticus+25:36%E2%80%9325...
"At the time, usury was interest of any kind, and the canon forbade the clergy to lend money at interest rates even as low as 1 percent per year. Later ecumenical councils applied this regulation to the laity." - https://www.jstor.org/stable/3161033?seq=1#page_scan_tab_con...
Do you have a source?
It is though? Again, do you have a source?
> The main reason is that it is a predatory practice that feeds off of other people in need.
Before it was said that the reason was skyrocketing prices?
There are several reasons, which may be tightly correlated. You can't deny that interest bearing loans are predatory due to the fact that they feed off the needs of others, some of which are beyond their control. Secondly, because now interest bearing loans are a means of making income (particularly for those with a lot of money), we end up with the cycle where loans are advertised to people, such that people who don't need them are heavily incentivized to get them (e.g. mortgages, credit cards, etc.). We end up in the cycle we see today.
Yes, that's what interest is, and it often makes sense.
There's a lot of value of having something (that you buy with money) available to you now rather than in a couple of years - especially if the means to make money depends that item (be it a car, education, a tractor, a musical instrument, set of tools, or what not).
Also, there was a lot of value for me to travel when I was a grad student and had a much more flexible schedule - and, frankly, was younger. I wish I took out loans for that, paying them off now that I'm working full time would not be a burden.
But while you rob your future self by taking a loan, you can't donate anything to your former self no matter how much you have.
TL;DR: there's value for people in having the right things at the right time.
A house may cost several hundred thousands dollars or higher. If that worker has paid for a university, no way they will be able to buy a house in their remaining lifespan.
Who is going to study in this university? Billionaires' kids?
I think you can make the argument that if someone is going to be making minimum wage after getting their degree, they should go to a cheaper school like a community college or a trade school. Or just start working right out of high school.
Everything has an enormous sticker price for anyone who asks, but no one is expected to actually pay that amount. And if you do pay that amount, it's just because you're a sucker who didn't get in on the fact that it's just a made up number.
Rich kids may pay that amount, but it probably gets flipped around into some tax-advantaged "donation" that also helps people feel good about themselves.
Poor people get "scholarships", which are really just the university cutting the sticker price down to what they actually need from the person, with some creative shuffling of funds to make it look like they are paying "sticker price".
Healthcare works exactly the same. The key is to have enough layers of bureaucracy that no one can quite figure it all out.
Someone earning minimum wage does not pay the full cost of tuition. In fact, few people ever pay full tuition due to scholarships, grants, aid, and various discounts. Only very affluent families pay the full tuition costs.
Families with low incomes pay well under $10K per year, all included, for even the top colleges.
Reference: https://www.nytimes.com/interactive/2018/06/05/opinion/colum...
Of course, it's all still more expensive than it should be. I don't pretend this system is good, but it's absolutely not true that minimum wage earners are paying $60K+ per year to get college degrees in the USA.
I have a high school senior and have been visiting many schools across the U.S. and Canada since last summer. The schools with sky-high all-in costs are not even consideration. If they lop off $10k-$15k per year, we will still be paying a quarter of a million dollars for a four-year education. There are no guarantees of this, either, considering grades and our middle class AGI.
The schools we have looked at are mostly public. Our in-state dream option, UMass Amherst, is "only" ~$30k/year all in, but is now super-competitive, likely because of outrageous private college costs driving families to the affordable options. The only comparable values are the schools we have seen in Canada - University of Ottawa, Carleton University, and Concordia.
Out-of-state public universities for out of state students in New England (URI, UConn, UVM) plus Pitt and Temple are generally high 40s/low 50s. CU Boulder was mid-upper 50s. I can't remember UCSD but it in that range, plus travel considerations.
You might want to reconsider those "schools with sky-high all-in costs". Many of them have very generous non-loan aid packages, which for many people can actually bring the effective cost below those of state schools.
For example, take Harvard, which totals about $74k/year.
A family of 3 (2 parents, 1 child) with $160k/year gross income only ends up having to cover $25k/year. A similar family with $120k/year pays $13k/year. They have a net price calculator here [1] if you want to see what it would cost you.
[1] https://college.harvard.edu/financial-aid/net-price-calculat...
I've heard from friends with students already in college that there are often ad hoc negotiations between parents and financial aid offices about the size of the discount, which is frustrating, unfair, and open to abuse.
But yeah, the grandparent is right - the US's problem is non-dischargable loans which removed back pressure on schools to control cost.
Well, worthwhile for whom? Just because the student won't capture an extra $150k from his university education, doesn't mean he won't produce that or more to the rest of society.
Obviously, nothing is perfect.
Source: https://de.wikipedia.org/wiki/Abiturientenquote_und_Studiena...
standardized testing is mostly a scam.
There are STRICT entrance requirement - basically tied to your Abitur or similar. This means big waitlists if you are not a top scoring (on Abitur). European systems DO have exams and they can be pretty high stakes for classes. There are lots of quotas - as should be obvious given the education is free.
"The remaining places not reserved for the aforementioned advanced quota groups are filled following the Abiturbestenquote, i.e. applicants with the best higher education entrance qualification grades, and Wartezeitquote, applicants with the highest amount of accumulated wait semesters. The admission criteria within the selection process of institutions of higher education (Auswahlverfahren der Hochschulen, AdH) are set by the universities and institutions themselves according to the respective state law and their own requirements. Therefore, the AdH is not an additional application and admission procedure, but only one of several quotas."
All programs have requirements, to take a STEM program you need to have calculus, physics and similar from high school. If you don't have it there's generally a system to study for a year to pass those courses, allowing you to change track.
The entrance is then essentially. (Checked my program)
1. 66% based on high school grades
2. 34% on a SAT/ACT like test.
The test is different though, no essays or other subjective stuff. It essentially has two parts both multiple choice, one testing language and one testing logic. Score is assigned by bell curve of all takers. Generally not as good predictor of student suitability as grades but allows people who just barely passed high school due to lack of motivation, issues at home and similar to still have a chance getting into their dream career if they are smart enough.
You can generally with really high motivation study for the test and raise your score a bit, not hugely though, and having that motivation is another predictor for success studying so works itself out.
There used to be public graduation rankings, but they are no more.
In some countries there is no exam at all.
I don't know which nations you're talking about, but I'm not certain that I'd call entrance exams in France "rigorous". But the entire system is different than in the US, so I guess maybe it's not comparable?
In any case, trying to get a perfect score on an SAT is way harder. Probably the whole reason an industry has popped up around increasing your score on the SAT/ACT/GRE/GMAT/MCAT etc etc etc.
This can be very selective or not at all depending on where you're going, there are totally different tracks so it really can't be discussed in general (Law, Medicine, Engineering, Business, Art, trades, etc...). All are basically free, except business schools that are always private and super expensive.
I think that's the main difference between the US, US always have gigantic college of 30000 students that cover everything, whereas France is rather fragmented.
that's just not quite true in all major European countries I have a direct experience with.
Can you name a SINGLE well known major university that does not have this and allows anyone a free education? I will post the requirements here. It is not open to all by any means - their are STRICT quotas.
Once you get used to picking out German morphemes, it’s not hard to make things out.
That seems fairly common everywhere. It seems pointless to me to give a university education to someone that’s illiterate.
Your acceptance depends very very significantly on your performance in high school - there are strict cutoffs based on how you did on your abitur, which in turn relates to a series of high stakes exams and earlier tracking in high school (europe has tracking already in high school where entire high schools are different track).
It's not get a high school diploma and go to university for free. To be a vet, a doctor, a lawyer etc - you basically need to track into these positions VERY early. The good news, they limit the number of graduates through these screenings so the jobs on the other end tend to pay pretty well.
A lot of the posters are claiming you get to go to top universities for free to study subjects that lead to good paying jobs without even taking standardized exams etc. This is totally false.
It's actually much easier for joe blow to become a lawyer in the US then in Europe - including going to law school - including the non ABA schools EVEN if they didn't do well in high school. It does cost money though and for many the jobs don't pay what they would expect or hope for.
Seriously, I wish people would name the top universities without cutoffs - they don't exist.
As another user pointed out, US universities are also restricted in the same manner. Perhaps you're attempting to describe a difference in how they would be perceived and thus perhaps politically digestable, but college admissions is extremely competitive in the United States as well.
The bar for entry has certainly lowered/widened, likely related to financial incentives being discussed in this post.
WHAT ?? Not. at. all.
I'm french and university is almost FREE (never more than 1000 euros a year and mostly around 300) for anyone with the A-level, at any age. Yeah of course there are exams like for any diploma in the entire world but there are not "super rigorous" especially at uni. There's only a "hard" exam in medecine, and normal "exams" every year (like in every program in the world) that are basically a joke for anyone qualified in these disciplines. If you want you can enroll in elite tracks, which are very hard, but they are almost free too (i paid 0 for the education, 200 a year for housing + around 60 euro per month of food).
Granted you have amphitheater with hundreds of people, but if you are motivated you'll get the education.
The most expensive school in frances are the high end economic school and some engineering school (not the best ones actually) and it's under 10k a year.
You have no idea of how much you get screwed in the US
Seriously - if you want to be a vet in the EU it is CRAZY competitive. You simply have no chance to get in unless you have top Abitur scores.
Everyone saying you just need a high school degree to get into a vet school or anything else is dreaming. Many of the high schools themselves are tiered schools.
Indeed, so people don’t spend a ton of time teaching that which won’t stick no matter what.
It’s absolutely possible to tier-up if you are so inclined, but generally that involves a lot of work on your part.
However, I liked more the atmosphere in University.
Also, most private eng schools are crap though they're quite expensive.
So it doesn't seem that tuition have an incidence on quality, at least in France.
Current-year tuition fees at Carleton range from $3500CAD/semester to $5800CAD/semester [1] for domestic students. The province foots the bill for over half, probably closer to three quarters based on the international student fees. It's gone up a little but it's hardly un-manageable. Both my brother and I graduated without debt by working during the summers, and both scholarships and bursaries are available to help cover the costs -- and loans via OSAP [2].
FWIW I did mean to type $3500 in my original post, which is probably now closer to $5000.
[1] https://admissions.carleton.ca/scholarships/domestic-costs/
[2] https://www.ontario.ca/page/osap-ontario-student-assistance-...
Not enough to still live there, apparently. Sounds like Canada is good in some respects but worse in others, like making good money in your chosen career. Every country has trade-offs, and the US’s is that a lot of safety nets aren’t there but the sky’s the limit for high achievers. Some people like it that way.
This is true of many issues the US faces that Europe has solved. Healthcare, education, income inequality, housing, transportation, gun violence...
Just go down down the list and it's easy to find "unsolvable American problems" that have solutions, and that we Americans are totally ignorant about or refuse to acknowledge, saying it "won't work for us".
I don't think there is a European standardisation on hard entrance exams and limited numbers.
With all the progress in civil rights, charging hefty intuition is the only way to go
That a given university is a non-profit tells you almost nothing about whether it functions like a state-funded school in a social democracy. Many are actually quite predatory in terms of saddling students with tuition, fees, unnecessary courses, etc.
Economic inequality is an important problem but it’s not the only problem. It’s okay to sometimes accumulate and deploy funds to other ends.
Universities don’t act like specific cost centers of governments, they act like governments.
If states want to find community college or something I wouldn't gripe too much, but universities are for advancing human knowledge. Don't hold them back.
Undergraduate degree as a social signal is a different problem to solve.
What you're talking about is just introduction to the concept of pricing. Each person has to determine for themselves what it's worth. It will be worth more to some than to others. Everything of economic value gets priced, even if it's socialized.
You can't escape the market. If you think you can get a better value at a cheaper school, or in a different country with socialized schools, go there. Some will let you attend their universities for free even if you're not a citizen. Meanwhile people from all over the world will continue to scramble to get into our top universities. Maybe you know something they don't.
All available data shows otherwise.
It's not unreasonable to charge tuition fees that are significant enough to make sure student will choose seriously and study diligently. I say that because it is certainly not always the case in countries where university is free...
It also makes sense to provide scholarship for deserving student who could not otherwise afford it.
https://www.cnbc.com/2019/04/24/tuition-at-public-universiti...
It is therefore not a question of affordability but a question of priority for most families. If they cannot set aside that much money it is, bluntly, because they chose to spend their money differently.
Edit: Apparently the average price paid for a new car in the US is $37k [2]... So basically the same as the average price of a 4 year degree in-state. People make their choice.
[1] https://www.thebalance.com/what-is-average-income-in-usa-fam...
[2] https://www.boston.com/cars/car-news/2019/06/09/average-new-...
The $76k figure is median across all US households, I’d be more interested in the median amongst those aged 25-45, which is basically the ages you’d be saving for university (and even then you have to take into account that your income at the start of that range is not going to be what it is at the end).
We're not accepting uncritically that universities are private endeavors. We're accepting that some are and they should be allowed to continue to exist.
UNC Chapel Hill (what I assume you mean by North Carolina) costs students from the state $8,834 USD. Out-of-state tuition is $33,916. I would not call either number "shockingly expensive."
Michigan is $14,402 and $45,410. UVA is similar. Quite a bit more but still not anything shocking. Minnesota is similar but out-of-state tuition is just $23k.
[Edited to add: Some people have more than one child. Some of them have more than one child in college at the same time.]
I still don't consider it shockingly expensive - it's been the top value public university in the country for 18 years in a row.
https://www.newsobserver.com/news/local/article233110061.htm...
No wonder university is a privilege of the wealthy.
Let's assume that the average high school graduate is an outlier, some financial wizard or an uneducated but driven high-earner with the wisdom and ability to save an entire years' base income for a college fund before they're out the high school's door, giving them just around enough to pay for four years of tuition at a cheaper public university.
So let's assume they have some kind of neat free housing deal where they work the dorm cafeteria and get their meals free as well.
They would then also have to be one of the 33% of undergrads who actually complete a degree in 4 years in public universities to wrap this miracle up without debt.
This person doesn't exist. And yet, achieving a debt-free college education at a reasonable age has been possible in previous decades and continues to be possible in other nations.
There are a few reasons why people would resist the idea of making all universities publicly funded. One of them is that Academic pursuit is now beholden to the state and its interests. In the current system, you can find funding for research in universities from both private and public investment. Also, when all funding is from the government, its bureaucratic nature tends to increase costs. Anyone that has worked with a government contract in the US probably understands how lucrative it can be because the government is not incentivized to reduce costs in a way a private entity would. Anyone that has worked in a department of the government when they have to spend the rest of their budget so it doesn't get reduced also understands this. Interaction with private entities that are incentivized to increase profits with what is basically an infinite money pit is dangerous (who then use said money to push for regulatory capture in congress), and you can see the effects of this in almost every aspect of the U.S. government.
It also further cements the idea that you must go to University in order to be eligible for any sort of job in the U.S. Jobs that traditionally only required a high school education or less now require a 4 year degree. This already is happening to an extent because it's an easy way to eliminate candidates, despite the fact that their profession may or may not require any sort of post-secondary education.
It also is a program that benefits and subsidizes people that either don't need it (wealthy upper class) or are already relatively advantaged in life (middle class). It would unlikely benefit the poor as much as you'd think, as there are still a lot of barriers to getting into higher education that the poor face that the middle and upper class simply don't. From the bottom up they have worse schooling and less opportunities. They may be under pressure to find a job immediately out of school (or drop out of high school) to support their family. The exceptions that can benefit from some program like this likely already can benefit from the current system of scholarships and grants to underprivileged students.
I would like to see a shift to something more similar to Canada where the distinction between college and university is clear. Academic and Vocational (but still professional) schooling being separate can be valuable and serve students with different learning styles better than the largely liberal arts education that universities in the U.S. provide. I'd also like to see some of this theoretical money that is funding tuition-free university towards improving educational opportunities from the bottom up in places that desperately need it. It doesn't matter if your postsecondary education is tuition-free if you can't make it to college.
Because that assumption doesn't exist, nor does this describe how universities work in the US.
That's how you end up with "Education" being the first cost element of the French budget (about 72 billions EUR per year) despite pretty poor academic results (that can be easily observed in the ever-decreasing level of the national exams). When government manages everything in one field, that field becomes mismanaged (trains: SNCF always in the red, the post office: ever increasing costs for users year after year, etc...)
And while your examples are also true, I would argue that it's actually normal for rail and post to be in the red. This is because their primary purpose is not to generate revenue for the state, but to provide a service to taxpayers. For example, unprofitable train routes have to be kept because they link remote areas to cities.
In fact, when private industry handles these type of public services, users tend to have poorer service and higher costs, because there is a natural monopoly.
For train service, take a look at the UK, where different companies "compete": service is worse than France at a higher cost.
La Poste has been a publicly traded company for about 10 years if memory serves. Service has been getting worse ever since.
According to E. D Hirsch in Why Knowledge Matters, the decline in French academic results is attributable to them adopting the individualistic USA model.
Where are you getting the information that the supposedly poor results are because schooling is publicly funded?
Because:
1) that's a true statement - private institutions are free to be for or not for profit and charge whatever they like.
2) public universities are already funded (in part) by the government and the problem exists there as well, just not to the same extent
I agree entirely with the OP that the source of the problem is in what I will refer to as the "financialization" of college. As OP mentioned, we saw the same thing with the housing bubble. We see it anywhere this type of "easy" money is offered because most people are not long term thinkers or don't fully grasp the details of the terms of the contract or the impact. Put simply, if you offer people money (even with interest attached) as a loan - especially when they are young and broke and want to pay for something expensive - they are going to take it.
The same thing happened with housing. People's incomes didn't magically do up. Rates went down and so the banks said "hey, we'll loan you more money now" and people did exactly what people do - most of them took out the most that the banks would offer them to buy the biggest houses they could afford. This drove up prices across the board.
The same thing has happened here. The actual cost of educating a person hasn't gone up dramatically. Faculty to student ratios are largely the same as well. Yes, the colleges added a bunch of non-teaching staff that increased cost, but they didn't actually need that money to function (in the beginning). They were just suddenly able to charge a lot more because the government guaranteed a bunch of loans to people who otherwise couldn't get them or at least could get them at reasonable rates. So now there was more money chasing after the same amount of services. Unsurprisingly prices went up (a lot). The colleges then spent money on building new dorms and offering all types of new programs and things. And they hired a lot of administrative staff. Now they need that money to function because they got bloated with all that easy money.
It's just the same process we see over and over. With the federal, state, and local budgets - it's not a tax problem, it's a spending problem. Similar story here. There is far too much bloat and debt within these universities. But it all started with the same shitty easy money crap that we've seen before. Same scam, different industry.
See how well this works out in France. Overcrowding, declining facilities, students that have no business in college continuing to go since they have nothing at stake. The top tier schools are still pretty good, but normal schools are a crowded mess.
That would probably work if the system was designed that way decades ago. But we’re already in a situation where “free money” is driving tuition costs sky-high. Taking the next step and just having the government cut a blank check for “operating expenses” to every university will just kick the whole thing into overdrive.
If universities in the US were responsible and could a) keep expenses under control and b) not cry like little children when whenever the state demands some belt-tightening, it could work. But that’s not the world we live in. Universities just keep spending more and more and keep hiring more and more administrators.
My favorite experience with this was when I was in school many years ago at a state university. The state government said that their share of the funding was decreasing by 2% the next year (FYI, state universities are funded by state governments to some degree, it’s not all tuition). Two freaking percent! Basically asking the school to cut back to where they were two or three years ago. Sounds like a relatively reasonable ask, don’t you think?
Oh, you should have seen the wailing and gnashing of teeth that generated. The school was claiming that there wasn’t any fat in their budget (ha), and immediately proposed cutting like 10% of all class sections in math, science, art, etc. Then they riled up the students enough to have them march to the capitol and demand the cuts be rolled back (to be fair though, doesn’t take much to get students to get interested in joining a protest).
Anyway, my point is that US universities only know grow, grow, grow and to top it off they all have a fetish for turning campuses into lavish, over-the-top affairs. Getting them to cut back on anything is next to impossible, and giving them a blank check to be paid for by taxpayers in perpetuity would be a disaster.
We gotta fix that too...
Hmmm:
>Robert J. ZimmerUniversity of Chicago
>Total Compensation: $1,625,136Base Pay: $1,090,844Bonus Pay: $100,000Other Pay: $286,484
https://i.imgur.com/b7omZa4.png
https://www.chronicle.com/interactives/executive-compensatio...
The $100k figure is a projection for 2025.
[1] https://www.collegetuitioncompare.com/trends/university-of-c...
"The total cost of undergraduate education for the 2010-11 school year will be $53,244; of that amount, tuition is $40,188, and the remaining $13,056 is for room, board and fees. For about 60 percent of students, that cost is significantly reduced through need- or merit-based aid. And for the 49 percent of undergraduate students receiving need-based aid, the average amount of grant assistance from all sources, though not yet final, will be more than $35,000 per student in the coming year."
So you are correct.
For in state students it was only $15,000 per year.
I came from a "middle class" family and received "grants" from the school, such that my cost of attendance per year averaged to $25,000.
Ever since I graduated, not a single person has ever asked me anything regarding my education, and I currently make $93,000 per year as a front end dev.
Strange times!!
What I did find more interesting is that it all depends on your work ethic and how you carry yourself at the workplace. My lack of interest in sports has hindered me at work slightly because I'm not part of certain groups at work. I've come to find out that they all participate in fantasy sports and meet on Saturdays to talk sports and a little bit of work gets involved. Usually I wouldn't care but some important work-related decisions have come out of that.
It's a hazing ritual similar to data structures and algorithms, but one is certainly more useful than the other.
What do you mean by that? Genuinely curious.
However many interviews demand many rounds of demonstrating o(logn) ideas quickly, which I would argue takes x months of preparation, not x weeks or x days.
I think its still very important to learn these structures, but the way they are applied in brain teaser format is not effective at finding the best all around candidate in terms of salary, general skills, sociability, iterative ability, etc.
And that's just taking the process at face value. Some interviewers will take this exercise to its extreme as a reason to deny you and make themselves feel good by giving you genuinely obscure and difficult problems that even Linus Torvalds and Guido admit they can't solve today in a reasonable time frame.
We can debate about whether that's a good use of money, or what spending priorities should be. Maybe the right thing to do is cut costs, preserving an equivalent education experience while cutting frills. Or, maybe Americans are so rich it's reasonable for us to splurge on all of that stuff. But Americans aren't irrational. It's not like Americans are just sitting here refusing to adopt an approach that would get them the same college experience for vastly less money.
It's not. I can get a gym membership for $10/month. And I'm not going to college to get a degree in physical fitness.
And, your argument doesn't hold numerically. Say 440 euros/year = $500/year. That's 1/200 the cost to the student of the University of Chicago. So Chicago spends 5 times as much per student; it still looks insane from the cost/benefit perspective.
I know several people who've gotten into prestigious institutions such as John Hopkins who are going to UTD instead.
It's not like options don't exist. Yeah UTD isn't some brand name, but it's a good starting point.
I blame universities to some degree for this problem, but I also blame consumers. I was once a starry-eyed high school student who applied to the likes of CMU and got rejected from all save UTD and A&M, with A&M basically giving me nothing. People realize that these schools open doors through elite social connections, more so than say UTD, but you can still network outside these elite institutions, it'll just be a little harder.
> "particularly if you'd like to stay in one geographical region."
A luxury I can scarcely comprehend...
> But fewer students are paying the full tuition
Any seller who can legally charge different prices based on means is under impossibly strong pressure to exercise that power. Universities do this by having "full" tuition rates that almost no one pays.
EDIT: I guess it is good? haha The more you know. Just surprising that I've been here in Chicago for almost 10 years now, and feel like I never hear about it compared to other colleges in the city. Maybe it's cause they aren't downtown or something? ¯\_(ツ)_/¯
What is probably very true is that getting into a top school is a signal that you did very well in the competition of getting into a good school. And employers absolutely pay attention to where you went.
so getting into a good school becomes a societal self fulfilling prophecy in terms of importance.
The high school student needs to ask the question, "where is the best place to get a undergraduate degree in a specific field"? Generic rankings, especially ones that are heavily influenced by the university's research record, are pretty useless for undergraduate education quality.
They recently started a "School of Molecular Engineering" with a large donation from the governor of Illinois. But that is certainly not a general engineering school and isn't going to be, so it will never show up in these kind of ratings.
> Our program was established as the Institute for Molecular Engineering in 2011 by the University in partnership with Argonne National Laboratory. In 2019, in recognition of our success, impact and expansion, and the support of the Pritzker Foundation, the institute was elevated to the Pritzker School of Molecular Engineering—the first school in the nation dedicated to this emerging field.
> At PME, our educational outreach initiatives begin with K-12 students. We offer youth-focused events, internships, and workshops throughout the year, from teaching molecular engineering fundamentals to extracting DNA from bananas. We also have a partnership with City Colleges of Chicago. The multi-year program connects city college students interested in STEM fields with our faculty and labs, with the goal of helping more students transfer into four-year STEM degree programs.
But Urbana-Champaign is 5th and should be somewhat less expensive.
> TTIC offers a graduate program leading to a doctorate in computer science, and is currently focusing primarily on theoretical computer science (algorithms and complexity), applications of machine learning (computational biology, computer vision, natural language processing, robotics, and speech), and scientific computing (including numerical analysis, numerical optimization, and signal processing).
> Both regular and research faculty receive endowment-provided research funding sufficient for equipment and normal academic travel. Research faculty are not expected to raise external funding. However, regular faculty are expected to eventually raise their summer salary and to support their students with external funding.
> Research faculty are in non-tenure track positions with no teaching requirements. This is similar to a postdoctoral fellowship, but comes with endowment-provided independent research funding. Regular faculty are expected to teach only one quarter per year.
> TTIC is located in Hyde Park on the University of Chicago campus and has a close affiliation with the University of Chicago Computer Science Department. An agreement between the University of Chicago and TTIC allows cross-listing of computer science course offerings between the two institutions, providing students from each institution the opportunity to register in the others courses. Faculty and students enjoy full privileges of the University library system, athletic facilities and other services.
I nearly spit out my drink when I read this. This guy doesn't seem to be aware of the existence of half the city, and he's lived here for 10 years!
UIUC has a similar problem that its a top school but isn't well-know outside the immediate region
In terms of the price, a few things come into play. First, most other schools have similar pricing. Northwestern is $54.6k and U Chicago is $58.2k. Yep, it's $3,600 per year, but is a 6% difference that meaningful? Maybe not given that university education has lots of other expenses. Room and board might end up eating a grand or two at another school out of that $3,600.
Plus, as a student, often you don't get full choice. It's not like going to the store and being allowed to buy whatever phone you can afford. The university has to pick you first.
Beyond that, the sticker price isn't what most people pay. For students coming from families earning over $110k/year, the net price is $40.8k. Northwestern's sticker is $3,600 cheaper, but the net for rich kids is $40.3k or only $500 cheaper.
Not only that, for lower-income students, U Chicago is cheaper. In the $0-30k bracket, $3.2k vs $13.4k; $30k-48k, $6.3k vs $7.4k; $48k-75k, $7.9k vs $10.7k.
So, is U Chicago more expensive? If your family is making half a million a year, maybe you're paying sticker everywhere and your family has to pay more for U Chicago. However, the sticker price isn't that meaningful given the parental income based sliding scale that universities use.
ARENT DOWNTOWN??? UChicago is in the heart of Chicago! You know Chicago doesn't end at Roosevelt, right?? Let me guess, you grew up in the suburbs and moved to Lincoln Park 10 years ago?
Still not clear how, if the US had a 'free market' for education, places like U of Chicago are able to compete with such steep prices.
Is the American Dream just the one who wants their kids don't go to university because it's so much expensive?
The boomer generation has really broken it. Imagine now that millennials could not send their kids to colleges because of the high tuition fee, connected to low salaries. It's a system that has its destiny doomed and that a day will collapse badly
So, never? A tutor cannot give you a magic piece of "job qualification" paper.
Also, if you are in Maryland take advantage of the MD program that lets you pay your kids college while they're in high school and lock in the college price as of when you enroll in the program. At the average 8% rate of college price increases you could save around %57 of the money you'd pay otherwise.
Not by a long shot.
At the same time learning has never been more accessible. I can study Python, mechanical engineering, calculus, aviation ground school, etc all without leaving the house if I wanted. So how does a commodity like education, which is basically free for the people who want to learn, increase in price?
"It also manages a staff that receives more than $1 billion in salary, $230 million of which is for its roughly 1,350 instructional staff and faculty, according to federal data for 2017-18. Producing and employing Nobel laureates does not come cheap."
In other words, only 25% of expense is for instructional staff and faculty, while 75% is not. I'd love to know how much of the $750M salary goes to administrative execs who don't actual do anything.
And probably a huge endowment that if properly applied would remove any need of tuition.
Is anyone paying the sticker price and if so what is their financial state / considerations?
https://www.usnews.com/education/best-colleges/paying-for-co...
This stinks.
So half the country is resisting those sorts of programs with all of their might.
It's just so wrong and stupid. On top of that I can always go back "home" to get free healthcare too.
US is (at times) so much better when you are an immigrant.
And then so many (who actually have student loans to repay and expensive healthcare to pay for) feel sorry for me because of discrimination (perceived only by them!)
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