Why has college gotten so expensive in the last 30 years? A blank check in 1993
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This is the crux of it that everyone needs to get over. Universality, High Quality, Low Cost. Pick two. By letting the government meddle you have guaranteed no one can afford college and will be long in debt to a loan they cannot discharge in bankruptcy. I'd rather have cheap college then universal access for every single person who wants a English Literature or Anthropology degree with low ROI. Colleges are now awash in money and they pump it into newer and fancier campuses to attract more of that government backed debt from all the masses, driving up cost significantly.
Or how about breaking the degree monopoly with something like equivalent certification programs and let private companies fill the gap. Similar to what Google is doing with its certificate program they are rolling out. 4 years for a piece of paper that includes 2 years of general education classes for "well roundness" is starting to look more and more ridiculous considering the cost of that "well roundness" is years of non-dis chargeable debt weighing you down during your best decades.
Americans expect college campuses to be like resorts, parents expect a lot of pampering and personalized whatever for their kid etc. In Europe, university students are independent adults who take a bunch of courses, take exams etc, but have lives on their own, outside uni. They may rent a room in housing with connections to the university, but the university doesn't babysit them. They don't expect anyone else to keep tabs on what they need to do, no pampering. There is no customer mentality. You spare a lot of money this way.
So it's at least in part cultural and also reflects in different attitudes regarding healthcare, restaurants, retail, and general business conduct.
You say that but the typical dorm room offers no privacy or air conditioning, and the showers and bathrooms are shared. They're similar in nature to SROs which the US pretty much abolished anywhere else, but way more expensive.
And then universities have the audacity to demand that students live in them freshman year, even though living off campus would be cheaper.
I went to a large school in one of the big NCAA athletic conferences. Their stadium cost around $100M in 2020 dollars, and they bring in roughly $100M in revenue from all sports annually. They call football and basketball "revenue sports" because they fund all the others. I'm not sure how much tuition goes to sports, but the big ones are very self-sufficient. That, and they serve as marketing for the school, and that can add value to the degree.
In a single year the tuition increased 5k, and yet the department of my major was downsized and classes that I needed to complete my degree were full. At the same time though they built a new $42 million "cultural exchange" building and began adding an enormous sports facility. It turned out that actually there was no intended purpose for the new building either, and it was mostly sat empty as far as I know.
You do not need a degree 30 years ago to do lots of jobs that now require one. Higher education for a lot of organizations is just an easy way to cut the application stack down
I know a lot of people will disagree because there are so many ways to compare colleges. But what I look for is the strength of the top faculty (not necessarily the teachers but who you might work with as you get more advanced), the facilities, the quality of the research that comes out of that University. The US really has an impressive number of schools that attract top faculty from around the world and produce world class research in many fields.
A lot of European colleges seem to give you a good education. But if you really wanted to be an expert in something, or just get the experience of working with top people, it is amazing how relatively strong US colleges are.
I know I am making a lot of generalizations, perhaps unfairly. So if you disagree or see it a different way please correct me. This is something I am really trying to learn about.
This is part of the problem.
Stop demanding a formal degree for jobs, allow anyone who can do the job to do it, and much/some of these problems will go away.
The cost is low for the student but it's pretty high for the taxpayers. Not US high but still, it's not free, there's lots of bloat in the system that thrives on volume of students not on quality so they try to push forward legislation and programs to increase the number of students, especially from abroad and build more faculties/universities with more staff to hire regardless if the jobs market has need for more students or not.
It's not super expensive for the taxpayers but because it's mostly free for the students, lots of them treat it like Highschool 2.0, bouncing in and out, not bothering to finish it or prolonging it till their thirties, etc. which turns into of a waste of public resources at some point.
And not universal. You do not go to a German university from a Realschule or a Hauptschule -- you go to Gymnasium, and if you succeed there, you can go to University.
Otherwise, there are professional and vocational tracks available.
University slots are limited as well -- you may have to hunt around for a university that has open space for you in your program of choice, or choose a different course of study.
Changing study programs is much more difficult than in the US.
I would be abundantly happy if we did this in the US, but the "everybody must go to college" crowd would have none of it.
This is an easy way to ensure you do not have a diverse workforce, or even the best people for the job
But they’re not universal and there’s nowhere near the level of handholding and support that’s common in US universities with high tuition, i.e. private ones. If you have a problem in a German university it’s on you to run around and solve it and if you can’t the administrators are quite likely to say “tough” if you tell them. Missed a deadline? Your problem, should have read the syllabus. Come back next year.
As you say, you can have high quality, and low cost. But European university isn’t as universal as north american universities are.
This stuff has existed for years and there are probably thousands of "certification programs". Most of the time, they're deemed worthless.
Why can't we have free online courses for everyone, where the only costs are the actual free market costs that go towards staff required for administration, courseware development, instructors, and test proctoring?
Why should a college degree from an online university cost a fortune, if the course material remains mostly unchanged from year to year? At the end of the day, all you need is the educational materials, someone who help guide you through them, and then a test to prove that you learned the material. Why isn't that good enough??
You need some way to get your foot in the door and prove your chops. Some bootcamps like Lambda school are doing a pretty good job about that
A lot of countries have been able to maintain high-quality, low-cost university systems. They all do it with a significant degree of government intervention. I can't think of a single one that has succeeded by letting the market solve this problem.
And you generally can't just make more of a positional good. That's like, "why can't Louis Vuitton ramp up production so that everyone can have a LV handbag?"
That's all blowhards (not you) really mean by "high quality" anyway.
Nonetheless it is quite the puzzle, why there aren't more colleges.
Like Leon Black could afford, just by himself, to found not one, but five world class universities, instead of donating to Harvard, one for each of his children to be admitted to. And yet.
This was the way medical school quotas / exclusions for Jews were dealt with: new medical schools that didn't discriminate!
Maybe it's a little about money. Getting your kids a guaranteed Yale admit probably costs around $20m - then the legacy system can deal with the rest of your family. It's a lot more affordable than founding a school.
Still I don't think it's about money. There isn't some monopoly on schools or lack of spending. Historically, and in my personal belief, someone has to feel they stopped getting a fair deal from the system. Then there will be more schools.
Essentially, the primary driver is states reducing funding to public institutions. (A reply to the linked comment shows how this transfers into private colleges costing more, but essentially consider that if UMass Boston ended up being more expensive than Harvard due to Massachusetts reducing tuition support, then Harvard would obviously be remiss if it didn't double its prices. This is not a knock on UMass Boston, an excellent institution that nonetheless does not carry the prestige factor of Harvard.).
So the problem is: 1) states are the only entities that can quickly (< a generation) create universities whose degrees broadly confer the benefits expected when purchasing a college degree, 2) states are cutting funding for higher ed. QED we are more likely to end up with fewer colleges in 10 years than even as many as we have now.
Incorrect. Most of Europe as well as Canada spend less money, on average, per student as the US, have universal systems, and are (very) high quality.
There’s a reason plumbers and electricians would rather their kid be a white collar worker.
I just had a former carpenter come over to do some work and saw me in running shorts and said he wished he could still do physical activities, but the years of carpentry work have ruined his joints. He was only upper 40s.
The key is manufacturing jobs - that is what disappeared over the last half century, and most of those jobs are semi-skilled.
But there are no jobs. There never will be - unless the US completely stopped importing from China. They can't - because then people will go to wal-mart and see the price increase, and get mad. And that doesn't take into account automation and technology further squeezing the need for workers.
To this, and as we're on hacker news; and bootcamps are proving it for web developers; a bachelor's degree often doesn't prepare students for jobs (and the larger concepts, ethics, systems thinking, etc often come from corporate training just as well)
Innovation is finding ways to do things faster, better, and quite often (in the long run generally) cheaper. It's the nature of disruption.
For education.. it seems mighty suspicious that we can't create better ways of delivering curriculum that doesn't change often... but in social media we can pump out so much digital information of the latest happenings (or opinions/interpretations) that it can overwhelm the senses and brain and become fact.
But, what do non-academics know. And what do academics know about the capabilities and possibilities of tech.
The next year will be extremely interesting for experts and leaders to show, instead of tell or talk.
It is not possible for me to overstate how very much this is not true at the college where I work, and at all colleges with which I have a personal connection.
And now with distance learning, tuitions have not decreased by an order of magnitude though the overhead should have.
It's easy to find example in the US past and in other countries where high general and specialized quality education is provided in a fairly low-cost fashion.
I'm not saying you get what you pay for, I'm saying you get what you vote for. The government needs to get the heck out of the loan market.
>>It's easy to find example in the US past and in other countries where high general and specialized quality education is provided in a fairly low-cost fashion.
If you are talking about Europe, the catch is that they weed out those who shouldn't be there early. For example in Italy, everyone can go for the first year, but then you have to pass a continuation exam, that upwards of 50 to 70 % fail. Germany has a similar system with exams early in high school that separate what tier school you can go to (trade schools or universities). So sure, its "free/low cost" but and technically "universal", except for those who fail at the gate. Otherwise try your luck in the US where you can rack up massive debt to attend any for profit college with 90% acceptance rates and the peice of paper is accredited the same as any other college. Plus, most Europeans want to finish in an American school because late game quality is light year beyond what you can get in Europe save for a few schools like Cambridge or Oxford, and maybe the Max Planck institute.
How is it, then, that most of Europe and many other countries seem to manage this just fine? The conflict between those parameters certainly doesn't seem inherent.
"spread out" implies taxation, but something similar can be done via endowment.
For example, a college with an existing $100MM endowment can educate at least a few hundred students for free in perpetuity.
With a billion dollar endowment, a college can educate a couple thousand for free.
In fact, Berea College does exactly this: 1600 students, 1.2 billion endowment, and provides effectively free college to nearly every student. Ranks alongside places like Denison University. So, Low Cost (to consumer), High Quality, but definitely not Universal (there are only so many billion dollar endowments to go around).
You see almost the same phenomena with Uber vs traditional taxi's. The government forced taxi's to buy medallions to operate a certain number of drivers because they didnt want the streets overrun with taxi's, with each medallion costing hundreds of thousands and even up to a million dollars in places like NYC. A taxi driver essentially had to have a second mortgage to operate. Along comes Uber and that whole government backed system gets crushed and starts to look ridiculous and artificially inflated in price. Yes, the taxi drivers got screwed, but it was the "good intentions" of the medallion system to keep the number of taxi's low that screwed over the consumer with higher cost rides compared to a market driven approach with companies like Lyft and Uber competing to the bottom. Let the market do the same for colleges. They have fancy campuses now.
There have been other ideas where student loan ROI is factored in and the college themselves must cover the cost of the loan if your degree turns into a lower paying job and the percentage of your loan payment exceeds some percentage of your income. Either way they have skin in the game that's EXACTLY whats needed.
University will stop offering low quality degrees that do not offer utility and focus on current needs of economy.
High Quality, Available to everyone: Will cost a lot because we'd need a lot of high quality teachers, and attracting them will be expensive.
Low Cost, High Quality: Only the best will get accepted, and the colleges will make their money in other ways using the work the students provide (like how medical school research departments are big money-makers)
As a person who hired a couple dozen people, and interviewed hundreds, let me correct this: at present it's "pick one", because "quality" is not a real option. My observation is, people who are good at software engineering are often good _in spite of_, and not _thanks to_ whatever their alma mater did. If they just took whatever their school offered and nothing else, they wouldn't know anything other than Java, and they'd suck at Java as well. The quality of CS education is piss poor even in "reputable" schools. People are overpaying for what they get to a rather extreme degree (pun intended).
In Germany we have all three: everyone with the proper credentials ("Abitur" plus a couple side ways for those who didn't manage it, like a Master certification in a trade) can attend university, our universities are top notch, and free (even for foreigners).
In some countries it still is free (or has a symbolic price), go figure!
No, this is just boring, lazy libertarianism. What the government did was hand the private sector a blank cheque, which they duly deposited into their bank account, just like any sensible person would.
If the government actually got seriously involved, education could be run as a public service, and it could be all three of universal, high quality, and cheap, as it is in many countries outside the US.
The failure modes arise when the actors are rational and profit oriented.
You can get all three. At leat if by high quality you mean that people learn stuff.
What conventional education gives you is signalling.
And part of the whole point of signalling is to burn resources to show off.
Oh come on, we do not need the facilities, sports stadiums, plush housing, food options, gaudy offices for professors, and non-professor bureaucrats, and grade inflation in modern "education". None of that actually contributes to High Quality.
You absolutely could have low cost and universality and produce well-educated undergraduates by the current standard of US education.
Read 'Paying for Party' if you'd like a sobering view at how fucked everything is (graduated in 2009 and it was so true even at that point)
E.g. New Zealand has interest free loans, and Auckland university is ranked 81st in the world (although I have no idea whether these rankings are meaningful for bachelors students)
Or, move to the Old Continent and pick 3...
Although fees are indirectly increasing in Europe as well. But it still is massively more affordable than in the US. Hopefully, we'll manage to keep it that way.
Will Google hire someone coming out of its certificate programs who didn't go to an actual college?
https://studentaid.gov/manage-loans/forgiveness-cancellation...
https://www.npr.org/2020/01/22/797330613/myth-busted-turns-o...
It's considered difficult but not totally impossible. It is indeed treated differently from other debt.
Aren't universality and low cost mostly the same thing? The lower the cost the more people can afford it, if the cost is low enough that is capitalism version of universal. (That's probably why many other commenters claimed their country has all three)
What do you really mean when you say "low cost", to which % of the population do you expect it to be "low"?
Eliminate all non-STEM coursework from degree requirements.
This could easily shave not only tens of thousands of dollars from a STEM degree but it would also cut it down by a year (if not more).
I would also vector students who lack the proper foundation in say, language skills or the sciences, to take courses at community colleges. Not only would this lower costs to students, it would also support local colleges.
IMO if you want to remove non-STEM courses, what you actually want is a trade school. University is all about learning outside of the normal narrow viewpoint, so removing everything outside the narrow viewpoint defeats the point.
"But so what", you might say. Well, here's the problem: trade schools already exist, and nobody wants to hire from a trade school because it's seen as less classy.
I think this is the fundamental problem: People want a degree to primarily satisfy employers, and what employers want is to exclude people. You can't have an all-inclusive exclusive degree, it's an oxymoron.
Either you change employers' minds to match your vision of all-inclusive degrees, or you change the degrees to match employer's vision of exclusivity.
To last point, many state colleges in the US let you transfer credits from a community/regional college easily, so you can save ~50%
I'm not sure how anyone looks at our health care reimbursement system and the decides that's the approach to apply to fix anything else?
Personally, I'd like to see:
* Employers are allowed to test students to see what they can do, but not evaluate them based on whether they went to school or where.
* Make student loan debt dischargeable in bankruptcy. Lenders will be much less willing to pay high tuitions in cases where students are unlikely to be able to pay it back, and if the lender guesses wrong and it does come to bankruptcy then the student is no longer encumbered.
(I wrote more along these lines: https://www.jefftk.com/p/fixing-student-loans)
Want lower doctor and hospital prices? Try competing against a “free but you have to wait” government option. Budget $X million dollars per year to put some primary care doctors on retainer.
Want lower private school tuition? Try competing against a free (or at least low cost) government / public option.
If you boost the demand side then the market will suck up any money thrown at it. Loans and subsidies going are the worst approach as they encourage price increases.
This works with housing too! Stop subsidizing rents (increasing demand) and build more houses (increase supply).
Better to say governments should do, not fund, on the institutional level (run the school, run the hospital, like you say), and fund, not do, in the individual level (UBI not SNAP).
Totally agreed, this a good thing.
> It is more of a monetary policy
Sure
> that has only an indirect impact on demand.
Many disagree.
Obviously the most basic goods aren't going to be consumed that much more (e.g. we might consume better food but not dramatically more calories).
That said, it's a not-fringe view that demand as been statement for ages, due to things like wages not keeping up with productivity growth. UBI is, among other things a way to fix that.
For those who are unaware, these tests are considered a violation of the Civil Rights Act because they result in hiring blacks at a much lower rate than whites.
A big underlying cause of that is that schools with lots of blacks are underfunded relative to schools with lots of whites.
Make student loan debt dischargeable in bankruptcy.
I support this. I thought that the 2005 change to the law that made it not dischargeable was a bad idea then, and we are seeing the predictable consequences now.
Work sample tests are legal; otherwise we wouldn't see tech companies giving whiteboard interviews.
More general tests are not legal (https://en.wikipedia.org/wiki/Griggs_v._Duke_Power_Co.) unless you can demonstrate that they "bear a demonstrable relationship to successful performance of the jobs for which it was used". On the other hand, they held that "neither the high school completion requirement nor the general intelligence test is shown to bear a demonstrable relationship to successful performance of the jobs for which it was used" so I think there's a decent chance that the widespread use of college degrees as a filter is also already illegal. (Not a lawyer)
At best they could attempt loan restructuring but even that would probably not be worth it. Student loans really don't need the bankruptcy protection they have. It's created a huge problem for a whole generation of adults that have been fucked over by three separate recessions in a twenty year span.
You haven’t actually stated under what conditions you would be allowed to discharge your debt, you’re just trying to convince me that it wouldn’t be abused and also that we really need this to happen. Again, not very convincing.
There’s a reason student debt was made undischargeable right around the same time that the government started guaranteeing loans.
The federal government is the lender. That's the central point of the post.
This would never work. People who went to high-prestige schools want to signal that to their employer and when barred would find other ways to signal like "Interned in Dr. Blah's group at the MIT media lab" or "Secretary of the Princeton chapter of the Phi Beta Kappa."
> Make student loan debt dischargeable in bankruptcy.
This is a fine solution iff you want to make the market exclude all academic endeavors that aren't high-probability profitable. This would basically destroy all specialized scientific research, education degrees, agricultural science, all high-level maths, biology, ecology, zoology, environmental research. When people want the market to decide these thing I imagine they think that "those silly liberal arts degrees" is what will get cut but forget that science doesn't pay either.
Why? All of these fields existed prior to student loans becoming non-dischargable. As it stands, in many fields there is a massive grad school bubble where there are many more grad students and Ph.D’s than tenured positions.
As for education degrees, those have the same basic instrumental role as engineering or business degrees—they’re a form of professional training and accreditation. A lot of minor public universities started off as teachers’ colleges in the first place.
Both of these are about what you have done, and not what you can do. I'm proposing limiting interviews, at least entry-level ones, to relevant skills, abilities, and knowledge. "Read this judicial decision and tell me whether you think it was correctly decided and why." etc.
> destroy all specialized scientific research, education degrees, agricultural science, all high-level maths, biology, ecology, zoology, environmental research
The government should fund students in these directly, as we do with grants in graduate level education.
This is akin to how you can fire someone for ANY REASON, except a few forbidden reason.
Guess which reason Timmy is fired for? Certainly not for trying to start a union.
One of my father's arguments, in trying to motivate me to focus on a degree, was that it helped show future employers that I can stay on task over a period of time.
I'm not sure how much of a role that really plays, but to whatever degree that matters to employers and a degree is helping to demonstrate it, it would be difficult to test directly in anything resembling an interview setting.
Our society uses debt for an enormous number of things: business loans, car loans, mortgages. Simply prohibiting these seems like a cure worse than the disease?
Lending with interest is taking advantage of the needy, it's predatory and immoral, that I think we can all agree on.
If we ban lending with interest, then you're right, there is no financial benefit to be made. So the lender would be lending out of good will. However, the seller might also be willing to let go of his product on installments (without raising the price, that's also usury). For example, if I go to purchase a car from the dealer, given most people would not be able to afford to pay cash outright, he'd be forced to give it out in installments, otherwise he wouldn't sell. The entire system must be set up properly for this to work.
Introducing easy debt just ups prices for everyone, and pushes the poor deeper into misery, exactly as you note: car loans, mortgages, etc.
There are solutions. Instead of business loans, the person providing the funds would get a share of the company in return. That way, if the company succeeds, he'll make a profit, and if it doesn't, he'll lose his investment. We can come up with similar scenarios for personal loans.
Many loans have nothing to do with the needy. If I borrow $1M to buy pile driving equipment to start a pile driving business, and pay the loan back with the proceeds of my business, nothing predatory or immoral has happened.
Similarly, I borrowed money from the bank to buy my current house. I am relatively well-off; the bank did not take advantage of me by offering a loan at market rate, and I wasn't needy.
> If I go to purchase a car from the dealer, given most people would not be able to afford to pay cash outright, he'd be forced to give it out in installments, otherwise he wouldn't sell. The entire system must be set up properly for this to work.
To afford to let you (and everyone else) pay for the car in installments, the dealer is going to need to charge a higher price. The amount you end up paying in total for the car is approximately the same under an installment approach than under a loan-with-interest approach.
> Instead of business loans, the person providing the funds would get a share of the company in return.
This is what most startups do, yes
An easy-ish solution to this is:
1. Breaking up unions/lobbies - AMA for reference is the limiting factor in the number of doctors. They limit the number of medical students intentionally, inflating doctors wages (and university costs). Administration costs for universities also have high overhead and should be reduced.
2. [Agree] Student loans should be dischargeable via bankruptcy
3. Government shouldn't offer student loans. Instead, offering grants and / or work programs. I went to a junior college for 2.5 years, while working and saving up. Then went to UIUC. I took on some loans, but it was subsidized by my own funds. This leads to more responsibility / accountability so people don't take loans to "party".
a) Zero evidence is provided in TFA that it is in fact easier for students to get loans under the government program. I could make an equally compelling argument and say, when the private sector provides loans guaranteed by the government, private sector has a monetary incentive to seek out students and pile them high with loans that they can't afford. The loans are guaranteed by the government, so more loaning is direct upside.
In contrast, the government has no incentive to partake of predatory lending! Its incentives are aligned -- and not just on the monetary angle, but also, the government does not succeed if students are stuck in debt forever. Therefore when government gives the loans, incentives are aligned and lending goes down.
I've provided just as much evidence as Andrew. I'm not saying I'm right, but how do we know he is, either?
b) Andrew who?
c) TFA neglects to mention that you can take out up to $5500-7500 in government loans per year as an undergrad. https://studentaid.gov/understand-aid/types/loans/subsidized... If they had, you might have doubted their claim that this is the reason that college costs $50+k/yr.
We are already under this dude's system of "government offers a small, fixed amount in loans and students have to figure it out". Prices are still high and increasing.
It turns out that the high cost of college doesn't have a simple explanation or solution. Who knew.
That's a double edged sword. Yeah, the government doesn't have the profit motive that predatory lenders do, but they also lack the incentive to say no to students who are borrowing money to study things that won't do much to help them pay it back. Politicians don't get re-elected on a platform of "let's reduce student loan amounts" or "let's give less money to students who are studying subjects that won't help them earn much". And the bureaucrats running the program don't have the power or the incentive to impose discipline here either.
It pays better than anything else, so what's the problem?
Never mind that some stupid math problem that only fifty people in the world ever cared about led to the creation of both crypto and computing.
So presumably it would have been "discipline" to have Turing flipping burgers instead of going to college, because most administrators, voters, and politicians had no clue what he was doing, and fewer people cared.
This is why we shouldn't make student loans justify themselves economically.
In fact we shouldn't have student loans at all. Because it's really hard to make multi-decade predictions about which areas of interest will be financially viable - as anyone doing a CS degree today will discover in the next ten years or so.
More to the point, the comparison here is against regular private lenders, but instead against private lenders with government guarantees. Those have no disincentive whatsoever to avoid people who can't pay money back or to limit the loan amount. In fact they have a very strong positive incentive: there's a guaranteed profit on every loan and it's proportional to loan amount. What's more, if you cap the loan amount then the "customer" might use a competitor with a higher cap, so you lose the whole of the loan.
Schools need to be the adults in the room, since they getting most of the money after all. And that will only be motivated by having them take the financial hit if students default.
Interesting in this regard - the macro picture shows that the majority of the USA’s assets are these loans. Let’s hope they can all pay us back!
I think of this more as a capacity problem. Let's say every student has the capacity to pay for ~15k in schooling. If you have ~15k in spending power you can almost always find someone who will lend to you at around 2x your spending power. Because of this you can probably find someone to give you 30k on top. After that the government gives you an extra 5K of deferred loans.
Suppose people couldn't get that last $5k from the government. No one in the country could come up with the money. Would colleges close down?
If they wouldn't close down, and they would instead make adjustments to their pricing, then you can reasonably say that the government involvement here is making SOME change to the market effects.
We might argue here about numbers and percents but it's pretty evident: if your consumer base has a higher purchasing power you can extract more money from them. There's a load of MacOS devs that make a living selling $10 utils that can attest to this.
Your own source says $5,500-$12,500, not $5,500-$7,500.
Or dependent students whose parents are unable to get a PLUS loan. And for dependent students whose parents are able to get a PLUS loan, you have to add the PLUS loan to the available federal financing. And how much is the maximum PLUS loan? “Maximum Loan Amount: Your child's cost of attendance minus other financial aid.” https://www.govloans.gov/loans/direct-plus-loans
So, the amount available for independent students or dependent students with no parent PLUS loan isn't the maximum loan amount available, it's the minimum. The maximum federal loan amount available, including PLUS loans to parents, is “cost of attendance minus any other financial aid”.
That's why they didn’t talk about a $5,500-$7,500 cap in federal loans.
Not with the students. Students generally don't vote and don't contribute to political campaigns.
The hypothesis is that increased availability of loans in 1993 is responsible for the rise in tuition between 2010 and 2020. Just stated as a fact, with nothing to back it up. Okay.
The most obvious answer that is cited by literally everyone that looks at this topic is that it's partially caused by cuts in state funding. Nope, let's just dismiss that, it was the one-time change in the availability of loans.
I don't see anything wrong with having a discussion, but there's not even anything to discuss, because it's just a statement that a change 27 years ago explains everything. HN can do better.
1. List a set of "peer institutions", usually with the primary input coming from admissions. Here, "peer" means "competes for the same set of students we're after". Almost always the region's public colleges and universities will be on this list.
2. Set prices relative to these "peer institutions".
If Local State College charges $X, then most (read: non-elite) regional private colleges can get away with charging after-discount-factor $(X+Y) for some relatively modest Y < X.
Increasing $X also increases $(X+Y).
Cutting state subsidies will lead to higher prices and private institutions. 100% probability. I've seen the exact process by which it happens.
Interestingly, it hasn't seemed to have much change on the spending side. Colleges are charging more to the median student, but are using a lot of it to subsidize less well-off students. It's not showing up in huge increases in faculty salaries, or administrative costs.
Not in faculty salaries, but often in faculty headcount. Lots of colleges and universities have added a lot of faculty while keeping student headcount constant. Mostly because they can't fire their tenured humanities faculty but need to hire people who can prepare students for something other than the Barista life.
IMO: tenure should be used very sparingly and should be viewed as part of a competitive compensation package. E.g., if the CS PhDs you want to recruit all have $300K offers in industry and the best you can do is $70K-$80K even with salary inversion, then you absolutely do need to offer tenure. It's part of the comp package and you simply will not recruit good people without offsetting such significant pay gaps.
But tenure for humanities borders on fiduciary irresponsibility. The job market for humanities PhDs is such that you can hire truly top-tier candidates without committing to having another head in the Philosophy or English department 40+ years. The $50K three-year contract is a competitive offer in the humanities. No need for tenure.
> Colleges are charging more to the median student, but are using a lot of it to subsidize less well-off students.
Certainly some of that too. I expect this will be the leading cause through 2030.
I remember my first day of college (in 1993!) and remember part of registering was signing all of these forms where my options were a) take out loans and go to school or b) don't take out loans and don't go to school. I had no idea what it meant to carry debt. As it turns out, I was fortunate to only have $30k of debt and interest rates that eventually went down to 2%. Between then and now, the "all-in" cost of attending my college has increased 200%.
Yes. Most people here who actually post in US college cost discussions seem to think the federal government is still only in the business of guaranteeing loans. As this article indicates, when the federal government is making these loans and owning them from start to finish it changes the dynamics considerably.
> I remember my first day of college (in 1993!) ... I was fortunate to only have $30k of debt
Where did you go? The on-campus sticker price on my state universities (Florida International and Florida Atlantic) was only about $35k (all-in) for the period of 1998-2002 (I didn't have to pay any of it).
I know some trade schools have attempted instead to do a risk sharing model where they are entitled to some fraction of your income for n years after graduation, but I don't think people are comfortable with that, especially at that age. They still imagine they will be millionaires by 32 and that means the school may get several times what you would owe with just normal loans.
Also you'd probably see more people getting paid under the table.
And why politicians want to see them in the voting booths so badly.
I was surprised to learn that the federal government were the ones now directly making the loans, and I'm sure many others are too.
I had to do quite a bit of research to come to the conclusion that this was causing tuition increases. It's rarely ever talked about for some reason.
"Among borrowers of all ages [1/3 of adults under 30] with outstanding student loan debt, the median self-reported amount owed among those with less than a bachelor’s degree was $10,000 in 2016. Bachelor’s degree holders owed a median of $25,000, while those with a postgraduate degree owed a median of $45,000."
And that's in 2016
https://www.pewresearch.org/fact-tank/2019/08/13/facts-about...
The logic of this made some sense at the time; very high tuition subsidies were a gift to the upper middle and upper class -- few poor students went to college back when subsidies were high. Ideally, states would have continued to fund higher education, and the increased tuition would be used to support lower income students. But the states took the money away from their universities in bad times, and did not replace it -- in my state (Virginia) it went to prisons and medicaid.
There are lots of other problems with student loan statistics -- it is true that the current student loan program has been a tremendous boon to for profit colleges and trade schools, which is where most of the default occurs. And the media likes to publicize the outliers; the average debt at public universities is about $26K, at private non-profits $31K.
But the overall cost of higher education has only slightly beaten the cost of living (and has certainly increased less than health costs); the price has gone up because students are responsible for more of the cost.
That is not how prices work, the prices can't go up if the only buyers have no money.
The price went up because they got access to credit. To government mandated credit.
College graduate parents are going to try very hard to send their kids to college, and today, the vast majority of students at 4 year colleges come from families with college graduate parents. When tuitions were low, this did not require much sacrifice for those parents. When prices went up, those parents continued to send their kids to college, making greater sacrifices, but often without taking out a loan (at least for public universities). Today, 42% of undergraduates at public universities have no debt.[0]
No doubt loans also had an effect -- among other things, they made it easier for state politicians to reduce support for public universities. But since 40% of students at public universities have no debt, and costs increased more than 5 fold, it is hard to argue that loans were the major factor driving up the cost. To support the loan driving argument, it would be useful to see relationship between the fraction of students with loans and college costs. Simply saying that costs went up when loans became more available ignores many other changes in education finance.
[0] https://www.aplu.org/projects-and-initiatives/college-costs-...
The community college in the town I grew up in was $17 a credit hour in 1997. Adjusted for inflation, that's $26.17 a credit hour. A 4 credit hour class would cost $104.68. That's something many working people could cover to take a class here and there to further themselves or their job prospects. There were subsidies for those who couldn't afford that as well.
That same community college today? $132 a credit hour. That's a 500% increase over inflation.
This isn't being talked about because university costs affect middle and upper-middle class people more, so pundits and the media are going to be more affected.
But this gross inflation has definitely pushed working class and poor people out of the classroom and that's a terrible thing for society at large.
The entire economy is subsidize. We have a credit-based system, hence universal access to cheap credit is the end-game, that is why car loans are starting to creep into the 10-year territory with 0 down and no credit score.
(Sources:
https://lao.ca.gov/analysis/1975/01_transmittal_1975.pdf http://www.ebudget.ca.gov/2019-20/pdf/Enacted/BudgetSummary/... https://www.usinflationcalculator.com/ https://en.wikipedia.org/wiki/Demographics_of_California)
If you want to accuse the universities of spending more, do you have data to back up that assertion that they are spending significantly more on a real, per-student basis?
Because if it's the latter and not the former, the cause isn't declining support, it's increasing cost.
In addition to this, student enrollment has increased, so per-student taxpayer funding has not kept pace even as taxpayer funding for public universities has gone up relative to the overall population.
Also, I get the figure of inflation-adjust college education cost doubling over thirty years. You can spin that as "only slightly beating the cost of living" but education is a major part of society's expenditure of resources and so such a doubling, over a longish time is still majorly important.
My dad went to City College in NYC in the late 60s/early 70s for $0. Like most of his fellow students, he was a 1st generation child of immigrants, and that enabled him to pursue a world unknown to the family. His dad was a proprietor of a bar; his uncle an able seaman on a tugboat, and other uncles NYC Firemen and Sanitation workers respectively.
Today in the name of equality we have resorts. Students get "deals" from colleges, etc, but those deals have strings and often push out students. I graduated from a SUNY college in 1999; every single one of my friends who went to private schools like Clarkson, RPI, Carnegie Mellon, etc ended up with $80-100k in crushing debt. I owed less than $10k.
Ah, the peak of an era.
Check out "Fear City: New York's Fiscal Crisis and the Rise of Austerity Politics" if you haven't, and cry some.
When I graphed the data over time, there was no place that stood out as being a place after which tuition increases were consistently worse than what they had been before. There would be a couple years or so here or there where it rose more rapidly during those years, and a couple years here or there where it did not rise as rapidly as in prior years, but mostly its been pretty steady.
Most articles I've seen where someone says the high cost of college is because of change X appear only look at the growth since X and just assume that X was the cause. So if tuition goes up 4% a year for 10 years, then some change is made, and it goes up 4% a year for the next 10 years, you'll see articles blaming the previous 10 years of 4% annual rise on X.
The problematic debt is usually held by those who don’t complete their degree, or who attend for-profit institutions. If there’s legislative action that should be done, it should be in those arenas.
Just a comparison: San Jose State University (public) and Santa Clara University (private) are less than ten miles from each other. Tuition at SJSU is $7,852 (+ fees). Tuition at SCU is $53,634. Yes, SCU has labs with all the latest equipment. A biology field class at SCU may go to Yellowstone, or Hawaii on a field trip while a similar course t SJSU would only go to the Sierras, but what you are going to learn is basically the same stuff, the level of interaction with faculty will be the same, opportunities for doing research as an undergraduate are about the same. There is no reason to spend huge sums of money to get a good education!
College tuition has increased faster than inflation, but this is not unique among service industries [1] [2]. The causes include [2]:
1. "Cost disease." Labor productivity has not increased in higher education, but has increased in industries that produce physical products, so costs have risen in general. Because educator productivity is flat, yet costs are increasing, the price of college increases faster than average.
2. Higher education needs highly educated workers. The wage gap between workers with and without a degree has grown over time [3], so the price of college grows faster than average. There may be a feedback loop here.
3. Technology adds cost to higher education because it has to be acquired, supported, and taught, without (yet) any commensurate increase in educator productivity. So the price rises.
Although tuition inevitably rises in /price/, it could still be /affordable/. It is less affordable now in the US than it used to be mainly because wages have not kept pace with GDP and, as the parent comment mentioned, state support for public colleges has decreased.
Note that [2] is a higher education industry publication, so it may have some bias. In particular its defense of the relative growth in college administrative staff compared to the growth of enrollment seems shaky. But the above points appear valid.
[1] https://www.aei.org/carpe-diem/chart-of-the-day-or-century/
[2] http://www.ntrp16.org/sites/default/files/Resources/ACE-%20T...
[3] https://www.bls.gov/charts/usual-weekly-earnings/usual-weekl...
We have high demand, limited supply and no sensitivity to price to drive down demand.
It’s only now that the costs have become so high that the payback cost can’t be ignored that we are seeing a societal shift questioning the value of college for the price.
And even then, people still choose to pay the price.
So spending per-student may be down, but spending overall certainly is not.
... is one of many complicating factors.
[1] https://en.wikipedia.org/wiki/Educational_attainment_in_the_...
Even if they're getting the same amount of money, that money is already earmarked. If it doesn't cover all their expenses, they need to figure out how to monetize their assets to make up the difference.
Universities have gotten much better at finance out of necessity.
Much later in law school I was shocked how my first financial aid award letter (I can't remember if it was for one semester or one year) offered $80,000 in loans even though I had an $18000 tuition grant/waiver.
I met younger students who had close to $200,000 debt before starting law school. It is too easy to take the loans, it is no wonder that so many kids or their families get buried in debt.
I got out of LS with $27K or so in debt from interest deferred federal loans that charged around 2% interest.
Now, 14 years later, that same Tier 2/3 school charges more than double what I paid. I would not have gone at that price.
I did some low-fee legal for awhile part-time because I was still programming after I got my JD. I think I charged $250/hr or flat fees but I did a lot of free/contingency cases too. As a solo you rarely bill 8-hours a day. Between running around to meet clients or driving to different courts in the area some days you are lucky to bill a few hours.
One guy got angry at me because I wanted $250 (or something like that) "just to read" his DIY complaint before he filed it. "Just to make sure everything looked okay..." He didn't realize that he would be establishing an attorney client relationship with me that would obligate me to give competent legal advice that put my license on the line. That is way beyond just reading his complaint. The same goes for reviewing contracts, non-competes, etc. I eventually read the complaint he had prepared since he sent it to me earlier, boy I dodged a bullet on that one. It would have taken a ton of work to get it even close to ready for filing.
I did some low-fee family law stuff too -- one client thought I was taking the side of her ex, because I didn't raise her legally irrelevant complaints in court. I still got her more money than any other family lawyer would have done for the small fee she paid. I think I charged her a flat $1100.
In a low stakes employment discrimination case, my client had been rejected by multiple attorneys before she ran into dumb me. I took the case and got the client a six figure settlement. Client promptly took me to arbitration because she thought my share to was too high even though it was well below industry standard.
Eventually I got tired of this crap and sold out and went corporate.
Seeing 200,000 in debt should raise alarm bells for anyone not from wealth.
A much simpler solution is to say that every year the most expensive 10% of schools are denied federal loans, with a sliding cap on loans over the next 30% down to unlimited loans to 60% of schools. Students will have access to loans based on the status of the school when the student started. And let students know what that status will be before the school is chosen.
Create a market incentive to deliver school more cheaply than its competitors, and see how long it takes them to figure out what a doable price point is.
I am absolutely convinced you could attend most universities in Northwestern Europe & live there for less than what this student has already paid + currently still owes. Including interest on a loan - as long as you don't get it from the US loan sharks involved in college loans.
Usafacts.org is a trove of data that is useful to have discussion around - op (and folks in this thread ;) ) don't need to rely on their gut feelings.
In addition to 1993 being boring, the majority of expenses are far and away instruction related versus student services (the luxury college memes folks are taking about isn't strictly true).
I think the most interesting point is that over the past 40 years, all types of expenses continue to grow at the same rate. (Inflation adjusted of course) There doesn't seem to be any ceiling in sight or any meaningful changes in what colleges will spend money on. Naturally tuition costs are on similar upward trend to balance this - and folks still somehow find the finances to pay for it.
This doesn't seem sustainable but it also doesn't seem to be stopping any time soon. Too many students trying to do 'the right thing' are being sucked into this meat grinder.
I think you have it backwards: the increasing ability to extract tuition is driving total spending up, because once you have the money, you are going to spend it, not expenses going up an dragging tuition with it.
Based on my baised observation of the local UC system I just don't see the types of personalities working there thinking about how to extract the last dime from students. What I do see though is very lax fiscal discipline and the inability to make even easy cost management choices. In this environment everyone just expects budgets to increase by x% each year. Then each year they realize - omg we have to increase tuition why does this keep happening?
I can not rely prove my idea - can you prove yours?
Technology has created a two tier economy, hollowed out in the middle. If you don't get a good degree, you'll just free fall down to whatever happens to be left in your region, and you'll still be biting your nails every day waiting for technology to make your skills obsolete.
I think @pmarca's admonition to build, build and build some more is part of the solution. We have to find technological applications besides building a monopoly and taking over an industry. There's really a lack of imagination on our part.
My father left school at 14, and many of my friends left at 16, and around only 1/4 of us went on to university.
Today 1/2 pupils will attend university - to all intents and purposes their full time education continues from 5-21.
https://en.wikipedia.org/wiki/Usury https://en.wikipedia.org/wiki/Dollar_auction https://en.wikipedia.org/wiki/Debt_jubilee
* Student loans detaching cost from time of service, similar to insurance and medicine
* Diminishing support for public colleges. In California UC and CSU schools were essentially free to Cal redidents until mid 60s.
* Metastatic administrations, partly for compliance and partly because the money is there. It sure isn't going to faculty.
1. gov loans
2. administration
3. Baumol effect (skilled labor $ goes up fast)
4. reduced public funding
5. demand inelasticity (cultural expectations to follow your passion and find your crowd, etc)
6. labor oversupply & elite overproduction (see Turchin)
How would you all rank these? Any others you would add?
1) Future debt is irrelevant: The US has a culture of "having the college experience". Easy loans facilitates this, but they would never be made without families ignoring their future debt in favor what has become less about education and more about a right of passage. For many, economics is not part of the fundamental decision making process.
2) Demand. High demand means there's little need to compete on price. Enrollment spiked up during the Great Recession as people went to retool for job changes, and while it's come down since then, it's still at historic highs compared to pre-recession enrollment. This might change over the next decade as the %of HS grads entering college has been relatively flat the past few years, and # of total graduating seniors is on a slight downward trend, projected to continue for the next decade.
3) Reduced State Funding: Many states have been systematically reducing their funding to public colleges & universities for a few decades. Right after the Great Recession, higher ed was low hanging fruit for cash-strapped state budget cuts, and dropped another 17%
4) Institutional Debt: With high demand eliminating much need to compete on price, institutions have to compete on amenities & facilities. Beautiful new dining halls, recreation facilities, dorms, academic buildings. Universities borrow, build, and bill the students.
The reason for eliminating the banks as middle men was just to save money. They weren't taking on any of the risk, or doing anything particularly useful for the government.
I'd agree with the more general premise that easily obtainable loans should push prices upward.
The other aspects in the Australian system, though, are a "Commonwealth contribution" (part that the student does not have to pay back), an institutional maximum on how much the government will fund / underwrite that's dependent on institutional performance metrics (e.g. student employment rate on graduation), and that they alter how much students can be charged and how much the government will contribute depending on the subject area.
It gets very political and there are perverse incentives hidden in the detail.
(There's a couple of controversies in Aus higher ed at the moment. One is a lot of downsizing due to Covid affecting the international market. The other is proposed changes to the fee structure for particular courses and universities from the government.)
However, it does get universities to respond to government strategy, so I expect the people in government who run it are probably very happy.
Within government, I think they see university funding as also being one of the levers the government has to influence economic growth. For example, directing student places to a particular institution brings university jobs, students, and the students' living expenses into that university's town to grow it. By giving incentives for particular courses, they can feed particular industries with graduates, etc.
So you'll hear universities and government talk about "creating job ready graduates" (they've always talked about this), but also "creating graduate ready jobs" (universities as a mechanism for growing parts of the economy in an area)
The real reason college costs so much is that the price of all services provided by people with doctorate Or professional degrees has risen. The cost of higher education has risen at the same rate as the cost of dentist services and legal services. See: https://image.slidesharecdn.com/disruptiveinnovationinhigher... Archibald and Feldman, 2010
The reason the cost of all services provided by people with doctorate or professional degrees has risen is complicated and could arise from many factors. For instance, it could be that there’s more industry demand for highly educated labor.
The rise in college costs relates primarily to overall changes in labor costs, not to anything wrong with the education system in particular.
This means it's hard to measure the effectiveness of the current student load system. Is the investment increasing productivity? Or just creating another hurdle for people to jump over to get a good job?
It’d be somewhat of a feedback loop
No, it's not.
> The cost of higher education has risen at the same rate as the cost of dentist services and legal services.
Most doctorates are not like those cherry-picked professional degrees and have not seen this inflation.
I’d say we let the private market handle school loans. Certainly wouldn’t be a perfect system in regards to access, but I feel it’d be better than current state because there’d be somebody involved deciding if a college loan is worthwhile.
I look to the UK as an example. The government only guarantees $10,000 in student loans so most programs coincidentally cost less than $10,000. Are there exceptions? Yes, but for the most part this holds true.
Not a complete solution but does significantly help to address the blank check issue.
> Up until 1993, the federal government merely guaranteed/backed student loans that private lenders gave. This meant that only in the case of someone defaulting on their loan would the government be on the hook, stepping in and paying the college what’s owed.
> This amendment completely overhauled that system, making it so that for the vast majority of student loans, the federal government directly made the loans to students. More specifically, the federal government pays the universities/colleges up front, and the student then owes the government that money.
What’s the difference between the federal government directly making a loan and a private lender making a loan and immediately pawning off all the risk on the federal government? Either way the lender does not care if the borrower will be able to pay it back. It sounds like the problem predates the Student Loan Reform Act of 1993.
<1993: there's a bank in the middle. If the student cannot pay, the bank has to do the paperwork to get paid by the Feds. Note that the profit for the bank is limited.
>1993: no bank in the middle. University gets paid right away. Zero risk for them
Getting paid upfront, instead of years later after tons of paperwork, can only accelerate the process.
I mean imagine graduating debt free and instead, just paying a small extra tax. People would be able to focus on creating more wealth instead of being underemployed so that they can pay their bills.
Out of curiosity, can you name some examples of programs that in your opinion don't have much of a use today?
The price of services relative to goods has also trended strongly upwards during that period due to increased trade.
Urbanization and increased cost of living in some areas could be pushing up averages in costs.
Nobody pays the sticker price. A lot of colleges are subsidized by a small slice of wealthy and/or foreign students, so to maximize differential pricing, universities raise prices, and simultaneously offer larger tuition grants for need or merit.
There are a dozen reasons. Student aid is probably one of them too, absolutely.
I just worry about someone saying 'x' is the reason for some complex social or economic changes decades in the making. The interesting question to me is how to weight all these influences.
All this talk about debt is mostly a non issue in real life but generates a lot of heat online. American jobs pay vastly more than any other country on the planet and paying back the debt is quite easy. Otherwise people wouldn't keep enrolling. From a European point of view, US taxes are low, salaries for professionals are sky high, utilities (gas, electricity) are cheap, consumer goods are cheap.
Of course, you'll have difficulties if you majored in art history or archeology, but that's also true everywhere.
I’m writing in the declarative, affirmative tone, but it is only my understanding.
No, but she's probably going to pay way more taxes for everything, including income tax, VAT, taxes on petrol, electricity and will earn less.
People who complain about it are concentrated in threads like this, but all real life Americans I've talked with (whom I know for different reasons) said the debt may be annoying psychologically but at the end of the day, white collar professionals can easily pay it.
However, it may be the case that more people go to college in America due to marketing and other influences than actually should. Also, students tend to get pushed through the system and are pampered and have an entitled customer attitude and the colleges have a service provider attitude. The end result may be that even people with bad job prospects move through the system and then get surprised at the end. In Europe, universities quickly fail these students and push them out of the system so the students face reality earlier.
Also, Americans seem to value the "service provider", "resort" type college, with all kinds of non-academic services, personal mentoring, sports stadiums and teams etc. compared to the bare bones approach of European universities.
EDIT: just saw it's an art degree in question. Spending years on studying art has always been the luxury of wealthy people at all times, in all places. You'll have difficulties finding a job (assuming no connections) anywhere with an art degree. The meme of having to work at McDonald's is also alive and well in European countries.
Unpopular to admit: we need doctors / engineers / farmers more than we need another art major.
As a US taxpayer, I wouldn't want to subsidize just anyone's education. I'd rather incentivize and subsidize engineering / STEM / agricultural science.
You don't get to just get a free education regardless of what you want to study - different work/study has different value to society.
That's backwards logic though. It might appear to be true in the short term but it doesn't mean that people are actually capable of sustaining the growth in the rate.
And as for the debt being easy to pay back, it kind of sounds like you're in a programmer debt and salary bubble.
The other Swiss flagship university, EPFL, which is also free, is ranked #14 overall in the QS world ranking.
https://www.topuniversities.com/university-rankings/world-un...
PhD students are incredibly cheap and do a lot of the revenue-generating work; namely, classroom teaching and research. PhD students earn between $20K/yr and $30K/yr in stipend. For the university, that is damn close to the ALL-IN cost! The university pays no FICA taxes and does not contribute to retirement for these employees.
For this reason, in high-demand fields like Computer Science, 60+% of PhD students are foreign nationals. And the domestic students are often over-represented at top-tier universities. So there are lots of CS departments where the majority of the revenue-generating employees are foreign nationals making $20K/yr all-in.
A PhD student instructing or leading recitations for university courses makes less than 1/2 of what a first year high school teacher makes.
A PhD student doing research is bringing in typically $100K - $200K in grant money but only receiving about $30K of that. Also, again, the "2x multiplier" used to calculate the total cost of a normal employee doesn't apply here because the university does not pay FICA taxes, doesn't contribute to retirement, and often gets great tax breaks and gifts to cover things like real estate (=office space). For universities the "total cost of a PhD student" multiple is more like 1.2x salary.
Professors are managers. Deans and so on are executives. PhD students are the "bread-and-butter" employees of the university. They are the ones who do the bench work/coding and the vast majority of face-to-face teaching. Without international PhD students, universities' total cost of operation would skyrocket.
https://thehill.com/blogs/congress-blog/economy-budget/28362...
And what It did explain could have done a little bit better job.
We could easily restrain the cost increases - which has far exceeded the rate of fiat destruction - by changing wildly irresponsible Federal loan backing. It wouldn't take much to begin tipping the cost inflation backwards, we could roll it back gently and it'd make a big difference over time versus continuing the upward climb. We could flatten it and let inflation chew it up over time in real terms. We don't have any politicians that are intelligent (wise?) enough or brave enough to do it.
Most politicians are cowards. Good luck finding one willing to step in front of the higher education train (everyone must get a four year degree in their Cracker Jack box). Suddenly all the headlines would be that Joe Politician doesn't want little Johnny to go to college, Joe Politician is depriving our children of access to college, Joe Politician is stealing our children's futures! And so on. The triggered propaganda flood would instantly drown anyone that dared to go near it.
The US only has two primary political types on this topic: those that ignore the problem, not wanting to go near it for the political consequences; or those that are only capable of arguing in favor of a lot more spending as a solution (as though the US can afford that, especially when the problem is that costs are already far out of line with peers around the world).
That's a feature, not a bug.
A similar thing has happened in housing. Various tax breaks introduced in the past 30 years allow people buy a much higher list price of house (in terms of annual salary multiples) than 30 years ago.
https://www.purdue.edu/newsroom/releases/2020/Q1/purdue-anno...
I would never support student loan forgiveness until the Government stopped the loans!
Do universities not compete for students? Why have costs gone up so much faster than inflation? It's not just a question of there being a huge pool of money, you can buy a car with loans and car prices haven't skyrocketed.
The answer is that education is a weird "good" that's probably a Veblen good, among a lot of other reasons.
The obvious difference is that car loans are not Federally issued and defaults are possible. Hence creditors have to issue loans in a prudent manner or else they will incur a loss. Not everyone is able to acquire a car loan, and interest rates can be very high.
These incentives do not exist in the student loan market and thereby subsidizing demand. Students become price inelastic.
you should better ask, why students have to pay for education in developed country
supply side are a bit better
wrt cost disease
see how milk has remained the same price for decades
The college tuition fiasco is a private/public creation. Now who wears the pants in the private/public relationship, that's up to you to decide. Did businesses decide to require college degrees for entry level positions and the government react to that? Or did the government decide to get people into colleges and the businesses react to that?
If businesses stop requiring college degrees, then college enrollment will drop significantly. If government stops guaranteeing student loans, college enrollment will drop significantly.
Who truly runs this country?
Credentialism is exactly that. If in the pre-covid era you went to Washington, DC, you will see huge illuminated ads in the metro stations for companies, for example "graduate school" (literally the name of one company I saw) which offer super sketchy master's degrees. This is because if you have a master's degree, you get a mandated pay bump in your salary as a civil servant.
A blanket pay bump for "Master's" degrees written into the code? Clearly that's going to be gamed.
If any auditing actually went into the source and value of the credentials then they could be appropriately valued or ignored, depending on the case.
This idea is from a book by Frederick Lewis Allen. "The Big Change", published 1952. http://gutenberg.net.au/ebooks05/0500881h.html
" With potential opposition melting away through the sales exit, the management is very much in the saddle--and in most of these larger companies it is virtually self-perpetuating. How else could things be run in, let us say, the American Telephone Company, which has over a million shareholders, no one of whom owns more than one-tenth of one per cent of the stock?
Looking at this segment of American business, we would almost find it appropriate to call our present economic system "managementism" rather than "capitalism." "
We now inhabit a world where no one is encouraged or even expected to do a trade (well except for the modern slave caste: illegals). The result is lots of HS grads who should be getting an Electricians degree instead trying to do a 4 year program.
The result not only inflates tuition cost, but also leads to 'degree inflation', that is everyone now has a degree. Therefore, this amps up the arms race so a Bachelors is no longer special, thus maybe a Masters or PhD is needed.
The colleges are all too happy to force kids into a lifetime of debt to sell them useless basket weaving and gender studies degrees.
And while it's definitely true that lifetime income expectations are higher for salaried people, I wonder if they're high enough to offset the negative compound interest most people are saddled with during their 20's.
I think we may be playing fast and loose with our comparisons elsewhere too. There's sort of an image that going to college for 4 or 6 years is a huge investment of energy in your future, and the alternative is to just take 1 year of trade school and then skip to the post-graduation part of on-the-job learning. Like we paused the clock for the college people to catch up?
If someone put half the time and energy into trade school + life skills + finances that we expect of college students, I think they'd turn out pretty okay. Stressing about money is expensive. Starting your nest egg eight years late is also expensive. If you make your early lead count for something, I don't expect too many regrets later on.
How much is one’s health and ability to move around in older age worth? How much is it worth to not have to drive around all day and come home on a regular schedule?
If this were the only factor, then businesses that simply stopped requiring a college degree would have a huge advantage over those that didn't. They could hire more employees, more cheaply.
So why isn't that happening? There has to be more to the story than all businesses and governments colluding to require college degrees.
And Reagan's legacy didn't just affect higher ed--it put public K-12 on the path to the financial and 'common core' shitshow that it is today.
Here's just one of hundreds of explanations of how Reagan fucked higher ed. It's not a theory--it's a very basic and well-documented fact.
https://www.theatlantic.com/education/archive/2019/09/colleg...
From that article: "The shift began in the 1980s, in terms of a changing political philosophy. President Ronald Reagan’s budget director, David Stockman, said in 1981, “If people want to go to college bad enough, then there is opportunity and responsibility on their part to finance their way through the best way they can.” When those who argued that college is a private benefit framed it like that, it became logical to say that education should be paid for by the people that it benefits. And so in the 1990s, the vast expansion of loans for higher education began."
And you can track--with plentiful data--the rise of college costs in direct parallel to this shift, year over year.