https://www.cbpp.org/research/state-budget-and-tax/state-hig...
Historically, funding was tied to tuition caps. These had to be removed when states cut funding to have balanced budgets.
So what are universities doing with that extra $1500 per year per student? I agree that schools should be better funded, but ballooning tuition costs are more than just a lack of funding.
2008 to 2021, 4 year public school tuition $7280 to $9375 = +28.8%
2008 to 2021, state support per full time equivalent student: $6552 to $7896 = +20.5%
It looks like cbpp "debunked" it by picking a year that was particularly favorable to that point of view (2018). Looks to me like the two variables have been trending together just fine as per recent data.
The article was written in 2019. There was no cherry picking. That was the most recent data available to them.
Universities _will not_ reduce tuition without being forced to do so. Universities _cannot_ reduce tuition without more funding.
Not me, no I agree with you here. It's the authors of the article you posted that think that students are price sensitive.
2010 6310 tuition 5790 federal 10420 state 22520 total (16210 from public funding)
2020 8160 tuition 6010 federal 12020 state 26190 (18030 from public funding)
Now if public funding went down $2000 and tuition went up $2000, that would lend evidence to the idea that collapsed public funding resulted in higher tuition. Yet public funding went up $2000 and tuition went up $2000. And you say this is because market forces don't apply and that the state isn't tying funding to tuition. That may be what you believe, but I don't see how any of this refutes the alternative explanation (that it has to do with student loans not being subject to bankruptcy).
Market forces do apply to colleges. Their customers simply are not price-sensitive.
Universities are not businesses. Tuition is frequently less than the cost of teaching students. The cost of an education has risen independently of how that education is paid for. Removing loans from the equation wouldn't lower prices because prices are set by costs, not by profits. There is a ton of administrative bloat, but universities will always prefer to not fire employees over reducing costs for transient members of their school.
Even if it was true, it would not prove your theory that it has anything to do with student loans not being subject to bankruptcy. Universities do not issue loans. Bankruptcy leaves lenders holding the bag, not universities. You have not given any explanation for your theory of undichargable student loans causing higher prices, you've only attempted to refute my explanation as proof that your theory is the only alternative.
This is factually untrue; the better universities do not, private for-profit often-predatory universities do, and those loans are subject to the same bankruptcy provisions as the federal loans issued to students at other schools. These are a part of the landscape that education policy must address.
The reason why it matters whether or not you can discharge the loan is because it changes lending behavior in the first place. The baby boomers used to work entry level jobs over the summer and pay for a semester of college. In the late 70s, congress changed the bankruptcy law.
Lenders loved this because it completely changes the risk equation. It incentivized them to lend as much as possible to as many as possible. This triggered a feedback loop with colleges. They could charge more for tuition, and in turn, lenders could lend more risk free debt. Rinse and repeat. Colleges would use that extra income to take on administrative bloat and wasteful programs. Four decades later, tuition is double that of other countries, colleges are happy, lenders are happy, and graduates are getting crushed by debt.