Tuition costs have risen 710% since 1983 | Hacker News Reader

Tuition costs have risen 710% since 1983

statecraft.beehiiv.com

720 pointsarmanhq744 comments

Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan since the bank knows that the government will protect their investment if she fails to pay them back. So now young people have this easy access to credit, and universities can greatly increase tuition and fees with the confidence that their admitted students will be able to pay.

Worse than just "backed by the federal government," the loans are basically protected by the government. Being one of the small list of things you can't bankrupt out of, the risk in giving out the loans has been fully pulled from the lenders.

It is frustrating to hear the discourse over the inappropriate students that are taking on too much debt, all the while ignoring the lenders that are taking on too much risk. At least, they would be taking on too much risk, if they hadn't captured the market so effectively.

> Worse than just "backed by the federal government," the loans are basically protected by the government.

It is really strange that government does not constrain tuitions of the colleges participating in the loan program. Currently, Universities have no incentives to control costs in any way.

> lenders that are taking on too much risk

The lenders are taking no risks since these loans cannot be discharged through bankruptcy. There are also very large late fees and penalties that can triple (or more) the amount owed.

What "lenders," and what "market" are you talking about? 92% of all student debt was issued by the federal government. As a matter of social policy, the government does not meaningfully consider credit risk when issuing student loans.

It's also frustrating to see politicians trumpeting efforts to help Americans pay rip-offs like health insurance and tuition, instead of putting a stop to the rip-offs themselves. It's hugely wrong-headed and makes the problem worse.

I went to a major private university, and several years after I graduated they raised the tuition 24% in one shot. When asked why, they basically answered, "Everyone else did it."

It's time to revoke universities' tax exemptions when they pull shit like this, or are rolling in massive endowments, windfalls from sports programs, whatever. The regression of education in the USA at all levels marks the continuing decline of our society. We've gone back to book-burning in some areas. Now college is unreachable or a crushing burden. WTF.

> all the while ignoring the lenders that are taking on too much risk. At least, they would be taking on too much risk, if they hadn't captured the market so effectively

The lenders? Risk? 93% of all student loan debt is owned by the US Government. What risk?

How is it everybody pretends it's the Big Evil Bankers making all the money on this racket? It's equivalent to the false narrative about private prisons driving the high US incarceration rate (when in fact it was over 95% government prisons across the decades that the rate was skyrocketing).

It's a government replacement funding system for the entitlement programs that are bleeding out. They had to find a new funding source as entitlements dipped red, so they're strapping young people with massive debt (forever rising interest payments) they can't discharge and that derives from magic fiat dollars the US Government 'prints' at will.

This is another case of the government abusing the population.

Anti abortion laws? Government.

Anti gay marriage laws? Government.

Anti trans laws? Government.

Segregation laws? Government.

The war on drugs? Government.

The war on terrorism? Government.

Foreign adventurism wars? Government.

Vast illegal domestic espionage? Government.

Non-existent social security 'lock box' (not filled with $10+ trillion like it should be; should be the world's largest sovereign wealth fund)? Government theft.

How many examples do you all need?

>It is frustrating to hear the discourse over the inappropriate students that are taking on too much debt, all the while ignoring the lenders that are taking on too much risk

But as you point out, the lenders are not taking on risk. The only ones who are silly in the deal are the students.

The system is really messed up. But when it comes to your individual student making that deal, it's often a dumb idea.

Aren’t they government issued loans? That’s how it worked over here

Some of the interest rates I've seen on federal student loans - 7+% - seem exorbitant in general but particularly because the lender takes no risk.

7% interest on a loan in a year with 3% inflation (the real cost of having money that year) that is guaranteed to be repaid seems like evidence of corruption to me. But maybe I think too simplistically.

> lenders

AFAIK virtually every financial institution has been pulled from student loans.

The U.S. government is now the only major lender.

It makes little sense to treat student loan dollars differently from regular dollars.

The simple solution is to remove student loans from that small list you mentioned.

But then, how do you secretly replace the billions in bribes to your friends in the universities?

The first I had heard about this was from libertarians complaining about the government backing causing the tuition increase.

This was among a debate where people were asking for more federal and state funding.

Its crazy to see this point become so mainstream. I suppose it was inevitable if it was the truth.

It's maddeningly frustrating to see such short-sighted greed dragging down the class of people meant to lead the future.

They are and they aren't. Student loans can also be forgiven once you've paid them for a long enough time

The loans are mostly owned by the government too :)

Curious for your opinion: do you think it’s really hard to discharge a student loan in personal bankruptcy in the US, or impossible?

Eh I think the impact of the federal government on undergraduate costs is largely overstated. The limits for dependent students, which is most undergrads, is really small over 4 years.

https://studentaid.gov/understand-aid/types/loans/subsidized...

You can only borrow $31k over 4 years. That isn't a lot at all.

I cannot imagine a more sinister, callus, and destructive way to punch down on some of the most vulnerable people. 18 year olds did not elect any of the people making these laws, every adult before them parrots “go to college”, financial aid offices don’t care what people do as long as they pay tuition, etc.

But grants, you say! We can avoid loans. Not so fast. If your parents made a certain amount, they are fully expected to pay a certain amount for their now adult children to go to college. To qualify for any aid, you need your parents’ income, demanding that A middle class family may still be fully expected to pay multi-thousands of dollars. The student must then take out loans to pay for the rest, which might be the full amount.

This is certified, nonsensical, bullshit. No credit system in history has been given the grace to royally fuck over generations of students, saddling them with loans that cannot be discharged, whose amount is effectively dictated by the institution that is charging tuition. This is a scam at the highest level, sanctioned by the federal government, and perpetuated by every adult figure in the students’ life.

True, although I expect that the US healthcare system is more than competitive if we consider its bad outcomes and overall inefficiency per dollar spent.

Systems where there is competition, but where efforts are made to make the service providers not really have big advantages for cutting costs, will get you bad outcomes. It's just unfortunate that avoiding needing healthcare, or going into many careers without paying for the very expensive college degree, is such a big gamble.

A fully public system would be very different. An unsubsidized market system would also be very different. Either one would be dramatically cheaper than what we have, which gives us the worst incentives of both worlds.

Private high school costs have also gone up astronomically and there are no federal loans for them.

[0] https://educationdata.org/average-cost-of-private-school

This says that the average private highschool tuition is $15,645. In 2003, the average private highschool tuition was $8,412 (Snyder, Dillow, & Hoffman, 2008), or $14,079 (in today's dollars).

Please correct me if I've made some mistake, but plugging those numbers in shows that the annualized real increase in price is 0.5% per year over 20 years. Looks like doing the same thing for public 4 year college over the same timespan results in an annual real increase in 2.1%

Where does it say that?

Btw private school looks quite affordable. I used to think my neighbor was rich, they were, but for only $20k/yr you can send 2 kids to private school? That is cheaper than daycare.

This is really interesting, but has it outpaced inflation ? Did not see that skimming the site.

This is not wrong (despite being common and the de facto explanation) but it isn't complete either. The reason I say this is because people that often say this (or read this) also conclude that the way to fix this is to just get rid of government backed loans. The issue is that this model doesn't question why the government backed loans in the first place. How they were seen as an investment in the people, as higher education was already prohibitively expensive. The solution failed because it did not account for a feedback loop, relying on competition to keep prices low rather than implicit coordination (sometimes explicit collusion). Mostly being due to momentum and prestige having an ineffable market value.

So we need to resolve that issue as well if we're to stop federally backed loans. There's more things at play as well and the convoluted mess is the real reason we haven't solved the problem. Realistically, this is probably true about most of the larger issues we face. I'm concerned that over simplifying the problem statement results in an over simplification of the solution and it just causes us to argue (which can be supported by evidence) or take ineffective/theatrical action rather than actually resolving the problem (meeting the intended goals (plural)).

We can keep having this conversation over and over, but it has happened for well over a decade now and no real progress has been made. We gotta start looking at the actual complexity of the situation as first order modeling isn't good enough.

Easy access to credit is a good thing. I cannot believe I am saying this on HN. The problem as I see it, as a non-American, is that university in the US is a business trying to turn a profit. Even if most universities are technically non-profits, they are managed like businesses by MBAs. In the EU many countries offer guaranteed loans for Uni education, but this has not spiked the cost of education because Universities are not run with the aim to turn a profit.

IMHO, easy access to credit is one of the best things about the American economy, and hiring MBAs to manage things that aren't for profit corporations, one of its worst aspects.

Not-for-profit businesses in the US are not legally allowed to turn a profit. There are no financial owners to be paid a profit. So, everything you wrote about that is BS.

Not-for-profit businesses are still businesses; they need to take in as much as they spend, whether it's through fees for service (e.g. tuition) or donations. Colleges and universities in the US spend a lot of time begging alumni to donate money.

And yes, there is education and training specific to running a not-for-profit _business_, and many GOOD leaders have MBAs. I have watched a lot of them fail because the folks at the top did not manage money well.

"Able to pay", but where is the "Want to pay?"

I feel you also need to argue: "18 year olds don't realize they are being ripped off", or "college is actually worth that much". It's probably a different answer for different students.

Society is better off as a whole with a well educated populace. We shouldn't optimize for college only for kids who can learn to program or whatever.

Most other developed nations manage to send every smart kid to college for ten thousand dollars per kid or less. Once again, it is only the US that thinks it is a special butterfly that can't somehow manage to give kids college. Sure, most European colleges don't spend one billion tax dollars on a football stadium, but that is also a good thing.

And no, those sports complexes largely DON'T pay their own way. A significant amount of college sports don't make much money, and don't give it back to the campus as a whole, and that's WITH literal free labor of NCAA athletes.

It's unfortunate, but to me this feels like half of the root of the problem.

One half is easy access to loans, the other half is student debt relief programs.

Between the two, colleges know they can charge absurd prices and pocket the money.

It's awful, and I wish someone was doing something to stop this. It cannot go like this forever.

>the other half is student debt relief programs

...which student debt relief programs?

Afaik there are no widely used student debt relief programs.

There is an answer that "just" requires the political will: instead of doing public K-12, do public K-16.

I think the solution is to just grant some money to schools and cap tuition costs. The current incentives are just so misaligned.

Its only half the problem because you'll still see inflated housing as well but at least its something.

This is a common theme on HN, but it's not obvious to me if it reflects this entire period we're talking about here. Were government loans growing from 1980 to 2000? I know they have been in the last 20 years, but tuition was clearly growing before that (as you can see for yourself in the graphs of the original article).

This was predicted by the then Secretary of Education in 1987.

https://www.nytimes.com/1987/02/18/opinion/our-greedy-colleg...

Here is something interesting:

https://www.ed.gov/category/keyword/borrower-defense

Two things you have to do to keep tuition costs down nowadays, by my estimation, unless you get a full ride scholarship or accepted by the an Ivy League:

- Do your first two years at community college. A lot of states have zero tuition costs for community college credits. I think in all 50 states its the absolute cheapest way to do get your first two years done

- Enterprising students may realize that if you're married, FAFSA (which is used to compute both federal and state aid) will use your married income and not your parents. Most students make little to money while in school. This automatically games the algorithm in your favor. Tricky to manage socially.

2+2 plans are really, really questionable in my observation. Most students I know ended up doing either 2+3 or 3+3, which since as you pointed out CC are so, so, so much cheaper than university did save them money none the less. However, if you're going into a field that has any kind of improved earning potential from a degree, you have to look at the opportunity cost, taking into account the fact that if they had just gone straight to a 4 year they would have had an extra 1-2 years of making substantially higher wages than they could before they graduated.

If you have a kid who doesn't really know if they want to, say, be an engineer, then a 2+2 plan that they realize they aren't cut out for during the cheap years probably is a huge price save. But for the kid with the tools to succeed in school, a passion for a field that pays well, and the opportunity to get into a 4 year, they should absolutely just go for it off the bat.

The other problem with the 2+2 is that you're sacrificing 2 years of one of the biggest advantages of going to competitive universities: meeting other students who could get into competitive universities. I met most of my friends I made in college in the first 2 weeks, freshman year. It's probably the single easiest time in anyone's life to make new friends and acquaintances. And those friends, beyond being invaluable to me for social and romantic reasons, also have benefited me financially: one friend's dad got me an internship, which I was able to leverage into my first job. I got my second job by no small part thanks to the recommendation of another friend who already worked there. Looking back in time, the ROI on the bottle of vodka I brought to the dorm nextdoor move-in weekend is likely in the ~10,000,000% range.

Transfer students get a greatly diminished version of that opportunity. By their upper-division levels, most students are spending a lot more time on school work, and much less time randomly meeting their dorm-hall mates. It's still possible to meet people, and my high-school friends who did the transfer route did meet some people, but there's a much greater than 50% loss in networking opportunity.

Agreed about community college. It’s unfortunate though that, like so many things, it’s essentially a lottery on where you’re born. Some community colleges are wonderful, others not.

I’ve heard of other FAFSA games as well - last I heard the parents’ cars and primary residence were excluded from the FAFSA expected contribution calculation so middle class folks with a fat savings account might decide to buy new cars or pay off the mortgage or do something similar to make the cash “disappear”. Deferred compensation plans are used along the same lines for income. The fact that such games are viable is a shame but probably unavoidable unless we have government foot the bill for college.

It only makes sense if you believe education is just like any other commodity whose price should be driven by market forces. Should government have any say in whether its citizenry gets educated? Is there a public interest in it?

I can’t think of an easier way for e.g. China to win the 21st century. American undergrad enrollment is already down. As the world gets more technical, that is not a good sign.

When an entire generation of Americans are priced out of higher education, who is going to develop the technologies of tomorrow? Should we assume foreign students will always want to come to our schools and stay to work in our companies? It’s not sustainable.

The rise in prices has largely been driven by schools going on real estate binges and bloating administrations.

Right before I graduated, my school decided to build a new football stadium, because they decided using the city's stadium wasn't attractive enough for students. They promised tuition wouldn't be used to pay for it, and it wasn't. We just got something like $500 added to student "fees" instead.

I have no sympathy for universities and colleges in the US, only for the students who were duped into thinking they didn't have another choice.

> Should government have any say in whether its citizenry gets educated? Is there a public interest in it?

That's a very dangerous road.

Governments are not some benevolent creature which always acts in the best interests of the People. As a practical matter, governments are usually incompetent and corrupt (usually in that order), and try to get the masses to further the interests of the politicians, the bureaucrats and the donor class.

I want an educated populace. For that reason, I want government as far away from it as possible.

The loans:

1) Increased demand.

2) Increased what the market could bear.

The result is Economic 101. There are no surprises here.

p.s. Note: Roughly the same applies to mortgages. The idea that more affordable mortgages (i.e., 30 yr) was going to make homes more affordable, is comical at best. With a relatively fixed supply, increasing demand is only going to have one effect on price. And the solution? The 40 yr or 50 yr mortgage.

Round and round we go.

That is obvious, but it used to be that admission needed some tests which most people simply cannot get past. Colleges lowered the bar of entry to make more money and that caused your point 2 and as well massively lowered the quality of the education making the diplomas not very worthwhile (known exceptions are there of course). Keep the bar to entry very high and you cannot have a reason for upping prices. Get a loan when you are actually really good and otherwise don’t get in, even if your parents have billions.

Agreed. The real question is: do they produce a net positive effect for society?

If that's the case, that the federal government backing the loans is what permits the increases, then why not just have the federal government pay up front and cut out the loan portion? Might give them more power to negotiate lower prices. Though I suppose the loan industry wouldn't like getting cut out of their middleman position, eh, and politicians probably wouldn't stand for that egregious cutting of profits.

> Makes sense when you have student loans backed by the federal government.

Everyone says that, but I've not seen much actual evidence.

I tried to find evidence, by looking for tuitions of various major universities over time and seeing if there was any clear difference in the tuition growth rates before Federal loans and after.

I know the data is available. Most schools list tuition in their catalog, and have their old catalogs in their library, but it wasn't turning up in. Google searches.

I was only able to find historical data for Stanford, giving tuition by decade, and one big state school whose name I don't remember. Here's a graph of log10(Stanford_tution) over time [1]. I don't have a copy of the graph for the other school but recall it was similar. It looks like it has been growing about the same for a century.

I also remember comparing tuition rate increases to inflation, and found that tuition has grown pretty consistently at roughly 2x inflation both before and after Federal backed loans.

[1] https://imgur.com/fXnjDNn

It's worth mentioning that degree granting institutions numbered ~3500 in 1980 and total enrollment was almost 10 million, and in 2022 there were just over 4000 such institutions serving 17 million students, and that number of institutions is actually declining from its peak in ~2016. This alone is bound to drive up prices.

More likely cause is the mentality that says universities are a for profit institutions That should squeeze as much as possible. Instead of "socialist" subsudised school, you give loans...

The reality in many cases is that total cost per student has actually decreased; meanwhile, governmental funding of universities has flatlined for decades. If enrolment doubles and funding remains stable, there's only one solution: Increased tuition.

Easy access to loans may create large amounts of debt, but increased tuition fees are mostly -- though I admit my research isn't exhaustive -- a function of an effective decrease in governmental funding per student.

If only governments could make…laws to restrict the price of University. Or…could limit the maximum loan size thus encouraging Universities to not charge more than that.

Price controls are one of the few things that economists on both sides of the political aisle agree do not work, and/or have unintended consequences which are worse than the problem they attempt to resolve.

https://www.econlib.org/the-consensus-on-price-controls/

Easy fix - include education, health care, and housing costs into inflation indices.

They could easily limit the loan size...

Proper solution is government to stop guaranteeing the loans and to allow people to put them in bankruptcy.

Prices will collapse to what people are willing to pay in real time, or save up for.

Also helps to drop standards like SAT/ACT. If you don't need grades or money to get into school, well, that includes just about everyone.

Purely out of interest: what do they do with all that money? Does it increase the quality of education and/or research?

Administration.

There’s a growth in admin [0] that I think is the proliferation of the most bullshit of bullshit jobs. It’s weird that I think the issue is much worse by basically funding all these admin positions that pay more than actual instructors and researchers yet I’m not sure what they really do.

I’d like to see universities advertise low admin:student and admin:instructor as measured of quality.

[0] https://yaledailynews.com/blog/2021/11/10/reluctance-on-the-...

A lot of the increase was driven by the "arms race" to attract the best students by building ever more facilities to make their ever glossier brochures more attractive. My school when I was leaving in the early 2000s was on a $200 million dollar building spending spree- a new library, a new sciences building, etc. I don't have a citation for this, but I had read somewhere awhile back that the administrative ranks have swelled at these schools and they are making tons more money than they used to in the past as well.

And I assume there is nothing preventing this student-loan backed tuition money from funding university endowments.

https://shrewdcuriosity.medium.com/why-has-college-gotten-so...

So the easier solution then since the government is effectively already paying for anyone who doesn't pay back their loan (a dead person for example) then is to just pay for everyone's college education (Public Universities).

I've been saying this for a while and no one has ever agreed. They are always like you think they are that greedy. YES I DO. It's not complicated. If one can get bailed out, one can do what ever they want.

You're missing another driver of the growth in tuition though: many colleges are only superficially "not for profit" and in reality are being run as profit maximizing institutions.

I hope to see the day where interest bearing loans are recognized by the rest of the world as the evil they are. Muslims and Jews know this fact quite well.

Abrahamic religions in general - Jesus was also not a fan.

>Jesus went into the temple courtyard and threw out everyone who was buying and selling there. He overturned the moneychangers’ tables and the chairs of those who sold pigeons. He told them, “Scripture says, ‘My house will be called a house of prayer,’ but you’re turning it into a gathering place for thieves!”

- Matthew 21:12-13

>If you lend money to my people—to any poor person among you—never act like a moneylender. Charge no interest.

- Exodus 22:25

KJV used the word "usurer", but it's the same idea.

Serious question: what would incentive anyone to lend to people who have any risk at all (i.e. everyone)?

The fact that default risk and time value of money exist are immutable, irrespective of whether you think that's evil. Modern Islamic banks in Sharia jurisdictions still recoup that risk and time value through various means, irrespective of whether you call that interest. (Some forms of "Islamic mortgages" charge you "rent" based on LIBOR/SOFR, which is just interest with extra steps.)

This seems good in theory but hard in reality. The modern economy is built on debt being used for new investments. The problem is high interest rates, not interest rates in general.

Christianity also used to have many restrictions on charging interest, but that got lost somewhere around the 19th century.

It is where the whole "Jews are greedy bankers" stereotype comes from: during the Middle Ages Jews were allowed to charge interest to non-Jews, so they were essentially the only people who could act as bankers for Christians. Combine that with a large dose of racism keeping them out of a lot of other jobs, and you end up with a lot of Jewish bankers.

This theory makes sense but since the loan is essentially risk free, why are private student loan interest rates roughly 10%?

Those are the private loans not backed by the government. The government ones are basically at the prime rate or less to fund the administration of the program.

Another problem with student loans is that they are frequently issued for way more than bare minimum required to pay tuition and study materials. This extra amount just exacerbates the problem and gives universities room to get to that money via tuition increases. Students may legitimately use that extra cash for living expenses, but most of the time it is just fun money expense.

> Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan

This is the exact problem. Whoever makes the loan has an incentive for eternally increasing prices.

false narrative, two counter points:

1. State govs have reduced funds to all public colleges. 2. Fed gov has refused to increase grants such as Pell on inflation basis.

And that is way before the other forces of price increases and demand increases.

You're right that state govs have definitely reduced funding in many places for public colleges. And although this started decades ago in some cases, it is significantly exacerbated by the size of loans that students can easily access (due directly to federal backing of such loans). Therefore, states can reduce spending on colleges with the knowledge that the colleges can easily increase tuition to make up the difference.

It is free money for lenders because backed by the Govt AND protected against bankruptcy. It is Free money for colleges because they know they will get paid regardless.

Remove this "free money guarantee" and watch how market corrects itself. When students can file for bankruptcy and/or the debt is not guaranteed by Govt, lenders would now use the same criteria they use to issue credit cards to 18 year olds. Hint: It's tough to get your 1st credit card if you have no credit history in the US and most lenders will not even entertain that idea. Some will do if you put in a collateral like $500 of actual cash deposit to guard against the default risk.

When lenders stop lending or get strict, colleges will have to consider how quickly and by how much they keep raising costs.

> Hint: It's tough to get your 1st credit card if you have no credit history in the US and most lenders will not even entertain that idea. Some will do if you put in a collateral like $500 of actual cash deposit to guard against the default risk.

Is that true these days? At my university 20 years ago, the credit card companies would bribe 18-year-old freshmen to sign up for their cards.

Same here. 25 years ago I got a $500 AMEX card and a bag of M&Ms. A $1,000 Citi card and a T-shirt. And another card—Discover, $2,000!—along with a free CD I think?

The conventional wisdom at the time was that (a) we were college students and were therefore more likely to have earnings in the near future to cover those small credit limits, and (b) we were college students and were therefore more likely to have parents to bail us out if we got in trouble with the credit card, and (c) there's no better time to snag a lifetime customer than at the very beginning of their adult lives.

I was able to get a credit card with a relatively low limit ($1200) as my first one, partly because I had a higher than average income during school as a private tutor. Many people do get secured cards if they are on a low income though.

That was a “student card,” so optimized for people who don’t have a credit history. After having that for a while I was able to leverage it into standard rewards cards.

I had an unsecured student credit card, 20 years now. Its limit was $800, no deposit required; just enough to pay for books, lab supplies, and a few meals. I know because I kept it as my last resort emergency card all these years later. Or use it on sketchy kiosk/online shopping sites. Every few years BoA asks me to increase the limit, which I decline to do.

I'm still FB friends with the girl that gave me a free t-shirt for signing up. LOL.

I had 0 credit history in 2016. Didn't have student loans and had avoided credit cards. Absolutely screwed me when I needed an Auto loan for a used car that I was willing to pay a heaft chunk up front. Couldn't get credit cards either, only one that would offer me one was a $100 secured card from Discover. Took me a year and luck that a loan agent at a credit union took pity on me before I could get that auto loan.

I got my first credit card when I was twelve years old. This was back in the year 2000. It had something like a $10,000 credit limit.

My parents didn’t co-sign, though I did use their incomes for the “household income,” which I don’t believe was a lie.

My first credit card was a $200 secured card. They offered me a real card after about 6 months of usage.

This was about 5 years ago.

This isn't going to happen because the whole point of the current government back student loan program is to give kids from not-ideal backgrounds access to credit, and hence access to the full range of schools available.

Crazy idea, but how about the gov just gives kids from not-ideal backgrounds access to grants and scholarships, rather than credit.

Why not just make it free? Kids from not-ideal backgrounds can compete on merit alone. The way this Supreme Court intended?

There is currently a shortage of people for the military, so let them join that for the education. Can pay for their schooling with service.

>Remove this "free money guarantee" and watch how market corrects itself.

While I agree, I can't imagine what it would be like for the first generation of students under such change. The reason they are government backed is to make college a possibility to begin with.

First ones in line would probably get massively screwed, no?

> First ones in line would probably get massively screwed, no?

No, College education will become cheaper, mechanically. Right now, it's the government that is highly distorting the education market with that loan system under pretense of allowing everybody to get an education.

I can vividly recall having this exact conversation in my grandmother's apartment, in 1995.

If you don't repay your student loan, it dies with you.

They won't go after your estate for the balance.

Sure but then it depends on *when* you die. Let's say you graduate at 22/23 and live till 70. For almost 50 years, you will be chased for that debt. Is that a good way to live ?

Sure, but the bulk of those consequences are decades away so effectively they don’t exist (or are at least invisible).

So schools and lenders are acting as if it’s true.

Hospice and long-term care would have already picked through those bones. Unless you're rich there isn't much of an estate to go after.

At great sacrifice to your credit score

I'm pretty sure the government is the lender in the case of federal student loans. There aren't any banks getting "free money".

Yeah but I'm not so comfortable with a technocracy where universities become advanced trade schools, purely to increase your chances of getting a job. As the late Kaczynski said, students are grudgingly pursuing these subjects because it's the only way to survive in a country without real social services.

There needs to be some formal patronage of the arts, but I have no idea how to pursue that.

> When students can file for bankruptcy

Agree with everything you say, except for this.

Allowing student loans to be discharged in bankruptcy will result in millions of students pulling that lever as soon as they graduate. They, of course, get to keep their degrees and use them to make money their entire lives.

If you file for bankruptcy and, for example, want to keep your car (which has a loan), you have to reaffirm that debt and continue paying. Same with your home, etc.

Student loans provide you with a valuable life-long asset. Allowing discharge simply isn't right and is economically destructive. How about I BK, discharge my mortgage and keep my house forever? Same thing.

I agree 100%, government has to get the hell out of the student loan business. Universities and students need to be forced into a situation where risk is assessed and loans are issued --or not-- accordingly. The university has to have risk. And students have to be held to their commitments.

The other problem the current system causes is what I call "course padding". Most degrees in the US have a year (or slightly more) of coursework unrelated to the field of study. In the case of STEM degrees, students spend a year or more on non-STEM courses.

This is detrimental on many fronts.

First, the time to graduation rate for undergrad is 33% longer than it would be without this irrelevant coursework. No employer cares about this stuff for STEM degrees. Some might differ wit this. OK. Let the free market decide then. If Google wants engineers who have taken three semesters of Underwater Basket Weaving History, the free market will drive students to take those courses as enhancements to the required curriculum. They should NOT be conditions for graduation at all.

This would reduce a typical engineering degree from four years to three.

Second, these non-major courses add 33% to the cost of a typical STEM degree. Whatever a year costs at a school (including housing, etc.), that's what they add to the student loan. That could mean $30K to $70K. This is horrific, unnecessary and counterproductive. If the student wants to take these courses because they add value and become additive to their career, they can make that decision --not be forced by government into it.

If government wasn't in this business, bullshit degrees and bullshit unnecessary courses would cost a ton less and some would completely evaporate from our universities. A few weeks ago I was watching a show where this guy helps people deal with debt. This poor fellow had over $250K in student debt for a degree that might not even make him $50K a year. The only way that happens is in a distorted market, one that is distorted by government in favor of what usually ends-up being political agendas disguised as good intentions.

The other element of this equation is our failures in K-12 education. Again, government (and union) meddling has caused much of this.

Our 18 year old's graduate high school devoid of marketable skills. They are useless to most businesses without training and, generalizing, are ignorant about most things that matter as they transition into adulthood.

For example, they have no understanding of money and finances and no skills to help them make sound decisions. So, someone throws a $200K loan at them for a degree on Basket Weaving and they take the ride, not understanding they are going to make just above minimum wage and have signed-on to financial hell for the rest of their lives.

That is a failure in pre-college education. And a serious one at that.

Not everyone has to go to college. Our K-12 path fails that population as well. The average US high school graduate requires training to stack boxes on shelves and make coffee. That sure sounds like a formula for societal success, doesn't it?

At the end of the day, the problem might very well be that education, in the US, has become a political punching bag. One could come-up with dozens of scenarios to understand why we seem to insist on destroying our nation by not doing a good job educating our kids. All of them would seem insane to even suggest. And yet, here we are, it's 2023 and our kids rank below third-world-nation levels almost across the board.

This is insane. What are we doing?

> This is insane. What are we doing?

expecting academia to be a job training program, reprimanding higher level general eduction as "33%" waste, trying to address the symptom (high loans) instead of the disease (why are they high) and pretending that cutting required courseloads wouldn't also reciprocate to higher tuition costs like every single time financial aid services like FAFSA increase, repeatedly posting out-of-touch "basket weaving" examples instead of allegedly any single other degree path with "bullshit degrees", having your only argument to discharging loans be that you can't repossess knowledge like you can cars, pretending this is an issue about students not holding "commitments" instead of addressing targeted bilking of a vulnerable group of people, trying to set up a cringe libertarian stance about government stepping in to "force" you to take courses and "distortions" from "political agendas" and anti-union sentiments completely irrelevant to any other issues anyone is talking about, creating huge fake scenarios of being hundreds of thousands in debt for fake degrees and passing this off as an even slightly applicable scenario to others, ... etc

> Our 18 year old's graduate high school devoid of marketable skills

it's really unfortunate for them that they had dead weight watching over them for 18 years, waiting for them to fail and to then immediately turn blame on someone else. it's not unknowable what they're being taught. the problem more and more seems to be that people like you have a voice in the world that someone might be fooled into believing is valid.

> Allowing student loans to be discharged in bankruptcy will result in millions of students pulling that lever as soon as they graduate.

What happened in the days before student loans become exempt from bankruptcy?

One thing that was mentioned in the article, but which seems to be missing from the discussion is the decrease in state funding for higher education.

When I was looking for colleges in the 80s, the most expensive private schools were on the order of $20K all in. Those same schools are on the order of $85K all in, which is an increase of "only" (hah) 450%.

However, my alma mater (SUNY Buffalo) has increased in-state tuition 830% ($1300 to 10.8K). When I went to school there, minimum wage was $3.35/hr. That means that I could work 10 weeks at 40hr/week and pay for my tuition. That's the main reason I graduated without student loan debt. The NYS min. wage is $15/hr, so a student today would have to work 18 weeks to pay for their tuition.

We need to increase state funding for higher education.

Indeed. I attended a talk by one of the presidents of a local state university about a decade ago, and she showed a plot showing that the overall cost to educate a student hadn't changed in 30 years (inflation adjusted). What had changed was the state support per student. As it dwindled, the university continually increased the tuition such that the overall cost remained constant.

It's one university, so I don't know if it applies to the others, but drops in state support is often excluded from these conversations.

This is absolutely correct. For public universities, the amount of state funding hasn't kept up with the increase in the number of students.

While tuition at private institutions have also gone up, so has the amount of financial aid (scholarships) that they've made available:

https://www.brookings.edu/articles/college-prices-arent-skyr...

The result is that the net price hasn't increased all that much for the average student.

Take home after taxes is only 77% at $15/hr or $1830/month if working 40 hours/week https://smartasset.com/taxes/new-york-paycheck-calculator#eI...

As of July 2023, the average rent for a 1-bedroom apartment in SUNY College Purchase, NY is $2,696. This is a 12% increase compared to the previous year. https://www.zumper.com/rent-research/near-suny-college-purch...

Minor quibble: the tax rate is a touch lower if you don't work year round. If you earn $10.8k in a calendar year, you'll take home 81%.

IDK that we _need_ to increase state funding, but it absolutely explains the tuition trend. I don't feel particularly bad about people graduating with student debt if they have high paying jobs on the other side.

What does feel bad is turning qualified students away, like one school I know used to do.[1] Every year they would pick a GPA cutoff to admit more engineering students to the upper level classes you need to graduate, not based on evidence of students failing but on faculty headcount. It's a total bait and switch, and thankfully it seems they ended the practice right before the pandemic.

And it's tricky, we run teaching universities because we think there's some benefit to students being taught by practicing researchers. But the reality is that, especially in STEM, research funding is what matters more than tuition funding. Which in essence means in order to admit more students we need more research labs and buildings, because the 3/3 teaching load of a tenure track faculty member will not yield competitive wages.

[1]: https://today.oregonstate.edu/news/osu-college-engineering-c...

Its made worse by the fact that pure-teaching positions at public institutions are frequently filled by adjuncts, so there's next to no benefits or job security, and the pay is often atrocious.

It's really screwy that a great many universities have essentially said there can be no long-term work situation for teachers if they aren't also researchers.

This seems relevant:

https://www.nytimes.com/1982/12/28/science/california-weighs...

Apparently University of California used to be free.

They didn't want an educated, unemployed proletariat (their words, not mine): https://theintercept.com/2022/08/25/student-loans-debt-reaga...

Adding to this: we should be looking at the actual amount paid by students have receiving financial aid. Analyses of tuition - average financial aid show that the actual amount paid has been relatively flat at private institutions. A lot of private institutions (mine included) give a 50% scholarship to most students.

Increased costs at public universities are driven largely by lack of state funding. This is also in part because the number of students attending public universities has gone up tremendously but state funding hasn't kept up.

https://www.brookings.edu/articles/college-prices-arent-skyr...

In 1975, large state state universities (like Michigan State and U Virginia) cost about $1500 for tuition and another $1500 for room and board.

Since you could earn about $1500 working each summer, your maximum shortfall was $1500 per year (assuming no loans or grants), or $6000 per bachelor degree. At the CPI's 194% inflation, today that would equate to less than $12k of debt.

I'd also like to know how much nonacademic college costs like R&B have inflated -- when provided by the rapacious university system. They should have followed the CPI. But I'd lay strong odds they haven't.

The only service category that has outpaced higher education is hospital services.

https://www.aei.org/carpe-diem/chart-of-the-day-or-century/

I generally see charts like this in relation to Baumol's cost disease, I'm surprised the linked article never mentions Baumol, but goes on to talk about government regulation and foreign competition.

https://en.wikipedia.org/wiki/Baumol_effect (See also section on education https://en.wikipedia.org/wiki/Baumol_effect#Education)

Basically as scalable goods and services get cheaper, non-scalable goods and services become relatively more expensive. In terms of hospital services and college tuition, this is a much more intuitive explanation than government regulation, although I'm open to more informed opinions.

I always thought the issue was in admin body count. However, just picking the largest universities in Germany and US on wikipedia we see:

Ludwig Maximilian University of Munich Academic staff: 5,565 Administrative staff: 8,208 Students: 51,606

Michigan State University Academic staff: 5,703 Administrative staff: 7,365 Students: 49,809

Those look pretty comparable, so what is going on?

And interestingly both have predominantly grown in "administrative" costs

People forget that fundamentally, these are services that become relatively more expensive over time (as other things get relatively cheaper). Both healthcare and education don't really benefit from cost-reduction from scaling. At the end of the day, its still one service provider to few service consumers. Productivity in that sense is unchanged in 30 years. Meanwhile, consumer goods can continue to drop precipitiously with technology and scale. As technology improves productivity in other sectors, Net result over time, is that things like healthcare and education and other services which don't scale will continue to get relatively even more expensive (i.e. grow faster than inflation).

How cheap TVs are is unreal. I was looking at the display TVs at Target and the largest one was only about a grand, maybe a touch less. Ridiculous how big of a panel, complete with "smart" OS and etc, you can get for <=1k.

(Mind you, I know "largest" doesn't mean most expensive usually - indeed the most expensive TV was "only" 65" but was still <$2k.)

Capitalism has certainly worked really well for this one specific consumer good.

I wonder why...

https://www.opensecrets.org/federal-lobbying/top-spenders?cy...

The medical cartels need to be destroyed.

Most of the 'service' industry is subsidized by cheap foreign labor. Harder for Schools and Hospitals to hire illegal/unskilled workers.

Government lending and a lack of price controls are the ultimate root cause. The government extends near-unlimited credit to student borrowers that goes way beyond their credit-worthiness, academic performance, graduation rates for the school, prospects for employment based on field of study, etc. And universities have clued into the fact that students who can pay any price, will pay any price. The ceiling of what students will pay, if they have sufficient access to credit, to join or maintain their status in the middle class is very very high. So universities hike the price year after year with little resistance because the availability of government borrowing takes the sting out and shifts the pain years or decades into the future of those students' lives.

I think some major force is needed to counter-act the runaway price growth without cutting off borrowing for students from low-income families. I think university prices should be capped by law at the inflation rate.

Think rent control for tuition.

> Think rent control for tuition.

The only thing economists from every politic view can agree is horrible?

There's no direct comparison to be made with housing shortages. The only scarce educational resources are those that convey high prestige, and there's no way to manufacture more of that through higher tuition payments because it's the scarcity that makes it prestigious. Harvard would be just as prestigious if it were free to attend as if it were $100k/yr to attend. Whereas in housing, if you had people lining up to pay $100k/yr, you'd be throwing up new buildings as quickly as possible.

In general there is a an oversupply of higher education capacity due to demographic downturn and a decline in enrollments since 2010. Smaller colleges have been closing because they cannot attract enough students.

The main reason correction is needed is a matter of economic and national strength. Increasingly we see students opt out of college because the cost benefit to them doesn’t make any sense.

You can argue that those people will learn skilled trades or online but university has always been and will continue to play an important role in economic output in the US. When only those in the highest tax bracket can afford college it exacerbates instability and undermines the economy.

Rent control results in slums and shortages.

The only thing that keeps a system functional is external pressure. Otherwise it will always turn into some weird messed up versions of itself that satisfies none of the original objectives but is somehow larger than ever.

Universities used to be separate systems, and you could opt out of one and into another, and most people wouldn’t even go to one at all. But now they are basically all parts of one whole (within the US, at least) and everyone is going and the universities are all failing in the same way.

It could be financial, but I think it’s because of the academic track and social status.

There’s a consensus that college is good and will turn you into a professional leader with a nice job title that reflects elite values (which happen to be a certain kind of liberal but it’s more about social status than politics philosophy). But it turns out the world only needs so many Environmental Justice Media Liaisons, so the universities are just making up these job titles to absorb their own graduates.

Of course, that doesn’t work well financially, so they pay them nothing for as long as possible and then close to nothing after that, and crank up the tuition promising the next batch the same deal.

The students put up with it because it’s hard to evaluate the numbers that they can actually expect from such a ridiculous job, and because it sounds like a cool (or at least acceptable) job title to announce at parties. The fact that a plumber makes three times as much is not worth acknowledging.

I am beginning to believe that the root cause of tuition costs in the US exceeding inflation is based much more on FOMO on the benefits of college education rather than federal government guarantees on student loans.

My claim is that buyers (parents+children) of college degrees are maybe not behaving rationally with respect to cost.

High-cost schools position themselves as offering a "better" outcome or opportunity to students. I'm really conflicted about this viewpoint. I have two children in high school with one a rising senior. So my family is discussing colleges and college costs somewhat regularly. We have visited a small number of state schools and a small number of smaller private universities and colleges. The smaller schools do a VERY good job of selling extra opportunities easily available to students. My experience is that opportunities can be found by a motivated college student at any institution but the small private schools seem to make it almost hard for a student to NOT be involved in meaningful outside-of-the-classroom options.

The advantage of the larger school in my experience, is that its like going to a dozen small schools at once. Plenty of people I know where able to transfer from one good program to another in a completely opposite field once they learned what they actually liked (usually quite different than what you imagined as a highscooler especially if your parents have no concept of the field), because the school was large enough to offer so many good options and departments with a lot of interesting faculty. The class sizes are the same between big and small schools anyhow for the most part, but you also have an easier time scheduling classes (and taking certain ones “out of season” if need be) at the larger school. It scales horizontally rather than vertically as your student body increases, big schools have the pockets to hire more faculty and support more taships than smaller schools.

I think you and GP are using different definitions of "larger". One definition is "more programs". Another is merely "more students".

Generally, go for the one with the lower student:teacher ratio. My anecdote:

I and a friend both went to low ranked undergrad universities (state schools). Mine, however, had a low student:teacher ratio per class. Comparing notes with him, the main benefit was that professors actually cared about teaching. The number of students wasn't high enough to be a burden. They didn't repeat the same HW and exams every semester. The number of office hours per week per professor was 3-9 hours. They could be that generous because there simply weren't enough students to use up those hours.

We also didn't have TAs teaching any course.

(Also went to a top ranked university for grad school - very few professors cared about teaching).

Agreed re: "large enough to offer so many good options and departments." This is definitely a big pro in our opinion. It is definitely true that smaller schools are more limited in offerings than big schools. During visits, smaller schools seem to carefully point out some flexibility in putting together a more personal course-of-study to offset this . . .

In the end college costs so much because people are willing to pay, because they think it's a good investment. Generally they have been right, college was the best investment you could possibly make historically. Now it's just an average investment, but the FOMO of not going puts it over the top.

I think these statistics are meaningless without discussing how much state/federal funding has been removed. The article briefly mentions it, but gives no idea of what percentage of tuition was effectively state funded in 1980/1983. I'm not sure where to get that information, and I expect tuition costs will have risen faster than inflation + reversion to students paying the true cost, but without that information these numbers are misleading at best.

Surprised that nobody here mentioned community colleges yet. Not a silver bullet, but the total cost of someone commuting to a community college from home is an order of magnitude cheaper than going to college. In many cases, CCs have explicit transfer programs, and the chances of transferring to a decent university after year two are pretty high.

+1, and don't forget that they don't force you to pay room & board for your dorm your first two years.

I'm a product of the California Community College system and a lot of my teachers were teaching both in the UC and Cal State systems at the same time. I am happy with the quality of education I received.

Or even just in state colleges. I went to a large public school. It was a great school, but so are the big public flagships found at any state. I knew a lot of people who were out of state, taking loans, to do things like business or premed they could literally do wherever they came from for over half off tuition before you even account for financial aid or scholarships. CCs really aren't that much cheaper than in state rates for public schools, and you can even take certain classes at the local CC and transfer the credits over to the public school to save a little bit per credit hour and have somewhat inflated grades (plenty of people I know did this for their physics or math requirements over a summer).

Another way to get free college is to just join the national guard program they have. A few friends did this as well. You do bootcamp which sucks, and like one weekend a month playing army in the woods during drill which I’m told also often sucks. But in the end you get free school and some pay. If you are used to doing hard work like manual labor, a weekend a month is not a bad deal. You can even land a job after through this experience and your degree e.g. in cybersecurity.

There are options, obviously not as good as affording it outright but there are things you can do that aren’t going out of state on a huge loan, so I’m surprised why so many people opt to take routes that put them in the same exact place by their mid 20s but with a massive debt over their heads versus these seemingly less glamorous routes. Maybe the marketing of “leaving the parents nest” is just that good?

Tuition at my states flagship, UIUC, is now 20k a year. Combine book costs and other misc and youre looking at 100k of debt before even accounting for room and board.

CCs are perfect for students who might not know if they need to go to college or not. Better to only waste a few hundred dollars to realize college isn't for you. I had an amazing time at Community College, and even though I took off time to work I ultimately did get a 4 year degree for a pretty low price .

The biggest issue in my opinion would be all of the people who have tons of student loan debt but didn't exactly graduate. You have the worst of both worlds

I'd like to see a new funding model for universities.

I'd like to see universities be able to register for a share of tax revenue from their students post-graduation.

For example "This course costs 5% extra income tax for 20 years".

Then, you pay nothing for the course, but after you graduate you pay a 5% higher tax rate, and that extra money goes to the university. The IRS would administer the scheme since they already have to do all the math anyway for every taxpayer.

This gives the university a strong incentive to make sure their students are productive. They'll help push students into studying finance rather than 'soccer studies'.

Obviously the university needs money now, not in 20 years, but private lenders can help cover that gap (and then the lender also has an incentive to make sure the university is doing a good job educating students).

This is just an Income Share Agreement. https://en.wikipedia.org/wiki/Income_share_agreement

The one problem with this scheme is that it turns colleges into job training and nothing else. They would most likely drop any major that doesn't make a lot of future money.

There is still value in providing philosophy courses and music and art and all the other things that don't lead directly to high paying jobs.

Well some philosophy majors will still end up earning a decent amount.

So the philosophy department will still be earning - just less.

They could also charge a higher percentage of future income to make up for the loss of earnings.

This value is nowhere near 200 thousand dollars, and everyone knows it

Yeah, that's an idea. Purdue used to have that, but at some point they stopped https://www.insidehighered.com/news/2022/06/23/purdue-pauses...

Ultimately, I think it's a market non-optimal way if you're the university since student loans allow you to decouple pricing entirely and completely derisk the student.

Fun fact, some schools do the opposite of this. Slightly oversimplifying, but the schools say "we'll raise your tuition by $x and give you ~$x in grants after you graduate if your income is below $y". It's most common for people in law school that know they'll be working for the government (eg prosecutor/public defender), so their income is mostly predetermined and they'll be eligible for loan forgiveness regardless. Win/win for the colleges and the students.

I think some places have tried it before, but if it's optional then people who think they will earn a lot will just get a traditional loan, and people who think they will earn less get the income based one. So it ends up not being economical to offer.

Can confirm. Currently attending a mid-tier public state school, and I'm looking at ~1200/mo (2000/mo, including housing - living w/ 3 roommates) out of pocket (since I'm trying to avoid taking out loans as much as possible). I've worked up to 2 jobs at the same time just to keep making ends meet. It's really rough out there, and my degree program doesn't even begin to cover fundamental CS concepts like P/NP-completeness, DFAs, etc. Waste of money IMHO.

> It's really rough out there, and my degree program doesn't even begin to cover fundamental CS concepts like P/NP-completeness, DFAs, etc

Then it's presumably not a CS degree...?

Main cause: Government-backed student loans.

While it is technically the student paying, in reality the money is going (indirectly) from the federal reserve to the universities.

Everyone loves free government money...

The fact the student may never pay off those loans (and hence the government foots the bill) is the cherry on top.

I believe this is no accident. The government wants a world class education system and leading research.

They could just give money direct to universities - but then it's hard to ensure they're getting good value for money.

But by giving it to students to in turn give to universities they get better value for money.

One day someone has to pay for that - and the students paying it back via loan repayments isn't awfully different to citizens paying it back via taxes. But with the student route everyone is more invested in getting good value for money. And non-university users (who tend to be the poorest) don't end up paying. Win win.

A world-class education system where you can leave the $200k in debt and never exceed $100k in income.

We're at a point where going into college for non-STEM degree can (and likely will be) one of the biggest mistakes of your life.

If it is 'free', then why are students in debt and liable for it?

(and don't confuse the issue with current debt relief bill. The current bill has not been in effect since 1983, it is trying to give relief for this situation, not causing it).

It's free for universities who can rest easy knowing that if students don't pay then it doesn't affect them.

I will say it again:

Private high school costs have also gone up astronomically and there are no federal loans for them.

[0] https://educationdata.org/average-cost-of-private-school

This says that the average private highschool tuition is $15,645.

In 2003, the average private highschool tuition was $8,412 (Snyder, Dillow, & Hoffman, 2008), or $14,079 (in today's dollars).

Please correct me if I've made some mistake, but plugging those numbers in shows that the annualized real increase in price is 0.5% per year over 20 years.

What is the rate of increase, and how does it compare to CPI inflation?

This said nothing about the number of seats in private schools versus public ones. If there are very few then we should expect private costs to increase dramatically as public costs increase. Not every student gets public loans, some students come from wealthy families that have other means of financing. If public is $100k, then these families would still likely choose the $120k private school for better outcomes. There is no reason for private to stay cheap.

Got a source for that claim?

Common sense?

Government (taxpayers) underwrite unlimited amounts to uninformed buyers paying informed sellers.

I am a seller (college boss), and I can boost my own income, and I know I have no competitive pressure to keep prices down, so why not increase the college budget and spending, hence justifying tuition increases.

Googling it provides a quick-answer box that states this claim and provides a source:

https://www.google.com/search?q=what+percent+of+student+loan...

92% Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans is federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers.

I think it's then pretty fair game for a forum comment to then suggest there's a causal relationship between "an entity that can print the currency that denominates the debt is backing the debt" and "this drives the price of the thing up due to easier access to funding for it".

The article this post was about?

You have to look at net price not sticker price. faulty analysis. better data here https://usafacts.org/articles/college-tuition-has-increased-...

You only get the net price after applying and submitting a FAFSA. The net price is only useful if you intend to go there. It's functionally useless for any other purpose. If the price says $100 then for most everyone it's $100.

The number of people where the net price =/= sticker price is growing.

"In 2000, 44.4% of all undergraduates received grant aid, whereas in 2016, that number increased to 63.1%."

There are resources such as https://collegecost.ed.gov/net-price to help with the information.

College prices are about as real as hospital prices. Sure, some outliers literally pay that much, but the vast majority receive a discounted price for various reasons. When you factor in those discounts, the cost inflation is 2.5x instead of 17x as the article suggests. It's more than a forgettable idiosyncrasy. It's "how it works" and if the author of the article doesn't mention it, they're either so ignorant as to not be worth reading or they're being dishonest.

I thought it was important to give that context.

American higher Ed is often about prestige and branding. The pricing strategy is similar to luxury goods.

I was offered a $10k/year academic scholarship in my state school offer letter, no application required.

I work IT for an institution that is currently kicking off a campaign to transform the business model of higher education. We're currently one of the more expensive private liberal arts schools in Michigan, and we want to pivot to fully funded tuition for all students. We have been talking a lot lately, just like OP, about how this cost trajectory in Higher Ed is unsustainable. We want to instead build a cycle of generosity.

1. https://hope.edu/forward

2. https://www.pushkin.fm/podcasts/revisionist-history/a-good-c...

3. https://youtu.be/A-c3h6J8ZKk

4. https://youtu.be/VssQtdXWqSs

The situation for students is pretty close to a double bind situation [1]:

- Get loans and go to school, or I (your family, society, the job market) will punish you.

- Do not get loans, or I (the economy, lenders, your credit score) will punish you.

- You must got to higher education and get a degree, but only if you want to. ("college isn't for everybody", except all we ever say is a HS education is a dead end).

- With a blaming tertiary of "You should have already know that and realized what an issue large student debt was before taking the loans. Why are you trying to act like such a victim?"

And I admit, I've fallen into this previously of "how did they borrow so much money?" Except its this same issue of "we put you in a bad situation, and then blame you for not escaping earlier."

[1] https://en.wikipedia.org/wiki/Double_bind

Sshhhh your theory implies systemic issues. And everyone knows the individual is supposed to be the one to be blamed for that!

From 1991 to 2013, federal student loan issuances increased from $20 billion to over $100 billion (in 2013 dollars). And federal tax expenditures related to education increased from $2.5 billion to over $30 billion.

Growing tuitions are a predictable consequence of the federal government subsidizing higher education systems that they don't control (unlike state funding of state universities). The feds should impose price controls on any institution that receives federal funding (including from federal student loans): https://prospect.org/education/case-for-higher-education-pri.... Otherwise, costs will predictably skyrocket.

I wonder if there's any data comparing tuition growth rates at "normal" schools and those schools that don't accept federal funding of any kind (including federal loans). There's not many of them, and they're usually small, Christian-oriented schools[0], but I'd be curious to see if there's actually any obvious difference in growth rate. A quick google search didn't come up with any data.

[0] https://deanclancy.com/a-list-of-colleges-that-dont-take-fed...

Isn't part of the issue that state and federal funding for higher education hasn't kept up with costs, so the increase just goes straight to the students paying?

Harvard has 2,000 students per year and a $50 billion endowment.

That is enough to refund $500,000 to every student they've had for the past 50 years.

Why are universities hoarding so much money?

https://www.highereddive.com/news/how-20-largest-college-end...

Why are universities hiring so many administrators in relation to professors and students?

https://www.usnews.com/education/articles/one-culprit-in-ris...

Harvard admits 2,000 undergraduates per year, but it has almost 3x as many graduate students as undergraduates. As far as private universities go, Harvard is a really big school.

In the United States, the growth in spending on administrators from ~2000-present is more than the combined growth of spending on scholarships and professorships combined.

Academia in the US has become a business, and the business is being run by the secretaries.

And yet, college is still worth it. While many folks like to point out the Baumol effect aka cost disease, it's also important to remember that college is overwhelmingly worth it, and the government ought to subsidize college educations. There's no better investment the government can make than subsidize more people to go to college. (Well, perhaps except for funding the IRS, but that's more of a zero-sum game.)

See: https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/c...

Lifetime net earnings increase for progressively higher levels of education, resulting in overall GDP growth and a wealthier society better able to pay for public goods and the social welfare of all. The vast majority of college students who attend a 2 or 4 year in-state program will net a significant increase in lifetime earnings and the amount they pay for that degree, even assuming they maximized their federal loans, will be dwarfed by their lifetime earnings increase.

Even for those folks getting masters degrees to the tune of hundreds of thousands of dollars, the Department of Education finds that the lifetime net earnings increase by nearly $1.5 million over a high school education, and yes, actually, around $300k over a Bachelor's degree.

I would love to see comparative data on how the average college-educated worker's earnings have changed during the same time frame!

My guess is that the adjusted wages haven't risen much over time, or at least nowhere near as steeply as the associated education costs have.

A better method to analyze college cost is to look at expected lifetime income gain for a college degree vs not having one. If it's significantly net positive, then college is a good investment.

Since 1980, that has gone up a lot. This method is

Why is that better? Non graduates also have loan expenses for other things, e.g. businesses or mortgages acquired sooner. You'd want to compare paychecks net of debt payments to look at workable income.

Anecdata, but graduated in ‘08 and it looks like the chart roughly matches the doubling in tuition in the university I attended since then.

I used loans to pay for my education, and one effect that has from an individual level is that it really changes your appetite for risk during the payoff. From a macro level it’s probably nice to have indebted young people motivated to work; however, I’m sure it produces a lot fewer entrepreneurs willing to gamble on a great idea.

This data is what I used to convince my parents were very much anti-student loan forgiveness (we paid ours so you get to suffer too), that a certain level of it is appropriate. I honestly don’t think a lot of people realize just how bad its gotten. Couple this with the fact that somehow budget is limiting the number classes being offered with the extra 1.5 semesters on average of additional general education requirements, and you’ve created a system that predates new adults, pushing them underwater from the start. A bit ironic that we’ve had the lowest wage growth in 60+ years just as the cost to get a degree, the default requirement for almost any job, skyrocketed. These loans students took out to go to university cannot be dismissed and will follow you until the day you die. This debt bondage of people just turning 18, is pure horseshit. We supposedly outlawed indentured servitude but it’s still style alive and well, and our machiavellian, geriatric congress in the US has offered nothing besides cruel indifference, useless excuses, and is distracted arguing about shit like drag performance and bathrooms? Like what the fuck.

I would love to know how other HN parents are thinking about postsecondary education for your kids. I started undergrad in 1990, and I have a 12yo now.

I understand financial planning, but I'm having a hard time wrapping my head around how to think about college. Does anyone have insight beyond "Don't pay a tuition amount that's out of line with likely earnings"?

Accreditation Boards

Textbook Publishers

University Tuition

It's a triangle scheme where one feeds the other and it's all fueled by non-dischargeable government loans.

Student Loans are the hill to die on. As someone who isn't eligible for Military Service, I don't get supplemental housing, free healthcare, free college education, hiring preferences, small business loan preferences, nor a lifetime of "OH THANK YOU FOR YOUR SERVICE!!", and that's if you aren't one of MILLIONS of Veterans gaming the VA disability system.

The military decided asthmatics and ADHD kids will forever be second class citizens because we can't join the drunken sexfest that is modern military service; which has essentially become a daycare for 18-24 year-olds.

It's absolutely unconstitutional for the military to relegate individuals to specific spectrums of society given how they were born. I'm not gay so I guess that doesn't matter. But, who cares? If the Constitution mattered we wouldn't be where we are today.

> can't join the drunken sexfest that is modern military service

Wait, what did I miss?

Apparently you missed being social. Having worked with a number of vets it's absolutely true.

Here, in case you missed this too:

https://www.npr.org/sections/alltechconsidered/2014/11/19/36...

sir this is a wendys

I can't downvote you, but the fact you find huge segments of people being left behind and forced into predatory loans simply for an education they should have received in high school while the military industrial complex forces its tendrils into every facet of American life funny, I can only assume you realize how wrong it is and can't handle the dissonance.

There was a #1 hn submission some time ago about a theory of how/why things have risen is price i.e. cost of educating a child now vs 100 years ago, but exam results are no better, cost of keeping someone in prison etc. but crime is no lower, etc. it gave a name to the phenomenon. I would like to find it, if that rings a bell with anyone..

My preferred solution is to establish an open university in the US (or make it borderless), through which anyone can earn a degree remotely for as little cost as possible -- like $5000 per year or $20k per degree.

Georgia Tech and others have shown this is possible (see their 13 MS degree programs in engineering). Certainly by enlisting the growing set of tools used for remote professional collaboration, it should be possible to cover a wide variety of subjects, especially if the staff is also remote (and not overpriced).

Compared to the $240K of almost all private colleges in the US, a viable alternative that costs only $20k should quickly reset the cost of advanced education to be a LOT more reasonable.

In addition, a cheap remote-only college system be a great resource for many people who want to take college courses but live nowhere near a full-time school, or who need retraining as they change careers or advance professionally.

Really, this solution is long overdue.

See:

- Western Governors University (WGU)

- Open University (OU)

Both online; both relatively cheap.

N.B. Georgia Tech’s online masters programs are professional masters and not research/thesis masters — so unless you are getting paid by someone else to get them, they are almost certainly a waste of money (and there is negative selection pressure during hiring for people with these sorts of degrees).

My 35 years of experience after a comparable part-time MS in CS says otherwise.

Professional masters are often compared to a BS curriculum, which is in no way a disability to hiring or advancement since most people in engineering don't have research degrees nor need them to thrive.

In fact, the presence of a research thesis in lieu of taking a couple more courses in useful subjects would be more of a waste in the real world than the reverse, IMHO.

> there is negative selection pressure during hiring for people with these sorts of degrees

This is a great point.

Much better data on changes in published and net tuition paid over time...

https://research.collegeboard.org/media/pdf/trends-in-colleg...

Yes, thank you. The OP analysis is terribly naive. Nameplate tuition has little relationship to what actual students pay. The net data from the college board is much better, and shows that actual tuition paid at many schools is flat over the past decade.

The OP also barely acknowledges the huge reductions in state funding for higher ed. In the 60s California paid 100% of educational costs for students. It's now down below 40%. Tuition has gone up to close the gap. https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...

> Long-term, controlling the underlying cost of higher ed itself is an imperative.

Nothing in the OPs analysis supports any increase in the underlying cost of higher ed. While there may be some, it's well well below the nameplate tuition increases. Here's the best data I have on expenditures by college on a per Full-Student basis, and they are nowhere near what the OP is claming: https://nces.ed.gov/programs/digest/d20/tables/dt20_334.10.a...

Lastly, while the argument for some student debt relief is a good one, and his points are well made, the correct policy is Biden's, a universal reduction in debt in the $20-30k range. This gives all students some relief, but doesn't give a regressive windfall relief to doctors, lawyers and other professional students with good career prospects and six-figure debt.

The sources cited in the “710%” chart don’t seem to have any data to support the thesis. What is the source for this data? (see https://educationdata.org/student-loan-debt-statistics and https://www.pewtrusts.org/en/research-and-analysis/fact-shee...)

As a single datapoint, in 1983 MIT tuition hit $10K -- highest in the nation according to a cartoon in the paper. It's currently $60K (total cost estimated $80K) so 7X is about right.

However there's another way to look at it: over the summer I would earn over $10K so roughly covered my tuition. Admittedly that was at the high end of summer job compensation due to the AI boom, but gives you a rough idea of where that tuition fee fit. I finished school with no debt.

These days I doubt anyone is getting $50K for a summer job.

>These days I doubt anyone is getting $50K for a summer job.

Enter Citadel: https://fortune.com/2023/06/28/wall-street-citadel-summer-in...

More than Google!

It's possible some grad students in AI are getting that kind of money these days. I was talking about my undergrad.

Big tech and big-tech-competitive places will generally pay you around $30k pre-tax for a summer job. But of course, most college students don't have access to those jobs at all, let alone for each summer in college.

I'm not seeing it explicitly defined but I assume this is the standard asterisk: "In the United States" so I got curious what's happening elsewhere.

Average annual tuition in Canada in 2006: CAD $4,400. 2023: CAD $6,834. So I could see it also being in the ballpark of 710% since 1983 as well.

https://www.statista.com/statistics/542989/canadian-undergra...

Here in Austria the increase has been 0% :)

Tuition and fees in California's CSU system are still only about $8k per year. The CSU system provides a very good education, in some ways better than the more prestigious UC system because there tends to be more opportunities for direct contact with instructors. In the sciences, there are often more research opportunities and spaces for undergraduate students in labs. It's a real bargain, and you can save even more money by doing your first two years at a community college.

Some of my favorite most professional colleges are from San Jose State, which is a part of CSU. Obviously, it is anecdotal, but I do see in them very practical no bullshit attitude, yet strong theoretical fundamentals.

Others have mentioned the proble of government backed loans, but the whole higher education system is broken.

People are going in to get a degree with a job, meanwhile there's a whole bunch of administrators and people that think universities should be for rounding out your knowledge so you're required to pay thousands more for courses not needed for your degree. If we really wanted to, I am sure we could condense a bachelors down to 1-2 years with 2-3 years of practical learning in the field.

The rounding out is absolutely intentional. If we want certificate programs that are shorter and career-focused, those already exist.

Not to mention the likes of McGraw-Hill and other textbook makers deciding that since students have to go to school, they're free to charge said students whatever they want. Those companies are for-profit and publicly traded, meaning they have to, by law, increase profits every quarter.

Reprinting a new edition every year with minimal changes but a nice $50 price increase (on top of the book already costing several hundred) is a nice way to do that.

Sick bastards, the lot of them.

a counterpoint to this narrative: grants/scholarships have been rising rapidly, so actual net tuition prices are surprisingly flat in recent years.

> Between 2006-07 and 2019-20, COA [cost of attendance] increased by around 27% at both types of institutions, but declined by 7-8% in the few years after that. The recent decline occurred because colleges posted similar nominal COA increases as in the past, but inflation was higher. Overall, COA increased by almost 20% over those 16 years at both types of institutions.

> But average net prices rose at a considerably more modest pace. Between 2006-07 and 2019-20, average net price increased by 13% and 7% at public and private four-year institutions, respectively. Those increases reversed in the post-COVID years. Overall, average net prices are largely unchanged, adjusted for inflation, compared to 2006-07.

https://www.brookings.edu/articles/college-prices-arent-skyr...

in the past 15 years in particular, the big story of college pricing is that it has become more progressive, i.e. more expensive for those with higher incomes.

I can vouch for this. My daughter went to Yale. I paid the "Yale tax" of 20% of my income. An that only because I made more than $100K. Below $100K parental salary and it's free.

"List Price" is meaningless at university.

Remove loans and make colleges and public universities free again. It worked before and worked quite well. All comes back to the failings of Reagan once again.

I think another reason for the increase is that it's one of the few industries where they can charge as much as possible. The price is basically determined by:

Student: How much does it cost to attend your school?

University: How much do you have?

The base cost is some ridiculously high value and can be brought down with grants/scholarships/loans, which are needs based.

The core issue is that there isn't a free market at work here and there are conflicting motivations that are preventing progress toward that model. One the one hand, people want higher education to be affordable and cost effective (which requires a free market) but on the other hand they want higher education available to all even if that means taking on an ROI negative course of study.

For example, if we allowed student loans to be a bankruptable form of debt, then over time, certain schools and majors would be unable to get loans, which then could have a series of economic responses such as universities increase tuition for ROI positive majors to support ROI negative majors or some departments might close or we might see consolidation of universities specializing in certain types of education.

We have two kids in the in-state university system which are considered "affordable" relative to private colleges ($35k all in for tuition/room/board/misc per student per academic year vs. $65k-$85k) but are laughably expensive compared to almost any other country in the world.

If we didn't set up 529 plans years ago loans would be our only option to pay for the quarter of a million dollars required for both of them. If they were in private colleges, the combined outlay would be well over half a million dollars.

FWIW we did look at Canadian schools which may be affordable to Canadians, but not to international students ... mid 40s pre-Covid when my oldest was applying.

The problem isn't just that the government is backing the loan program and forcing borrowers to pay. The government also allowed tuition rates to rise. Colleges and Universities increased the price of tuition because they were allowed to.

I wonder why University Presidents/ Top Administrators get so much less flak from politicians compared to CEOs, while probably making decisions that further increase the University "profits" all while many make $1mil/year+.

Because CEOs contribute and control a lot more money going to lobbing and politician financing.

Universities are heavily subsidized industries with little or no oversight.

Any other industry has all kinds of regulations and consumer protections they have to comply with.

A university is allowed to sell degrees to unsophisticated buyers, and if the degree is worthless, they are not on the hook. Who else can do that?

Universities never experience recessions or any other kind of contraction, so they never have to shed dead weight. The administrator to student/faculty ratio is way out of whack.

Student loans should be guaranteed by the university, not by the government. If the university has enough confidence in admitting a person and conferring a degree, they should stand behind it.

I watched the university I was in for graduate school add all sorts of campus buildings, luxury apartments, and new administrative titles and hierarchies. Handing out massive contracts is a good job, but it's all borne on the students backs, and most of that stuff was not necessary for a good education.

They do a lot of catering to student egos too to get them in the door - "ooh, you're so special and wonderful, we're going to help you make it with our programs", knowing full well that most of the degrees were garbage.

"In 2022, the relative values of $100.00 from 1983 ranges from $249.00 to $701.00.... A simple Purchasing Power Calculator would say the relative value is $294.00. This answer is obtained by multiplying $100 by the percentage increase in the CPI from 1983 to 2022." - https://www.measuringworth.com/calculators/uscompare/

Easy access to credit does that. You can see it in developing countries. Once banks start offering mortgages to regular people, home prices go up five or ten fold in a few years.

We are seeing the perverse incentives of subsidized and free education. There are few barriers to increasing the cost of something if neither the consumer or supplier have sensitivity to cost at the time the purchase is made. And loans defer the pain for students in a way that makes them basically insensitive to the eventual cost of their education.

People react to incentives. Systems react to incentives. America has been ignoring this for 50 years.

I was just asking colleagues at work in response to the supreme court ruling on the student debt forgiveness stuff whether or not they experienced yearly tuition increases every single year they were enrolled--straight monotonic increase. I got many yes emoji's tagged onto that post so I knew I wasn't the only one. I can only imagine that treadmill never stopped for people.

If lenders actually had to evaluate their chances of getting paid back what percentage of students do you think would not receive a loan? 50%? We need to make student loan debt dischargable in bankruptcy and the problem will be solved overnight. Lenders will suddenly take a keen interest in determining which students are serious and have a reasonable chance for success.

a16z had a great article on govt interference raising costs through the roof.

710% rise in education costs is American exceptionalism and greed.

If the federal govt stopped backing loans and let the market play out, the prices would come down.

If they removed employment sponsored healthcare loophole, and allowed a transparent pricing (like the one you get from your car mechanic before they fix your car), prices would come down.

There’s nothing magically different in health insurance vs car insurance.

I’m gonna get downvoted for this. Democrats have a good heart, but when they start giving away money, it’s not well thought out on how supply will react to increased demand.

PPP loans were a huge clusterfuck of giving out free money.

Now they’ve blown the debt ceiling.

The goal should be to lower prices, not to doll out more free money.

Inflation in house prices is nuts.

So you’ve got young people who can’t afford to own their home, ridden in education debt they may not be able to pay, not having kids since they can’t afford em.

Doesn’t look like a bright economic future.

A little anecdote that made me realize the college I went to was running a racket:

I remember getting lunch freshman year and one day, the signs in the student union cafeteria were printed on poster board and the next they were flat screen TVs. When I asked the on duty manager why, they just said "because it's more eco friendly."

My entire world view shifted in that moment.

I don't know if my world view would shift from an answer given off the cuff by someone who is not an expert in that domain. There are many rationales for switching to screens including easier to update and may be seen as more up to date.

I think using the CPI is flawed. Especially because the formula to calculate it changed. Also, more efficient industries yield cheaper products. This puts downward pressure on the CPI. I don't think this can be applied to tuition in this magnitude. For comparison, M2 money supply increased 10-fold the last 40 years.

Here in California you can go to JC almost if not completely free. Transfer to a UC school with TAP (guaranteed), and save considerable amounts of money. I will never recommend paying for a 4 year university, it's just not worth it when you can get the same exact diploma for half the price.

I couldn't tell from the article or the chart: is that sticker price of tuition or actual paid price? Because those 2 things are _very_ different. It is true that in either case, tuition has outpaced inflation, but I'm skeptical that actual paid tuition has increased by _that_ much.

I'm curious if anyone has run the numbers on tuition versus direct state spending on higher education. What is the trend for overall spending on public higher ed since 1983, for instance? How much of the increase in tuition fees is to make up for decreased direct subsidization?

The article lost me at the continued suggestion we forgive debt. If the gov wants to wholesale forgive debt, send everybody a check. Otherwise it isn’t fair to those who have no degree, couldn’t afford one or get loans, or already paid theirs off or paid cash.

Universities are the gatekeepers for good white-collar jobs, and will charge whatever the market will bear, which is quite a lot. Government subsidies are absorbed as pure profit. The money goes into cushy salaries for administrators and empire-building, specially in real estate.

My favorite idea that I have seen is allowed students to return their degrees for a 70% refund within 12 months of graduation. If the school is confident that the degree will be a great asset throughout the person's career it will be no problem.

This is how lemon laws work with cars.

I studied a year abroad in a US public university back in 2008. Annual tuition back then was around $10k. In local currency, that was about 400,000.

Today, that tuition is $28k. But the dollar has also appreciated so real cost in local currency is now 2,268,000 - an appreciation of 467%.

It's because universities have no incentive to lower costs. The majority of students get loans, which transfer to the university and they don't really care if it gets paid back or not.

The only way this will stop is if the universities are forced to take on the risk of the debt.

Students will stop attending at some point. Kind of like people will stop paying markups on cars. Or it will become so unattainable that the middle class will protest rising costs.

During the same period the house prices have risen 586%

I think the way we calculate inflation is kinda weird.

Kinda weird? That's a nice way to say "total bogus". It strikes me that the CPI is practically propaganda at this point, a way to placate the citizens by saying "oh look inflation is fine", distracting them from the mega-hyper asset price inflation that has been happening over the past 40 years.

Suppose it kind of makes sense, since the rich control the country, and they are the ones directly benefitting from the asset price inflation.

I was thinking along similar lines. Overall cost of living as certainly increased by more than 200% during that timeframe.

We know what happens when it is other people's money.

Also fascinating is the increased room and board (square area requirement per student) due to the lack of experience sharing rooms in the family as family sizes have collapsed to sub replacement levels.

Funny because all the other countries that use literal public funds to pay for all of college do not have this problem.

Won't it go up more if colleges can be assured that students will be bailed out?

You're confused. Colleges and universities have made (poor) decisions that have increased their cost, ostensibly to attract enrollment because of all the tuition/fee dollars out there for the taking.

If those tuition/fee dollars dry up, then that money isn't out there floating around to chase after with poor decisions.

However, all the previous poor decisions were still made, and they're still paying for all the extra buildings and gardens and resort spa dorms thinking they'd have time to pay them off. Not to mention the absurd increases in (non-faculty) staff levels... those people might be looking at unemployment.

But, and this is the most important point: allowing bankruptcy is never a bail out. It's the acceptance of reality. Yeh, "loan forgiveness" is sort of screwed up, but why has bankruptcy been denied these people? Why is education debt such an important kind of lending that we must make an exception for it and allow the lender to do what we allow no other lenders to do?

> we allow no other lenders to do?

Well, because we don't technically allow debtors prison. It is an unsecured loan which are not really that common.

Agree to disagree, and I guess we'll just have to wait and see :popcorn:

Did tuition grow that much more than inflation, or is inflation understated?

Inflation is lumpy. This is the localized rate of inflation in the higher education industry. As another commenter pointed out, TVs have a much more favorable rate.

Can we add "American" in the title? Not everyone on HN is from the US.

As someone who had access to various feeds of people in the university and their roles, well, the non-teaching staff numbers just kept going up and up as compared to everything else. Administrative bloat is real.

There are two broad solutions to these kinds of problems: demand-side and supply-side. This article is another data point in exactly why demand-side solutions are short term if they work at all. More likely they don't work.

A supply-side solution to education would be to create more spaces in quality higher education and to make those places cheap or free by government subsidy, often with price controls on the receiving institution. This is largely how most of the developed world works.

A demand-side solution is to make something more accessible, which has the net effect of increasing demand. This almost always raises prices. It's no surprise that money backed by the government has increased prices. It's inevitable. Demand for high-quality college places still exceeds supply so those colleges can (and do) respond by increasing costs. Sometimes that extra money benefits the students through better facilities (eg a new library, better and/or more dorms, etc). Often however it's lost in subsidizing college sports, which most colleges lose money on, and inflating administrative costs. Division 1 football coaches make millions a year for a supposedly amateur (that's what one of the As in NCAA stands for) competition. That extra money makes those programs more expensive to run too through the same means.

We see the same problem in housing. Nearly all legislative efforts are demand-side (eg programs to help first homebuyers) where what we need is simply to increase housing supply by building more units, making more current units available or both. But that runs afoul of vested interests where our homes have become retirement accounts.

It's worth noting that many elite colleges are sitting on eye-watering endowments that could easily be used to pay for tuition but they largely don't do that (outside of a few programs for students from poorer backgrounds).

Pretty much all of this is by design. Post-WW2 there was a concerted campaign to charge for things that were once cheap or free including health care and education. This is nothing more than economic bondage, the developed world's equivalent of Pakistani brick kilns. A person saddled with debt is a compliant worker who will show up to work and not complain or fight for better working conditions. That's literally the point.

It's why the prison population is used as cheap labor. It's why most states like illegal immigration. It's why states are enacting child labor laws. My point is that all of this, including spiralling student debt, is a systemic problem.

Education should be free.

What is the "best" thing for students to do?

What is the "best" thing for parents to do?

For "best", I'm interested in two things: making the system less broken, and the kiddos being ok as adults.

Well, and wages haven't kept pace with inflation either. And I'm sure other categories aside from tuition vastly outpace inflation. Cost for health insurance for US folks, for example.

Well, speaking of loan forgivance - i am not really sure how it is supposed to work. Just allow to also let go of student debt when declaring bankruptcy, and revoking the degree?

If you look at the whole World: It's a country specific problem. There are even English speaking graduation programs with international degrees abroad from top universities everywhere. To give some examples study in Sweden, Denmark, Germany etc and spend nearly no money on tuition. Factor the cost of living in and it's overall still cheaper than studying in the US. And I have no doubt that people grow personally (beside the education side) if they spend a good amount of time in another country. It's just not super easy and super obvious to think out of the box.

Some companies even pay your study. You do a regular BS at a university (or college), work as an intern at the company between terms, and the company will pay you 1000€+ per month over a period of 3 to 5 years. This is not a scholarship, but a mixture of apprenticeship and study (called "dual study"), which is becoming increasingly popular at least in Germany.

What was the corresponding increase in teacher salaries?

Can we talk about the inflation related to the value of the degree as well? A college degree in 1983 is worth alot more than one in 2023.

This is something that always bothers me. People have completely lost sight of the forest for the trees.

The entire point of an education is to make you a good worker/citizen. That's it. People completely lose sight of this and think that the point of an education is to get a degree.

Therefore we end up with legions of kids trying to "get a degree" as opposed to "become a good worker/citizen".

Exactly the opposite. In 2023, a degree is a prerequisite (or effectively so) to a lot of jobs. This was less true in 1983 than it is now.

students per administrator has gone down down down

https://scaleatucla.weebly.com/uploads/2/9/9/2/29923337/4935...

stanford has more administrators than undergrads now.

administrator growth is like a cancer

And in 1983 they were down how much since 1943? (Or some close pre-war point if you want, I'm not cherry-picking.)

I don't know anyone with half a brain who would believe real inflation was only 194% during this whole time.

Exactly. For example, house prices increased 7x. S&P 500 jumped 11x.

if we had to eat this elephant one bite at a time, one option to consider is completely seperating sports from colleges?

What would be the impact? What are the drivers that could enable youth to participate in sports run/administered by a 3rd party as well as attend college?

Stating that inflation is at 194% can be misleading - it all depends on which products you include in your calculation. It might be more meaningful to differentiate between predictable and measured inflation. Predictable inflation should be defined as the increase in the money supply, while measured inflation could refer to the currently published figures.

I love all of the creative ways they use to exclude inflation from the inflation statistics.

In the same time period, stay public university systems had their state funding also decimated. Federally sourced loans were favored over expanding grant programs.

The thought that public universities should “run like private businesses” is a disease of neoliberalism. They largely succeeded in running like businesses, but it’s all the wrong metrics. public goods should not be profit centers for state or federal government budgets.

*state public university systems.

Take away state funding, make it a business objective to capture students, add a abstraction of student loans and direct federal funding, and of course tuition increases.

Why is this understating the increase in overall inflation to such a large degree?

Where’s the money going? I’m not seeing evidence for 5x better research outcomes.

In england we refer to this as "pulling up the ladder behind you".

now we have wikipedia, stackoverflow, youtube, google, and gpt4.

rising tuition is bad, but if schools had retained the monopoly on education they had before it would be fatal instead of annoying.

internet and cheap laptops ftw.

Part of this is probably because real inflation has been undercounted.

Could it be because in capitalism, the seller tries to take as much money as possible from buyer and the price is not related to expenses?

Let me give an example that can illustrate this: a typical mobile plan from Verizon in US costs $45/month and gives you 15 Gb of traffic. At the same time in Russia one can get 30 Gb for $9/month. Are expenses for maintaining a cell network 5 times higher in US? Unlikely. It is just customers in US are richer and are ok to pay more for the same service.

I don't know how this effect is called, but couldn't the same thing happen to education, land or housing costs? These are obviously things that everyone needs desperately so the seller will squeeze the maximum they can, and the price is unrelated to how much the lecturer earns or how much the bricks cost. The house will cost you almost all your life's earnings no matter where you live.

I was with you until "It is just customers in US are richer and are ok to pay more for the same service." How did you reach that conclusion? The other reason (which seems more likely to me) is that it is because the free market is not functioning because of monopoly/duopoly created by regulatory capture.

Isn’t Russia capitalist too? I’m confused but your comparison. Sounds like you’ve just compared two markets without myriad variables.

The fact that student loans are backed by the government would in fact undermine this as a good example of a free market.

Viewed in this light, grade inflation really hasn’t kept up.

Supply demand pricing has to be part of this equation

What happens if you compare with real estate prices?

Imagine if banks didn’t have to worry about if you could afford to pay the loan or not. Every loan would be approved. House prices would sky rocket.

This sounds a lot like 2008 housing crash, among others.

Should probably measure this before and after the US left the gold standard in 1971. The question is, which contributed more, leaving the gold standard, or some Reagan era policies?

Surely the problem will go away if President Biden simply uses US taxpayer money to pay off student’s loans. That’s the smartest course of action, not blatant pandering to young voters that will only perpetuate the underlying problems.

What's that compounded annually, though?

S&P has risen 2,200%+ since then as well

“Prices will rise to absorb any subsidies.”

And has the populace gotten more educated?

It is getting expensive to live.

what happened in 1980?

Universities finally figured out what happened in 1971, and started riding the Wall Street-Federal Government paper money wave.

https://wtfhappenedin1971.com/

Yup, so has everything else, everywhere.

this is corporate greed, end-stage capitalism and Bush's fault. Or is it Trump's fault? And Elon Musk's mgmt of twitter

Short-term, students need recourse. Defaulting on loans creates a cascade of consequences that necessarily harm borrowers earning potential for years (e.g. colleges can withholding proof of attendance, decline in credit score, wage garnishments, etc.) There are loans that are highly likely to default regardless after the COVID moratorium on payments ends .

no they don't, as mean as this may sound. The data shows that college grads earn way ore than non-grads, even after accounting for inflation and loans. people who fial to finish or fail to attend college do way worse. Thanks to an abundance of aid, scholarships, and other discounts, hardly anyone is paying these inflated tuition prices in full.

Reply on news.ycombinator.com