4 ms·

Why does a college degree cost so much?

14 points by SQL2219 10y ago

Dowwie 10y ago
Good post. I was surprised at the depth of this study given who it was published by.
- chmaynard 10y ago
  Agreed, this is the best summary article I have ever read on the economic trends in US higher ed. One conclusion seems to be that at the non-elite schools like URI, my local state university, traditional liberal arts education will get starved into obscurity because it doesn't train students for a career. Learning how to think and write clearly and do scholarly research will no longer be an important part of a college education.
  - WhiteSource1 10y ago
    Which is sad. In part, society has rewarded those who don't have training, particularly in non-technical subjects. How many political advisors and policy folk have political science degrees?
    - deleted 10y ago
      [deleted]
rahimnathwani 10y ago
I read the whole article looking for something about causality (the 'why'), but found little that addresses directly the _price_ of a college education. Sure, there were mentions of reduction in state funding, but those are subsidies for schools, and do not necessarily affect the price paid per student. If the government were to give Starbucks a $2 subsidy for each coffee sold, would you expect Starbucks to charge $2 less per cup? So it goes with state funding. It makes no sense to talk about why a price is X without considering both buyers and sellers. The cost base of sellers would undoubtedly affect how attractive an industry college education is to enter, but in the short term the price is determined by the supply/demand characteristics of the market. If a school spends more on a sports centre, it doesn't automatically get to charge students more. Perhaps they can attract more students (shifting the demand curve up) or perhaps they just have lots of money (due to high margins) and so can afford to spend on a new sports centre without specific rationale.
- johan_larson 10y ago
  The price is going to depend on a lot of factors. For example, an education in civil engineering or medicine, with extensive equipment-heavy labs, is going to be more expensive than an education in history, which really only needs a library and maybe some field-trips if you want to get fancy. I did try to come up with a BOTE number for the cost of a bare-bones college education, and the number I arrived at was $30,000. http://short-sharp.blogspot.ca/2016/07/how-much-does-it-cost-to-provide.html http://short-sharp.blogspot.ca/2016/07/how-much-does-it-cost...
  - pkaye 10y ago
    But engineering colleges also tend to get more outside funding through private donors. The engineering colleges I attended had their respective building fully remodeled through the donation of wealthy graduates of the college. Most of the computer labs were put together through industry donations. Also even in civil engineering you would be surprised how little lab courses are provided in undergrad... most of it is pen and paper work or maybe computer simulations which cost little extra.
  - rahimnathwani 10y ago
    You're conflating price (what the student pays) with cost (what the college education costs the provider. I said the article focused on just the cost part, rather than the interaction of supply and demand. You responded by providing more commentary and data on cost.
zomg 10y ago
school's will continue to raise tuition and fees because students have access to an unlimited line of credit from the US government. with the increased tuition monies, schools become businesses, building out infrastructure and overhead, which must be sustained. if they know the loan money is always coming, why not raise prices? it makes perfect sense. it would be interesting to see how institutions reacted if the 59% of students who receive loans dropped down to, say, 20%, or even better, 0%. in my opinion, this would force schools to lower prices, down to "market value" (whatever that is, but certainly a lot lower than prices are now), and force market competition, which is ALWAYS a good thing.
- dilemma 10y ago
  This.
- arximboldi 10y ago
  That is such a backwards mindset. What should be the market value for education? You should be able to get a degree if you are willing to put through the effort of getting it, not whether you can afford its "market price". I agree that that subsidizing tuition fees might not be the best way to solve the problem. That is why I think that education should be provided mostly by public institutions, like here in Europe. That way, access is not a matter of how much money you have and offer is controlled by a democratic agreement on what kind of society we want to invest in.
- mbrodersen 10y ago
  It would also ensure that only rich kids get educated. Do you really want a country full of uneducated people? And also remember that the loans have to be paid back. Nothing is given a way for free here.
leovonl 10y ago
> Why does a college degree cost so much in USA? FTFY Not excluding the fact that some private institutions (and even some public ones) in other contries charge a considerable tuition as well, but that usually is handled differently (fee reduction, scholarships, etc) than in the USA (long-term loans).
mbrodersen 10y ago
Demand and supply. It's that simple. The education you get from a "top" college isn't better than the education you get from an "average" college. They are using the same text books and teaching the same material. However having a "top" college name on your CV gives you an edge in the job market. Whether that edge actually is worth the money you pay is questionable though.
- mbrodersen 10y ago
  By the way the reason why we know that the education you get at a "top" college isn't better, has been shown by looking at students who were accepted to "top" colleges but instead chose to go to a local college instead; and comparing the long term earnings etc. outcome. There were no differences. In other words, people do well based on their abilities. Not whether they go to college A or B.

14 points by SQL2219 10y ago

Dowwie 10y ago

Good post. I was surprised at the depth of this study given who it was published by.

chmaynard 10y ago
Agreed, this is the best summary article I have ever read on the economic trends in US higher ed. One conclusion seems to be that at the non-elite schools like URI, my local state university, traditional liberal arts education will get starved into obscurity because it doesn't train students for a career. Learning how to think and write clearly and do scholarly research will no longer be an important part of a college education.
- WhiteSource1 10y ago
  Which is sad. In part, society has rewarded those who don't have training, particularly in non-technical subjects. How many political advisors and policy folk have political science degrees?
  - deleted 10y ago
    [deleted]

rahimnathwani 10y ago

I read the whole article looking for something about causality (the 'why'), but found little that addresses directly the _price_ of a college education. Sure, there were mentions of reduction in state funding, but those are subsidies for schools, and do not necessarily affect the price paid per student. If the government were to give Starbucks a $2 subsidy for each coffee sold, would you expect Starbucks to charge $2 less per cup? So it goes with state funding. It makes no sense to talk about why a price is X without considering both buyers and sellers. The cost base of sellers would undoubtedly affect how attractive an industry college education is to enter, but in the short term the price is determined by the supply/demand characteristics of the market. If a school spends more on a sports centre, it doesn't automatically get to charge students more. Perhaps they can attract more students (shifting the demand curve up) or perhaps they just have lots of money (due to high margins) and so can afford to spend on a new sports centre without specific rationale.

johan_larson 10y ago
The price is going to depend on a lot of factors. For example, an education in civil engineering or medicine, with extensive equipment-heavy labs, is going to be more expensive than an education in history, which really only needs a library and maybe some field-trips if you want to get fancy. I did try to come up with a BOTE number for the cost of a bare-bones college education, and the number I arrived at was $30,000. http://short-sharp.blogspot.ca/2016/07/how-much-does-it-cost-to-provide.html http://short-sharp.blogspot.ca/2016/07/how-much-does-it-cost...
- pkaye 10y ago
  But engineering colleges also tend to get more outside funding through private donors. The engineering colleges I attended had their respective building fully remodeled through the donation of wealthy graduates of the college. Most of the computer labs were put together through industry donations. Also even in civil engineering you would be surprised how little lab courses are provided in undergrad... most of it is pen and paper work or maybe computer simulations which cost little extra.
- rahimnathwani 10y ago
  You're conflating price (what the student pays) with cost (what the college education costs the provider. I said the article focused on just the cost part, rather than the interaction of supply and demand. You responded by providing more commentary and data on cost.

zomg 10y ago

school's will continue to raise tuition and fees because students have access to an unlimited line of credit from the US government. with the increased tuition monies, schools become businesses, building out infrastructure and overhead, which must be sustained. if they know the loan money is always coming, why not raise prices? it makes perfect sense. it would be interesting to see how institutions reacted if the 59% of students who receive loans dropped down to, say, 20%, or even better, 0%. in my opinion, this would force schools to lower prices, down to "market value" (whatever that is, but certainly a lot lower than prices are now), and force market competition, which is ALWAYS a good thing.

dilemma 10y ago
This.
arximboldi 10y ago
That is such a backwards mindset. What should be the market value for education? You should be able to get a degree if you are willing to put through the effort of getting it, not whether you can afford its "market price". I agree that that subsidizing tuition fees might not be the best way to solve the problem. That is why I think that education should be provided mostly by public institutions, like here in Europe. That way, access is not a matter of how much money you have and offer is controlled by a democratic agreement on what kind of society we want to invest in.
mbrodersen 10y ago
It would also ensure that only rich kids get educated. Do you really want a country full of uneducated people? And also remember that the loans have to be paid back. Nothing is given a way for free here.

leovonl 10y ago

> Why does a college degree cost so much in USA? FTFY Not excluding the fact that some private institutions (and even some public ones) in other contries charge a considerable tuition as well, but that usually is handled differently (fee reduction, scholarships, etc) than in the USA (long-term loans).

mbrodersen 10y ago

Demand and supply. It's that simple. The education you get from a "top" college isn't better than the education you get from an "average" college. They are using the same text books and teaching the same material. However having a "top" college name on your CV gives you an edge in the job market. Whether that edge actually is worth the money you pay is questionable though.

mbrodersen 10y ago
By the way the reason why we know that the education you get at a "top" college isn't better, has been shown by looking at students who were accepted to "top" colleges but instead chose to go to a local college instead; and comparing the long term earnings etc. outcome. There were no differences. In other words, people do well based on their abilities. Not whether they go to college A or B.