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I found this comment on Quora: Through 1992, the top 50 colleges in the USA got together each year to collude on: amount of tuition base salary for assistant p

I found this comment on Quora: Through 1992, the top 50 colleges in the USA got together each year to collude on: amount of tuition base salary for assistant professors preventing any bidding wars for applicants Then the Federal government sued and put a stop to that. However, by that point the tuition was way out of whack and the private elite colleges are still allowed to increase tuition at a rate that is above the inflation rate, therefore keeping tuition very high. At the same time the endowments have increased to huge amounts. Elite colleges are being run like corporations with the goal to maximize income and continually increase the endowment. Therefore, tuition will continue to rise (as every college uses the elite private college tuition as their yardstick) until the Federal government sues and forces the elite colleges to reduce their endowment by using the money to reduce tuition. Elite colleges will gobble up all the money that they are allowed to........ https://www.quora.com/Why-have-college-costs-increased-so-dramatically-in-the-past-30-years-What-can-be-done-to-fix-this/answer/Tom-Stagliano https://www.quora.com/Why-have-college-costs-increased-so-dr... Gov intervention is probably needed.

duncan_bayne 9y ago
Welcome to the vicious cycle of Government intervention. "Well we threatened a bunch of people with violence until they behaved against their own judgement. Turns out this led to all sorts of problems. Better do some more threatening to correct it." In addition to being moral, a free market avoids this sort of feedback loop.
- deleted 9y ago
  [deleted]
abfan1127 9y ago
gov intervention in easy money in the form of student loans and tax-payer backed private student loans is what caused it to be begin with.
conanbatt 9y ago
> Gov intervention is probably needed. The government interventino has been the problem, as you just exposed. Let people default on their student debt with 5 years of bad credit, and colleges will fix themselves.
- lbearl 9y ago
  I hear that argument all of the time, but in reality the colleges aren't the ones giving out loans. What will probably happen is that loans will start being more difficult to get, which in turn will make getting into college even more difficult for people who already struggle to pay for it.
  - int_19h 9y ago
    The argument is that the colleges are basically building their business model around those loans, because government regulations guarantee easy access to those loans, with no collateral and no barriers on obtaining one (http://www.collegescholarships.org/loans/guaranteed.htm http://www.collegescholarships.org/loans/guaranteed.htm). This means that anyone can get it, and that in turn makes it viable for college to demand that everyone does (by charging exorbitant amount of money). From this it follows that if government gets out of the business of such loans, then a lot fewer people would be able to get them - which would mean that colleges would suddenly get a lot less applicants, sending their revenues plummeting. Which, in turn, would force them to lower the prices. It's doubtful that it would bring them to the point where a loan wouldn't be necessary for most students, and it would still exclude quite a few who cannot afford such a loan, or wouldn't qualify for it. But one could argue that it's better to not be able to take such a loan in the first place, then to be able to take it only to be saddled with a mountain of debt with no hope of repaying it, and no ability to discharge it in bankruptcy. IMO, if we want universal high education, the government needs to be in the game, but instead of providing traditional loans, or underwriting such from private parties, we should have a system whereby a loan is unconditionally provided in exchange for a share of future income, with a progressive bracket system (i.e. you don't pay anything below $X, including if you aren't working; and you pay a percentage off anything earned above $X). Percentage would be variable depending on how much income, on average, is expected to be earned by holder of a given degree, based on the current job market - this is to avoid subsidizing too many "worthless" degrees that never pay anything back. Also, I would expect such system to emphasize trade schools over "real" college - and that is a good thing.

duncan_bayne 9y ago

Welcome to the vicious cycle of Government intervention. "Well we threatened a bunch of people with violence until they behaved against their own judgement. Turns out this led to all sorts of problems. Better do some more threatening to correct it." In addition to being moral, a free market avoids this sort of feedback loop.

deleted 9y ago
[deleted]

abfan1127 9y ago

gov intervention in easy money in the form of student loans and tax-payer backed private student loans is what caused it to be begin with.

conanbatt 9y ago

> Gov intervention is probably needed. The government interventino has been the problem, as you just exposed. Let people default on their student debt with 5 years of bad credit, and colleges will fix themselves.

lbearl 9y ago
I hear that argument all of the time, but in reality the colleges aren't the ones giving out loans. What will probably happen is that loans will start being more difficult to get, which in turn will make getting into college even more difficult for people who already struggle to pay for it.
- int_19h 9y ago
  The argument is that the colleges are basically building their business model around those loans, because government regulations guarantee easy access to those loans, with no collateral and no barriers on obtaining one (http://www.collegescholarships.org/loans/guaranteed.htm http://www.collegescholarships.org/loans/guaranteed.htm). This means that anyone can get it, and that in turn makes it viable for college to demand that everyone does (by charging exorbitant amount of money). From this it follows that if government gets out of the business of such loans, then a lot fewer people would be able to get them - which would mean that colleges would suddenly get a lot less applicants, sending their revenues plummeting. Which, in turn, would force them to lower the prices. It's doubtful that it would bring them to the point where a loan wouldn't be necessary for most students, and it would still exclude quite a few who cannot afford such a loan, or wouldn't qualify for it. But one could argue that it's better to not be able to take such a loan in the first place, then to be able to take it only to be saddled with a mountain of debt with no hope of repaying it, and no ability to discharge it in bankruptcy. IMO, if we want universal high education, the government needs to be in the game, but instead of providing traditional loans, or underwriting such from private parties, we should have a system whereby a loan is unconditionally provided in exchange for a share of future income, with a progressive bracket system (i.e. you don't pay anything below $X, including if you aren't working; and you pay a percentage off anything earned above $X). Percentage would be variable depending on how much income, on average, is expected to be earned by holder of a given degree, based on the current job market - this is to avoid subsidizing too many "worthless" degrees that never pay anything back. Also, I would expect such system to emphasize trade schools over "real" college - and that is a good thing.