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And college got expensive partly through policy choices. Offering easy loans tends to make people price insensitive, so tuitions go up and a lot of that money g

And college got expensive partly through policy choices. Offering easy loans tends to make people price insensitive, so tuitions go up and a lot of that money goes to things like increasingly fancy buildings and making textbook publishers' shareholders rich. Meanwhile often less is going to state schools that, with low in-state tuitions, were historically a way up for a lot of people. (An older friend went to Berkeley a few decades ago for under $1,000.) There's some comparison to the housing bubble, where policy also supported big loans. Don't have all the answers, but less emphasis on loans, competition from better-supported state and other non-profit schools, and having multiple forms of post-high-school education and credentialing available could all potentially help to bring some competition and sanity back to all this.

jaggi1 9y ago
This comment is likely to fetch downvotes because you are suggesting that government should not subsidize both.
MrTonyD 9y ago
I remember reading an article describing how college costs can be explained by an analysis of supply and demand. There have been a variety of historic reasons for demand rising at different times - mostly related to unemployment and lack of other economic choices. I keep hearing the meme that low-cost college is the cause of college expense - but college is free in many countries where they are doing quite well. So I question the facile opinions I keep hearing.
- wutbrodo 9y ago
  > I keep hearing the meme that low-cost college is the cause of college expense I think you've misunderstood what you're hearing: low cost college by definition can't be the cause of high cost college. The claim is that high availability of funds/liquidity for college is what pushes up prices,since there are more dollars available to chase a supply that hasn't kept pace[1]. > college is free in many countries where they are doing quite well. So I question the facile opinions I keep hearing. This doesn't really make any sense. Colleges that are provided for free are a lot less dependent on markets to determine prices: they treat them like a more or less generic public good (where college choice is determined by quality of student more than ability to pay). [1] strictly speaking, the supply hasn't been that constrained, but since college is largely perceived as a positional good, this affects all but the bottom rung for-profit colleges.
  - taneq 9y ago
    > The claim is that high availability of funds/liquidity for college is what pushes up prices,since there are more dollars available to chase a supply that hasn't kept pace[1]. Exactly. It's no different to what causes a real estate bubble: Extremely low interest rates and lax lending policies make borrowed cash very cheap, which pushes up the amount that the average buyer can 'afford' to borrow.
- gozur88 9y ago
  College in the US is used by employers as a proxy for intelligence, something that's an outgrowth of laws and court rulings that date back to the '70s. So if you want to put yourself on the path to the C-Suite in a Fortune 500 company or to a partnership in a major law firm, you have to get into one of the very top colleges in the country. That, in turn, means top colleges can charge pretty much whatever they want and it's still worth the money. Not because of the instruction students receive, but because getting admitted is highly competitive and those students managed to do it. In other words, it's a positive feedback loop driving up prices for a scarce resource. Even when you get out of the nosebleed tier, colleges are easy to rank by their accept/reject ratio. So if you're a big employer and you have a candidate from Brown (acceptance 9.5%) and one from Cornell (acceptance 15.1%), you'd probably prefer the one from Brown, everything else being equal. The sad part is adding more money just makes the problem worse for the same reason adding money to real estate markets just makes everything more expensive.
  - akhilcacharya 9y ago
    Hmm, what happens if we don't go to any of these schools?
    - gozur88 9y ago
      Meaning what, not going to college or going instead to the local State U?
      - akhilcacharya 9y ago
        Going to a State U instead of those elite Us
        gozur88 9y ago
        State U is just fine for a technical degree, but you're diminishingly unlikely to be a CEO of a large company you didn't start yourself. Or a partner in a big NYC corporate law firm.
  - 9y ago
icantdrive55 9y ago
I don't have an answer either. I do think they should make student loans bankrupt-able. It's time. Oh yea, and put a hiring freeze/salary cap on all administrative personnel for any school that accepts federal loans. The best teachers I had were at community colleges, and usually had summer jobs. I never figured out what most of the administration did besides irritate the better teachers.
- tedivm 9y ago
  Administration costs have risen quite a bit, and are even used as political gifts. Mitch Daniels, former governor of Indiana, stacked Purdue's board with his contributors and supports and when he left the governor position they made him president of Purdue. The detachment from the administration of schools and the actual education portion is a big issue.
  - kevin_thibedeau 9y ago
    They also gold plate all of their new facilities. Not enough to have a normal hand dryer. Gotta have it covered in custom graphics.
    - pixl97 9y ago
      > Gotta have it covered in custom graphics. Unless they are going out of their way to spend a lot of money, the cost of those graphics is actually pretty cheap in comparison to the entire device. It's probably things like marble floors where the cost between one material choice can be 3x-10x the cost of another that would increase costs.
- kcdev 9y ago
  Bankrupt-able student loans will not help the problem. The universities who are taking advantage of the easily available money from the government will still get paid. During bankruptcy, the loan write down hurts the lender. In this case it's us taxpayers. The real answer is to cut what's funded by the government, make the rest of the financing come from the universities themselves, AND make it bankrupt-able. Then as demand declines and universities share the hit for each bankruptcy, universities will lower prices to something more reasonable to increase supply.
tedivm 9y ago
Government spending on higher education peaked in the mid 70s, dropped in the 80s, and has not kept up with the population increases. The focus on loans, instead of government funding, was basically a new tax on the poor and middle classes in order to fund the Reagan tax cuts for the rich.
- oxide 9y ago
  Ah, the ol' trickle down fallacy.
- BrandonMarc 9y ago
  How does an increased demand for loans lead to funding the Reagan tax cuts?
  - del82 9y ago
    Causation goes the other way: Reagan's prioritization of tax cuts over public education led to tuition increases, which lead to an increased demand for loans to pay the higher tuition.
    - fivestar 9y ago
      I don't see it that way. The 80s "greed is good" mentality laid the groundwork for the fleecing, but that was not Reagan's fault other than perhaps that administration was the time when financialization of everything began. Think "junk bonds" then think "loans that can't be discharged in bankruptcy."
      - eli_gottlieb 9y ago
        Reagan was the one who re-introduced tuition (at all) to the University of California system in the first place.
  - fivestar 9y ago
    It doesn't--this is one of those times where the statement makes zero sense, but it was fun to bash Reagan. No, the whole story of runaway costs can be explained quite easily by the financialization of higher ed--the liberal student loan policies championed during the Clinton Administration tied to the typical greed of Wall Street bankers, enabled by the bleeding heart "everyone should go to college" drama. Everyone got paid, except the sheep who got sheared.
learc83 9y ago
This article from 538 argues that almost 3/4 of the rise in tuition is accounted for by a drop in state support. https://fivethirtyeight.com/features/fancy-dorms-arent-the-main-reason-tuition-is-skyrocketing/ https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...
- johnnyb9 9y ago
  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr733.pdf https://www.newyorkfed.org/medialibrary/media/research/staff... "We find a pass-through effect on tuition of changes in subsidized loan maximums of about 60 cents on the dollar, and smaller but positive effects for unsubsidized federal loans."
- wmeredith 9y ago
  I came here to say this. My wife left the private sector four years ago to work in higher ed. This was a huge epiphany to both of us after she had been there a while and we could see the big picture from the inside. Sure there are a couple other factors at play, but it's small potatoes, comparatively. If you look at the big state schools and the support they receive from the community, they've systematically had their legs cut out from under them over the last couple decades. It's horrifying. And the students are paying for it. As are the teachers.
  - kchoudhu 9y ago
    Doesn't explain what's happening in private higher education though.
    - rebuilder 9y ago
      If public higher ed. has its capacity and/or quality cut, wouldn't that increase the demand for private education?
      - strommen 9y ago
        The public universities don't cut capacity or quality - they raise costs. And the private colleges follow suit because they can.
deleted 9y ago
[deleted]
jacquesm 9y ago
And then there is the bit where rich foreigners want to send their children to top schools, which usually translates into sending them to the United States as well as the general population increase. With more people competing for the same (or in some cases even fewer) spots the prices could only go up. So now we get to see other effects at work and some of those effects expose this rise in price as unrealistic.
- whazor 9y ago
  Not a fair statement, as highly esteemed foreign teachers and professors also get bought by US colleges and universities. These top school would not be top without the capital they have. Although I do want to mention that in my eyes these so-called top schools are overvalued. With both their professors and students gaming the system in order to 'stay the best'.
supremesaboteur 9y ago
So since state interference is the cause for unaffordable tuition costs, more state interference will fix the problem ?
- MichaelBurge 9y ago
  "Since programmers caused all the bugs, more programmers will fix them?" Well, yes; software is on average more reliable today than 15 years ago. This has the same structure as your argument and is incorrect, so you have to add something specific to government to repair the argument structure.
  - viridian 9y ago
    If you have a software problem, and your solution is to throw more programmers at it, you now have two problems.
m-j-fox 9y ago
I can't understand the paradox that as tuition increased, tenured professor jobs became more scarce and other professor jobs lower paying. I guess fancy facilities and less gov't subsidy helps explain. It's gotten to the point that you might consider the alternative of starting a higher education co-op to hire associate professors and frustrated, underemployed phds while minimizing tuition by meeting in un-fancy locations or online.
- scriptkiddy 9y ago
  While a great idea for learning and purely academic purposes, a degree from such a co-op would mean nothing to potential employers. Actually, it would mean nothing to anyone. At least in the U.S., an institution must be accredited for the degree to mean anything at all. That said, I would definitely join such a co-op as I feel the knowledge is more important than the paperwork anyways.
  - m-j-fox 9y ago
    Why offer a degree when a BA in English isn't worth the paper it's printed on to employers? This is about knowledge, as you say. An affordable, liberal education, not a pipeline to Goldman Sachs. For those seeking ROI, boot camps are already providing a compelling vocational alternative.
- Fomite 9y ago
  The increase in tuition (and fees) make up for budget shortfalls everywhere (fancy facilities are actually not all that big of a deal if you crunch the numbers). At the same time, getting rid of tenured positions is a decent means of cutting costs to try to address the same shortfall.
  - m-j-fox 9y ago
    Sounds like a death spiral. My father got a PhD in history so he could be a professor. If he couldn't expect that, he would have gone to business school, reducing the demand for history professors and so on until there's none left. You get it.

jaggi1 9y ago

This comment is likely to fetch downvotes because you are suggesting that government should not subsidize both.

MrTonyD 9y ago

I remember reading an article describing how college costs can be explained by an analysis of supply and demand. There have been a variety of historic reasons for demand rising at different times - mostly related to unemployment and lack of other economic choices. I keep hearing the meme that low-cost college is the cause of college expense - but college is free in many countries where they are doing quite well. So I question the facile opinions I keep hearing.

wutbrodo 9y ago
> I keep hearing the meme that low-cost college is the cause of college expense I think you've misunderstood what you're hearing: low cost college by definition can't be the cause of high cost college. The claim is that high availability of funds/liquidity for college is what pushes up prices,since there are more dollars available to chase a supply that hasn't kept pace[1]. > college is free in many countries where they are doing quite well. So I question the facile opinions I keep hearing. This doesn't really make any sense. Colleges that are provided for free are a lot less dependent on markets to determine prices: they treat them like a more or less generic public good (where college choice is determined by quality of student more than ability to pay). [1] strictly speaking, the supply hasn't been that constrained, but since college is largely perceived as a positional good, this affects all but the bottom rung for-profit colleges.
- taneq 9y ago
  > The claim is that high availability of funds/liquidity for college is what pushes up prices,since there are more dollars available to chase a supply that hasn't kept pace[1]. Exactly. It's no different to what causes a real estate bubble: Extremely low interest rates and lax lending policies make borrowed cash very cheap, which pushes up the amount that the average buyer can 'afford' to borrow.
gozur88 9y ago
College in the US is used by employers as a proxy for intelligence, something that's an outgrowth of laws and court rulings that date back to the '70s. So if you want to put yourself on the path to the C-Suite in a Fortune 500 company or to a partnership in a major law firm, you have to get into one of the very top colleges in the country. That, in turn, means top colleges can charge pretty much whatever they want and it's still worth the money. Not because of the instruction students receive, but because getting admitted is highly competitive and those students managed to do it. In other words, it's a positive feedback loop driving up prices for a scarce resource. Even when you get out of the nosebleed tier, colleges are easy to rank by their accept/reject ratio. So if you're a big employer and you have a candidate from Brown (acceptance 9.5%) and one from Cornell (acceptance 15.1%), you'd probably prefer the one from Brown, everything else being equal. The sad part is adding more money just makes the problem worse for the same reason adding money to real estate markets just makes everything more expensive.
- akhilcacharya 9y ago
  Hmm, what happens if we don't go to any of these schools?
  - gozur88 9y ago
    Meaning what, not going to college or going instead to the local State U?
    - akhilcacharya 9y ago
      Going to a State U instead of those elite Us
      - gozur88 9y ago
        State U is just fine for a technical degree, but you're diminishingly unlikely to be a CEO of a large company you didn't start yourself. Or a partner in a big NYC corporate law firm.
- 9y ago

icantdrive55 9y ago

I don't have an answer either. I do think they should make student loans bankrupt-able. It's time. Oh yea, and put a hiring freeze/salary cap on all administrative personnel for any school that accepts federal loans. The best teachers I had were at community colleges, and usually had summer jobs. I never figured out what most of the administration did besides irritate the better teachers.

tedivm 9y ago
Administration costs have risen quite a bit, and are even used as political gifts. Mitch Daniels, former governor of Indiana, stacked Purdue's board with his contributors and supports and when he left the governor position they made him president of Purdue. The detachment from the administration of schools and the actual education portion is a big issue.
- kevin_thibedeau 9y ago
  They also gold plate all of their new facilities. Not enough to have a normal hand dryer. Gotta have it covered in custom graphics.
  - pixl97 9y ago
    > Gotta have it covered in custom graphics. Unless they are going out of their way to spend a lot of money, the cost of those graphics is actually pretty cheap in comparison to the entire device. It's probably things like marble floors where the cost between one material choice can be 3x-10x the cost of another that would increase costs.
kcdev 9y ago
Bankrupt-able student loans will not help the problem. The universities who are taking advantage of the easily available money from the government will still get paid. During bankruptcy, the loan write down hurts the lender. In this case it's us taxpayers. The real answer is to cut what's funded by the government, make the rest of the financing come from the universities themselves, AND make it bankrupt-able. Then as demand declines and universities share the hit for each bankruptcy, universities will lower prices to something more reasonable to increase supply.

tedivm 9y ago

Government spending on higher education peaked in the mid 70s, dropped in the 80s, and has not kept up with the population increases. The focus on loans, instead of government funding, was basically a new tax on the poor and middle classes in order to fund the Reagan tax cuts for the rich.

oxide 9y ago
Ah, the ol' trickle down fallacy.
BrandonMarc 9y ago
How does an increased demand for loans lead to funding the Reagan tax cuts?
- del82 9y ago
  Causation goes the other way: Reagan's prioritization of tax cuts over public education led to tuition increases, which lead to an increased demand for loans to pay the higher tuition.
  - fivestar 9y ago
    I don't see it that way. The 80s "greed is good" mentality laid the groundwork for the fleecing, but that was not Reagan's fault other than perhaps that administration was the time when financialization of everything began. Think "junk bonds" then think "loans that can't be discharged in bankruptcy."
    - eli_gottlieb 9y ago
      Reagan was the one who re-introduced tuition (at all) to the University of California system in the first place.
- fivestar 9y ago
  It doesn't--this is one of those times where the statement makes zero sense, but it was fun to bash Reagan. No, the whole story of runaway costs can be explained quite easily by the financialization of higher ed--the liberal student loan policies championed during the Clinton Administration tied to the typical greed of Wall Street bankers, enabled by the bleeding heart "everyone should go to college" drama. Everyone got paid, except the sheep who got sheared.

learc83 9y ago

This article from 538 argues that almost 3/4 of the rise in tuition is accounted for by a drop in state support. https://fivethirtyeight.com/features/fancy-dorms-arent-the-main-reason-tuition-is-skyrocketing/ https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...

johnnyb9 9y ago
https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr733.pdf https://www.newyorkfed.org/medialibrary/media/research/staff... "We find a pass-through effect on tuition of changes in subsidized loan maximums of about 60 cents on the dollar, and smaller but positive effects for unsubsidized federal loans."
wmeredith 9y ago
I came here to say this. My wife left the private sector four years ago to work in higher ed. This was a huge epiphany to both of us after she had been there a while and we could see the big picture from the inside. Sure there are a couple other factors at play, but it's small potatoes, comparatively. If you look at the big state schools and the support they receive from the community, they've systematically had their legs cut out from under them over the last couple decades. It's horrifying. And the students are paying for it. As are the teachers.
- kchoudhu 9y ago
  Doesn't explain what's happening in private higher education though.
  - rebuilder 9y ago
    If public higher ed. has its capacity and/or quality cut, wouldn't that increase the demand for private education?
    - strommen 9y ago
      The public universities don't cut capacity or quality - they raise costs. And the private colleges follow suit because they can.

deleted 9y ago

[deleted]

jacquesm 9y ago

And then there is the bit where rich foreigners want to send their children to top schools, which usually translates into sending them to the United States as well as the general population increase. With more people competing for the same (or in some cases even fewer) spots the prices could only go up. So now we get to see other effects at work and some of those effects expose this rise in price as unrealistic.

whazor 9y ago
Not a fair statement, as highly esteemed foreign teachers and professors also get bought by US colleges and universities. These top school would not be top without the capital they have. Although I do want to mention that in my eyes these so-called top schools are overvalued. With both their professors and students gaming the system in order to 'stay the best'.

supremesaboteur 9y ago

So since state interference is the cause for unaffordable tuition costs, more state interference will fix the problem ?

MichaelBurge 9y ago
"Since programmers caused all the bugs, more programmers will fix them?" Well, yes; software is on average more reliable today than 15 years ago. This has the same structure as your argument and is incorrect, so you have to add something specific to government to repair the argument structure.
- viridian 9y ago
  If you have a software problem, and your solution is to throw more programmers at it, you now have two problems.

m-j-fox 9y ago

I can't understand the paradox that as tuition increased, tenured professor jobs became more scarce and other professor jobs lower paying. I guess fancy facilities and less gov't subsidy helps explain. It's gotten to the point that you might consider the alternative of starting a higher education co-op to hire associate professors and frustrated, underemployed phds while minimizing tuition by meeting in un-fancy locations or online.

scriptkiddy 9y ago
While a great idea for learning and purely academic purposes, a degree from such a co-op would mean nothing to potential employers. Actually, it would mean nothing to anyone. At least in the U.S., an institution must be accredited for the degree to mean anything at all. That said, I would definitely join such a co-op as I feel the knowledge is more important than the paperwork anyways.
- m-j-fox 9y ago
  Why offer a degree when a BA in English isn't worth the paper it's printed on to employers? This is about knowledge, as you say. An affordable, liberal education, not a pipeline to Goldman Sachs. For those seeking ROI, boot camps are already providing a compelling vocational alternative.
Fomite 9y ago
The increase in tuition (and fees) make up for budget shortfalls everywhere (fancy facilities are actually not all that big of a deal if you crunch the numbers). At the same time, getting rid of tenured positions is a decent means of cutting costs to try to address the same shortfall.
- m-j-fox 9y ago
  Sounds like a death spiral. My father got a PhD in history so he could be a professor. If he couldn't expect that, he would have gone to business school, reducing the demand for history professors and so on until there's none left. You get it.