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I think this is a good thing. Graduate education is grossly overpriced, because institutions know the government will help pickup the tab.

taylodl 9y ago
I don't follow your line of thought. How is the government picking up the tab? The government isn't making any payment back to the institution.
- pkaye 9y ago
  My understanding is that universities jack up the tuition knowing the students can get government subsidized loans and grants. Then they give tuition waivers to those who cant because the prices are jacked up and getting something from them is better than nothing.
  - taylodl 9y ago
    But these students aren't getting loans - they're having their tuition waived. Now the government wants to tax the amount waived as income. If anything, graduate students will now be forced to get loans in order to pay their taxes - which is absurd.
    - lostapathy 9y ago
      Or maybe tuition will come back down to a level that actually matches what it costs to run the school, and grad student instructors will get paid a wage instead?
      - taylodl 9y ago
        Which costs the institutions money in the form of paid wages to grad student instructors - which is an actual outlay of money. Lowering the tuition across the board for grad students lowers it for all grad students, not just the grad student instructors. Either way the institution, the grad student, or both, are out more money out of pocket as a result of this plan.
- turc1656 9y ago
  I believe what Overtonwindow meant was that the cost of education has gotten out of control primarily because whenever the government guarantees debt (cough housing cough) it creates a perverse incentive where the lenders profit by bigger loan values and the schools profit by jacking up the cost of their service for which the loans are issued. Essentially, there is far less of a check and balance on the price of the good/service. Whenever you have true cost hidden or put way down the road it tends to significantly increase the total cost. Also, there was a hard limit on the cost of education previously because it used to be hard to get a loan for school. People had to actually save money for it, get a scholarship, or pay as they went along. There was a natural limit based on the available money people had available and were willing and able to use to purchase education. Less than a decade ago (2008/2009) the average in-state tuition was $6,585 for a public school. I graduated in 2006 and this number seems accurate. My undergrad tuition in 2006 was something like $5,500-$6,000. Based on data from the College Board, the inflation factor for 2008 is ~9.5 (against the reference value in 1978 of 1, when the numbers begin). Which means the average cost of tuition for in-state public schools was $693. The minimum wage in 1978 was $2.65. It would thus take 262 hours to be able to earn enough to pay that tuition. That averages out to a mere 5 hours a week! And that's the worst case scenario (making minimum wage). Using the 2008 numbers, the minimum wage was $6.55, so it would take 3.83 times longer to pay tuition (1005 hours)! And that was nearly a decade ago - it's gotten far, far worse since then. Viewed another way, if the cost of college was subject to the normal inflation that the rest of the economy average, that $693 would be a mere $2,737 for 2008.
  - taylodl 9y ago
    In my state the state legislature has repeatedly and dramatically curtailed state funding for the public colleges, which of course has led to tuition increases. Then the state legislature capped the percentage in-state tuition may increase on an annual basis. Now the public schools take far fewer in-state students and instead focus on out-of-state and foreign students who are able to pay the pretty darn near private school tuition. Education is a global commodity and the pricing is set by demand. The fact is other governments are assisting their best and brightest to attend American universities, which are considered amongst the best in the world, while our government is making it harder for our best and brightest to attend our own universities. This doesn't seem like a good strategy for America.
esaym 9y ago
I was going to post a single comment of "Good!" But knew I'd just get down voted for it... so here I just did.. But I share the same sentiments

taylodl 9y ago

I don't follow your line of thought. How is the government picking up the tab? The government isn't making any payment back to the institution.

pkaye 9y ago
My understanding is that universities jack up the tuition knowing the students can get government subsidized loans and grants. Then they give tuition waivers to those who cant because the prices are jacked up and getting something from them is better than nothing.
- taylodl 9y ago
  But these students aren't getting loans - they're having their tuition waived. Now the government wants to tax the amount waived as income. If anything, graduate students will now be forced to get loans in order to pay their taxes - which is absurd.
  - lostapathy 9y ago
    Or maybe tuition will come back down to a level that actually matches what it costs to run the school, and grad student instructors will get paid a wage instead?
    - taylodl 9y ago
      Which costs the institutions money in the form of paid wages to grad student instructors - which is an actual outlay of money. Lowering the tuition across the board for grad students lowers it for all grad students, not just the grad student instructors. Either way the institution, the grad student, or both, are out more money out of pocket as a result of this plan.
turc1656 9y ago
I believe what Overtonwindow meant was that the cost of education has gotten out of control primarily because whenever the government guarantees debt (cough housing cough) it creates a perverse incentive where the lenders profit by bigger loan values and the schools profit by jacking up the cost of their service for which the loans are issued. Essentially, there is far less of a check and balance on the price of the good/service. Whenever you have true cost hidden or put way down the road it tends to significantly increase the total cost. Also, there was a hard limit on the cost of education previously because it used to be hard to get a loan for school. People had to actually save money for it, get a scholarship, or pay as they went along. There was a natural limit based on the available money people had available and were willing and able to use to purchase education. Less than a decade ago (2008/2009) the average in-state tuition was $6,585 for a public school. I graduated in 2006 and this number seems accurate. My undergrad tuition in 2006 was something like $5,500-$6,000. Based on data from the College Board, the inflation factor for 2008 is ~9.5 (against the reference value in 1978 of 1, when the numbers begin). Which means the average cost of tuition for in-state public schools was $693. The minimum wage in 1978 was $2.65. It would thus take 262 hours to be able to earn enough to pay that tuition. That averages out to a mere 5 hours a week! And that's the worst case scenario (making minimum wage). Using the 2008 numbers, the minimum wage was $6.55, so it would take 3.83 times longer to pay tuition (1005 hours)! And that was nearly a decade ago - it's gotten far, far worse since then. Viewed another way, if the cost of college was subject to the normal inflation that the rest of the economy average, that $693 would be a mere $2,737 for 2008.
- taylodl 9y ago
  In my state the state legislature has repeatedly and dramatically curtailed state funding for the public colleges, which of course has led to tuition increases. Then the state legislature capped the percentage in-state tuition may increase on an annual basis. Now the public schools take far fewer in-state students and instead focus on out-of-state and foreign students who are able to pay the pretty darn near private school tuition. Education is a global commodity and the pricing is set by demand. The fact is other governments are assisting their best and brightest to attend American universities, which are considered amongst the best in the world, while our government is making it harder for our best and brightest to attend our own universities. This doesn't seem like a good strategy for America.

esaym 9y ago

I was going to post a single comment of "Good!" But knew I'd just get down voted for it... so here I just did.. But I share the same sentiments