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Megan McArdle misses the biggest reason why tuitions are sky-rocketing and that is because Government funding is disappearing. Basically this is what happened:
by hristov 16y ago
Megan McArdle misses the biggest reason why tuitions are sky-rocketing and that is because Government funding is disappearing.
Basically this is what happened: Before the Bush administration, the fed government would give out these huge grants to the states for education and other purposes. When Bush became president he had to figure out a way to cut taxes while drastically increasing spending at the same time (because he had to have his war). Borrowing was a big part of the answer but he also severely cut the grants to the states. Bush also transferred huge war costs to the states by requiring that the national guard take an unprecedented part in the war.
All of a sudden states budgets were trashed and the first thing they cut was education subsidies.
Of course there were other things that destroyed state budgets such as the slow economy, pension liabilities (which were caused by the slow economy), etc., but it all started with the war.
It was always the large high quality state schools that kept tuitions down. If you have the UC system (for example) that can take hundreds of thousands of students, provides excellent education and charges only $5k per year (as it did during the 90's), it is very difficult for other schools to raise tuition. Of course few schools that were clearly better than the UC system could raise tuition also few schools that specialised in serving rich kids, but most schools could not.
Now of course the state schools are losing their state funding, which means they must raise their tuition, which means that all other schools can raise theirs too.
Now mind you student loans are an issue as well, but one has to mention the disappearing state funding when discussing skyrocketing tuitions.
- jacoblyles 16y agoWould love to see numbers and citations or just a good article on this.
- forinti 16y agoAccording to an article on the NY Times: "While tuition has risen at public universities, his report said, that has largely been to make up for declining state appropriations." Source: http://www.nytimes.com/2008/12/03/education/03college.html http://www.nytimes.com/2008/12/03/education/03college.html
- hristov 16y agohttp://www.cbpp.org/cms/index.cfm?fa=view&id=1554 http://www.cbpp.org/cms/index.cfm?fa=view&id=1554 http://www.americanprogress.org/issues/kfiles/b34039.html http://www.americanprogress.org/issues/kfiles/b34039.html
- deleted 16y ago[deleted]
- hristov 16y agoAnd this is something that outlines the state budget costs of the Iraq war: http://www.nationalpriorities.org/budgetpriorities2009 http://www.nationalpriorities.org/budgetpriorities2009
- mnemonicsloth 16y agoIt sounds like you're saying that cuts to education by the Bush admin caused total education spending to increase. Regardless, education spending has been increasing at a more or less constant rate since the mid-1960s. Discounting one hiccup in the seventies, (energy crisis/boomers leaving school) the uptrend goes back almost 50 years. http://www.johnstonsarchive.net/policy/edgraph.html http://www.johnstonsarchive.net/policy/edgraph.html
- hristov 16y agoNo, I am saying that cuts in government education subsidies cause higher tuition, something that makes perfect sense. It also makes perfect sense that total education spending would increase, because (a) the population is increasing, and (b) our economy is changing in such a manner as to require higher and higher portion of college-education-necessary jobs.
- chopsueyar 16y agoHow do you explain a similar increase in private tuition?
- hristov 16y agoI thought I explained that in my initial post. Many of the state schools (such as the UC system, but many others too) provide high quality education and take so many students that they influence the market. Thus private school tuitions depend on market forces created by public school tuitions. Once the public schools raised their tuitions the private schools knew it would be safe to raise theirs as well.
- bd_at_rivenhill 16y agoI could see this argument carrying some weight if you just looked at California, but the top-tier private schools on the East coast have never had such strong competition from state schools and geography is definitely a factor in school choice, so I expect that the effect of this price competition would be limited.
- adambyrtek 16y agoUn-downvoted. The poster presented his case in detail, if you don't agree then respond with counterarguments instead of just downvoting.
- Goladus 16y agoMegan McArdle misses the biggest reason why tuitions are sky-rocketing and that is because Government funding is disappearing. It's not clear this is the biggest reason, and she doesn't actually miss it, either. She states we could just "shift the burden from students to taxpayers." In fact both of you completely ignore the most important question: What is the tuition actually paying for? Where is the money going? Government subsidizing those costs doesn't make them go away and merely fuels demand, which probably causes raises costs even more. A subsidy could keep tuition down, but that would not discourage waste or increase the value of education.