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> I didn't see this discussed in the article, but IMO the main driver is the availability of student loans. When the government guarantees loans, you can lend w
by xienze 8y ago
> I didn't see this discussed in the article, but IMO the main driver is the availability of student loans. When the government guarantees loans, you can lend whatever you want!
The other kicker is that they bake BIG subsidies for low-income students into tuition, which I found rather counter-intuitive. We're gonna raise tuition... to help students who can't afford tuition... pay for tuition that they can't afford... because we keep raising tuition to help students who can't afford tuition.
As bizarre as it sounds, I think if you stripped subsidies and the effect of near-universal availability of student loans out of the equation tuition (at least for state schools) would be downright reasonable. It certainly was when I was in school around the turn of the century. I was paying somewhere in the neighborhood of $2-3K per sememster (increasing over time, naturally) to go to a well-regarded state university. Now I see it's about 3x that. Yeesh.
- ryandrake 8y agoYes, universities are subject to the usual market incentives like everything else. If the market will bear $2000/semester and they can sustainably offer their service at that rate, they will. If students have guaranteed access to $20,000/semester in loans, then they know the market will bear $22,000/semester and that’s what they’ll charge.
- jaxtellerSoA 8y ago> As bizarre as it sounds, I think if you stripped subsidies and the effect of near-universal availability of student loans out of the equation But the lefties will cry "You're discriminating and making it harder for poor people to get an education". So it will never happen.
- fzeroracer 8y agoOr, we can go the tried-and-true European route of making higher education free instead of all this stupid experimentation for the sake of a 'free market' which results in disaster for some of our most vulnerable citizens.
- sheepmullet 8y ago> Or, we can go the tried-and-true European route of making higher education free We aren’t Europeans. What makes you think it would work with our culture? And if it can work then let’s get a state or two to prove it. California easily could and has the most left-leaning culture.
- AvocadoPanic 8y agoSure, but a good whack of the 'free' countries have attainment rates half of the US. I'm ok with that but which half of the current cohort gets booted?
- mcguire 8y agoThe ones whose families don't value education as highly: the poor.
- skybrian 8y agoThis is called price discrimination. It's similar to what airlines do (in their own way). Many businesses will try to charge customers who can afford it more than penny-pinchers. It's part of what the article called "being entrepreneural". There are some companies that compete with lower prices for all, but it's not the most common strategy.
- secabeen 8y agoIt's because while few students pay the nameplate tuition, for the few that do (high-income and out-of-state students), it brings in a lot of revenue. Thus, there's little incentive to control it, if you can make the net-cost to each student controlled behind the scenes.