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This is what happens when there's 0 pressure on universities to price their programs competitively. If the government is backing every loan, the schools get pai

• freewilly1040 7y ago
  This is why I'm so skeptical of the "free college" rhetoric from Elizabeth Warren and the like... The underlying problem is the giant wealth transfer to colleges, and the progressive fixes seem to be to transfer even more wealth to them.
  • dd36 7y ago
    Or to do exactly as the OP said: this is what we’ll pay per student.
    • freewilly1040 7y ago
      Is this what is being proposed though? I agree with this approach, but I haven't seen the proposals being framed this way.
    • conanbatt 7y ago
      School vouchers. Still bad for college: why give free money to the richest of society?
      • leetcrew 7y ago
        it's not really giving them free money when they've already paid way more than the value of a single voucher in taxes that year.
      • ndiscussion 7y ago
        Because they will stay in our country and help us develop the most productive economy on earth. imo.
        • conanbatt 7y ago
          Thats usually critiqued as "trickle down economics", curiously by the same group that advocates free college.
      • dd36 7y ago
        Because relatively speaking, there’s not that many of them and it’s only fair. The rich get Medicare, right?
        • conanbatt 7y ago
          Medicare definitely has regressive components to it. But I don't know enough about the aggregates to make a conclusion.
  • jimmaswell 7y ago
    Free college works just fine elsewhere.
    • ngngngng 7y ago
      Yes, but do other places have the complication of having to replace systems that are sucking billions of dollars out of students to line the pockets of university presidents? This is what makes me skeptical. A solution in the United States for our education, healthcare, or other problems has to involve removing the leeches from the system. But political bribery is legal in the US, and the leeches have more than enough money to bribe the politicians. So insurance companies will keep existing. University presidents will keep taking home 7 figures. Turbotax won't go away anytime soon. You can either find a way to suck money away from the vulnerable, or you can be poor.
      • Elv13 7y ago
        Canada did switch from "for profit" health care to universal one in the 60's. Of course the doctors were furious, but it worked, eventually. Same thing for electricity in Quebec in the 40's. Same thing from prying the education system out of the church hands in the 60's. In all the case of electricity, it is hugely profitable for the government and used to balance the budget. I went to university and turned a good profit working part time as a programmer (while paying everything and having an apartment). My University had a balanced budget too and grew over 50% since I graduated. Hospitals are as good as anywhere else. They spend billions building them and replace the older facility as they become obsolete. Yet the cost are totally under control. Public infrastructure work as long as the bureaucracy is kept in check and corruption is managed properly. Inefficiencies and corruption is unavoidable, but at least the slippery slope of "on purpose" waste like US Universities is avoided. edit: typo
        • tastygreenapple 7y ago
          Unfortunately for America, the grift is part of the system. American colleges aren't expensive because they've been investing in the organization, often they budget for a worse university. Each year, more money is allocated to administrators who aren't involved in teaching at the expense of instructional material/quality. Moving to a university as a center for education means ending the iron rice bowl for overeducated good thinkers. Good luck.
  • thatfrenchguy 7y ago
    Well when it’s free & the gov pays, they’ll make sure their budget is tight.
    • partiallypro 7y ago
      I can't tell if you meant for this to be sarcastic or not.
      • mywittyname 7y ago
        Lots of government-sponsored social programs manage on shoe-string budgets. In the US, it really comes down to how Republicans feel about a program. The programs they hate are often forced to run at maximum efficiency because they face an large amount of scrutiny and budget instability. It's the programs that Republican fail to scrutinize that become symbols of waste and mismanagement. The biggest and most obvious case is the military. I can't imagine the HHS being in a situation where they are forced by Congress to spend a few hundred million dollars on equipment they don't need, so it's given away, or having any project that costs $1,500,000,000,000. I hate to be political like this, but it's an observable trend. Scrutiny over the use of public funds by officials is an efficient means of cost-control. But the country has an issue with selective enforcement based, it seems, on how much of a program's budget is funneled into the hands of private government contractors.
        • tastygreenapple 7y ago
          This is a really interesting train of thought. Why do you think the Republicans are so effective at driving efficiency in the government? It seems like they're fantastic watch dogs of social programs, do you think the Democrats could become watch dogs of the other programs?
  • novok 7y ago
    State universities in other countries either supply control through very high entrance standards or keeping everything cheap (think the interior of the typical USPS post office).
    • dsfyu404ed 7y ago
      What's wrong with the post office interior? You're there to mail stuff, not to vacation.
      • Hydraulix989 7y ago
        I don’t think OP was criticizing it.
    • geodel 7y ago
      I understand what you mean but USPS post office would be lot better than most of the buildings in university I attended in my country :)
    • harichinnan 7y ago
      From my experience with State funded education in India. The quality of education is far from what you expect somewhere in West. Biggest problem is attracting teachers at professional education institutions like Engineering. The salaries are less than $1000 a month vs in Engineering companies which would pay a multiple of that. The schools do attract a talented bunch of students who have to clear extremely high entrance standards.
  • geodel 7y ago
    Right. I do not see media attaching 'Populist' tag to her as they seem to do when they do not like a politician.
  • Shivetya 7y ago
    if they want government to pay for college then government should decide what is worthy of being paid for and how much. after all that is the attitude with regards to medical care. However I feel a better solution is for the government to still do it as loans but set the rates and required classes for each degree type. simply put there are valueless degree programs out there which only enrich the schools. Colleges would still trip over themselves to offer class and degree programs to fit into these restrictions, those that don't could rely on the private market, endowments, and scholarship programs.
    • vharuck 7y ago
      I don't like the idea that only career-focused degrees are important. I studied math not to get a job with those skills, but because I enjoyed math and wanted to add to the world's knowledge. Money is a means to quality of life, sure. But you can't ignore the things that are part of the "quality" because they're not profitable.
      • magduf 7y ago
        Math isn't a non-career-focused degree. It's not as immediately applicable as engineering, sure, but it does lead pretty directly to good-paying jobs. What the OP is referring to is probably degrees such as theater, women's studies, philosophy, etc. Women's studies and philosophy have no real job potential, and while theater might, there's only a very small market for actors compared to the number of starlets who dream of that job, which is why LA is so full of "actors" working as restaurant waiters.
        • mywittyname 7y ago
          Pure maths is a non-career degree. Much like physics, philosophy, and history, the intent of most programs is to produce teachers and researchers. It just turns out that math is incredibly useful in many disciplines, so knowing high-level math makes you clearly employable. Career-oriented math degrees are found in the engineering school. The difference between math and philosophy is that having a pure maths degree will provide someone with a number of job prospects. But that isn't really the intent of math programs. I venture to guess most people studying math are like the GP and doing so because they enjoy math.
  • calhoun137 7y ago
    > This is why I'm so skeptical of the "free college" rhetoric I assume by "this" you are refering to the OP's statement that "This is what happens when there's 0 pressure on universities to price their programs competitively." One of the idea's behind free public college is to apply market pressure to private college's, so that they have to price their programs competitively. In a risk free debt financed system, prices will rise, the same dynamic happens for both medical care and real estate. I am not sure on what basis you think this kind of system would make the problems worse. Also I am curious, are you in favor of abolishing public high school? What part of your argument against free college does not apply to free high schools? One of the many talking points behind the free college proposal is that in today's job market, a college degree has the some utility that a high school degree used to have.
    • freewilly1040 7y ago
      I am not against free public education, and if I were starting a system from scratch I think making public universities free would be a great idea, for the reasons you point to. The current proposals as I understand them will subsidize tuition at the current, severely inflated rate, letting the colleges get away with their price gouging, and I want to see accountability there. I wonder if as an incremental step attaching cost effectiveness conditions to school's ability to accept loan funds would be better. I believe this was Obama's general approach, though I will admit I have not looked into the issue deeply.
      • calhoun137 7y ago
        > The current proposals as I understand them will subsidize tuition at the current, severely inflated rate, letting the colleges get away with their price gouging This is great point in my opinion. Solving this issue in the real world is not simple, it comes down more to the political power of various competing factions than it does to coming up with a "big idea". Once you have a "big idea" (like free public college), unless your faction has sufficient political power, then how are you going to implement it? The problem is not that we are lacking big ideas that will work, there are many of them. The problem is we don't have the political power to implement a single one of them. Consider this statement from the OP: "Look no further than this chart (https://i.imgur.com/B3sVMjg.png https://i.imgur.com/B3sVMjg.png), around 2010 was when the gov started fully backing and giving the loans directly, and conveniently it's when students needs for loans skyrocketed. It's so obvious that colleges took advantage of it." Right now the gov't intervene's in public education by "fully backing and giving the loans directly". My position is that not all forms of government intervention are inherently bad, for example, the way the government intervenes in public high school is something we both agree is good. I believe that the current way the gov't intervenes in college education is deeply problematic, and that instead of completely removing the role of gov't, we should copy the model from high school which has proven to work very well.
  • sjg007 7y ago
    Most public colleges had significant funding guarantees in the State budget. A consequence of the 2008 financial crisis was that most State legislatures cut these obligations significantly. Accordingly, colleges had to raise tuition prices to compensate for the lost funding. I see student loans as basically a tax on the middle class. Get an education and a better job and pay an additional 6.5% tax on what you borrowed for 10 years. It would be better to have higher taxes on everyone but this is basically what we have now.
    • magduf 7y ago
      From what I've seen, State Universities seem to be awash in cash, and use it for enormous amounts of expensive construction.
      • deleted 7y ago
        [deleted]
      • sjg007 7y ago
        Well, they raised tuition and have record enrollments due to demographic change.. The construction to take advantage of continued revenue trends (to put it in financial terms)... but maybe I missed your point?
      • jldugger 7y ago
        Not exactly. Public uni finance is complicated. They are building, but in many cases, construction is required to compete for research grants. The chemical engineering labs built in the 50s are not always sufficient for modern science, for example. And in general, State Universities should be growing to serve their state's growing populations. Where things get tricky is funding this. By and large, new construction is donor secured -- it's relatively easy to put a name on a building. But those donations come attached with strings, ie the name on the building. you can't reallocate it elsewhere. And donor funding for endowed faculty seats or administrative costs are not so frequent. Ongoing costs of running the university (salaries, utilities, maintenance, public safety, cleaning) are funded via three main sources: state funding (ever dwindling), tuition (ever growing but small overall) and research. Research is where state universities pull in the big bucks, but it also often requires expensive specialty capital equipment and facilities in which to install and run it. A rule of thumb is 30 percent of research grant is handed over to administrative overhead. That is effectively rent to pay for depreciation of the building. tl;dr: expensive construction is required to further the mission of public universities, and doesn't mean general funds are available.
  • peteretep 7y ago
    > This is why I'm so skeptical of the "free college" rhetoric from Elizabeth Warren and the like... ITT! American discovers something else almost all of the rich world is doing, claims it can't be done.
    • AlgorithmicTime 7y ago
      No. He didn't say that at all.
  • tw04 7y ago
    Like the giant wealth transfer to elementary and high schools...? As the child of a couple teachers, I can tell you they're both still waiting on this wealth transfer you speak of.
    • wyclif 7y ago
      This is a non-sequitur. The wealth transfer isn't going to teachers, it's going to administrators, stakeholders, and shareholders. Essentially the wealth is being transferred to the corporation, not the employees.
      • tw04 7y ago
        Who are these stakeholders and shareholders in Public Universities? As for non-sequitur - the administrators are making their money off of the sports teams, not tuition.
• JackFr 7y ago
  > The dept of education needs to treat universities the same way Medicaid treats healthcare providers. Determine what it actually costs per student per year to run a university, and tell the schools "Accept $x or shove off". If they're going to benefit from gov backed loans, they should play by the govs rules. This. Either eliminate Federal aid entirely, or if you want aid, here's the price you're gonna charge.
  • mertd 7y ago
    How do you reckon that the government won't keep cutting the cost to make budget for the next shiny fighter jet?
    • lostcolony 7y ago
      In other countries that have free education, students get very involved with politics whenever the government tries to do that. The very best thing to create an engaged electorate is to make policies that affect the people you want voting. This is why Democrats are pushing for these changes (and Republicans resist). It's also why even though Republicans will cut the budget, and cut social programs, they always promise (not necessarily promises they intend to keep) to leave Medicare alone (old people vote, and are more Republican than young people).
    • JackFr 7y ago
      In the current context, the government is spending $X for education. We can say $X = $X_students + $X_schools + $X_lenders, where the subscripted variables represent the portion of the benefit each of the groups captures. I don't necessarily want to change the level of $X. I just want to raise $X_students at the expense of the other two.
• secabeen 7y ago
  >Their non-profit status hasn't even done much to keep costs low, as they can just keep hiring tons of redundant administrators and have never-ending construction, thereby justifying higher tuitions as "operating costs". Is there any evidence of non-profit universities doing that? Here's the best expenditure data I have from the Department of Education. Per-student real expenditures are up about 20% over 17 years. That doesn't seem like "hop(ping) on the gravy train". https://nces.ed.gov/programs/digest/d17/tables/dt17_334.30.asp https://nces.ed.gov/programs/digest/d17/tables/dt17_334.30.a...
  • ac29 7y ago
    The data you linked to is for private non-profit universities. At least in the state I went to public university at, its not so much that per-student expenses went up (though they did to some degree), its that the State started funding a far lower percentage of costs, leaving the student (and the student's ability to take loans) to pay for a larger share.
    • secabeen 7y ago
      Yes, but there's similar data in an adjacent table for public institutions. I think either dataset still shows clearly that Universities haven't greatly increase spending. It is, as you note, the huge disinvestments in tertiary education by the state governments.
    • telchar 7y ago
      This is a significantly underappreciated cause of the student debt crisis. People love to harp on overpaid or unneeded administrators and buildings but they are largely unaware of how much state budget cuts have contributed to rising tuition. My public alma mater gets well under 10% of their funding from the state at this point.
      • ghobs91 7y ago
        Then what's the explanation for the thousands of private non-profit universities who have never received state funding?
• zamfi 7y ago
  > The dept of education needs to treat universities the same way Medicaid treats healthcare providers. Determine what it actually costs per student per year to run a university, and tell the schools "Accept $x or shove off". If they're going to benefit from gov backed loans, they should play by the govs rules. This sounds appealing, but healthcare and education are different in some fundamental ways. People (generally) don't end up in the hospital, on Medicaid, by choice. So there is a moral argument to be made in regulating pricing to avoid the exploitation of sick people who need medical care to survive, by capping prices for that care. But people do choose to attend Masters degree programs -- they aren't forced to by circumstances outside their own control. The moral argument for preventing exploitation by capping price is much weaker compared with other avenues: transparency about outcomes, truth in advertising, required financial projections, etc. -- give people more data about what a Masters' degree is actually worth, and hopefully they'll make better choices. When you're in the back of an ambulance unconscious you are not able to make any choices, justifying societal intervention. In education, limiting the amount of loans available / backed by the government for a single individual would do just as much as artificially capping prices. (From the article: "there are no hard caps on how much someone can borrow for graduate school".) Let the crappy Masters' programs that aren't worth it get exposed and lose enrollment. By capping prices you're implicitly also saying that every Masters' program that charges this much is worth this much, an implication that is very much false. The value of a degree is not really correlated with the cost to provide it -- why base the price on cost rather than value? (Plus, how would you even "determine what it actually costs per student per year to run a university"? This probably depends on a zillion factors like endowment, cost of living, faculty salaries -- and their alternative job prospects -- availability of land and housing, etc. Would you average it across the country? Good luck running a school in NYC or SFBA, then.) Telling a university how much it can charge for a Masters degree is like telling Tesla how much it can charge for the Model 3.
  • ghobs91 7y ago
    If all people were buying Teslas using government-backed loans that the gov was then responsible to collect, while Tesla got paid up front and claimed to be a non-profit, they would absolutely have the right to tell them what they could charge. If a university is going to call itself non-profit, they should only be charging whatevers needed to cover costs of operating. Tuition has skyrocketed in the last 10-20 years, with no reasonable explanation for what aspect of operating costs has gone up enough to justify that.
• tzs 7y ago
  What's your evidence that government backed loans have anything to do with this? I haven't been able to find much historical tuition data, but what little I have found (e.g., Stanford going back about 100 years) shows a pretty steady tuition increase over time, at a rate quite a bit above the inflation rate of the time. This was happening before government backed loans became available, and continued happening about the same after they became available.
• js2 7y ago
  "Lessons from Chile’s transition to free college": https://www.brookings.edu/research/lessons-from-chiles-transition-to-free-college/ https://www.brookings.edu/research/lessons-from-chiles-trans... HN discussion when it was introduced four years ago: https://news.ycombinator.com/item?id=9514404 https://news.ycombinator.com/item?id=9514404 An essay by By Andreas Schleicher, Deputy Director for Education and Special Advisor on Education Policy to the Secretary- General, OECD from 2013 that looks at free higher education and concludes that a combination of public/private financing seems best: http://www.oecd.org/forum/education-for-all.htm http://www.oecd.org/forum/education-for-all.htm OECD data show that tertiary education creates large social benefits in the form of economic growth, social cohesion and citizenship values that justify public investment. Equally, in light of the very significant–and growing–private benefits of tertiary qualifications, individual graduates should be expected to bear some of the cost, too. The case for costsharing is strongest when tight public budgets would otherwise lead to cuts in the number of tertiary students, a decline in the quality of instruction, or a decrease in the resources available to support disadvantaged students. Cost-sharing allows systems to continue to expand with no apparent sacrifice of instructional quality, and makes institutions more responsive to student needs. Institutions also become less reliant on taxpayers’ money and are able, within certain limits, to raise their own funds. The savings from these kinds of arrangements can be used to broaden access to tertiary education by expanding student support systems. All things in moderation, however. Countries that rely solely on the market to determine the cost of higher education, such as the United States, often see tuition fees rise to such stratospheric levels that higher education becomes inaccessible to many prospective students. And that, in turn, undermines these countries’ own intentions of raising the level of their populations’ educational attainment. Thus, there is a case to be made for fee-stabilisation policies that contain costs.
  • conanbatt 7y ago
    > Countries that rely solely on the market to determine the cost of higher education, such as the United States, This essay ends with a correlation but not causation conclusion. It is not the free market that makes private colleges expensive in the US.
  • leetcrew 7y ago
• belljustin95 7y ago
  That chart illustrates federal student loans, not (federal + private) student loans. The total has been only been increasing linearly, as shown by this chart (https://en.wikipedia.org/wiki/Student_debt#/media/File:Student_loan_debt.png https://en.wikipedia.org/wiki/Student_debt#/media/File:Stude...), while the percentage owned by the federal government has drastically increased.