4 ms·

As long as the government continues to give people loans (ie demand side) rather than directly provide a competitor to schools (ie supply side), the price will

by koolba 7y ago

As long as the government continues to give people loans (ie demand side) rather than directly provide a competitor to schools (ie supply side), the price will continue to grow.

tzs 7y ago
I haven't been able to find much online historical tuition data, but the little I have found (about 100 years of Stanford tuition) shows that it was increasing before there were government loans at about the same rate it increased after government loans. This makes me doubt the theory that government loans are behind high tuition.
- 52-6F-62 7y ago
  To add to that: many other countries subsidize or offer student loan and grant programs (including Canada) and domestic costs have not risen to the same extent. A loose example: https://www.cnbc.com/2017/07/13/heres-how-much-it-costs-to-go-to-college-in-the-us-compared-to-other-countries.html https://www.cnbc.com/2017/07/13/heres-how-much-it-costs-to-g... I think there are just too many counterpoints for the student loan thing to be accurate outside of a vacuum.
- wtvanhest 7y ago
  Stanford is not a good proxy bc the students were well funded before the loans poured fuel on the fire. Loans help increase the cost of schools with lower social economic status (middle class) schools like state schools. Loans allowed many schools to charge private costs for public education. Professor salaried have risen, cost structures are too high to support unloaned demand.
  - jdkee 7y ago
    "Professor salaried[SIC] have risen,...." This is untrue. If anything, the rapidly growing pool of poorly paid adjuncts has lowered the median salary. Perhaps you could take a look at this book for a deeper understanding of the issue. https://www.insidehighered.com/news/2019/04/16/herb-childress-discusses-his-new-book-adjunct-underclass https://www.insidehighered.com/news/2019/04/16/herb-childres...
    - wtvanhest 7y ago
      This is one story. If you pull the financials of major public colleges, prof salaries per credit hour taught are increasing. No other metric matters. The cost has to come down, and that includes the cost of instruction etc.
      - chongli 7y ago
        No other metric matters That’s simply not true. The vast majority of the increase in cost is due to the explosive growth of non-teaching administrative staff. When wealthy donors earmark their gift for a new library or sports complex, it’s the students who end up paying for all of the staff to maintain the building and run the programs.
        craftinator 7y ago
        Ding, +1. Schools spend their vast income on administrators, marketing, and marketing gimmicks, such as sports and very expensive new buildings. They are in competition with other schools to bring in more students and manage more students (thus bringing in more cash), so they optimize for that goal.
        wtvanhest 7y ago
        I've looked at a bunch of school financials, and I am not really seeing the admin bloat that everyone quotes. That said, its not really the only metric that matters, but it does matter a lot. And it matters a lot more than all other metrics around cost because you can easily reduce those other metrics if they are truly bloat. Professor salaries cannot easily come down, and you cannot easily add more kids per class.
        chongli 7y ago
        Schools don't need to bring professor salaries down. They just hire cheap adjuncts to teach a lot of classes. That greatly reduces their average cost per credit hour. Good professors pay for themselves by bringing in grant money.
larnmar 7y ago
Also as long as US education remains a strongly positional good — that the value of your education continues to be mostly dependent on where your university sits in the pecking order, rather than on some absolute value (e.g. of the knowledge you actually learn). With a positional good, demand can never be really satisfied, because everyone always wants something further up the chain, so prices expand to whatever people can possibly pay.
0000011111 7y ago
Government loans for college could very well cause the next recession. https://www.npr.org/2019/12/09/785527874/student-loans-a-lot-like-the-subprime-mortgage-debacle-watchdog-says https://www.npr.org/2019/12/09/785527874/student-loans-a-lot... The economic effects will be more indirect than the last one. Folks will delay homebuying, they will have fewer children later in life. Schools and Colleges will be competing for fewer people. Many small liberal arts colleges will close.
- 0000011111 7y ago
  https://www.educationdive.com/news/how-many-colleges-and-universities-have-closed-since-2016/539379/ https://www.educationdive.com/news/how-many-colleges-and-uni...

by koolba 7y ago

As long as the government continues to give people loans (ie demand side) rather than directly provide a competitor to schools (ie supply side), the price will continue to grow.

tzs 7y ago

I haven't been able to find much online historical tuition data, but the little I have found (about 100 years of Stanford tuition) shows that it was increasing before there were government loans at about the same rate it increased after government loans. This makes me doubt the theory that government loans are behind high tuition.

52-6F-62 7y ago
To add to that: many other countries subsidize or offer student loan and grant programs (including Canada) and domestic costs have not risen to the same extent. A loose example: https://www.cnbc.com/2017/07/13/heres-how-much-it-costs-to-go-to-college-in-the-us-compared-to-other-countries.html https://www.cnbc.com/2017/07/13/heres-how-much-it-costs-to-g... I think there are just too many counterpoints for the student loan thing to be accurate outside of a vacuum.
wtvanhest 7y ago
Stanford is not a good proxy bc the students were well funded before the loans poured fuel on the fire. Loans help increase the cost of schools with lower social economic status (middle class) schools like state schools. Loans allowed many schools to charge private costs for public education. Professor salaried have risen, cost structures are too high to support unloaned demand.
- jdkee 7y ago
  "Professor salaried[SIC] have risen,...." This is untrue. If anything, the rapidly growing pool of poorly paid adjuncts has lowered the median salary. Perhaps you could take a look at this book for a deeper understanding of the issue. https://www.insidehighered.com/news/2019/04/16/herb-childress-discusses-his-new-book-adjunct-underclass https://www.insidehighered.com/news/2019/04/16/herb-childres...
  - wtvanhest 7y ago
    This is one story. If you pull the financials of major public colleges, prof salaries per credit hour taught are increasing. No other metric matters. The cost has to come down, and that includes the cost of instruction etc.
    - chongli 7y ago
      No other metric matters That’s simply not true. The vast majority of the increase in cost is due to the explosive growth of non-teaching administrative staff. When wealthy donors earmark their gift for a new library or sports complex, it’s the students who end up paying for all of the staff to maintain the building and run the programs.
      - craftinator 7y ago
        Ding, +1. Schools spend their vast income on administrators, marketing, and marketing gimmicks, such as sports and very expensive new buildings. They are in competition with other schools to bring in more students and manage more students (thus bringing in more cash), so they optimize for that goal.
      - wtvanhest 7y ago
        I've looked at a bunch of school financials, and I am not really seeing the admin bloat that everyone quotes. That said, its not really the only metric that matters, but it does matter a lot. And it matters a lot more than all other metrics around cost because you can easily reduce those other metrics if they are truly bloat. Professor salaries cannot easily come down, and you cannot easily add more kids per class.
        chongli 7y ago
        Schools don't need to bring professor salaries down. They just hire cheap adjuncts to teach a lot of classes. That greatly reduces their average cost per credit hour. Good professors pay for themselves by bringing in grant money.

larnmar 7y ago

Also as long as US education remains a strongly positional good — that the value of your education continues to be mostly dependent on where your university sits in the pecking order, rather than on some absolute value (e.g. of the knowledge you actually learn). With a positional good, demand can never be really satisfied, because everyone always wants something further up the chain, so prices expand to whatever people can possibly pay.

0000011111 7y ago

Government loans for college could very well cause the next recession. https://www.npr.org/2019/12/09/785527874/student-loans-a-lot-like-the-subprime-mortgage-debacle-watchdog-says https://www.npr.org/2019/12/09/785527874/student-loans-a-lot... The economic effects will be more indirect than the last one. Folks will delay homebuying, they will have fewer children later in life. Schools and Colleges will be competing for fewer people. Many small liberal arts colleges will close.

0000011111 7y ago
https://www.educationdive.com/news/how-many-colleges-and-universities-have-closed-since-2016/539379/ https://www.educationdive.com/news/how-many-colleges-and-uni...