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I agree that you need to find a way to bring the costs down, I think that a lot of money are wasted, For example in Mathematics or computer science you don't ne

I agree that you need to find a way to bring the costs down, I think that a lot of money are wasted, For example in Mathematics or computer science you don't need super expensive equipment, you need good professors that are good at teaching. Some universities have buildings with cheap bedrooms for students, places with cheap but good cooked food. What I think it happened in US is the capitalistic thing where you raise the prices until people stop buying so the final price is not the costs + some profit on top but just the maximum money you could force out from your customers , you could say that maybe true free markets can solve this but for medicine you can't have 1000 universities competing because this domain is not like math or computers, you need access to hospitals to train your students.

robomartin 7y ago
It actually is precisely opposite to capitalism. In the US the government guarantees student loans. This means the universities have exactly zero risk. When someone has no risk of losing money because they government will guarantee payment, they will charge and lend any amount to anyone. You can't lose. What would happen if the government got out of student loans and did not guarantee them? Universities would experience significantly more risk than before. And, in fact, there is no way they could charge the exorbitant amounts they charge today. They would be forced to reduce costs in order to be able to reduce tuition and, as a result, reduce the risk they undertake. I know a kid who is going for a Masters in Mechanical Engineering and will graduate with a debt of over $300K. He was a member of the robotics team I mentor. I strongly suggested it was a terrible idea to start life with an ME degree and that much debt. It amounts to economic slavery. Well, the university, didn't care because the government guarantees the loan. So, they lured the kid in by promising all kinds of wonderful things. Sadly, in a couple of years this person is going to start to understand why I advised against taking that path. From my perspective, the largest problem with regards to the cost of education in the US is that government disrupts free market forces. All they have to do is stop and the cost of education in the US will drop over time. Nobody in their right mind would loan $300K to an 18 year old without market distorting forces such as a 100% government guarantee.
- simion314 7y ago
  But if the government stops tomorrow to get involved won't you get a giant backlash? I do not see that universities would stop spending and reduce the costs by 90%, if those universities are also in debt because they planned on the money they won't get you could get them bankrupt. Do you have a solution for this ? Btw I appreciate you taking time to provide this comments.
  - robomartin 7y ago
    It's a complex problem and, yes, you are correct, you can't just stop overnight. I won't claim to know exactly how to execute the removal of government from the equation. Perhaps it starts with an announcement of a reduction of guarantees over a period of time. For example, US $40K maximum and it goes down by $5K every year until reaching zero. That would provide for a gradual reduction and a transition from a "we can't lose because the government guarantees it" mentality to universities being forced to exist in the real world. I say "exist in the real world" because it is easy to forget that lots of people leave university with very expensive yet useless degrees. It's easy in a place like HN to think of STEM degrees. There are lots of other degrees universities get paid lots of money to deliver that do not have the earning potential of STEM degrees. Again, because government guarantees the loans universities are able to charge silly amounts for these degrees. Not a simple problem, but I think we know that distorting the market through government involvement isn't helping anyone.
    - simion314 7y ago
      Could be there a big risk that some private companies would popup and offer students the money as lending or in exchange for a few ears of your career? Then the costs will not go down. I would suggest a controversial thing, the government decides the maximum and enforces it, it also decides that for each subject the universities would accept a number of students for free, for the free sports there will be an exam . Who would pay for the free spots? The universities and the government will have to decide on how to split this. With my solution I am trying to solve a possible tragedy, brilliant students that can't become doctors and engineers and have to get other jobs or are forced to work instead of study so it affects their performance, as a society we should try to identify the briliant people and help them because they will help our children in the future.

robomartin 7y ago

It actually is precisely opposite to capitalism. In the US the government guarantees student loans. This means the universities have exactly zero risk. When someone has no risk of losing money because they government will guarantee payment, they will charge and lend any amount to anyone. You can't lose. What would happen if the government got out of student loans and did not guarantee them? Universities would experience significantly more risk than before. And, in fact, there is no way they could charge the exorbitant amounts they charge today. They would be forced to reduce costs in order to be able to reduce tuition and, as a result, reduce the risk they undertake. I know a kid who is going for a Masters in Mechanical Engineering and will graduate with a debt of over $300K. He was a member of the robotics team I mentor. I strongly suggested it was a terrible idea to start life with an ME degree and that much debt. It amounts to economic slavery. Well, the university, didn't care because the government guarantees the loan. So, they lured the kid in by promising all kinds of wonderful things. Sadly, in a couple of years this person is going to start to understand why I advised against taking that path. From my perspective, the largest problem with regards to the cost of education in the US is that government disrupts free market forces. All they have to do is stop and the cost of education in the US will drop over time. Nobody in their right mind would loan $300K to an 18 year old without market distorting forces such as a 100% government guarantee.

simion314 7y ago
But if the government stops tomorrow to get involved won't you get a giant backlash? I do not see that universities would stop spending and reduce the costs by 90%, if those universities are also in debt because they planned on the money they won't get you could get them bankrupt. Do you have a solution for this ? Btw I appreciate you taking time to provide this comments.
- robomartin 7y ago
  It's a complex problem and, yes, you are correct, you can't just stop overnight. I won't claim to know exactly how to execute the removal of government from the equation. Perhaps it starts with an announcement of a reduction of guarantees over a period of time. For example, US $40K maximum and it goes down by $5K every year until reaching zero. That would provide for a gradual reduction and a transition from a "we can't lose because the government guarantees it" mentality to universities being forced to exist in the real world. I say "exist in the real world" because it is easy to forget that lots of people leave university with very expensive yet useless degrees. It's easy in a place like HN to think of STEM degrees. There are lots of other degrees universities get paid lots of money to deliver that do not have the earning potential of STEM degrees. Again, because government guarantees the loans universities are able to charge silly amounts for these degrees. Not a simple problem, but I think we know that distorting the market through government involvement isn't helping anyone.
  - simion314 7y ago
    Could be there a big risk that some private companies would popup and offer students the money as lending or in exchange for a few ears of your career? Then the costs will not go down. I would suggest a controversial thing, the government decides the maximum and enforces it, it also decides that for each subject the universities would accept a number of students for free, for the free sports there will be an exam . Who would pay for the free spots? The universities and the government will have to decide on how to split this. With my solution I am trying to solve a possible tragedy, brilliant students that can't become doctors and engineers and have to get other jobs or are forced to work instead of study so it affects their performance, as a society we should try to identify the briliant people and help them because they will help our children in the future.