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> The bulk of their customers are able to pay thanks to loan guarantees backed by special government rules. Universities are not businesses. Students are not c

> The bulk of their customers are able to pay thanks to loan guarantees backed by special government rules. Universities are not businesses. Students are not customers. Student tuition was much more heavily subsidized by states, but funding from states to universities has declined in the past few decades. This is the reason for tuition hikes. In the past, there was an agreement between states and universities: The states will provide a certain level of funding for students, and in exchange the universities will be barred from raising tuition above a very small rate annually. Then some states decided that having a "balanced budget" during all years, including recessions, was better policy than keeping education well-funded. Now recessions cause huge drops in education funding, which are accompanied by removing the limits on yearly tuition hikes. Because it's generally better to have a more educated population, the federal government picks up some of the slack with grant and loan aid, and banks pick up more slack with private loans to students who otherwise couldn't afford it. Then funding never returns to prior levels. Stop blaming universities. The blame very clearly lies with states and their asinine balanced budget policies.

btilly 6y ago
Yours is a narrative that universities themselves like to put forth. However it doesn't make sense. Tuition rises are a long-term trend. As https://www.usgovernmentspending.com/education_spending https://www.usgovernmentspending.com/education_spending points out, from the 1950s to the present, the share of GDP spent by government on universities went from 0.4% to 1.7%. With sometimes progress, and sometimes a loss. But the long-term trend is that spending by states has gone up relative to both enrollment and inflation. Yes, there are recession years where universities blame tuition hikes on cutbacks in state spending. But tuition has outpaced inflation in good years as well. Which suggests that the long-term trend has other causes. How bad is it? At present average college tuition at a private school is $45k/year. Salaries for the people teaching vary from $40k for a postdoc to an average of $95k for a full professor. Which means that in an average classroom, a handful of students could hire the teacher as a private tutor, give the teacher a pay raise, and themselves save money! This basic fact suggests that it should be possible to teach students for a lot less than we consider normal today. Now why have caused risen? It turns out that a lot of causes have been proposed, from the cost of buildings going up to an increase in bureaucracy to deal with government regulation. But attempts to quantify all the different factors, such as https://www.nber.org/papers/w21967 https://www.nber.org/papers/w21967, find that the biggest single factor is the combination of restricted supply and artificially increased demand (thanks to the availability of loans and financial aid). Exactly as I said.
- ZoomerCretin 6y ago
  >As https://www.usgovernmentspending.com/education_spending https://www.usgovernmentspending.com/education_spending points out, from the 1950s to the present, the share of GDP spent by government on universities went from 0.4% to 1.7%. A four-fold increase in funding as a percentage of GDP isn't relevant to the more important metric, real funding per student. https://www.cbpp.org/research/state-budget-and-tax/state-higher-education-funding-cuts-have-pushed-costs-to-students https://www.cbpp.org/research/state-budget-and-tax/state-hig... > But the long-term trend is that spending by states has gone up relative to both enrollment and inflation. Real funding per university student has not increased, and this claim is not backed by your source. See my source above for rebuttal. https://www.dallasnews.com/news/texas/2012/09/23/texas-college-tuition-up-55-since-2003-deregulation-analysis-shows/ https://www.dallasnews.com/news/texas/2012/09/23/texas-colle... "State officials used to brag about the affordability of college, but the costs have ballooned since 2003, even when inflation is factored in. Less money from state That year, to help close a budget cap without raising taxes, lawmakers cut the amount of taxpayer money the state sent to universities — an overall 11 percent decrease per student — but removed ceilings placed on tuition so campuses could make up for the lost revenue." > But tuition has outpaced inflation in good years as well. Which suggests that the long-term trend has other causes. Yes, that state funding doesn't return to prior levels (See my first source) > Salaries for the people teaching vary from $40k for a postdoc to an average of $95k for a full professor. Which means that in an average classroom, a handful of students could hire the teacher as a private tutor, give the teacher a pay raise, and themselves save money! This basic fact suggests that it should be possible to teach students for a lot less than we consider normal today. A university is more than its teaching staff. There's research, buildings to maintain, academic support staff and programs, and plenty of other things as well. > But attempts to quantify all the different factors, such as https://www.nber.org/papers/w21967 https://www.nber.org/papers/w21967, find that the biggest single factor is the combination of restricted supply and artificially increased demand (thanks to the availability of loans and financial aid). One source which happens to ignore many of the factors I mentioned above does not prove your point true. Most importantly, tuition ceilings imposed on universities by state governments. Luckily the paper discusses its shortcomings: "Given that our model effectively lumps private and public colleges together, it appears that changes in state funding support and changes in other sources of non-tuition revenue largely offset each other. In future work, we plan to disaggregate the model along the public/private dimension." The source groups private and public colleges together. Private colleges do not receive state funding and therefore would not have to hike tuition in response to lower stand funding. This noise averages out the effect that state funding cuts have on public school tuition rates.

btilly 6y ago

Yours is a narrative that universities themselves like to put forth. However it doesn't make sense. Tuition rises are a long-term trend. As https://www.usgovernmentspending.com/education_spending https://www.usgovernmentspending.com/education_spending points out, from the 1950s to the present, the share of GDP spent by government on universities went from 0.4% to 1.7%. With sometimes progress, and sometimes a loss. But the long-term trend is that spending by states has gone up relative to both enrollment and inflation. Yes, there are recession years where universities blame tuition hikes on cutbacks in state spending. But tuition has outpaced inflation in good years as well. Which suggests that the long-term trend has other causes. How bad is it? At present average college tuition at a private school is $45k/year. Salaries for the people teaching vary from $40k for a postdoc to an average of $95k for a full professor. Which means that in an average classroom, a handful of students could hire the teacher as a private tutor, give the teacher a pay raise, and themselves save money! This basic fact suggests that it should be possible to teach students for a lot less than we consider normal today. Now why have caused risen? It turns out that a lot of causes have been proposed, from the cost of buildings going up to an increase in bureaucracy to deal with government regulation. But attempts to quantify all the different factors, such as https://www.nber.org/papers/w21967 https://www.nber.org/papers/w21967, find that the biggest single factor is the combination of restricted supply and artificially increased demand (thanks to the availability of loans and financial aid). Exactly as I said.

ZoomerCretin 6y ago
>As https://www.usgovernmentspending.com/education_spending https://www.usgovernmentspending.com/education_spending points out, from the 1950s to the present, the share of GDP spent by government on universities went from 0.4% to 1.7%. A four-fold increase in funding as a percentage of GDP isn't relevant to the more important metric, real funding per student. https://www.cbpp.org/research/state-budget-and-tax/state-higher-education-funding-cuts-have-pushed-costs-to-students https://www.cbpp.org/research/state-budget-and-tax/state-hig... > But the long-term trend is that spending by states has gone up relative to both enrollment and inflation. Real funding per university student has not increased, and this claim is not backed by your source. See my source above for rebuttal. https://www.dallasnews.com/news/texas/2012/09/23/texas-college-tuition-up-55-since-2003-deregulation-analysis-shows/ https://www.dallasnews.com/news/texas/2012/09/23/texas-colle... "State officials used to brag about the affordability of college, but the costs have ballooned since 2003, even when inflation is factored in. Less money from state That year, to help close a budget cap without raising taxes, lawmakers cut the amount of taxpayer money the state sent to universities — an overall 11 percent decrease per student — but removed ceilings placed on tuition so campuses could make up for the lost revenue." > But tuition has outpaced inflation in good years as well. Which suggests that the long-term trend has other causes. Yes, that state funding doesn't return to prior levels (See my first source) > Salaries for the people teaching vary from $40k for a postdoc to an average of $95k for a full professor. Which means that in an average classroom, a handful of students could hire the teacher as a private tutor, give the teacher a pay raise, and themselves save money! This basic fact suggests that it should be possible to teach students for a lot less than we consider normal today. A university is more than its teaching staff. There's research, buildings to maintain, academic support staff and programs, and plenty of other things as well. > But attempts to quantify all the different factors, such as https://www.nber.org/papers/w21967 https://www.nber.org/papers/w21967, find that the biggest single factor is the combination of restricted supply and artificially increased demand (thanks to the availability of loans and financial aid). One source which happens to ignore many of the factors I mentioned above does not prove your point true. Most importantly, tuition ceilings imposed on universities by state governments. Luckily the paper discusses its shortcomings: "Given that our model effectively lumps private and public colleges together, it appears that changes in state funding support and changes in other sources of non-tuition revenue largely offset each other. In future work, we plan to disaggregate the model along the public/private dimension." The source groups private and public colleges together. Private colleges do not receive state funding and therefore would not have to hike tuition in response to lower stand funding. This noise averages out the effect that state funding cuts have on public school tuition rates.