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I've often wondered why it is that colleges have gotten away with raising tuition 7% to 10% per year for decades on end. This post is, indeed, very honest abou

I've often wondered why it is that colleges have gotten away with raising tuition 7% to 10% per year for decades on end. This post is, indeed, very honest about the reason: Your college degree is a badge of social class that every other college grad will look for. If you don't have one, many college grads will assume that you are shiftless and lazy and whining and self-pitying and that you potentially have a series of pregnant girlfriends. Colleges are charging you -- are striving to put you deeply into debt for a decade or more -- for admission to a club. And, make no mistake, I do generally recommend that you join that club -- the advice here is correct; you should fight to get a degree from one school or another, because the perks are real. But let's not lose sight of the reason why college grads get ahead and folks like the inventive and hardworking techs in my old fab, or my military-veteran uncles with their high school educations, get sneered at. The reason is prejudice. Incidentally, I for one am willing to take the OP at his (her?) word when he says he's having trouble getting an affordable loan, particularly given the recent turmoil in the credit markets: http://www.thinkfinancial.com/blog/index.php/student-loans/student-loan-availability-jeopardized http://www.thinkfinancial.com/blog/index.php/student-loans/s...

coglethorpe 18y ago
I've always thought that it's the loans that end up raising tuition. It's the same way the easy loans raised housing prices. Too much money chasing too few goods.
- j2d2 18y ago
  Hmm... I wonder how often these loans default and if the derivatives markets trade them...
  - randombit 18y ago
    I'm not sure about the derivatives market part, but remember that (in the US, at least) most student loans are administered by the federal government, and are 'guaranteed' by them. That means if you don't pay up, the government will fuck with you in all the various ways a government can (confiscation of tax refunds, wage garnishment, etc - and don't forget student loans are not covered by bankruptcy). That is why my loan interest is less than 2% over the fed funds rate - it's worth it to loan money at that rate, because there is effectively no way to avoid having to pay up, short of dying.
- aswanson 18y ago
  Raising tuition by how much? Back in the 90s when I was an undergrad an unsubsizded stafford max was about $2600. Last time I checked (2005) the max was still around $2600 in 2005 dollars! They didn't even add on yearly for inflation. So whatever is driving costs, I seriously doubt government largesse.

coglethorpe 18y ago

I've always thought that it's the loans that end up raising tuition. It's the same way the easy loans raised housing prices. Too much money chasing too few goods.

j2d2 18y ago
Hmm... I wonder how often these loans default and if the derivatives markets trade them...
- randombit 18y ago
  I'm not sure about the derivatives market part, but remember that (in the US, at least) most student loans are administered by the federal government, and are 'guaranteed' by them. That means if you don't pay up, the government will fuck with you in all the various ways a government can (confiscation of tax refunds, wage garnishment, etc - and don't forget student loans are not covered by bankruptcy). That is why my loan interest is less than 2% over the fed funds rate - it's worth it to loan money at that rate, because there is effectively no way to avoid having to pay up, short of dying.
aswanson 18y ago
Raising tuition by how much? Back in the 90s when I was an undergrad an unsubsizded stafford max was about $2600. Last time I checked (2005) the max was still around $2600 in 2005 dollars! They didn't even add on yearly for inflation. So whatever is driving costs, I seriously doubt government largesse.