4 ms·

Student debt is massive, yes, but why are so few people asking where that money actually went? A cursory search says student loan debt is roughly $1.6 trillion

Student debt is massive, yes, but why are so few people asking where that money actually went? A cursory search says student loan debt is roughly $1.6 trillion dollars and there are around 4,000 to 6,000 colleges/universities. This is a rough number and the actual amount depends on your criteria, but the gist is that you have a ton of money flowing into a relatively small pool. Yes, I know not every dollar of loans goes to the school, but I really have to beg the question on what these institutions have done with all this money. Seems like any discussion about forgiving debt should involve going after some of these universities themselves.

CSSer 4y ago
In the case of my alum, I think I can tell you: they spent it on housing and amenities to attract more students (quantity, not quality). I watched it happen while I attended. A university operates under the same principles as any other business in this case. Administrators are not innocent here, but they do have to live within the system and work with the incentives they are provided. Loans are made available to students and parents to shop around. This is a big part of what has created the upward pressure on tuition. We’ve revitalized a lot of state school campuses while letting their academics rot. Parents and students see fancy common areas, gyms, cafeterias and living spaces when they visit campuses then use that to decide where to go unless they’re very focused on the education, which they’re likely not because most very focused students require less financial help. If that money had been given to the administrators we are often so quick to villify, this picture may be a very different one.
- CSSer 4y ago
  Turns out "alum" is the gender neutral term for a graduate, not the school. I should've used "alma mater" here. I've never had a chance to learn latin properly and it shows :)
- kevin_thibedeau 4y ago
  One big name school I've been to had a new gym where the bathroom hand dryers all had custom graphics on them. This is where the money goes.
colechristensen 4y ago
University administrative costs have blown up with all of the easy to acquire loan money. Just a few highly paid and many mildly paid bureaucrats doing things which don’t need to be done… or in some cases doing very little at all (I’ve heard stories) Also lots of fundraising and shiny new buildings which are more advertisements than useful expansions.
remarkEon 4y ago
This is a great question that no one is really asking. Too much of the conversation revolves around what’s fair for student borrowers and not enough on what in the world these universities have done with all of that money.
sokoloff 4y ago
Just housing and feeding around 50 million borrowers while they attend school for 4-ish years ends up being a damn lot of money.
- washadjeffmad 4y ago
  I thought college was expensive until I looked into historical tuition prior to the modern era. Turns out our grand parents, parents, and siblings just lived in a golden age of fair wages and massively affordable and available education.
  - mmcgaha 4y ago
    I am younger than your grandparents but I have children that range for 14-31 and I can tell you that I could afford to go to college based on what I made as a short order cook but my kids would not have been able to earn enough to even pay for school much less have enough left over for life. It sure feels like schools have taken advantage of the student loan programs to increase fees and tuition while at the same time lowering the admission standards to put even more asses in seats.
spiffytech 4y ago
My alma mater needed to bring their student center into compliance on the last ~50 years of building code changes. The project was estimated to cost high-8-figures, for nothing but code compliance. Instead, they spent $120,000,000 renovating it to be shiny and modern and also up to code. I don't understand why it was so expensive, but I'll assume it's not an order of magnitude away from true cost. $1.6 trillion is "only" a few hundred million per school. If the cost of renovating one building is any indication, it's easy for a university to use up that much money.
- CSSer 4y ago
  This tracks because my alma mater built new housing and a new student center over the course of a few years at the cost of roughly $300 million.

CSSer 4y ago

In the case of my alum, I think I can tell you: they spent it on housing and amenities to attract more students (quantity, not quality). I watched it happen while I attended. A university operates under the same principles as any other business in this case. Administrators are not innocent here, but they do have to live within the system and work with the incentives they are provided. Loans are made available to students and parents to shop around. This is a big part of what has created the upward pressure on tuition. We’ve revitalized a lot of state school campuses while letting their academics rot. Parents and students see fancy common areas, gyms, cafeterias and living spaces when they visit campuses then use that to decide where to go unless they’re very focused on the education, which they’re likely not because most very focused students require less financial help. If that money had been given to the administrators we are often so quick to villify, this picture may be a very different one.

CSSer 4y ago
Turns out "alum" is the gender neutral term for a graduate, not the school. I should've used "alma mater" here. I've never had a chance to learn latin properly and it shows :)
kevin_thibedeau 4y ago
One big name school I've been to had a new gym where the bathroom hand dryers all had custom graphics on them. This is where the money goes.

colechristensen 4y ago

University administrative costs have blown up with all of the easy to acquire loan money. Just a few highly paid and many mildly paid bureaucrats doing things which don’t need to be done… or in some cases doing very little at all (I’ve heard stories) Also lots of fundraising and shiny new buildings which are more advertisements than useful expansions.

remarkEon 4y ago

This is a great question that no one is really asking. Too much of the conversation revolves around what’s fair for student borrowers and not enough on what in the world these universities have done with all of that money.

sokoloff 4y ago

Just housing and feeding around 50 million borrowers while they attend school for 4-ish years ends up being a damn lot of money.

washadjeffmad 4y ago
I thought college was expensive until I looked into historical tuition prior to the modern era. Turns out our grand parents, parents, and siblings just lived in a golden age of fair wages and massively affordable and available education.
- mmcgaha 4y ago
  I am younger than your grandparents but I have children that range for 14-31 and I can tell you that I could afford to go to college based on what I made as a short order cook but my kids would not have been able to earn enough to even pay for school much less have enough left over for life. It sure feels like schools have taken advantage of the student loan programs to increase fees and tuition while at the same time lowering the admission standards to put even more asses in seats.

spiffytech 4y ago

My alma mater needed to bring their student center into compliance on the last ~50 years of building code changes. The project was estimated to cost high-8-figures, for nothing but code compliance. Instead, they spent $120,000,000 renovating it to be shiny and modern and also up to code. I don't understand why it was so expensive, but I'll assume it's not an order of magnitude away from true cost. $1.6 trillion is "only" a few hundred million per school. If the cost of renovating one building is any indication, it's easy for a university to use up that much money.

CSSer 4y ago
This tracks because my alma mater built new housing and a new student center over the course of a few years at the cost of roughly $300 million.