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High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

• paulpauper 4y ago
  "Omnibus Budget Reconciliation Act 1993" yet the chart he supplies clearly show the trend starting in 1985, so he torpedoes his own argument with his own 'evidence'. self-own
• mc4ndr3 4y ago
  Instead of transitioning college from a luxury to a municipal resource, we continue to treat it as a business.
  • missedthecue 4y ago
    There are municipal resource colleges. They're called community colleges. They are extremely affordable. Very few people want to go there.
    • thereddaikon 4y ago
      few people want to go there because the bit of paper you get at the end is the value and those a worth less than the bits of paper you get from other universities.
      • judge2020 4y ago
        Plus, usually they don't offer anything more than an associate's degree. Can't remember the last time I saw anything less than "bachelor's degree or equivalent experience" on a job listing.
        • balefrost 4y ago
          One strategy is to go to community college for your gen ed requirements, transfer those credits to a more prestigious university, then finish your degree there. The piece of paper will have the university's name on it, but you will have saved money in the process. You have to do some due diligence to figure out what credits you can transfer. You don't want to waste your time and money on a class that doesn't count. But I know of some people who did this.
          • ClumsyPilot 4y ago
            That's more hacking the system than using the system as intended
            • toast0 4y ago
              That some community colleges focused on being 'transfer schools' was old hat when I was in school 20 years ago; there were established curriculums designed to meet the general ed requirements of UC and CSU. Since then, many states have developed programs where you can get guaranteed transfer admission to their state schools for year three and four. It's a better way to do it anyway. Lower level courses at big schools tend to be giant lectures, but many of those are going to be higher level courses at community college. Would you rather take Calculus in a giant lecture hall or a small class room? Same with Physics and Chemistry (although those at least have lab sections that are usually size limited)
          • the_only_law 4y ago
            This is my current plan. Look to see if your state has any programs that guarantee entry. If I pick the right CC, I’m guaranteed admission (though not guaranteed any major) at the primary school I’m eyeing.
        • thereddaikon 4y ago
          That's what I mean about the bit of paper being worth less than at other universities.
      • SpicyLemonZest 4y ago
        If you reason from the premise that it's only the diploma that matters, I'm not sure it makes sense to talk about "transitioning" college from one model to another in the first place. We can't just decide by administrative fiat to transfer a bit of prestige from Harvard to the local 2-year school, even if we all agree it'd be better that way.
        • nicoburns 4y ago
          No, but we can decide by administrative fiat that Harvard can’t charge more than the community college does, and must transition its business model to be similar to that of the community college.
          • SpicyLemonZest 4y ago
            It's not obvious to me that we can. Harvard Community College seems like it would just end up in the same place as Harvard Extension School currently is, where everyone understands that it's not "really" Harvard and if you want the associated prestige you need to go to the 4 year residential program with competitive admissions.
            • nicoburns 4y ago
              You could regulate the cost of the 4 year residential programme (and presumably you also include those at similar universities while you were at it). Whether that's a good idea or not is a matter of debate, but it's essentially how most European universities work.
          • the_only_law 4y ago
            I thought most people who get into Ivy’s end up paying surprisingly lower, even compared to a state school. The problem is you probably won’t ever get in.
            • nicoburns 4y ago
              The problem is also the "most". It's dependant on discretionary grants.
      • slap_shot 4y ago
        There's also a stigma against this path. I went to a community college for two years (it was free), and then transferred the University of Florida to finish my degree (a fine public R1 university by any standard), paying exactly $0 for my degree. I know people who followed that same path and went on to top tier law schools, medical schools, bulge bracket investment banking, etc. Now I can look back and be grateful that I got a great education for free, but I was, and still am slightly embarrassed by saying I went to a community college. I now live in NYC where I'm pretty sure people can do almost the same thing with the SUNY school system, and come out with an undergrad degree for like $30k (still a lot, but most folks I know paid $100k+ for undergrad degrees that are not substantially differentiated from the path I did).
        • heretogetout 4y ago
          I understand feeling embarrassed but I think sharing your experience with your peers and (perhaps more importantly) their kids could help reduce the stigma, even if just a little.
        • jimmaswell 4y ago
          I did exactly that with the SUNY system. I could have probably gone to some "prestigious" place if I applied myself more, but I hated extracurriculars and all the other tertiary nonsense the applications seemed to expect of me. It should be about your educational and relevant (e.g. self taught programming demonstrated with projects) achievement, nothing else, IMO. SUNY system worked out for me and I'm not embarrassed of it. They almost screwed up my graduation with a one credit discrepency in the requirements with the transfer. You have to be careful and do their job for them checking up on that, I've learned.
      • jimmaswell 4y ago
        I went to one for an associate's, followed by transferring my credits to a state university for two more years for a bachelor's. Got an internship out of it, found my first good programming job within half a year, worked up to six figures remote a few years later. Seems like you get what you put into it and "prestige" isn't necessary at all just to have a good career.
      • bitexploder 4y ago
        A big part of the value is you can take core classes very inexpensively and then transfer to a more expensive same state university. Not an option for everyone, but it really saves a lot of $$ for those that can make it work. Most two year degrees that don’t focus on a trade of some sort are mostly of dubious value on their own, though.
      • toast0 4y ago
        If you go to a community college for two years (nominal) and transfer to get a bachelors degree in two more years (nominal), you end up with the same piece of paper as if you had done all four years at that same place. Your bank balance (and life experience) would likely be different however. Of course if you get through only two years, you'll (optionally) have a piece of paper, which might be better than dropping out of a four year school two years in.
  • deleted 4y ago
    [deleted]
• Minor49er 4y ago
  Charles J. Sykes has been writing about this for decades. I recommend his books "Profscam" and especially "Fail U" for more information on why college has become so costly for such little return
• calimac 4y ago
  Bill Clinton and JP Morgan Chase led the bill in 1993.
  • twa999 4y ago
    ol' Bill strikes again
• timeimp 4y ago
  Why not penalise tertiary institutions by stating that if students don’t find employment using those credentials, within 2 yard, their alumni fund / endowment fund gets raided the cost the degree?
  • HKH2 4y ago
    There goes any degrees considered useless. That's probably not what you want.
    • the_only_law 4y ago
      Or they can borrow a strategy from boot camps and hire their graduates to boost the numbers.
• lizknope 4y ago
  So where is the money going? If the price of something is increasing faster than inflation then I expect something in return for the extra money I am paying like a bigger house, faster computer, whatever. I went to college in the 1990's. Are college students getting a better education or experience for all the extra money they are paying? I've seen my university's new classrooms, student center, library, dorms, etc. and they are way nicer than when I was there. I don't know if the huge upgrade in facilities is also happening at other schools.
  • wyldfire 4y ago
    The extra money is going into administration. That includes salaries for non-teacher administrators and the fancy new real estate. Meanwhile they also cleverly decided to hire more part time teachers and fewer full time teachers, so they don't have to offer as much in benefits.
  • chongli 4y ago
    The money is going into a bottomless pit of administrative and bureaucratic overhead. Universities are caught up in a zero-sum competition for the top students (and athletes). To attract these students they invest in massive infrastructure projects (new buildings and renovations), often with the support of earmarked donations from wealthy alumni. These new facilities must then be staffed with administrators and maintenance workers. Along with the new facilities come new departments and schools of X and Y which also need their own administration. The short answer is: administrative bloat. That's where all the money is going. Universities employ far more non-teaching staff than ever before. A large bulk of this staff is essentially dedicated to marketing the university to prospective students, a zero-sum competition with other universities. One of the big problems is that wealthy donors love to earmark their donations for big projects that carry their name. It's way less sexy to donate a bunch of no-strings-attached money that the school can use to pay salaries and keep tuition down. For donors who actually want to help future students, the usual route is named scholarships. But then, of course, scholarships also require admin staff to oversee them. And schools can have thousands of these scholarships.
    • 4y ago
• throw93232 4y ago
  College today has way more responsibilities. It has to fix rape culture, dismantle patriarchy, fix diversity, organize protests... All that costs money. In 1990ties 20% of students got raped, nobody wants to go back to that dark times!
  • mgamache 4y ago
    Is this meant as parody? I can't tell sometimes.
    • throw93232 4y ago
      Why it would be parody? It is a reality. I can provide quotes from university officials.
      • Jerrrry 4y ago
        it depresses me that you are being serious.
    • ClumsyPilot 4y ago
      Life and parody is indistinguishable now. Like it's difficult for me to cone up with any ridiculous statement that I could publish, and someone online would not take it seriously
    • deleted 4y ago
      [deleted]
  • mgamache 4y ago
    The 20% rape is a fiction. Patriarchy in university is a fiction based on the number of females graduating (even in science). Organizing protests is not a part university's mission.
• Mc91 4y ago
  Western Europeans seem to have figured out how to get a good, affordable college education without this sort of thing. Some Europeans I talked to said the government even gives them a per diem for spending money or what have you while they go to college. They don't seem to have onerous debt. Just like high medical costs, or school shootings (nineteen children were just killed by a gunman at a school in the US, for the Europeans unaware) and so forth, this seems to be a mostly US specific problem.
  • onlyrealcuzzo 4y ago
    Look at the cost of private colleges in the EU compared to the US. It's roughly what you would expect. The difference between the EU and the US is mostly who pays for college - not how much it costs.
    • pif 4y ago
      If I understand correctly, the main difference is that in the EU you don't need to go to a private college.
      • endisneigh 4y ago
        You don’t need to in the United States either.
    • dividedbyzero 4y ago
      Private Universities are in totally different niches over here (at least in Germany); they either cater to the elites (and sell high-level networking) and can charge pretty much whatever, or serve as a plan B for those kids who can't make it in the public system but have parents willing to buy a degree (also expensive) or in very narrow niches (there are some catholic ones I think), those tend to be cheaper. Since the public system is very good, there's little incentive to go to a private University otherwise. I don't think any of them charge as much as a good US college would, by a fair margin. Might be different in other EU countries, but I don't think it's that different. Edit: And I would be extremely surprised if cost per student was that much higher in the public system than what I know people in one of the "plan B" private universities got charged, economies of scale and all that.
• coryrc 4y ago
  Michigan cut basically all remaining funding for higher education while I was in college. I saw double-digit percent increases every year. A few years ago I went back to look, assuming sky-high tuition rates, but they ended up only being a little bit higher than when I went. So why did tuition get high? The state stopped subsidizing it directly.
  • willcipriano 4y ago
    Given that degree holders go on to make wages much higher than those without, is it really fair that those without subsidize the education expenses of people who will go on to out earn them? Especially given how vanishingly little of it goes to actual education and instead administration and sporting programs.
    • thehappypm 4y ago
      It’s a societal good as a whole, so yes, societies should invest in them. Example: not everyone becomes a doctor. But society needs doctors. Having affordable pre-med college programs benefits everyone, even though only doctors directly make income from the program.
      • willcipriano 4y ago
        How about in exchange we cap their rate of pay so that society as a whole can benefit from their affordable services?
        • thehappypm 4y ago
          I’d rather lower the barrier of entry than punish the doctors. If it was easier to become a medical professional, doctors wouldn’t need to be paid so highly. We’re actually seeing a trend now of more people going into PA school which could help.
          • derbOac 4y ago
• Loughla 4y ago
  I mean, yeah. But also, the expectations placed on colleges have grown exponentially. Retention staff, student life staff, counseling staff, new innovative (read: Expensive) programs, the 'experience'. These all cost money. My experience of expectations of college in the 90's - can I drink? Do the faculty let me miss if I need to? My experience of expectations of college now - is my child safe? Can s/he access appropriate supports to ensure his/her success? What can s/he do on campus that ensures his/her safety and security and is free? Who can s/he talk to 24 hours a day for any reason? What connections to industry do you have for him/her? Do you have co-curricular and curricular experiences ensuring that s/he learns about life skills that s/he doesn't have? Is there a gym? Are there activities available 24/7 based on his/her schedule? Is the technology in the classroom accessible for my student? Are the buildings new? Edit: My source is my decades of working in higher education. Like it or not, the expectations placed on colleges/universities are much, much higher today. All of that costs money. Every single part of it.
  • nonethewiser 4y ago
    > But also, the expectations placed on colleges have grown exponentially. Retention staff, student life staff, counseling staff, new innovative (read: Expensive) programs Have they? Or are these just new things the college has come up with to sell?
    • zippergz 4y ago
      I worked in a university system for a while, and my observation is that the expectations have absolutely grown. Yes, someone has to be the first to think of some new thing to sell, but once they do, all of their competitors have to do the same thing to keep up. So many of the questions from prospective students and their parents are of the form "do you have X" or "do you do Y," all being things that other schools they are considering have or do. It's very hard for an individual institution to buck this trend if they wish to stay competitive for students.
  • Agamus 4y ago
    When I send my own children to college, it will be exclusively through extension courses. No frills. A long time professor at Harvard did the same thing for his children and gave me this idea. I feel strongly that these expectations could well lead to the undoing of Western Civilization. "...is my child safe..." Perhaps the issue is that the people who go to college these days are still... children?
• sorenn111 4y ago
  I think the cultural stance in the U.S. that to progress in life/elevate oneself/stigma against forgoing college is also a large part of it. I personally think that one policy that could have an outsized effect in solving this problem is establishing a max percentage of income that student loan repayment can be required to be for a maximum number of years (I'm pulling these numbers out of nowhere but just as an example) like 7.5% of gross income for 20 years. If the student hasn't repayed by that time using that percentage of income, the college is on the hook. Alternatively, a combination of the college and the lender (potentially switching away from government lenders). The problem I'm hoping to solve is the insane growth rates of tuition for a wide variety of degrees that do not justify their cost. Young kids being told that college is the required pathway into a good life often are not given the commensurate instruction that the college degree should be useful in terms of earning more/securing a job. An instruction of "study whatever you find interesting!" sounds good but is IMO very poor advice. It should be modified "Study things you find interesting but remember that college is to build and refine your skills for your career after"
  • onlyrealcuzzo 4y ago
    If you let students default on debt - most of the problems get solved. Creditors are going to make risk-free high-interest loans. As long as the loans are available - students will take them to get their underwater basket weaving degrees. If students could default on debt - then there wouldn't be an endless supply of creditors willing to lend them money to get degrees they know won't pay enough money to pay them back.
    • TimPC 4y ago
      This doesn't work though because even the attractive degrees can declare bankruptcy based on having greater liabilities than assets immediately after finishing their degree. Allowing students to default on student loan debt without requiring a minimum time period to do so basically means no one can safely provide loans for any degrees regardless of income potential.
      • 4y ago
• Agamus 4y ago
  "The solution is and always has been to cut the fluff from the academies. For context, go add up the salaries the 'student services' area of the expensive school of your choice. Having worked for one such office for ~15 years, the most appalling part was that they are largely antagonistic toward the faculty and mission of the schools. The waste is dizzying." I made the above comment on another thread with a similar topic: "Boston University Undergraduate Cost Reach $80K" https://news.ycombinator.com/item?id=31309700 https://news.ycombinator.com/item?id=31309700
  • the_only_law 4y ago
    Shit I’m fine with keeping stuff if majority of the student body wants to pay for it, but let me opt out. The education system and tangential friends have so far proven the hardest bureaucracy I’ve ever tried to find a way around. I hate that now, when I’m more mature, more experienced, and know exactly what I want from it is the time it’s the most difficult for me to go back.
    • nonethewiser 4y ago
      But why would they do that? They will taught these extravagant programs that few want/need/will take advantage of but they will bake into everyone's tuition.
    • michaelt 4y ago
      > Shit I’m fine with keeping stuff if majority of the student body wants to pay for it, but let me opt out. For things like swimming pools and gyms, sure. But some of the new services are things like 'mental health support' - it would be problematic if you'd opted out of mental health support to save $50/month, then you committed suicide.
      • j_walter 4y ago
        What about things you already have...like say health insurance. I went back for an MBA ~2009 while working a full time job. I was forced to pay an extra ~$300 per term for health care even though I already had it through my work. No way to opt out. When my tuition was ~$2,500/term...another $300 doesn't seem like that much except I was paying out of pocket so every dollar counted.
• deleted 4y ago
  [deleted]
• saperyton 4y ago
  This article goes far but leaves out the logical conclusion: the federal government should drastically cut on all student loans.
  • Jerrrry 4y ago
    And taper the Pell grant. The more free money, the less the money is worth.
• hackererror404 4y ago
  Might be an unpopular opinion... but this is exactly why we shouldn't do student loan debt forgiveness. The root core of the issue wouldn't at all be addressed and it would actually be a signal to universities and students alike, that Universities can charge more, and students can continue to take out larger loans because... they might be forgiven at some future point in time.
  • vsareto 4y ago
    With free universities, they wouldn't have to charge students anything.
    • lamontcg 4y ago
      And the government would then cap the amount that universities get per student, and it would allow poor people to go to college as well. Everyone winds up paying tuition via taxes over time.
      • weberer 4y ago
        Poor people already go to college. You don't have to pay anything up front. Its entirely debt-based.
  • pyrophane 4y ago
    I'd like to see student loan debt forgiven along with implementing a plan to address the cause of this ballooning debt. Unfortunately, this is the United States, and federal legislation on just about anything is currently impossible if there is any opportunity at all to turn it into a divisive issue. Even if the democrats managed to build a majority that would allow them to pass whatever they wanted, tackling a problem like this in a forward-looking way seems beyond them.
    • jaywalk 4y ago
      Every problem that gets solved is one less thing to campaign on. And since we don't hold our politicians accountable, they can just campaign on the same things over and over and never do anything about them.
• suture 4y ago
  State funding per student has steadily declined since 1987. Tuition rates have risen in response. I don’t claim all of the tuition increases have come from the decline in funding but the decline in public funding contributes to the increase. Public colleges are more and more being run like businesses. According to this research, public funding for higher education has declined in response to increased welfare and Medicaid spending. https://www.educationnext.org/state-funding-public-colleges-gone/ https://www.educationnext.org/state-funding-public-colleges-...
  • readthenotes1 4y ago
    "State funding for higher education has declined by roughly a quarter, to $7,152 per student enrolled in a public two- or four-year school in 2015, down from $9,489 per student in 1987." The article is not in disagreement with the thought that Free Federal Money displaces other sources. Also, the article does not show why tuition has risen 1200% instead of 30%.
    • thawaya3113 4y ago
      The free federal money existed even before the law being suggested. It’s not clear why a minor change in mechanics would lead to such a significant change in incentives.
    • suture 4y ago
      Tuition in the University of California system increased by an infinite percent from 1960 to 1980. It used to be tuition free. Had it remained tuition free it would have been cheaper and better overall for society.
      • j_walter 4y ago
        I think many people are for tuition free for a certain amount of people based on merit. However it shouldn't be just a 5th-8th year of high school...like it seems to be becoming. When an admissions rate of a large public university can reach 95%+...we are no longer selecting the best students that will actually gain anything from going to college.
• woopwoop 4y ago
  I feel like this article doesn't support it's thesis at all. Why does the government lending directly result in less downward price pressure than guaranteeing loans? The only hypothesis I can imagine is that people anticipated something like student loan forgiveness, but that requires more evidence than what is given here (after all the government could in theory waive private loans and reimburse the lender).
  • nonethewiser 4y ago
    Because the colleges get paid up front instead of going through the collection process 15 years later.
    • woopwoop 4y ago
      Colleges got paid up front before as well. The loans were not originated by the universities, they were originated by financial institutions.
  • TimPC 4y ago
    A smaller fraction of government loans have very high interest rates for starters, so loans became cheaper money when they came directly from government rather than were insured by government.
• chadash 4y ago
  I did a semester overseas at a top tier public university in Australia. There were some very notable differences about what is included with university there. Your tuition basically covers the academics, but that is it. No free gym (but the gym was relatively cheap... I guess they provide it at cost or at least don't make much profit). No included meal plan (but again, subsidized). Far fewer student activities. And you know what? The education, which is far and away the most important thing, was just fine... If I were paying Australian tuition prices, the added cost of a gym membership seems like nothing by comparison. There's a whole lot of bloat in our college experience. I personally loved all the stuff that was included with my tuition. But you know what I don't love? That college is our society's key to upward mobility, but instead it creates crushing debt for many, because it includes lots of unnecessary stuff.
  • xwolfi 4y ago
    There are several american stuff in what you say yes. Im French, raise my kids in China. For me college is not an experience, it's simply a place to learn a trade, it's serious, it's not supposed to have gym. The food can be basic. What matters are the teachers and I adored my French ones in a small city. I wonder how much of that debt burden is due to the non-teaching part of college in the US: do students expect frats, dorms, gym, fancy cantine, exotic location, isolated modern campus ? Hell we barely had one 90s computer per student in some classes in France, and well it did the job just fine. It was in 2009.
• otagekki 4y ago
  Previous discussion: - https://news.ycombinator.com/item?id=24343572 https://news.ycombinator.com/item?id=24343572 (562 comments, 440 points) - https://news.ycombinator.com/item?id=31569654 https://news.ycombinator.com/item?id=31569654 (34 comments, 43 points)
• ortusdux 4y ago
  While you can technically discharge student loans through bankruptcy, the bar is much higher than traditional debts. I wonder what the consequences would be if that bar was lowered?
• tootie 4y ago
  I'm dubious honestly. For one, the separation of college costs from inflation started before 1993 and that's even called out in Bennet's op-ed from 1987. Secondly, the number of students enrolled has increased dramatically while the number of new colleges has not. Acceptance rates at elite schools have dropped precipitously in the face of increase demand. Same as skyrocketing housing costs, you can certainly see how certain policies have had an impact, but the overwhelming force is simple supply and demand. If we accredit 1000 more colleges next year, I guarantee that tuition will drop.
• Swizec 4y ago
  Another likely contributing factor: “Yale now has as many administrators as undergraduates”. The trend is similar for other colleges. https://freakonomics.com/podcast/what-is-the-future-of-college-and-does-it-have-room-for-men/ https://freakonomics.com/podcast/what-is-the-future-of-colle...
  • colinmhayes 4y ago
    Yale also has twice as many postgrads as undergrads.
• Gunax 4y ago
  I think there is a trilemma in uni funding: 1. Anyone can receive funds, regardless of cost/financial sense. 2. Anyone can receive funds, regardless of academic performance. 3. Burden on the state will be low. There has to be a filter somewhere. Germany (and others) chose 1 & 3. It's cheap, but only available for good students (but tell me if I am wrong, I am not German). For historical reasons, this is largely untenable in the USA: if they chose the same, it would be seen as enhancing privilege (both economic and ethnic) and a transfer from poor -> rich. Americans want to believe that education is a means to racial equality, a restoration of historical wrongs, and a land of opportunity. America is forced to offer loans for all students at all institutions, even when they don't really believe it will be beneficial because of cultural ethos, and choose 1 & 2. Fixing grade school education would go a long way to remedy this. Americans don't really believe in the fairness of their grade schools, and are unwilling to deny uni to students based on their grade school performance.
  • nonethewiser 4y ago
    > For historical reasons, this is largely untenable in the USA: if they chose the same, it would be seen as enhancing privilege (both economic and ethnic) and a transfer from poor -> rich. Devils advocate - how is the current situation any different? Education has skyrocketed in price which disproportionately disadvantages people with less. I totally take your point and think you're right about picking 2 of the 3. It's just that the people who think that way aren't considering the larger picture (and probably never will).
• dap 4y ago
  There’s no data in this article. In his recent book, Ron Lieber argues that the actual price paid hasn’t gone up nearly so much as the sticker price because of the increasing ubiquity of merit aid (which is terribly named). How does that factor in? He also points out that people’s expectations about what colleges provide have gone up. People expect small class sizes, mental health services, etc. If you argue colleges are just capturing extra money and not doing anything useful with it, I want to know where you think it’s going and why you think that? The solution here sounds awful. I really like the diversity of college experiences available and I’d hate to see that homogenized. Which is not to say it should be a “blank check”, but it’s already not that — the max is calculated based on need, and families have to make up the difference. Plus loans aren’t cheap. So there’s already incentive for students to choose cheaper schools even if they qualify for more aid.
  • peteradio 4y ago
    > I want to know where you think it’s going and why you think that Guess: Do nothing administrators paid to be on vacation. Why: Several years ago I called 4 of them to follow up on different job applications and did not once get a live human, only out of office messages. Over the course of about six weeks I called each every week and left each a single message. I never received a single call back or email. This was my almamater after moving back to the state following my graduate study.
    • nonethewiser 4y ago
      • peteradio 4y ago
        Like I said, never heard back but that would have been a pretty extraordinary explanation given this was around 2018.
    • dap 4y ago
      Ugh, that does sound really frustrating. Certainly, people bring up too many overpaid administrators a lot. It's a compelling story too because it's got a well-defined bad guy. I've not seen much depth to the analysis though. Another story might be that "administrator" is what some people call people whose jobs they don't know or don't associate with "running a college"? Elsewhere in this thread folks have pointed out that colleges _do_ a lot more things now, from mental health services to just being bigger (and so having more overhead and associated middle management). _More_ administrators isn't bad if they're doing useful things.
• giorgosts 4y ago
  Why are tuition fees and student loans necessary? Instead of the government backing up or paying up the student loans, can't it just pay the university directly and then the student would study for free? (after perhaps some common sense adjustments to prevent abuse). Like in, you know, Europe.
  • nonethewiser 4y ago
    Well, then everyone would be paying for it instead of the people that go.
    • giorgosts 4y ago
      If most students end up being paid their loans by the government its the same, minus the bureaucracy and the optics (we are not socialists, we discourage socialist behavior). You can apply this rationale to the army, police, fire brigades, hospitals, schools, street lighting, public roads, public transport etc. and you end up in a jungle, not a civilized society.
• pyrophane 4y ago
  The academic industrial complex has since moved on to focusing on wealthy international students, a group that is even less cost sensitive than an American student with a blank check.
  • the_only_law 4y ago
    I really noticed this when reading the page for a grad school at a nearby university, maybe one of the students on any of the research teams in the department were American.
    • Barracoon 4y ago
      Were they not American or did they not have traditionally white Anglo-Saxon names?
      • the_only_law 4y ago
        Both, I believe most of them were from China.
    • Xeronate 4y ago
      I think this is more likely caused by grad school being a poor investment for the average American but a great investment for a foreign student looking to get a job in America.
      • the_only_law 4y ago
        Yeah this was my initial thought as well. In fairness, the program was also somewhat niche.
• thawaya3113 4y ago
  I’m not sure I understand. What’s the difference in incentives colleges in lowering tuitions whether the government pays them directly or indirectly through the students? They are getting paid either way. Unless there was a cap that was removed that I missed. And the students are picking up the same loan amounts whether it was originally backed by the government, or originated from the government. The chart in the figure also doesn’t line up with the claims, with college inflation deviating from before the law was passed, and then a further increase in growth starting over a decade after it passed. Anecdotally, having been heavily involved in the student govt affairs of a major state university at the time a lot of these tuition increases happened, what we saw was: 1) A huge pullback in state govt tuition support. 2) Coinciding with a massive increase in spending on athletics and buildings 3) leading to my otherwise extremely price competitive state college becoming as expensive as the equivalent private college a few streets down the road. 4) Followed a few years later by an increase in tuition at the private college. This was once again further entrenched after the 2007-2009 financial crisis.
• ookdatnog 4y ago
  The article contains a chart, ostensibly to support its claim, but I don't see how it supports the claim. The chart shows that tuition inflation was already massively outpacing overall inflation in the '80s. The trend seems to accelerate a little bit in '93, but there's a much more pronounced acceleration in the early 2000's. So whatever the underlying reason is for tuition growing much faster than inflation, that reason must have been present in the '80s already, and the greatest acceleration of that process happened about ten years after the event that the article claims is the cause of all of it.
• stillbourne 4y ago
  Let's be real here, our generation was sold a bill of goods. Do well in high school and you'll get into college, which is the only chance you have to succeed in the world. If we didn't do well, we were shamed, grounded, told we were failures and punished. Do good, get a degree and the world will be your oyster! There will be an ocean of jobs all of which will allow you to retire with a big fat nest egg! The problem here isn't the loans, its not the universities costing too much, its the big fat lie. Maybe Johnny can't be a doctor or lawyer but if he went to a trade school and learned a skill more mechanical in nature he might just be as well off. We eliminated all the trade schools though, why? Because the big lie that University and the Corporate ladder is the "One True Way." It was all horseshit though. High tuition isn't because of the "Omnibus Budget Reconciliation Act 1993". Sure maybe it is a contributing factor, one of many, but the true reason its cost so damn much is because most of the degrees of asinine bullshit that doesn't prepare anyone for the real world. We ended all the trade schools and stuffed everyone into the same cookie cutter mold and then get upset when no one hires all the ugly cookies that didn't graduate magna cum laude. But little Johnny got a degree, why is he still working at McDonald's. Maybe you shouldn't have told Johnny that his only worth while trajectory in life was to get a degree. Maybe when Johnny's grades were tough you should have introduced him to something like metalworking, or wood shop, or electrical work.
  • colinmhayes 4y ago
    College is still the best investment you can make in yourself, even accounting for opportunity cost. Expected earnings increase by over a million for getting your degree. That's a large reason why people are willing to pay so much.
    • nonethewiser 4y ago
      >College is still the best investment you can make in yourself No it's not. Not without qualifiers. What if it costs $5M/year and the median income for graduates is 40k upon graduation? Clearly not worth it. That would utterly ruin your finances for the rest of your life. So there is some point where it becomes worth it. The question is where, which is going to be a little different for everyone. Is 240k for a liberal arts degree worth it to you? It's certainly not for me.
• Wowfunhappy 4y ago
  Incentive structures are important, but not the entire story. The article makes no attempt to examine where tuition revenue is actually being spent. Without that piece, I don't find their argument particularly convincing. The article asserts: > Close to 70% of college students attend using federal student loans, so schools would have no choice but to adjust their tuitions to match [the maximum federal loan], or risk losing a large chunk of revenue. But as the article points out, the vast majority of schools are non-profits. Unlike corporations, they should not be attempting to maximize revenue. I could be wrong, but I do not think most college administrators are looking to extract as much money for their students as possible. They want to put their students on a path to success, which implies not leaving them with crippling levels of debt. Unfortunately, colleges sometimes don't have a choice, because they have bills to pay and are not swimming in piles of cash. Which leaves my primary question—if tuition has risen so much, where is that money going? I have not yet seen a really good examination of this question.
  • bumby 4y ago
    >where is that money going? One place is that it is used to replace reductions in government support. "the single most important factor associated with tuition increases was decreasing revenue from government appropriations, with state appropriations making up the majority of such revenue.[1] (this is an old study, but I believe the pattern still exists, and is even more exacerbated) Another seems to be that administrative costs are growing disproportionately at the same time that public money has been getting smaller. This seems to be aligned politically, so it may need to be taken with a grain of salt but I can give one anecdote. When I went to college, I was sent to see the veterans representative. At that time it was just a single person who had those duties tasked on top of her "real" role. Now, it's common for colleges to have entire admin teams to recruit and help veteran students. On one hand, this can be great for the colleges and students; if managed well, those students bring in "free" government money. On the other, it's probably hard to calculate the true ROI of such a team; for example, it may be hard to know how many of those student-veterans would have attended regardless if there was a full team to support them or not. But all those admin teams, across all the different groups and bureaucracies add up. [1]https://nces.ed.gov/pubs2002/2002157.pdf https://nces.ed.gov/pubs2002/2002157.pdf
• ineedasername 4y ago
  This is only one piece of the puzzle. Another is the significant reduction in state funding to colleges. In particular, funding cuts are somewhat cyclical, occuring during economic downturns. Higher Ed funding always looks like the low-hanging fruit to cut. Health and social services, corrections (prisons) and K-12 education are much more problematic from a political optics viewpoint. Higher Ed is, in some sense, still seen as "optional" in the sense that people can live without it and because colleges do have an alternative revenue stream. I've seen colleges have funding for basic things like updating crumbling infrastructure pulled mid-summer when states finalize budgets and a 5-year infrastructure program from the state is cut off in year three. This makes it very difficult for budget planning, and it's not uncommon for schools to then have to put out a bond to finish funding things itself. A third factor is a sort of toxic arms race between colleges to recruit new students. In the wake of revenue uncertainty colleges of course try to increase their their enrollment to boost revenue. It has turned into a negative sum game, a college builds shiny new dining or housing facilities to attract new students, and the school down the road loses enrollment & revenue as a result which means they need to spend money building such things just to not lose students. Meanwhile the old facilities were perfectly adequate though by no means luxurious. Students going through the recruitment meat grinder are then making choices based on whether or not the school has various food franchises on campus. Schools doesn't have a Starbucks or even a Dunkin Donuts? Can't go there! I don't know the solution to that one. The first schools that did it gained a brief competitive advantage but now it's more of an equilibrium where all schools have to do it just to tread water. Anyway, it's all much more complicated than simply changing the loan structure (which of course was a big part of things as well.)
• scottcodie 4y ago
  I often think about the role of universities in the education process. It seems that universities are just profit maximizing entities. They don't care about student's education unless it impacts their reputation or ability to make more money. They give the bare minimum support to teachers to teach as well as bare minimum investment in processes like admissions. Seems like universities are doing exactly what you'd expect any company would do.
  • satao 4y ago
    in academia education is secondary to research... we make the mistake of thinking they it serves an education purpose, but in reality their focus is on research. this is what matters for their funding, their public name, etc etc
    • SoftTalker 4y ago
      At research universities, sure that is a big part of it. The professors are paid largely from research grant awards that they bring in, and about half of that award is skimmed off the top by the university for "overhead." There are many small colleges that are not research-focused. They teach. They make their money from tuition and gifts, and possibly other federal grants but not for research.
  • zaptheimpaler 4y ago
    This feels almost word for word true for any institution in the US today. It would be one thing if institutions mistakenly over-prioritized profits over their broader goals, but they don't even have meaningful missions beyond profit anymore.
  • bergenty 4y ago
    Universities are centers of research so working towards funding and endowments makes sense. The students are there to learn and be a part of the existing culture. There are plenty of small and community colleges directed totally towards imparting academic knowledge however.
    • 4y ago
• massysett 4y ago
  This makes no sense at all. Under the Federal Family Education Loan program, the student borrowed from a bank, and the university was paid right away. The government paid the bank in case of default. Under the William D Ford Federal Direct Loan program, the student borrows from the government. The university is paid right away. So this post’s argument, which is that the Direct Loan program made universities get paid right away, makes no sense.
  • ribosometronome 4y ago
    Yeah, it feels like the author forgot a paragraph then explaining why this switch caused the increase. It's not clear why having a private lender between the gov and schools would keep costs down if the gov is ultimately on the hook for the money either way.
  • nappy 4y ago
    It seems like the author must think that the private lenders were the schools themselves? Otherwise, I agree, this doesn't make sense at all.
• GlenTheMachine 4y ago
  Wait, the claim doesn't match the little data presented and the primary claim is not examined or supported. 1) The Omnibus bill passed in 1993, but from the graph tuition was already increasing at 200% greater than inflation, and appears to have started in the mid 1980's; and 2) Why would the fact that the loans are now from the government mean that universities no longer had to compete on costs? The bill ultimately goes to the student in either case.
  • dragonwriter 4y ago
    > The Omnibus bill passed in 1993, but from the graph tuition was already increasing at 200% greater than inflation, What, you don't like pre hoc ergo propter hoc argument?
  • dmitriy_ko 4y ago
    > Why would the fact that the loans are now from the government mean that universities no longer had to compete on costs? The bill ultimately goes to the student in either case. Because 17 years old student taking out the loan is not financially experienced, so the issue of cost is often not properly considered.
    • GlenTheMachine 4y ago
      The students were 17 before 1993, just like they are now. Maybe what you're trying to say is that the private lenders vetted their loans better than the government does. And that might be true, but nothing in the article backs it up. In addition, note that even before the Omnibus bill, the government still insured the loans. So private lenders had basically no risk, and hence no incentive to deny a loan.
  • ethbr0 4y ago
    Furthermore, the rate of increase really picks up around 2002/3. What happened then? I'd assume universities didn't just take a decade to realize the implications of a 1993 law change.
  • bumby 4y ago
• vlovich123 4y ago
  This analysis seems flawed. Not only does it start outpacing inflation in 1980 as someone else noted, it fails to explain the tuition explosion that Canada has faced over a similar timespan. It wouldn't surprise me if it was something more subtle, like globalisation and massive Chinese and Indian populations seeking tuition from abroad. On the other hand, that seems like a bad explanation since typically these students are gouged even worse than domestic students (at least they are in Canada).
• murgurglll 4y ago
  Seems more likely it's just an arbitrage. There was a big gap between the cost of an education and the return so the market naturally is driving the gap to zero from both sides.
• dragonwriter 4y ago
  > Up until 1993, the federal government merely guaranteed/backed student loans that private lenders gave. This meant that only in the case of someone defaulting on their loan would the government be on the hook, stepping in and paying the college what’s owed. No, the college gets paid on day one by the lender, whether it's (1) a non-federal loan, (2) a federally-guaranteed loan, or (3) a direct federal loan. The only case where the college would be out money is if they were the lender, but loans from schools were not the norm in the guaranteed loan program, school-issued loans tended to be (an old still are found as) private non-federal loans that are most commonly offered by for-profit institutions. The difference between (1) and (2) is that the feds pay the lender (not the school) in case of default, so lenders have no real risk and behave accordingly. From the schools perspective, there is no incentive difference between #2 and #3.