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College financial aid is a sham based on what colleges think families will pay
- closeparen 4y agoThe accounting labels are different, but structurally what's going on here is as if college were publicly funded by progressive taxes, except that "unfortunately" the cost tops out instead of scaling with income forever.
- s1artibartfast 4y agoIt is what happens when you have an unlimited demand more for services and cost controls. You can provide a world-class education in a bungalow or you can provide it in a marble Hall with a plethora of ancillary services and an army of Administrators to support them. If the consumers don't fit the bill, they will always opt for a more expensive service. Add and lies about return on investment and a healthy dose of fear of missing out, even those who have to take on debt to buy the service we'll go along with it
- sircastor 4y agoYes. Universities, and higher education in general (in the US) has optimized to capitalistic gains. And as a result the institutions are happy to accept the funding guaranteed through the government - this is actually preferable. It should be easy and cheap to get a good, extensive education. But again, optimized for capitalism, the institution favors money.
- yucky 4y agoOptimized for capitalism? Universities are propped up by Government-backed loans and special rules that forbid people from discharging those loans through bankruptcy. The colleges and universities are guaranteed to get their money no matter what. It's about as anti-capitalist as you can get.
- brewdad 4y agoIt's the modern American form of capitalism. Privatize the gains and socialize the losses. In this case, the schools get guaranteed funds and the students will pay the bill until it is paid in full or they die.
- yucky 4y agoIf we're playing by those linguistical rules then the Nazi's really were socialists and the Democratic People's Republic of Korea really is democratic.
- bojangleslover 4y ago100% Capitalism would force the colleges to have skin in the game.
- xhkkffbf 4y agoTheir model seems to be straight forward: fill out a form telling us everything you own. Then, give it to us. And if we want more, we'll give you a loan so you can keep emptying your pockets into our coffers for long into the future.
- anonAndOn 4y agoIt's called perfect price discrimination[0] because it maximizes the profit for every sale. It's also unethical and illegal in many circumstances but cleverly not for college tuition. [0]https://www.myaccountingcourse.com/accounting-dictionary/perfect-price-discrimination https://www.myaccountingcourse.com/accounting-dictionary/per...
- joshuamorton 4y agoThat website is wrong. Price discrimination is perfectly legal unless it's done on the basis of a protected class (race, gender, etc.) or is deemed to be anticompetitive. But those are often the exception. Forms of price discrimination (bulk discounts, membership discounts, etc.) are exceedingly common and perfectly fine, as is price discrimination based on purchaser income or interest, its just often difficult to figure that out, but airlines and hotels commonly raise prices when you revisit their sites, under the assumption that you're more interested the second time around.
- frumper 4y agoGet government financing out of college tuition. Also remove special protections to banks for private college loans. Colleges are filled with smart people, they'll figure it out.
- cafard 4y agoBetter yet, get government financing back into state university systems, at least until the ratio of annual tuition to minimum hourly wage is back to what it was in 1980. Then see whether the kid who got into Cal Berkeley really needs to go to Stanford.
- elashri 4y agoOur university do something like that plus each year accepting their record enrollment number of freshmen. Yet with inflation and very low payment for graduate students, they refuse any payment raise because they cannot afford that.