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With the $4,000 tax credit this is really a massive subsidy for college tuition in return for a bit of make work. The trouble is that the iron law of college s

With the $4,000 tax credit this is really a massive subsidy for college tuition in return for a bit of make work. The trouble is that the iron law of college subsidies is that the subsidy gets capitalized into the tuition. The net result of the tens of billions in existing aid is that tuition rates have risen higher than inflation for the past four decades. If the government was serious about making college more affordable, they could simply mandate that in return for the non-profit tax status a college must keep tuition hikes lower than inflation. This wouldn't cost taxpayers a dime. It would simply force colleges to cut a lot of the bloat they've added over the years.

nostrademons 18y ago
> If the government was serious about making college more affordable, they could simply mandate that in return for the non-profit tax status a college must keep tuition hikes lower than inflation. The effect of this might just be to encourage colleges to drop their non-profit tax status. Or it might force the best faculty to all work for for-profit colleges, which makes a for-profit degree nearly required, which makes college less affordable. Beware unintended consequences. IMHO, if the government was serious about college more affordable, they teach basic financial literacy in high school, and then give graduating high school students accurate, detailed information about the real degree requirements of different jobs and the salaries attached to them.
- bokonist 18y ago
  The effect of this might just be to encourage colleges to drop their non-profit tax status. Or it might force the best faculty to all work for for-profit colleges, which makes a for-profit degree nearly required, which makes college less affordable. No way. For one, most top professors get paid from government grant money. Second, you way underestimate the benefits of the non-profit status. Most colleges have accumulated vast land holdings because they do not have to pay property tax. They then lease this land out to retail stores and restaurants and make mad cash. The tax free status also gives them a big advantage in equity trading: "Its endowment managers can trade rapidly in hedge funds without paying the short-term capital gains rates that we peons pay. This gives them a big advantage over most investors. If it were taken away, I wonder what the endowment's return on investments would be in stock or commodities trading." http://www.nytimes.com/2005/10/23/business/yourmoney/23every.html?pagewanted=print http://www.nytimes.com/2005/10/23/business/yourmoney/23every... Also, you make the assumption that for-profit means more expensive. Personally, I'd expect the opposite. The other thing that the government should do is separate credentialing from schooling. Want to become a teacher? Pass a test and do a year apprenticeship. Want to be a lawyer? Just pass the bar exam. If going to college helps you learn the information you need to pass these exams, then great. But if you are poor and determined, you should be able to teach yourself and enter your chosen career without having to pay the college tax. Of course, none of this has any chance of happening. The universities are probably the most politically powerful organizations in the country. That's how they got all these advantages in the first place. The point of this exercise is to show 1) there are plenty of solutions to the problems of this country that don't actually require spending more money and 2) the current political system is not even capable of talking about these solutions, much less actually enacting them.

nostrademons 18y ago

> If the government was serious about making college more affordable, they could simply mandate that in return for the non-profit tax status a college must keep tuition hikes lower than inflation. The effect of this might just be to encourage colleges to drop their non-profit tax status. Or it might force the best faculty to all work for for-profit colleges, which makes a for-profit degree nearly required, which makes college less affordable. Beware unintended consequences. IMHO, if the government was serious about college more affordable, they teach basic financial literacy in high school, and then give graduating high school students accurate, detailed information about the real degree requirements of different jobs and the salaries attached to them.

bokonist 18y ago
The effect of this might just be to encourage colleges to drop their non-profit tax status. Or it might force the best faculty to all work for for-profit colleges, which makes a for-profit degree nearly required, which makes college less affordable. No way. For one, most top professors get paid from government grant money. Second, you way underestimate the benefits of the non-profit status. Most colleges have accumulated vast land holdings because they do not have to pay property tax. They then lease this land out to retail stores and restaurants and make mad cash. The tax free status also gives them a big advantage in equity trading: "Its endowment managers can trade rapidly in hedge funds without paying the short-term capital gains rates that we peons pay. This gives them a big advantage over most investors. If it were taken away, I wonder what the endowment's return on investments would be in stock or commodities trading." http://www.nytimes.com/2005/10/23/business/yourmoney/23every.html?pagewanted=print http://www.nytimes.com/2005/10/23/business/yourmoney/23every... Also, you make the assumption that for-profit means more expensive. Personally, I'd expect the opposite. The other thing that the government should do is separate credentialing from schooling. Want to become a teacher? Pass a test and do a year apprenticeship. Want to be a lawyer? Just pass the bar exam. If going to college helps you learn the information you need to pass these exams, then great. But if you are poor and determined, you should be able to teach yourself and enter your chosen career without having to pay the college tax. Of course, none of this has any chance of happening. The universities are probably the most politically powerful organizations in the country. That's how they got all these advantages in the first place. The point of this exercise is to show 1) there are plenty of solutions to the problems of this country that don't actually require spending more money and 2) the current political system is not even capable of talking about these solutions, much less actually enacting them.