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Government lending and a lack of price controls are the ultimate root cause. The government extends near-unlimited credit to student borrowers that goes way bey

Government lending and a lack of price controls are the ultimate root cause. The government extends near-unlimited credit to student borrowers that goes way beyond their credit-worthiness, academic performance, graduation rates for the school, prospects for employment based on field of study, etc. And universities have clued into the fact that students who can pay any price, will pay any price. The ceiling of what students will pay, if they have sufficient access to credit, to join or maintain their status in the middle class is very very high. So universities hike the price year after year with little resistance because the availability of government borrowing takes the sting out and shifts the pain years or decades into the future of those students' lives. I think some major force is needed to counter-act the runaway price growth without cutting off borrowing for students from low-income families. I think university prices should be capped by law at the inflation rate. Think rent control for tuition.

briandear 3y ago
Rent control results in slums and shortages.
tick_tock_tick 3y ago
> Think rent control for tuition. The only thing economists from every politic view can agree is horrible?
- jurassic 3y ago
  There's no direct comparison to be made with housing shortages. The only scarce educational resources are those that convey high prestige, and there's no way to manufacture more of that through higher tuition payments because it's the scarcity that makes it prestigious. Harvard would be just as prestigious if it were free to attend as if it were $100k/yr to attend. Whereas in housing, if you had people lining up to pay $100k/yr, you'd be throwing up new buildings as quickly as possible. In general there is a an oversupply of higher education capacity due to demographic downturn and a decline in enrollments since 2010. Smaller colleges have been closing because they cannot attract enough students.
RyanShook 3y ago
The main reason correction is needed is a matter of economic and national strength. Increasingly we see students opt out of college because the cost benefit to them doesn’t make any sense. You can argue that those people will learn skilled trades or online but university has always been and will continue to play an important role in economic output in the US. When only those in the highest tax bracket can afford college it exacerbates instability and undermines the economy.

briandear 3y ago

Rent control results in slums and shortages.

tick_tock_tick 3y ago

> Think rent control for tuition. The only thing economists from every politic view can agree is horrible?

jurassic 3y ago
There's no direct comparison to be made with housing shortages. The only scarce educational resources are those that convey high prestige, and there's no way to manufacture more of that through higher tuition payments because it's the scarcity that makes it prestigious. Harvard would be just as prestigious if it were free to attend as if it were $100k/yr to attend. Whereas in housing, if you had people lining up to pay $100k/yr, you'd be throwing up new buildings as quickly as possible. In general there is a an oversupply of higher education capacity due to demographic downturn and a decline in enrollments since 2010. Smaller colleges have been closing because they cannot attract enough students.

RyanShook 3y ago

The main reason correction is needed is a matter of economic and national strength. Increasingly we see students opt out of college because the cost benefit to them doesn’t make any sense. You can argue that those people will learn skilled trades or online but university has always been and will continue to play an important role in economic output in the US. When only those in the highest tax bracket can afford college it exacerbates instability and undermines the economy.