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American universities have an incentive to seem extortionate

75 points by martincmartin 3y ago

cushpush 3y ago
Most fruit at the store is also pretty cheap, does that mean all food is equally good and all fruits are equally ripe?
deleted 3y ago
[deleted]
metaphor 3y ago
https://archive.is/ruREB https://archive.is/ruREB
- soared 3y ago
  Banners cover the text on mobile so it’s still unreadable =\
  - engineer_22 3y ago
    Which browser are you using ? I can read it on chrome
- drewg123 3y ago
  Firefox wouldn't connect to the site, talking about how the connection is not secure. It turns out the I was accidentally using cloudfare DNS, and they won't resolve archive.is, and their landing page triggers this. Switching back to nextdns fixes it..
nimbius 3y ago
Eventually this becomes an issue of national security. If your brightest minds are categorically excluded from education in the service of maintaining the American class structure and quarterly profit margins, if debt cripples to such a degree that it disenfranchises anyone from considering education in the first place, then it becomes increasingly difficult to engage in the type of research and development that keeps and maintains your nations elite status. A parasitic idiocracy ensues from which the prospect of recovery at all is grim at best.
- jrpt 3y ago
  Universities aren't the only places research and development take place.
  - mydogcanpurr 3y ago
    But they are where the vast majority of researchers are educated.
    - j45 3y ago
      Educating to create a researcher, vs application of applied research vs results of commercializing in less than one decade is a fair observation.
  - whoknowsidont 3y ago
    But it is where the majority of useful research takes place, because Universities are where researches are created. Most research at private companies is namesake.
    - ke88y 3y ago
      This isn't even remotely close to true. The only perspective in society from which it appears that Academia does more R&D than the private sector is academia itself. Academics in this respect have their eyes wide shut. At mot, publishing in academic conferences at private companies is namesake. But academic publishing in general is a shadow of its former self in terms of dissemination power, both because most academics are horrible writers and also because a product you can buy (with a support contract) or a well-documented software package is many orders of magnitude more impactful than a paper no one will read. And even then, many companies publish far more than even highly productive research universities. Consider AI. There are little pieces here and there that you can attribute to academia. But for the most part, over the last two decades, the enabling big steps happened at TSMC+NVIDIA+Google+OpenAI.
      - 3y ago
shove 3y ago
The Economist has an incentive to push this POV
- HFguy 3y ago
  Because why???
  - engineer_22 3y ago
    I don't know Economists business model, but maybe a headline, like this one, contrary to the general consensus is able to drive clicks
  - shove 3y ago
    1) they cherry pick the timeframe for historical comparison and conclude college has gotten cheaper (a more honest analysis for that period is that it stayed flat). What about 20, 30, 40, 50 years ago? The silence sure is loud. 2) Good for them using inflation-adjusted prices. Too bad incomes haven’t kept up with inflation. If we’re going to discuss “affordability” we probably need to include the income side, hmm? 3) I’d hoped that my initial comment was worded closely enough to the headline for the tongue-in-cheek to be more blatantly obvious. Alas.
    - gruez 3y ago
      > 1) they cherry pick the timeframe for historical comparison and conclude college has gotten cheaper (a more honest analysis for that period is that it stayed flat). What about 20, 30, 40, 50 years ago? The silence sure is loud. The exact quote from them is: "Sticker prices are rising while net costs remain steady and, in some cases, drop." I guess you can call that cherry picking, but they're not exactly taking that data and concluding everything is fine. The following paragraphs go through the various reasons why the high prices are bad. >Yet even with decreasing costs and with discounts, college can still feel unaffordable to many. >2) Good for them using inflation-adjusted prices. Too bad incomes haven’t kept up with inflation. Source? At least according to this graph from the BLS[1], incomes have generally kept up with inflation. There are periods where that's not the case (eg. post 2020), but that's likely due to lockdown effects (eg. service workers, who are typically low paid, were laid off, so they were excluded from the average, which bumps it up). [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
rahimnathwani 3y ago
The article says that the net price (price after discounts) has gone down over time. This surprised me. They cite a College Board report, but don't specify which one. I suspect it's this one: https://research.collegeboard.org/trends/college-pricing https://research.collegeboard.org/trends/college-pricing Tables CP-9 and CP-10 do indeed show net price going down for the last few years. But the figures aren't expressed in dollars, but in '2022 dollars', i.e. the charts don't show the actual net price, but the net price adjusted by CPI inflation. This is an important distinction because, when people pay for college, they're not comparing it with the cost of other goods and services (which is what CPI measures), but whether they can afford it, based on their parents' current/past income, or their own future expected income. If you agree with this perspective, using CPI to make the curves look flatter does everyone a disservice. Wages for many people haven't kept up with CPI, so a higher nominal net cost still makes college less affordable.
- fiprofessor 3y ago
  Point taken, but it's very common to adjust by CPI (or some other price index) when comparing prices over time. All attempts to track prices over time have some flaw. But not adjusting for inflation in a chart that goes back ~20 years could also be perceived as misleading. Moreover, we are starting to see growth in real median wages again. They are already above Q4 2019: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q. So I think it is fair to say in some sense that the real price of attendance has started to go down (albeit not that much).
  - rahimnathwani 3y ago
    You're correct on all counts. EDIT: The rest of my comment below is (as pointed out below by gruez) incorrect. The article did say 'in 2021 dollars' in reference to one set of numbers, and it's reasonable to assume they meant that to apply to all the other numbers in the same paragraph. It's still surprises me that The Economist would use CPI-adjusted figures, but fail to mention the adjustment. Using CPI-adjusted figures is common, but it's not the default, which is why people often add 'in real terms' or some other qualifier.
NotYourLawyer 3y ago
Kids with no credit history can borrow limitless money that’s backed by the government and not discharged in bankruptcy. Is anyone surprised to see the prices rising to slurp up as much of that cash as possible?
- paddw 3y ago
  Try to borrow without a set of parents who are easily able to cosign the loans and you'll quickly find out the amount is not, in fact, "limitless"...
  - WalterBright 3y ago
    The debt forgiveness program was going to cost what, half a trillion dollars? That's a pretty high limit!
  - hn_throwaway_99 3y ago
    Federal loan programs (subsidized, unsubsidized and direct PLUS loans) still means that the average student is able to borrow a substantial amount of money without really considering their eventual ability to repay. True, it's not "limitless", but I think that's fair use of hyperbole.
  - pessimizer 3y ago
    I went to college at 27, and the money was sort of limitless. The free money was pretty limited (grants and direct loans), but there were enough usurious private lenders to keep you in debt for the rest of your life.
  - LanceH 3y ago
    My son qualified for $100 a year in federal loans. To my dismay, he actually took that loan. I had to have a conversation with him that it is better to just pay the $100 and not have the possibility of missing payments, getting interest and penalties, etc... Everything he has is a private loan which I cosign for -- and with an 850 credit score, I didn't get anywhere close to the advertised interest rates.
- 3y ago
monero-xmr 3y ago
It’s like buying used cars. As a parent you have to shop around and pit different colleges against each other for the best deal. No one knows what the real price is. And you may get a good deal, but the terms require a GPA that 85% of students fall under so mathematically the college knows they only pay the merit scholarships mostly for the first year. Undergraduate is a racket. If my kids choose to get into tech I will use my connections to get them a job, either working for one of my companies or for a friend of mine, or start a company with children of friends. Now that is how the real world works - not handing 6 figures every year to a government sponsored scam.
- rootw0rm 3y ago
  Nepotism and government money make the world go round.
- gruez 3y ago
  >Undergraduate is a racket. If my kids choose to get into tech I will use my connections to get them a job, either working for one of my companies or for a friend of mine, or start a company with children of friends. Now that is how the real world works - not handing 6 figures every year to a government sponsored scam. Your solution to the "racket" that is undergraduate education is to... engage in nepotism? What exactly is that supposed to mean in terms of policy implications? Rather than paying tens of thousands for an undergraduate degree, students should just ask their parents to vouch for them instead? What if their parents don't have the connections? And what about the flip side? Should your friends oblige you and hire your children without any credentials just because you're their friend?
  - monero-xmr 3y ago
    I think most people help their friends get jobs. I’m 1000x more incentivized to help my own children over a friend. Same story for everyone, it’s part of human nature.
    - goodoldneon 3y ago
      When reading your original comment, it sounds like you're saying that the solution is to avoid undergraduate college and leverage connections to immediately get a job. While that might work for people with those connections, how is that a solution for people without connections?
jmspring 3y ago
Administrative positions have grown faster than student bodies, from grade school to public universities. Teacher/lecturer wages have not gone up with enrollment increases or administrative overhead. That is where one needs to first look for cost savings.
hn_throwaway_99 3y ago
It's hard for me to tell if this article is being intentionally disingenuous, or if it's just missing the forest for the trees. Take a look at this graph of college costs vs salaries for young people over time: https://image.cnbcfm.com/api/v1/image/106968880-1635799559954-College_costs_vs_Earnings.jpg?v=1635799656&ffmt=webp&vtcrop=y https://image.cnbcfm.com/api/v1/image/106968880-163579955995... . It's really hard to look at that graph and make the argument "No, no, expensive college costs are basically all in your head." The other thing I think is insane, which I see often, is to compare salaries of college grads vs. HS grads to make the argument that college is "worth it". But why is it a moral argument that colleges should have a right to "capture" as much of this increase in earnings as they can? After all, a huge reason for the discrepancy is that people who are inclined to go to college are more likely to get higher paying jobs in the first place. It's kinda like how I see some marketing departments that try to ascribe every single purchase to their efforts (and winning a larger budget in the process), when their "science of marketing attribution" is often a lot of hand wavy BS. This article does make some fair points: public colleges tend to much cheaper than private ones, and most colleges give substantial grants. But even then it's leaving out some vital details (e.g. I didn't hear it mention room and board or obscene textbook prices). I think the thing that is most frustrating to me about the general college cost debate is that the thing that is most out of whack is giving giant, non-dischargeable student loans to students in non-lucrative majors. The reason lenders are willing to give hundreds of thousands of dollars in loans to someone who studies poetry is they know either the government has their back, or the student will be paying off their loan until they die - and colleges know this, too, which is why they feel so little downward pressure on pricing.
- gruez 3y ago
  >Take a look at this graph of college costs vs salaries for young people over time: https://image.cnbcfm.com/api/v1/image/106968880-163579955995 https://image.cnbcfm.com/api/v1/image/106968880-163579955995... . Let me stop you right there. The fact that the graph doesn't show the dip in actual tuition costs that the article mentions, and the fact that other commenters have corroborated the dip does indeed exist, makes me think that the chart you linked is talking about the wrong metric. I suspect that the prices are "sticker prices", not actual costs, which the article specifically addresses: >Sticker prices are rising while net costs remain steady and, in some cases, drop. A report from the College Board, a non-profit, shows that whereas published tuition and fees for private non-profit colleges increased from $29,000 in 2006-07 to $38,000 in 2021-22 (in 2021 dollars), the net price actually decreased from $17,000 to $15,000.
nemo44x 3y ago
College is expensive because there’s so much demand for their services (education is important in developed economies) coupled with the moral hazard of guaranteed loans and voila - we have the situation we have today. It’s this simple. I don’t know why we need think pieces on this topic. Either make college a true market product (loans would change based on expected return), make it free for all (bad idea mainly), or create an economy where education isn’t needed (regressive and not practical without “make work” which is cruel).
- brnaftr361 3y ago
  This seems like such an old train of thought. There are full lecture series available from a large number of prestigious lecturers at highly accredited universities. There are thousands of creators/hackers/researchers that have spun up every manifestation of creation you can think of and many of them publish the how-to in the process. You can get digital copies of textbooks, there's a whole open source encyclopedia which is competitive with proprietary encyclopedias. All the knowledge has been democratized. Causing a recession of the institutions at this point would be progressive. By all means I think the most progressive thing would be a move back to the apprenticeships of yore, even in STEM. A lot of people are going into specialist fields anyways, you may as well learn to make bespoke rats from somebody that's been doing it their whole career, nobody needs all the tangential shit when there's a straight, well-trodden road to the end product. We need to loose the grip of these institutions on our economy, they're - very evidently - a trillion dollar sink.
jay-anderson 3y ago
I have a child starting college next year. One thing that surprised me is the number of extra fees. It very much reminded me of ticketmaster, comcast, or airbnb hidden fees. Adding them all up for starting next semester the fees are over $1000. This article does say 'tuition and fees' so it's probably taking this into account. Still it surprised me and feels like a pretty scummy practice.
- SoftTalker 3y ago
  This depends on the school. One of my kids is at a college where there are very few if any itemized extra fees, not even room and board (all students live on campus). Another went to a school where there were at least half a dozen fees in addition to the tuition, as well as room and board.
presentation 3y ago
I agree that costs are overstated but it’s a significant downside to confuse the populace (and your customers) by being so misleading about the cost of education (their service). I guess it’s kind of like enterprise pricing, in reverse. Rather than the rich outliers getting the extortionate pricing, it’s the average consumer who has to request the real price. That lack of transparency makes making a rational choice harder for the average person.
vehemenz 3y ago
It's surprising, but tuition is only half the story. The cost of everything else for students is going up quickly, including room and board, food, and textbooks. Textbooks particularly have risen much faster than the rate of inflation over the last thirty years. Meanwhile, the wages paid by assistantships and work study programs have barely budged.
linguae 3y ago
As a way of reducing the costs of higher education in America, I’m wondering how well a “no-thrills” model of a university will be received by students, faculty, employers, and other stakeholders? Today’s universities in America arguably have far more amenities than they did generations ago. My undergraduate institution, Cal Poly San Luis Obispo, had in the mid-2000s (and still has) a police department, a large student union building complete with a bowling alley, a career center, many sports and recreation facilities, a health center offering many services, dormitories ranging from classic dorms to relatively fancy shared apartments, and many non-faculty employees offering a wide range of services to their students, from academic counselors to those that watched over the university’s many fraternities and sororities. I’m grateful for these services, and I used many of them. But I wonder how much this costs the university to run, and I also wonder if the addition of such services at universities throughout America, as beneficial as they are, helped contribute to the escalating cost of college? A good teaching-oriented university needs dedicated faculty, dedicated students, and facilities that help the faculty teach and help the students learn. Some costs are unavoidable, such as hiring good faculty, running a library, maintaining facilities, etc. However, if we eliminate the “frills” and pare a university down to its essentials, will it be affordable? I’m very curious if this is one of the major factors, or are there more significant factors leading to exploding costs?
- seanmcdirmid 3y ago
  Isn’t this just the German model? They go a bit further: no TA-led sections, homework isn’t graded or checked (so no TAs)k and your entire grade is based on just your final (no mid-term).
  - phreeza 3y ago
    That's not the German system I remember. In physics at least there was graded homework, it was just not required. The grading was actually invaluable because they prepared you for the actual exam you were going to get (can vary a lot between professors even for the same subject).
    - 3y ago
BenGuz 3y ago
I strongly recommend https://www.tuitiontracker.org/ https://www.tuitiontracker.org/ for anyone in the college process interested in real costs.
curiousllama 3y ago
Anecdotally, I was able to negotiate a merit scholarship to a top college - not based on merit, totally, but based on alternative offers from other schools. The price discrimination approach is a really effective method for pricing, and I'd be all for it (progressive taxation, basically) if not for the shoddy implementation leading to a student loan crisis.
drewg123 3y ago
The system is seems designed to screw the middle / upper middle class. My son is going to college next year. I make enough that my son will not qualify for aid, but I'm not a billionaire, so the sticker price that I'll have to pay will be enough to be painful for me. Using the calculator at https://www.savingforcollege.com/calculators/financial-aid-calculator https://www.savingforcollege.com/calculators/financial-aid-c..., and setting no savings and no 529, it appears you're expected to pay about 1/4 to 1/3 of your AGI (checked at $50k and $500k and several points in between). Which basically means no relief from the sticker price at private schools if your AGI is over ~$250k, and no relief from the sticker price at even the least expensive public schools if your AGI is over ~$80K. Or am I missing something?
- ab_testing 3y ago
  Can you disown your son so that he shows up as an adult whose family does not make any money . That way he would be eligible for aid and grants ?
  - anon25783 3y ago
    I don't think "disown" is the word you want to use here. In English, "disown" means that you refuse to acknowledge that he is your son at all, not in a legal sense, but in a social sense, i.e. "I hate you so much I no longer consider you my son". I think you probably mean, "Can you declare your son as not a dependent", not "Can you disown your son" :)
    - halkony 3y ago
      The more precise word would be "emancipate"
      - notmypenguin 3y ago
        Yes you can. Marriage, military service, or being over age 23 are sufficient in the USA for this purpose
  - 3y ago
lo_zamoyski 3y ago
If universities stuck to their core mission and shed their dead weight, bloat, and misappropriation of tuition dollars, I guarantee you that you would see a huge decrease in cost. It's become a circus and a racket that doesn't even deliver on the core mission, and even actively harms students. Unfortunately, the market has played a role in creating incentives to measure college quality according to the wrong factors. In any case, the thicket of incentives is so dense, and the interests so mutually intertwined, that any reform would be met with kicking and screaming (and lots of rationalization, of course). This university lobby would work overtime against successful attempts to educate the public about what it means for a university to be good, and what sorts of gimmicks make them more expensive. But it is still important to try. It is important to counter the misinformation that's taught in primary school about what universities are about, but that would also entail a reform of primary education by implication, another milieu that would resist reform. It is important that we try. We need a clear and correct notion of what education is for, and then what primary, secondary, etc. education is for. Once there is clarity, it becomes easier to make decisions about how to structure education, what to keep in, and what to keep out. It is easy to see why some may not want to resolve the ambiguity. One avenue that's being pursued is the founding of new colleges that demonstrate what is possible. This is the long haul, but in an environment as entrenched as this one, it may be the only realistic solution.
- lovich 3y ago
  Why would the cost decrease? They’ve already seen that the market will bear the price and there’s no competitive pressure to lower it.
jschveibinz 3y ago
In the US, here is the sensible “magic” formula: Go to community college for 2-3 years, then matriculate from the university. Way cheaper, better teacher/instructors, more time to mature, start early in 12th grade, and the diploma is from the university. What do you lose? 2-3 years of goofing off at a country club. What do you gain? time and money.
- CuriouslyC 3y ago
  This isn't universally true, CA and NY have good community colleges where this works, but if you're from Mississippi or somewhere similar it's likely your community college won't be great and might not have good transfer agreements with state universities.
- hammock 3y ago
  >What do you lose? 2-3 years of goofing off at a country club. Depending on what you want in life, the social class you started in and the one you want to end in, that is worth a lot...
  - glorvigenjm 3y ago
    Exactly this, I grew up very rural and studied computer science in college, since I didn’t have any connections to companies needing my skills through parents, friends, etc. these interactions in college with kids from cities and making friends with them netted me my first job out of college.
- opportune 3y ago
  Not to be dramatic but those first two years were probably the best 2 years of my life so far. And I built friendships and connections that would have been a lot harder to build coming in as a junior transfer. Similarly I could take classes as a freshman (not Harvard Math 55, but same concept elsewhere) that were well past the level most community colleges would offer I’m not saying don’t go to community college by any means. I think for people who still need to mature more before becoming independent, or who are especially price sensitive (remember there are many colleges in the US that will give you a full ride just for good test scores, or there were a few years ago at least) it’s a good choice. But just because the sticker price is a little lower doesn’t mean it’s better for everyone
AlexCornila 3y ago
Amazed that the author can even make this claim without affecting his/her reputation/credibility more broadly. Simply if that were the case we could’ve afford to pay for college from fixed income without the need to access loans. Second you wouldn’t have the loan crisis where the debt accelerates way above income. This is just plain dumb.
- AlexCornila 3y ago
  One can have whatever interpretation of the data it wants but I’d like to see the raw data they used; this is gaslighting.

75 points by martincmartin 3y ago

cushpush 3y ago

Most fruit at the store is also pretty cheap, does that mean all food is equally good and all fruits are equally ripe?

deleted 3y ago

[deleted]

metaphor 3y ago

https://archive.is/ruREB https://archive.is/ruREB

soared 3y ago
Banners cover the text on mobile so it’s still unreadable =\
- engineer_22 3y ago
  Which browser are you using ? I can read it on chrome
drewg123 3y ago
Firefox wouldn't connect to the site, talking about how the connection is not secure. It turns out the I was accidentally using cloudfare DNS, and they won't resolve archive.is, and their landing page triggers this. Switching back to nextdns fixes it..

nimbius 3y ago

Eventually this becomes an issue of national security. If your brightest minds are categorically excluded from education in the service of maintaining the American class structure and quarterly profit margins, if debt cripples to such a degree that it disenfranchises anyone from considering education in the first place, then it becomes increasingly difficult to engage in the type of research and development that keeps and maintains your nations elite status. A parasitic idiocracy ensues from which the prospect of recovery at all is grim at best.

jrpt 3y ago
Universities aren't the only places research and development take place.
- mydogcanpurr 3y ago
  But they are where the vast majority of researchers are educated.
  - j45 3y ago
    Educating to create a researcher, vs application of applied research vs results of commercializing in less than one decade is a fair observation.
- whoknowsidont 3y ago
  But it is where the majority of useful research takes place, because Universities are where researches are created. Most research at private companies is namesake.
  - ke88y 3y ago
    This isn't even remotely close to true. The only perspective in society from which it appears that Academia does more R&D than the private sector is academia itself. Academics in this respect have their eyes wide shut. At mot, publishing in academic conferences at private companies is namesake. But academic publishing in general is a shadow of its former self in terms of dissemination power, both because most academics are horrible writers and also because a product you can buy (with a support contract) or a well-documented software package is many orders of magnitude more impactful than a paper no one will read. And even then, many companies publish far more than even highly productive research universities. Consider AI. There are little pieces here and there that you can attribute to academia. But for the most part, over the last two decades, the enabling big steps happened at TSMC+NVIDIA+Google+OpenAI.
    - 3y ago

shove 3y ago

The Economist has an incentive to push this POV

HFguy 3y ago
Because why???
- engineer_22 3y ago
  I don't know Economists business model, but maybe a headline, like this one, contrary to the general consensus is able to drive clicks
- shove 3y ago
  1) they cherry pick the timeframe for historical comparison and conclude college has gotten cheaper (a more honest analysis for that period is that it stayed flat). What about 20, 30, 40, 50 years ago? The silence sure is loud. 2) Good for them using inflation-adjusted prices. Too bad incomes haven’t kept up with inflation. If we’re going to discuss “affordability” we probably need to include the income side, hmm? 3) I’d hoped that my initial comment was worded closely enough to the headline for the tongue-in-cheek to be more blatantly obvious. Alas.
  - gruez 3y ago
    > 1) they cherry pick the timeframe for historical comparison and conclude college has gotten cheaper (a more honest analysis for that period is that it stayed flat). What about 20, 30, 40, 50 years ago? The silence sure is loud. The exact quote from them is: "Sticker prices are rising while net costs remain steady and, in some cases, drop." I guess you can call that cherry picking, but they're not exactly taking that data and concluding everything is fine. The following paragraphs go through the various reasons why the high prices are bad. >Yet even with decreasing costs and with discounts, college can still feel unaffordable to many. >2) Good for them using inflation-adjusted prices. Too bad incomes haven’t kept up with inflation. Source? At least according to this graph from the BLS[1], incomes have generally kept up with inflation. There are periods where that's not the case (eg. post 2020), but that's likely due to lockdown effects (eg. service workers, who are typically low paid, were laid off, so they were excluded from the average, which bumps it up). [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q

rahimnathwani 3y ago

The article says that the net price (price after discounts) has gone down over time. This surprised me. They cite a College Board report, but don't specify which one. I suspect it's this one: https://research.collegeboard.org/trends/college-pricing https://research.collegeboard.org/trends/college-pricing Tables CP-9 and CP-10 do indeed show net price going down for the last few years. But the figures aren't expressed in dollars, but in '2022 dollars', i.e. the charts don't show the actual net price, but the net price adjusted by CPI inflation. This is an important distinction because, when people pay for college, they're not comparing it with the cost of other goods and services (which is what CPI measures), but whether they can afford it, based on their parents' current/past income, or their own future expected income. If you agree with this perspective, using CPI to make the curves look flatter does everyone a disservice. Wages for many people haven't kept up with CPI, so a higher nominal net cost still makes college less affordable.

fiprofessor 3y ago
Point taken, but it's very common to adjust by CPI (or some other price index) when comparing prices over time. All attempts to track prices over time have some flaw. But not adjusting for inflation in a chart that goes back ~20 years could also be perceived as misleading. Moreover, we are starting to see growth in real median wages again. They are already above Q4 2019: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q. So I think it is fair to say in some sense that the real price of attendance has started to go down (albeit not that much).
- rahimnathwani 3y ago
  You're correct on all counts. EDIT: The rest of my comment below is (as pointed out below by gruez) incorrect. The article did say 'in 2021 dollars' in reference to one set of numbers, and it's reasonable to assume they meant that to apply to all the other numbers in the same paragraph. It's still surprises me that The Economist would use CPI-adjusted figures, but fail to mention the adjustment. Using CPI-adjusted figures is common, but it's not the default, which is why people often add 'in real terms' or some other qualifier.

NotYourLawyer 3y ago

Kids with no credit history can borrow limitless money that’s backed by the government and not discharged in bankruptcy. Is anyone surprised to see the prices rising to slurp up as much of that cash as possible?

paddw 3y ago
Try to borrow without a set of parents who are easily able to cosign the loans and you'll quickly find out the amount is not, in fact, "limitless"...
- WalterBright 3y ago
  The debt forgiveness program was going to cost what, half a trillion dollars? That's a pretty high limit!
- hn_throwaway_99 3y ago
  Federal loan programs (subsidized, unsubsidized and direct PLUS loans) still means that the average student is able to borrow a substantial amount of money without really considering their eventual ability to repay. True, it's not "limitless", but I think that's fair use of hyperbole.
- pessimizer 3y ago
  I went to college at 27, and the money was sort of limitless. The free money was pretty limited (grants and direct loans), but there were enough usurious private lenders to keep you in debt for the rest of your life.
- LanceH 3y ago
  My son qualified for $100 a year in federal loans. To my dismay, he actually took that loan. I had to have a conversation with him that it is better to just pay the $100 and not have the possibility of missing payments, getting interest and penalties, etc... Everything he has is a private loan which I cosign for -- and with an 850 credit score, I didn't get anywhere close to the advertised interest rates.
3y ago

monero-xmr 3y ago

It’s like buying used cars. As a parent you have to shop around and pit different colleges against each other for the best deal. No one knows what the real price is. And you may get a good deal, but the terms require a GPA that 85% of students fall under so mathematically the college knows they only pay the merit scholarships mostly for the first year. Undergraduate is a racket. If my kids choose to get into tech I will use my connections to get them a job, either working for one of my companies or for a friend of mine, or start a company with children of friends. Now that is how the real world works - not handing 6 figures every year to a government sponsored scam.

rootw0rm 3y ago
Nepotism and government money make the world go round.
gruez 3y ago
>Undergraduate is a racket. If my kids choose to get into tech I will use my connections to get them a job, either working for one of my companies or for a friend of mine, or start a company with children of friends. Now that is how the real world works - not handing 6 figures every year to a government sponsored scam. Your solution to the "racket" that is undergraduate education is to... engage in nepotism? What exactly is that supposed to mean in terms of policy implications? Rather than paying tens of thousands for an undergraduate degree, students should just ask their parents to vouch for them instead? What if their parents don't have the connections? And what about the flip side? Should your friends oblige you and hire your children without any credentials just because you're their friend?
- monero-xmr 3y ago
  I think most people help their friends get jobs. I’m 1000x more incentivized to help my own children over a friend. Same story for everyone, it’s part of human nature.
  - goodoldneon 3y ago
    When reading your original comment, it sounds like you're saying that the solution is to avoid undergraduate college and leverage connections to immediately get a job. While that might work for people with those connections, how is that a solution for people without connections?

jmspring 3y ago

Administrative positions have grown faster than student bodies, from grade school to public universities. Teacher/lecturer wages have not gone up with enrollment increases or administrative overhead. That is where one needs to first look for cost savings.

hn_throwaway_99 3y ago

It's hard for me to tell if this article is being intentionally disingenuous, or if it's just missing the forest for the trees. Take a look at this graph of college costs vs salaries for young people over time: https://image.cnbcfm.com/api/v1/image/106968880-1635799559954-College_costs_vs_Earnings.jpg?v=1635799656&ffmt=webp&vtcrop=y https://image.cnbcfm.com/api/v1/image/106968880-163579955995... . It's really hard to look at that graph and make the argument "No, no, expensive college costs are basically all in your head." The other thing I think is insane, which I see often, is to compare salaries of college grads vs. HS grads to make the argument that college is "worth it". But why is it a moral argument that colleges should have a right to "capture" as much of this increase in earnings as they can? After all, a huge reason for the discrepancy is that people who are inclined to go to college are more likely to get higher paying jobs in the first place. It's kinda like how I see some marketing departments that try to ascribe every single purchase to their efforts (and winning a larger budget in the process), when their "science of marketing attribution" is often a lot of hand wavy BS. This article does make some fair points: public colleges tend to much cheaper than private ones, and most colleges give substantial grants. But even then it's leaving out some vital details (e.g. I didn't hear it mention room and board or obscene textbook prices). I think the thing that is most frustrating to me about the general college cost debate is that the thing that is most out of whack is giving giant, non-dischargeable student loans to students in non-lucrative majors. The reason lenders are willing to give hundreds of thousands of dollars in loans to someone who studies poetry is they know either the government has their back, or the student will be paying off their loan until they die - and colleges know this, too, which is why they feel so little downward pressure on pricing.

gruez 3y ago
>Take a look at this graph of college costs vs salaries for young people over time: https://image.cnbcfm.com/api/v1/image/106968880-163579955995 https://image.cnbcfm.com/api/v1/image/106968880-163579955995... . Let me stop you right there. The fact that the graph doesn't show the dip in actual tuition costs that the article mentions, and the fact that other commenters have corroborated the dip does indeed exist, makes me think that the chart you linked is talking about the wrong metric. I suspect that the prices are "sticker prices", not actual costs, which the article specifically addresses: >Sticker prices are rising while net costs remain steady and, in some cases, drop. A report from the College Board, a non-profit, shows that whereas published tuition and fees for private non-profit colleges increased from $29,000 in 2006-07 to $38,000 in 2021-22 (in 2021 dollars), the net price actually decreased from $17,000 to $15,000.

nemo44x 3y ago

College is expensive because there’s so much demand for their services (education is important in developed economies) coupled with the moral hazard of guaranteed loans and voila - we have the situation we have today. It’s this simple. I don’t know why we need think pieces on this topic. Either make college a true market product (loans would change based on expected return), make it free for all (bad idea mainly), or create an economy where education isn’t needed (regressive and not practical without “make work” which is cruel).

brnaftr361 3y ago
This seems like such an old train of thought. There are full lecture series available from a large number of prestigious lecturers at highly accredited universities. There are thousands of creators/hackers/researchers that have spun up every manifestation of creation you can think of and many of them publish the how-to in the process. You can get digital copies of textbooks, there's a whole open source encyclopedia which is competitive with proprietary encyclopedias. All the knowledge has been democratized. Causing a recession of the institutions at this point would be progressive. By all means I think the most progressive thing would be a move back to the apprenticeships of yore, even in STEM. A lot of people are going into specialist fields anyways, you may as well learn to make bespoke rats from somebody that's been doing it their whole career, nobody needs all the tangential shit when there's a straight, well-trodden road to the end product. We need to loose the grip of these institutions on our economy, they're - very evidently - a trillion dollar sink.

jay-anderson 3y ago

I have a child starting college next year. One thing that surprised me is the number of extra fees. It very much reminded me of ticketmaster, comcast, or airbnb hidden fees. Adding them all up for starting next semester the fees are over $1000. This article does say 'tuition and fees' so it's probably taking this into account. Still it surprised me and feels like a pretty scummy practice.

SoftTalker 3y ago
This depends on the school. One of my kids is at a college where there are very few if any itemized extra fees, not even room and board (all students live on campus). Another went to a school where there were at least half a dozen fees in addition to the tuition, as well as room and board.

presentation 3y ago

I agree that costs are overstated but it’s a significant downside to confuse the populace (and your customers) by being so misleading about the cost of education (their service). I guess it’s kind of like enterprise pricing, in reverse. Rather than the rich outliers getting the extortionate pricing, it’s the average consumer who has to request the real price. That lack of transparency makes making a rational choice harder for the average person.

vehemenz 3y ago

It's surprising, but tuition is only half the story. The cost of everything else for students is going up quickly, including room and board, food, and textbooks. Textbooks particularly have risen much faster than the rate of inflation over the last thirty years. Meanwhile, the wages paid by assistantships and work study programs have barely budged.

linguae 3y ago

As a way of reducing the costs of higher education in America, I’m wondering how well a “no-thrills” model of a university will be received by students, faculty, employers, and other stakeholders? Today’s universities in America arguably have far more amenities than they did generations ago. My undergraduate institution, Cal Poly San Luis Obispo, had in the mid-2000s (and still has) a police department, a large student union building complete with a bowling alley, a career center, many sports and recreation facilities, a health center offering many services, dormitories ranging from classic dorms to relatively fancy shared apartments, and many non-faculty employees offering a wide range of services to their students, from academic counselors to those that watched over the university’s many fraternities and sororities. I’m grateful for these services, and I used many of them. But I wonder how much this costs the university to run, and I also wonder if the addition of such services at universities throughout America, as beneficial as they are, helped contribute to the escalating cost of college? A good teaching-oriented university needs dedicated faculty, dedicated students, and facilities that help the faculty teach and help the students learn. Some costs are unavoidable, such as hiring good faculty, running a library, maintaining facilities, etc. However, if we eliminate the “frills” and pare a university down to its essentials, will it be affordable? I’m very curious if this is one of the major factors, or are there more significant factors leading to exploding costs?

seanmcdirmid 3y ago
Isn’t this just the German model? They go a bit further: no TA-led sections, homework isn’t graded or checked (so no TAs)k and your entire grade is based on just your final (no mid-term).
- phreeza 3y ago
  That's not the German system I remember. In physics at least there was graded homework, it was just not required. The grading was actually invaluable because they prepared you for the actual exam you were going to get (can vary a lot between professors even for the same subject).
  - 3y ago

BenGuz 3y ago

I strongly recommend https://www.tuitiontracker.org/ https://www.tuitiontracker.org/ for anyone in the college process interested in real costs.

curiousllama 3y ago

Anecdotally, I was able to negotiate a merit scholarship to a top college - not based on merit, totally, but based on alternative offers from other schools. The price discrimination approach is a really effective method for pricing, and I'd be all for it (progressive taxation, basically) if not for the shoddy implementation leading to a student loan crisis.

drewg123 3y ago

The system is seems designed to screw the middle / upper middle class. My son is going to college next year. I make enough that my son will not qualify for aid, but I'm not a billionaire, so the sticker price that I'll have to pay will be enough to be painful for me. Using the calculator at https://www.savingforcollege.com/calculators/financial-aid-calculator https://www.savingforcollege.com/calculators/financial-aid-c..., and setting no savings and no 529, it appears you're expected to pay about 1/4 to 1/3 of your AGI (checked at $50k and $500k and several points in between). Which basically means no relief from the sticker price at private schools if your AGI is over ~$250k, and no relief from the sticker price at even the least expensive public schools if your AGI is over ~$80K. Or am I missing something?

ab_testing 3y ago
Can you disown your son so that he shows up as an adult whose family does not make any money . That way he would be eligible for aid and grants ?
- anon25783 3y ago
  I don't think "disown" is the word you want to use here. In English, "disown" means that you refuse to acknowledge that he is your son at all, not in a legal sense, but in a social sense, i.e. "I hate you so much I no longer consider you my son". I think you probably mean, "Can you declare your son as not a dependent", not "Can you disown your son" :)
  - halkony 3y ago
    The more precise word would be "emancipate"
    - notmypenguin 3y ago
      Yes you can. Marriage, military service, or being over age 23 are sufficient in the USA for this purpose
- 3y ago

lo_zamoyski 3y ago

If universities stuck to their core mission and shed their dead weight, bloat, and misappropriation of tuition dollars, I guarantee you that you would see a huge decrease in cost. It's become a circus and a racket that doesn't even deliver on the core mission, and even actively harms students. Unfortunately, the market has played a role in creating incentives to measure college quality according to the wrong factors. In any case, the thicket of incentives is so dense, and the interests so mutually intertwined, that any reform would be met with kicking and screaming (and lots of rationalization, of course). This university lobby would work overtime against successful attempts to educate the public about what it means for a university to be good, and what sorts of gimmicks make them more expensive. But it is still important to try. It is important to counter the misinformation that's taught in primary school about what universities are about, but that would also entail a reform of primary education by implication, another milieu that would resist reform. It is important that we try. We need a clear and correct notion of what education is for, and then what primary, secondary, etc. education is for. Once there is clarity, it becomes easier to make decisions about how to structure education, what to keep in, and what to keep out. It is easy to see why some may not want to resolve the ambiguity. One avenue that's being pursued is the founding of new colleges that demonstrate what is possible. This is the long haul, but in an environment as entrenched as this one, it may be the only realistic solution.

lovich 3y ago
Why would the cost decrease? They’ve already seen that the market will bear the price and there’s no competitive pressure to lower it.

jschveibinz 3y ago

In the US, here is the sensible “magic” formula: Go to community college for 2-3 years, then matriculate from the university. Way cheaper, better teacher/instructors, more time to mature, start early in 12th grade, and the diploma is from the university. What do you lose? 2-3 years of goofing off at a country club. What do you gain? time and money.

CuriouslyC 3y ago
This isn't universally true, CA and NY have good community colleges where this works, but if you're from Mississippi or somewhere similar it's likely your community college won't be great and might not have good transfer agreements with state universities.
hammock 3y ago
>What do you lose? 2-3 years of goofing off at a country club. Depending on what you want in life, the social class you started in and the one you want to end in, that is worth a lot...
- glorvigenjm 3y ago
  Exactly this, I grew up very rural and studied computer science in college, since I didn’t have any connections to companies needing my skills through parents, friends, etc. these interactions in college with kids from cities and making friends with them netted me my first job out of college.
opportune 3y ago
Not to be dramatic but those first two years were probably the best 2 years of my life so far. And I built friendships and connections that would have been a lot harder to build coming in as a junior transfer. Similarly I could take classes as a freshman (not Harvard Math 55, but same concept elsewhere) that were well past the level most community colleges would offer I’m not saying don’t go to community college by any means. I think for people who still need to mature more before becoming independent, or who are especially price sensitive (remember there are many colleges in the US that will give you a full ride just for good test scores, or there were a few years ago at least) it’s a good choice. But just because the sticker price is a little lower doesn’t mean it’s better for everyone

AlexCornila 3y ago

Amazed that the author can even make this claim without affecting his/her reputation/credibility more broadly. Simply if that were the case we could’ve afford to pay for college from fixed income without the need to access loans. Second you wouldn’t have the loan crisis where the debt accelerates way above income. This is just plain dumb.

AlexCornila 3y ago
One can have whatever interpretation of the data it wants but I’d like to see the raw data they used; this is gaslighting.