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The poor choices started in the early 90's when the SCOTUS decided that MIT didn't have to pay taxes as long as they gave enough charity discounts to students.

The poor choices started in the early 90's when the SCOTUS decided that MIT didn't have to pay taxes as long as they gave enough charity discounts to students. Everyone else jumped on it and abused the student loan system by jacking up tuition and then applying charity grants to basically all students. Leading to our current Student Loan crisis.

blackguardx 1y ago
This is the first time I've seen this framing. Typically folks blame bloated admin and fancy dorms. Where can I learn more about this take on the student loan crisis.
- adastra22 1y ago
  Those are not incompatible statements.
- lotsofpulp 1y ago
  The loan (and hence tuition) crisis is because US taxpayers provide blank checks to students with no underwriting.
runako 1y ago
As I understand matters, it started in the 70s and 80s as states pulled back from funding public institutions. This funding was the mechanism which allowed public institutions to be affordable to families such that a person could pay for a year of public college by working in a grocery store over the summer. MIT + the more expensive private colleges are effectively a rounding error in terms of number of students matriculating, but they do play in the same market and will price accordingly. But the big driver of what they can get away with is that a college like University of Tennessee is $35,000 annually, for a total ticket likely north of $150k. (Not picking on them, just chose a state at random.) Worth noting that this is a deliberate political choice. At any time, a state could choose to return to subsidizing in-state college at its public institutions, perhaps in exchange for working in the state after graduation.
- mixdup 1y ago
  >As I understand matters, it started in the 70s and 80s as states pulled back from funding public institutions. Yes, absolutely this, and accelerating heavily in the late 00s after the financial crisis. In some states, especially for non-flagship universities, you can overlay the decrease in state funding and tuition increases and they're nearly the same line Tuition explosion isn't all just the proliferation of assistant deans and VPs (although that is a problem, too), a huge portion of it is that public higher education is essentially public in name only these days
- lxm 1y ago
  Does subsidizing lower the cost, or just mask it by having it covered from a different wallet, e.g. robbing Peter to pay Paul? What stops the higher ed players from regulatory capture of the state agency in charge of those subsidies and milking that cow for all it's got?
  - runako 1y ago
    > What stops the higher ed players from regulatory capture of the state agency in charge of those subsidies and milking that cow for all it's got? Yes, you are correct that a corrupt state will deliver poor results. A key bulwark against in many places is effective oversight of public assets and administrations. But a corrupt state also could do much worse than $35k for undergraduate tuition. Which suggests priorities are being set to accomplish a different set of goals. Also keep in mind that the primary mechanism here is not adding regulation. Rather, it's about things like ensuring universities have enough open slots for the children matriculating through their K-12 programs. Think about it more in the way states are generally capable of managing and subsidizing/funding student education at the K-12 level. Bigger picture: consider why it should even be seen to be such a massive difference in capability for a state to run a public education program for the 4 years after high school vs the first 13 years.
    - lxm 1y ago
      Has this - “effective oversight of public assets and administrations” - happened in other systems with significant state involvement, like secondary ed, healthcare or infrastructure projects? My view is skewed towards California, where admittedly examples of cost decreases through economies of scale are lacking.

blackguardx 1y ago

This is the first time I've seen this framing. Typically folks blame bloated admin and fancy dorms. Where can I learn more about this take on the student loan crisis.

adastra22 1y ago
Those are not incompatible statements.
lotsofpulp 1y ago
The loan (and hence tuition) crisis is because US taxpayers provide blank checks to students with no underwriting.

runako 1y ago

As I understand matters, it started in the 70s and 80s as states pulled back from funding public institutions. This funding was the mechanism which allowed public institutions to be affordable to families such that a person could pay for a year of public college by working in a grocery store over the summer. MIT + the more expensive private colleges are effectively a rounding error in terms of number of students matriculating, but they do play in the same market and will price accordingly. But the big driver of what they can get away with is that a college like University of Tennessee is $35,000 annually, for a total ticket likely north of $150k. (Not picking on them, just chose a state at random.) Worth noting that this is a deliberate political choice. At any time, a state could choose to return to subsidizing in-state college at its public institutions, perhaps in exchange for working in the state after graduation.

mixdup 1y ago
>As I understand matters, it started in the 70s and 80s as states pulled back from funding public institutions. Yes, absolutely this, and accelerating heavily in the late 00s after the financial crisis. In some states, especially for non-flagship universities, you can overlay the decrease in state funding and tuition increases and they're nearly the same line Tuition explosion isn't all just the proliferation of assistant deans and VPs (although that is a problem, too), a huge portion of it is that public higher education is essentially public in name only these days
lxm 1y ago
Does subsidizing lower the cost, or just mask it by having it covered from a different wallet, e.g. robbing Peter to pay Paul? What stops the higher ed players from regulatory capture of the state agency in charge of those subsidies and milking that cow for all it's got?
- runako 1y ago
  > What stops the higher ed players from regulatory capture of the state agency in charge of those subsidies and milking that cow for all it's got? Yes, you are correct that a corrupt state will deliver poor results. A key bulwark against in many places is effective oversight of public assets and administrations. But a corrupt state also could do much worse than $35k for undergraduate tuition. Which suggests priorities are being set to accomplish a different set of goals. Also keep in mind that the primary mechanism here is not adding regulation. Rather, it's about things like ensuring universities have enough open slots for the children matriculating through their K-12 programs. Think about it more in the way states are generally capable of managing and subsidizing/funding student education at the K-12 level. Bigger picture: consider why it should even be seen to be such a massive difference in capability for a state to run a public education program for the 4 years after high school vs the first 13 years.
  - lxm 1y ago
    Has this - “effective oversight of public assets and administrations” - happened in other systems with significant state involvement, like secondary ed, healthcare or infrastructure projects? My view is skewed towards California, where admittedly examples of cost decreases through economies of scale are lacking.