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The same as any tuition program or grant: When you separate the cost from the consumer, prices skyrocket. With 100% of their tuition being paid by anonymous don

The same as any tuition program or grant: When you separate the cost from the consumer, prices skyrocket. With 100% of their tuition being paid by anonymous donors, why should these kids care how much it costs? And if the kids don't care and have a blank check, why shouldn't the schools raise the price tag? I'm just using this an example of unintended consequences in this type of stuff. I'm well aware this handful of kids aren't enough to skew tuition prices, that most public institutions (which this program seems to target) have caps on tuition increases, etc... Regardless, disconnecting the consumer from the price of the product have caused tuition prices to rise artificially fast.

ktizo 14y ago
When you separate the cost from the consumer, prices skyrocket. Not always. Cost of education in the UK has skyrocketed more since the scrapping of grants in favour of a loans+tuition fees model. Part of this is that when there is a marketplace based on prestige, nobody wants to appear cheap, so price becomes based on the highest price that the market will bear.
- 001sky 14y ago
  This is an iteresting and valid point. the counter example to the uk (20 years ago, in medicine and in university) is the us. In the USA both medicine and college are inflated because between the taxes collected and the end user there are [insert conspiracy theory here] actors of questionable probity. Everyone benefits from the massive opaque flow of cash. Politicans get the clout of collecting tax and the support of the [insurance, university, hospital, dentist, doctor, finance companies]. Then everybody gets "cost+pricing". To "pay their fair share." But the intermediaries skimm the pool and make extraordinary profits on the cost base hollywood accounting style. With a wink and a nod. Its a great system. =D
  - ktizo 14y ago
    The way I think about it is this: If there is a limited supply of a good that is highly desired by the richest in society, and if price is used as an indicator of quality for that good, then it is the connection between the cost and the consumer that drives prices upwards. For things like speedboats and handcrafted watches and personal spaceships, this is all cool, and I don't think that randomly insanely rich people buying toys like this does much harm really on the scale of things and probably does a lot of good if anything. Power tends to follow a power law, no matter what kind of politics you try and squidge in the middle. However, if it is then thought to cause injury to the society in general for certain goods (such as education and health services, for example) to be priced above people's general means, then the state can lower the cost of that good by regulation or by direct competition by the state. The purchasing power and drug research of the UK's NHS being a good example. And I don't think there is any massive contradiction in being lassie-faire capitalist with most stuff and socialist with specific areas. It seems to be how places like Finland get along mostly, and they seem to be doing ok. [edit] Just thought, private spaceships shouldn't be on that list as they follow a different set of economics, as the rich people who want them are directly funding their construction rather than purchasing a consumer good. Posh watches and big speedboats follow this rule though.
    - 001sky 14y ago
      The USA is 6x the size of the UK. Thats the trick. The issue we have: who wants to aggregate all of that power in the hands of [insert conspiraciy theory] actors of dubious propriety. With healthcare thats a problem @20pc GDP (70% increase of size of Gov't spend). With schools, it would need to be thought through, but is likely more manageble. The main conflict with schools is they fight for money, for the research (aka, presitige). Alot of that money comes from the Gov't. And alot of the cost base is fancy non-education-related things. [edited]
      - ktizo 14y ago
        I read your first version and didn't think it was particularly off topic, but then again I can meander all over the place when it comes to discussions.
droithomme 14y ago
It doesn't guarantee admission, only funding. As the article notes, most of the recipients use the grant at the community college, which is the least expensive possibility involving an accredited college and real degree.

ktizo 14y ago

When you separate the cost from the consumer, prices skyrocket. Not always. Cost of education in the UK has skyrocketed more since the scrapping of grants in favour of a loans+tuition fees model. Part of this is that when there is a marketplace based on prestige, nobody wants to appear cheap, so price becomes based on the highest price that the market will bear.

001sky 14y ago
This is an iteresting and valid point. the counter example to the uk (20 years ago, in medicine and in university) is the us. In the USA both medicine and college are inflated because between the taxes collected and the end user there are [insert conspiracy theory here] actors of questionable probity. Everyone benefits from the massive opaque flow of cash. Politicans get the clout of collecting tax and the support of the [insurance, university, hospital, dentist, doctor, finance companies]. Then everybody gets "cost+pricing". To "pay their fair share." But the intermediaries skimm the pool and make extraordinary profits on the cost base hollywood accounting style. With a wink and a nod. Its a great system. =D
- ktizo 14y ago
  The way I think about it is this: If there is a limited supply of a good that is highly desired by the richest in society, and if price is used as an indicator of quality for that good, then it is the connection between the cost and the consumer that drives prices upwards. For things like speedboats and handcrafted watches and personal spaceships, this is all cool, and I don't think that randomly insanely rich people buying toys like this does much harm really on the scale of things and probably does a lot of good if anything. Power tends to follow a power law, no matter what kind of politics you try and squidge in the middle. However, if it is then thought to cause injury to the society in general for certain goods (such as education and health services, for example) to be priced above people's general means, then the state can lower the cost of that good by regulation or by direct competition by the state. The purchasing power and drug research of the UK's NHS being a good example. And I don't think there is any massive contradiction in being lassie-faire capitalist with most stuff and socialist with specific areas. It seems to be how places like Finland get along mostly, and they seem to be doing ok. [edit] Just thought, private spaceships shouldn't be on that list as they follow a different set of economics, as the rich people who want them are directly funding their construction rather than purchasing a consumer good. Posh watches and big speedboats follow this rule though.
  - 001sky 14y ago
    The USA is 6x the size of the UK. Thats the trick. The issue we have: who wants to aggregate all of that power in the hands of [insert conspiraciy theory] actors of dubious propriety. With healthcare thats a problem @20pc GDP (70% increase of size of Gov't spend). With schools, it would need to be thought through, but is likely more manageble. The main conflict with schools is they fight for money, for the research (aka, presitige). Alot of that money comes from the Gov't. And alot of the cost base is fancy non-education-related things. [edited]
    - ktizo 14y ago
      I read your first version and didn't think it was particularly off topic, but then again I can meander all over the place when it comes to discussions.

droithomme 14y ago

It doesn't guarantee admission, only funding. As the article notes, most of the recipients use the grant at the community college, which is the least expensive possibility involving an accredited college and real degree.