5 ms·

Deregulation is the simple fix: quality of education and cost has predictably gone up due to regulation, as well as costs of doing business

by erelong 6mo ago

gottorf 6mo ago
I don't know if "regulation" is the right word. In the end, what happened was that the foremost power in the world, the US federal government, having observed that college grads earn more than non-college grads, flipped cause and effect on its head and decided that everyone must go to college for better life outcomes. A tremendous amount of time, money, and resources went into making that happen. Against this backdrop, there was no world in which the price of higher education wasn't going to go dramatically up.
- secabeen 6mo ago
  Do you have data to support this claim? The data I have shows that expenditures have gone up, but no where near what the nameplate tuition has or what detractors claim: https://nces.ed.gov/programs/digest/d22/tables/dt22_334.10.asp https://nces.ed.gov/programs/digest/d22/tables/dt22_334.10.a... College Board data shows that Tuition and Fees net of financial aid has fallen by significant amounts over the past 20 years (see page 18). Room and board has gone up, but that is broadly true in college towns generally, and is not in the control of the Universities: https://research.collegeboard.org/media/pdf/Trends-in-College-Pricing-and-Student-Aid-2025-final_1.pdf https://research.collegeboard.org/media/pdf/Trends-in-Colleg...
  - gottorf 6mo ago
    My comment was on the price of higher ed, not its cost, which is what your ed.gov source shows. CPI component calculations done by the BLS shows "College tuition and fees", including adjustments for scholarships and grants, had a 63% increase from 2009 (to match the CB data baseline) to now, which outpaces overall inflation of 56% over the same timeframe. I'm not sure what methodology CB uses to show falling inflation-adjusted prices. Granted, it's not a massive difference in those percentages[0], but because college is a large single-ticket item, that difference is probably felt more acutely. > Room and board has gone up, but that is broadly true in college towns generally, and is not in the control of the Universities In many places the local university is the largest landowner in town, and is tax-exempt to boot. They might hold some of the blame in those costs. [0]: As an aside, it's incredible that everyone half of their purchasing power in ~15 years, and a quarter in just the past 5 years alone.
    - secabeen 6mo ago
      > My comment was on the price of higher ed, not its cost, which is what your ed.gov source shows. That's true, but as non-profits, the revenues and expenditures of higher ed have to balance; they can't take out surplus revenue as profit. I think we largely agree overall, the CPI numbers are close enough that I wouldn't dispute them; they align with my argument that the rhetoric and public discussion of massive tuition increases is not supported by the data when using actual tuition paid rather than nameplate/MSRP prices. > In many places the local university is the largest landowner in town, and is tax-exempt to boot. They might hold some of the blame in those costs. This is probably true, and campuses could run housing at less-than-market rates. Whether that would be a better model than just giving students more financial aid that then gets paid back to the University as rent is something we'd have to model. Either way, my point is that we've seen a significant increase in the cost of rent across the entire country in the post-COVID era. That makes the Cost of College seem higher, but is something that Universities are subject to as much as a cause of.
      - gottorf 6mo ago
        > as non-profits, the revenues and expenditures of higher ed have to balance; they can't take out surplus revenue as profit. Just pointing out that nonprofits do not have to balance revenues and expenditures at all. This is not a mere technical detail. Profit cannot inure to owners with nonprofits as it can with for-profits, but this does not prevent the organization from building up a surplus over time, nor does it prevent them from paying employees very handsomely. Otherwise it wouldn't be possible to have almost one hundred universities with endowments over a billion dollars. > my argument that the rhetoric and public discussion of massive tuition increases is not supported by the data when using actual tuition paid rather than nameplate/MSRP prices That's fair, but I suppose there's more to it than that. Any number of datasets point to the cost of admin rising far above the cost of faculty or maintenance; and a lot of them actually show on an inflation-adjusted basis that schools are spending less now on instruction than they did a decade or two ago. So perhaps there's enough truth to the idea that you're getting substantially less education per dollar than you used to.
        6mo ago
- verteu 6mo ago
  They did not "flip cause and effect on its head" - There is strong evidence for positive causal returns to education: https://www.sciencedirect.com/science/article/pii/S0738059326000751 https://www.sciencedirect.com/science/article/pii/S073805932...
  - gottorf 6mo ago
    > Under simplifying assumptions, including competitive labor markets, no direct schooling costs, and constant proportional returns, this specification yields an interpretable estimate of the average percentage increase in earnings associated with an additional year of schooling. So, an individual student will be expected to have higher earnings with more schooling. But as a matter of public policy that involves taxpayer funding of higher education, I cannot accurately base those decisions on a methodology that assumes a cost of zero ("no direct schooling costs"). Your source also identifies that higher marginal returns are found in lower-income, lower-educated countries, which makes sense. How much marginal return (for the taxpayer dollar) can we expect in a high-income country with a service-based economy and a third of the population already having a bachelor's degree?
    - verteu 6mo ago
      > I cannot accurately base those decisions on a methodology that assumes a cost of zero ("no direct schooling costs"). The study measures benefit of education. If you wish to determine whether cost>benefit, join it with research on the cost of education.

Deregulation is the simple fix: quality of education and cost has predictably gone up due to regulation, as well as costs of doing business

by erelong 6mo ago

Deregulation is the simple fix: quality of education and cost has predictably gone up due to regulation, as well as costs of doing business

gottorf 6mo ago

I don't know if "regulation" is the right word. In the end, what happened was that the foremost power in the world, the US federal government, having observed that college grads earn more than non-college grads, flipped cause and effect on its head and decided that everyone must go to college for better life outcomes. A tremendous amount of time, money, and resources went into making that happen. Against this backdrop, there was no world in which the price of higher education wasn't going to go dramatically up.

secabeen 6mo ago
Do you have data to support this claim? The data I have shows that expenditures have gone up, but no where near what the nameplate tuition has or what detractors claim: https://nces.ed.gov/programs/digest/d22/tables/dt22_334.10.asp https://nces.ed.gov/programs/digest/d22/tables/dt22_334.10.a... College Board data shows that Tuition and Fees net of financial aid has fallen by significant amounts over the past 20 years (see page 18). Room and board has gone up, but that is broadly true in college towns generally, and is not in the control of the Universities: https://research.collegeboard.org/media/pdf/Trends-in-College-Pricing-and-Student-Aid-2025-final_1.pdf https://research.collegeboard.org/media/pdf/Trends-in-Colleg...
- gottorf 6mo ago
  My comment was on the price of higher ed, not its cost, which is what your ed.gov source shows. CPI component calculations done by the BLS shows "College tuition and fees", including adjustments for scholarships and grants, had a 63% increase from 2009 (to match the CB data baseline) to now, which outpaces overall inflation of 56% over the same timeframe. I'm not sure what methodology CB uses to show falling inflation-adjusted prices. Granted, it's not a massive difference in those percentages[0], but because college is a large single-ticket item, that difference is probably felt more acutely. > Room and board has gone up, but that is broadly true in college towns generally, and is not in the control of the Universities In many places the local university is the largest landowner in town, and is tax-exempt to boot. They might hold some of the blame in those costs. [0]: As an aside, it's incredible that everyone half of their purchasing power in ~15 years, and a quarter in just the past 5 years alone.
  - secabeen 6mo ago
    > My comment was on the price of higher ed, not its cost, which is what your ed.gov source shows. That's true, but as non-profits, the revenues and expenditures of higher ed have to balance; they can't take out surplus revenue as profit. I think we largely agree overall, the CPI numbers are close enough that I wouldn't dispute them; they align with my argument that the rhetoric and public discussion of massive tuition increases is not supported by the data when using actual tuition paid rather than nameplate/MSRP prices. > In many places the local university is the largest landowner in town, and is tax-exempt to boot. They might hold some of the blame in those costs. This is probably true, and campuses could run housing at less-than-market rates. Whether that would be a better model than just giving students more financial aid that then gets paid back to the University as rent is something we'd have to model. Either way, my point is that we've seen a significant increase in the cost of rent across the entire country in the post-COVID era. That makes the Cost of College seem higher, but is something that Universities are subject to as much as a cause of.
    - gottorf 6mo ago
      > as non-profits, the revenues and expenditures of higher ed have to balance; they can't take out surplus revenue as profit. Just pointing out that nonprofits do not have to balance revenues and expenditures at all. This is not a mere technical detail. Profit cannot inure to owners with nonprofits as it can with for-profits, but this does not prevent the organization from building up a surplus over time, nor does it prevent them from paying employees very handsomely. Otherwise it wouldn't be possible to have almost one hundred universities with endowments over a billion dollars. > my argument that the rhetoric and public discussion of massive tuition increases is not supported by the data when using actual tuition paid rather than nameplate/MSRP prices That's fair, but I suppose there's more to it than that. Any number of datasets point to the cost of admin rising far above the cost of faculty or maintenance; and a lot of them actually show on an inflation-adjusted basis that schools are spending less now on instruction than they did a decade or two ago. So perhaps there's enough truth to the idea that you're getting substantially less education per dollar than you used to.
      - 6mo ago
verteu 6mo ago
They did not "flip cause and effect on its head" - There is strong evidence for positive causal returns to education: https://www.sciencedirect.com/science/article/pii/S0738059326000751 https://www.sciencedirect.com/science/article/pii/S073805932...
- gottorf 6mo ago
  > Under simplifying assumptions, including competitive labor markets, no direct schooling costs, and constant proportional returns, this specification yields an interpretable estimate of the average percentage increase in earnings associated with an additional year of schooling. So, an individual student will be expected to have higher earnings with more schooling. But as a matter of public policy that involves taxpayer funding of higher education, I cannot accurately base those decisions on a methodology that assumes a cost of zero ("no direct schooling costs"). Your source also identifies that higher marginal returns are found in lower-income, lower-educated countries, which makes sense. How much marginal return (for the taxpayer dollar) can we expect in a high-income country with a service-based economy and a third of the population already having a bachelor's degree?
  - verteu 6mo ago
    > I cannot accurately base those decisions on a methodology that assumes a cost of zero ("no direct schooling costs"). The study measures benefit of education. If you wish to determine whether cost>benefit, join it with research on the cost of education.