4 ms·

Since government started subsidizing higher eduction by underwriting student loans, college tuition has risen much faster than inflation, both for private and p

by MCRed 12y ago

Since government started subsidizing higher eduction by underwriting student loans, college tuition has risen much faster than inflation, both for private and public schools. At the same time, more and more people have gone to college and the value of a college degree has declined, as more people enter the marketplace with them. Anecdotally, it appears (from the college graduates I've interviewed) that the quality of a college education has also declined noticeably in the past 30 years. All of these are unintended consequences, but not surprising results when you look at the situation from the perspective of economics.

cantankerous 12y ago
True, but when you talk about the perspective of economics, it behooves you to talk about demand, I think. The broad based demand for a college education is based on the irrational thinking that so many should have a college education in order to work, which is pretty much untrue. It's hard to argue that the quality of a college education has declined when its purpose has changed. So many folks just need a college degree to remain competitive, at least on paper, and not much else. I think this is a much more modern trend. Perhaps one could make the case that the low cost of a college education somehow spurred this irrational demand for it. So many people have set off to set themselves apart with a degree that now only substandard prospective workers don't have them.
- dikaiosune 12y ago
  Perhaps the demand is irrational, but the effects are very real: http://www.bls.gov/emp/ep_chart_001.htm http://www.bls.gov/emp/ep_chart_001.htm It would be nice if we could change the fundamental problems underlying that irrational demand (pre-college schooling which doesn't prepare students for work, a national obsession with white collar jobs, etc.). However, if I was staring down a big wealth gap and decided to propose a concrete policy shift to resolve some of it, I think that it's not a bad idea to get people moved from the 7-11% unemployment category to the 5.4% unemployment category.
  - thaumasiotes 12y ago
    > if I was staring down a big wealth gap and decided to propose a concrete policy shift to resolve some of it, I think that it's not a bad idea to get people moved from the 7-11% unemployment category to the 5.4% unemployment category Sure, as long as the categories have no content other than an employment rating, this makes sense. According to the same logic, you could have huge effects on unemployment by giving black people cosmetic surgery and calling them white.
    - dikaiosune 12y ago
      It's not exactly great that race is a decent predictor of education level[1], or of income[2], but that doesn't mean that we have to solve the entire race problem to improve social equality. America has failed miserably for some time now to "cure" racism[3]. So what's wrong with throwing resources at improving some of the social factors which contribute to racial/socioeconomic trends? As an aside, it's a bit simplified and inflammatory to cast this as a black/white thing. If you insist on boiling this down to only being about race (a stance I would disagree with), the comparison is much starker when cast as hispanic/asian[1] or black/asian[2]. [1] http://nces.ed.gov/programs/coe/indicator_caa.asp http://nces.ed.gov/programs/coe/indicator_caa.asp [2] http://www.census.gov/compendia/statab/2012/tables/12s0691.pdf http://www.census.gov/compendia/statab/2012/tables/12s0691.p... [3] Any contemporary news story about the police in dense urban areas.
      - thaumasiotes 12y ago
        > As an aside, it's a bit simplified and inflammatory to cast this as a black/white thing. I agree in a limited way. I was originally going to use forced religious conversion as my example instead of cosmetic surgery, but I discovered that while it's easy to find unemployment statistics by race, it's not so easy to find unemployment statistics by religion. Regardless -- as far as I can see, you've completely missed the point that being in a bucket labeled "5.4% unemployment" doesn't necessarily cause people to personally experience 5.4% unemployment. If it sounds strange to you that a group of people might develop better employment statistics by having cosmetic surgery en masse, or by all converting from voodoo to judaism, that should give you pause before concluding that forced education would have any more effect than forced conversion.
- billyhoffman 12y ago
  "The broad based demand for a college education is based on the irrational thinking that so many should have a college education in order to work, which is pretty much untrue." Sources? The "you don't need college" meme is quite popular with VC of late, and I think is often true in the technology field. But is this true in other white collar job sectors? I'm honestly asking.
tzs 12y ago
> Since government started subsidizing higher eduction by underwriting student loans, college tuition has risen much faster than inflation, both for private and public schools. Do you happen to have links to data that supports that? I was unable to find historical tuition rates for more than a handful of schools when I looked several months ago, but for the few I did find last it appeared to not be true. They were rising much faster than inflation long before the government stepped in, and did not show much if any change after that...maybe just a slight increase.
mikecb 12y ago
>At the same time, more and more people have gone to college and the value of a college degree has declined, as more people enter the marketplace with them. You might expect this to be true, but the data actually shows the highest gap between college and highschool graduates in half a century[1], meaning the value of a college degree has increased. [1] http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-to-college/ http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of...
eli_gottlieb 12y ago
As comparison with any other First World country shows, there is a vast difference in effects between subsidizing X by having the state directly supply it for free or cheap, and "subsidizing" X by having the state subsidize credit to be spent on X.

by MCRed 12y ago

cantankerous 12y ago

True, but when you talk about the perspective of economics, it behooves you to talk about demand, I think. The broad based demand for a college education is based on the irrational thinking that so many should have a college education in order to work, which is pretty much untrue. It's hard to argue that the quality of a college education has declined when its purpose has changed. So many folks just need a college degree to remain competitive, at least on paper, and not much else. I think this is a much more modern trend. Perhaps one could make the case that the low cost of a college education somehow spurred this irrational demand for it. So many people have set off to set themselves apart with a degree that now only substandard prospective workers don't have them.

dikaiosune 12y ago
Perhaps the demand is irrational, but the effects are very real: http://www.bls.gov/emp/ep_chart_001.htm http://www.bls.gov/emp/ep_chart_001.htm It would be nice if we could change the fundamental problems underlying that irrational demand (pre-college schooling which doesn't prepare students for work, a national obsession with white collar jobs, etc.). However, if I was staring down a big wealth gap and decided to propose a concrete policy shift to resolve some of it, I think that it's not a bad idea to get people moved from the 7-11% unemployment category to the 5.4% unemployment category.
- thaumasiotes 12y ago
  > if I was staring down a big wealth gap and decided to propose a concrete policy shift to resolve some of it, I think that it's not a bad idea to get people moved from the 7-11% unemployment category to the 5.4% unemployment category Sure, as long as the categories have no content other than an employment rating, this makes sense. According to the same logic, you could have huge effects on unemployment by giving black people cosmetic surgery and calling them white.
  - dikaiosune 12y ago
    It's not exactly great that race is a decent predictor of education level[1], or of income[2], but that doesn't mean that we have to solve the entire race problem to improve social equality. America has failed miserably for some time now to "cure" racism[3]. So what's wrong with throwing resources at improving some of the social factors which contribute to racial/socioeconomic trends? As an aside, it's a bit simplified and inflammatory to cast this as a black/white thing. If you insist on boiling this down to only being about race (a stance I would disagree with), the comparison is much starker when cast as hispanic/asian[1] or black/asian[2]. [1] http://nces.ed.gov/programs/coe/indicator_caa.asp http://nces.ed.gov/programs/coe/indicator_caa.asp [2] http://www.census.gov/compendia/statab/2012/tables/12s0691.pdf http://www.census.gov/compendia/statab/2012/tables/12s0691.p... [3] Any contemporary news story about the police in dense urban areas.
    - thaumasiotes 12y ago
      > As an aside, it's a bit simplified and inflammatory to cast this as a black/white thing. I agree in a limited way. I was originally going to use forced religious conversion as my example instead of cosmetic surgery, but I discovered that while it's easy to find unemployment statistics by race, it's not so easy to find unemployment statistics by religion. Regardless -- as far as I can see, you've completely missed the point that being in a bucket labeled "5.4% unemployment" doesn't necessarily cause people to personally experience 5.4% unemployment. If it sounds strange to you that a group of people might develop better employment statistics by having cosmetic surgery en masse, or by all converting from voodoo to judaism, that should give you pause before concluding that forced education would have any more effect than forced conversion.
billyhoffman 12y ago
"The broad based demand for a college education is based on the irrational thinking that so many should have a college education in order to work, which is pretty much untrue." Sources? The "you don't need college" meme is quite popular with VC of late, and I think is often true in the technology field. But is this true in other white collar job sectors? I'm honestly asking.

tzs 12y ago

> Since government started subsidizing higher eduction by underwriting student loans, college tuition has risen much faster than inflation, both for private and public schools. Do you happen to have links to data that supports that? I was unable to find historical tuition rates for more than a handful of schools when I looked several months ago, but for the few I did find last it appeared to not be true. They were rising much faster than inflation long before the government stepped in, and did not show much if any change after that...maybe just a slight increase.

mikecb 12y ago

>At the same time, more and more people have gone to college and the value of a college degree has declined, as more people enter the marketplace with them. You might expect this to be true, but the data actually shows the highest gap between college and highschool graduates in half a century[1], meaning the value of a college degree has increased. [1] http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-to-college/ http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of...

eli_gottlieb 12y ago

As comparison with any other First World country shows, there is a vast difference in effects between subsidizing X by having the state directly supply it for free or cheap, and "subsidizing" X by having the state subsidize credit to be spent on X.