4 ms·
what they taught me in econ 1a: 1. limited supply (even when you count the fake for-profit schools) 2. increased demand (EVERYONE wants to go to college) 3.
by beachstartup 12y ago
what they taught me in econ 1a:
1. limited supply (even when you count the fake for-profit schools)
2. increased demand (EVERYONE wants to go to college)
3. easy financing which increases 2. (student loans)
results in inflating prices.
not really sure what the mystery here is.
- ta82828 12y agoThe article is about state schools though.
- beachstartup 12y agouh, what part of my post doesn't apply to state schools?
- ta82828 12y agoThey're a government service, and are not - theoretically - supposed to charge market rates.
- adventured 12y agoThey still have to compete on everything from providing good enough facilities to paying professors enough to keep or acquire them. If you inflate half the market when it comes to salaries, the other half either has to compete or will lose all of its talent. If X type of lab becomes standard at non-state schools, then all the state schools must build one too or suffer.
- mark-r 12y agoThis is the fallacy in government providing low-cost loans to everyone. Unless the supply of colleges increases, it just ends up increasing demand for the same supply, driving up prices - and producing a boatload of graduates with mortgage-sized student loans. All on the assumption that the degree will give them increased earning power, which is increasingly unlikely in today's economy.
- TronPaul_ 12y agoIt's not just the fact that they're low-cost loans. They're almost zero-risk loans (you can not declare bankruptcy on student loans), which benefits lenders and encourages schools to increase prices.
- mrxd 12y agoRevenue per student (state appropriations + tuition) has been flat for 30 years. What's changed is the proportion of revenue that comes from tuition.