Tuition costs have risen 710% since 1983(statecraft.beehiiv.com)
statecraft.beehiiv.com
Tuition costs have risen 710% since 1983
https://statecraft.beehiiv.com/p/student-loan-debt-forgiveness
769 comments
Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan since the bank knows that the government will protect their investment if she fails to pay them back. So now young people have this easy access to credit, and universities can greatly increase tuition and fees with the confidence that their admitted students will be able to pay.
Worse than just "backed by the federal government," the loans are basically protected by the government. Being one of the small list of things you can't bankrupt out of, the risk in giving out the loans has been fully pulled from the lenders.
It is frustrating to hear the discourse over the inappropriate students that are taking on too much debt, all the while ignoring the lenders that are taking on too much risk. At least, they would be taking on too much risk, if they hadn't captured the market so effectively.
It is frustrating to hear the discourse over the inappropriate students that are taking on too much debt, all the while ignoring the lenders that are taking on too much risk. At least, they would be taking on too much risk, if they hadn't captured the market so effectively.
> Worse than just "backed by the federal government," the loans are basically protected by the government.
It is really strange that government does not constrain tuitions of the colleges participating in the loan program. Currently, Universities have no incentives to control costs in any way.
It is really strange that government does not constrain tuitions of the colleges participating in the loan program. Currently, Universities have no incentives to control costs in any way.
Well yeah, the problem is never that prices are too high and always that customers can't afford it so therefore they need more debt to help them!
(This message brought to you by people-with-thing-to-sell.)
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Reminds me of our healthcare system.
And military contractors.
And..
Extra layers of payment indirection seem to invite overcharging.
Note that universities also basically act as a cartel.
Note that universities also basically act as a cartel.
Pharmacy benefits managers provide no value and collect absurd fees. Perhaps companies should be required to justify their continued existence if subject of consumer complaints.
housing and transportation and…
So true.
This is essentially how the US works. We're built on debt. Sometimes I think our society would collapse without all the debt we create.
This is essentially how the US works. We're built on debt. Sometimes I think our society would collapse without all the debt we create.
The US is built on interest from debt. Money does grow on trees for some.
Literally all they have to do is limit the maximum loan size. Max $50k per year. Anything beyond that is not subsidized or requires proof of academic performance or ability to repay.
Then parents with money and pull in academic orgs will make sure that tuition will float just far enough above that limit that their children won't suffer from too much competition by the less fortunate.
But then on the other hand I'm not really convinced that this would actually be worse than the model of betting (or worse: bidding, it's a market with limited supply of high-status slots) seemingly unbounded amounts of future income on flying really high. And if they do fly high, just not quite high enough, it's effectively indentured service. No limits gambling is never a good idea, even if the game is not entirely devoid of an element of skill.
But then on the other hand I'm not really convinced that this would actually be worse than the model of betting (or worse: bidding, it's a market with limited supply of high-status slots) seemingly unbounded amounts of future income on flying really high. And if they do fly high, just not quite high enough, it's effectively indentured service. No limits gambling is never a good idea, even if the game is not entirely devoid of an element of skill.
> Then parents with money and pull in academic orgs will make sure that tuition will float just far enough above that limit that their children won't suffer from too much competition by the less fortunate
Universities do that already. "Need-based" financial aid ensures that the parental contribution is near the hardship threshold for low-income parents - tipping the scale toward those with greater ability to pay. And external scholarships are simply deducted from "financial need" and largely pocketed by the university (which usually prohibits the funds from being used to reduce the parental contribution.)
Isn't it wonderful to be in a business that requires customers to turn over their financial records and charges based on "ability to pay?"
Universities do that already. "Need-based" financial aid ensures that the parental contribution is near the hardship threshold for low-income parents - tipping the scale toward those with greater ability to pay. And external scholarships are simply deducted from "financial need" and largely pocketed by the university (which usually prohibits the funds from being used to reduce the parental contribution.)
Isn't it wonderful to be in a business that requires customers to turn over their financial records and charges based on "ability to pay?"
there's a very nice video I saw posted a while back where a graphic designer talks about how he'll charge different amounts for a logo for different customers - a small mom and pop shop will pay much less than a large multinational.
You price the customer, not the service.
You price the customer, not the service.
The max should be 20k per year, maybe even 15k.
I teach part time at a relatively affordable public university and the waste, inefficiency and bureaucracy takes my breath away.
Limit loans to 15k/60k lifetime and make them forgivable. You would be amazed at how focused, productive and inexpensive higher education could get.
I teach part time at a relatively affordable public university and the waste, inefficiency and bureaucracy takes my breath away.
Limit loans to 15k/60k lifetime and make them forgivable. You would be amazed at how focused, productive and inexpensive higher education could get.
You'd probably need to do that. I pay $6k/sem for my university tuition, but it seems that what doesn't go towards tuition gets sucked up by slumlords or university room and board, so pressing down tuition prices alone doesn't seem like a feasible option. Limiting the overall liquidity, I think, would dramatically improve things.
It's either that or enrollment drops off a cliff because the college proposition is so off the rails. That appears to be the current trend, I believe.
It's either that or enrollment drops off a cliff because the college proposition is so off the rails. That appears to be the current trend, I believe.
How about a tuition capped at the median salaries of its graduates?
1. Over what time frame? Med school takes 4 years and Residency takes 4+. JDs+bar take a few years and earnings take some time to ramp up. PhDs take half a decade (Even if we don't need more faculty, we do have a shortage of PhD supply in industry for fields like CS, Chem E, Biotech-ad, etc. and the median salary for those graduates is quite high with unemployment basically as low as you can go.)
2. Even without graduate education requirements, other fields have loooong ramp-up times but eventually end up doing well.
3. There are also jobs that are extremely valuable to society despite the expense of education (nursing comes to mind, as does teaching).
4. We would end up with stupid boom-bust cycles in labor supply and demand, even worse than what we have now. Reducing labor supply by making loans unavailable increases labor prices eventually, which eventually results in loans becoming available, which saturates supply, and then repeat the cycle every couple decades. Constant idiotic predicable crises. Welcome to myopic financial capitalism, where trust fund kids who never needed to pass their delay differential equations unit have all the power.
So to make this work you need some form of central planning of supply and demand -- by DECADES at a time. Who knew we'd need so many Python programmers in 1980 or even 2000? Which, if that predictive function works, why the FUCK are we using markets anyway?! Cut out the middle man if central planning works. (It doesn't.)
How about we just lose the cold war brain-rot and stop trying to use markets -- a legal fiction and policy tool!!! -- where they make no fucking sense. Markets are an incoherent solution to allocation problems where price signals are EXTREMELY delayed (education) or EXTREMELY coercive (health). Just fund it with tax dollars instead.
The market religion zombie from the red scare era needs to die. The amount of absolute brain rot in the American public caused by the inability to understand that markets are just fucking tools that depend on government coercion anyways is sending our entire society into a death spiral.
It's somehow unsurprising that the one true American religion of the 21st century -- deference to The Troops -- is the place where we're completely okay with socialism in higher education (the military academies).
2. Even without graduate education requirements, other fields have loooong ramp-up times but eventually end up doing well.
3. There are also jobs that are extremely valuable to society despite the expense of education (nursing comes to mind, as does teaching).
4. We would end up with stupid boom-bust cycles in labor supply and demand, even worse than what we have now. Reducing labor supply by making loans unavailable increases labor prices eventually, which eventually results in loans becoming available, which saturates supply, and then repeat the cycle every couple decades. Constant idiotic predicable crises. Welcome to myopic financial capitalism, where trust fund kids who never needed to pass their delay differential equations unit have all the power.
So to make this work you need some form of central planning of supply and demand -- by DECADES at a time. Who knew we'd need so many Python programmers in 1980 or even 2000? Which, if that predictive function works, why the FUCK are we using markets anyway?! Cut out the middle man if central planning works. (It doesn't.)
How about we just lose the cold war brain-rot and stop trying to use markets -- a legal fiction and policy tool!!! -- where they make no fucking sense. Markets are an incoherent solution to allocation problems where price signals are EXTREMELY delayed (education) or EXTREMELY coercive (health). Just fund it with tax dollars instead.
The market religion zombie from the red scare era needs to die. The amount of absolute brain rot in the American public caused by the inability to understand that markets are just fucking tools that depend on government coercion anyways is sending our entire society into a death spiral.
It's somehow unsurprising that the one true American religion of the 21st century -- deference to The Troops -- is the place where we're completely okay with socialism in higher education (the military academies).
There goes philosophy, music, and many other liberal arts degrees.
Universities have long tried to argue that education isn't 'vocational' that their entire focus should be on producing a well rounded individual.
That dog don't hunt when that 'well rounded education' costs tens or even hundreds of thousands of dollars and will burden the students for the rest of their lives. Once the student is on the hook for that debt, it becomes a strict return on investment calculation.
Want to study philosophy? By all means! It's among the most important subjects humanity can study, but you probably shouldn't be seeking a degree in it if you don't wish to teach it, and you damned sure shouldn't be condemned to serfdom because of it.
That dog don't hunt when that 'well rounded education' costs tens or even hundreds of thousands of dollars and will burden the students for the rest of their lives. Once the student is on the hook for that debt, it becomes a strict return on investment calculation.
Want to study philosophy? By all means! It's among the most important subjects humanity can study, but you probably shouldn't be seeking a degree in it if you don't wish to teach it, and you damned sure shouldn't be condemned to serfdom because of it.
I have a philosophy degree (and a good career in a different field). It’s a good thing I didn’t wish to teach it, otherwise modern academia being what it is, that would be a life of serfdom!
Yeah if we did that I think we’d need to build some systems for these things. We need artists and writers and what not and precluding anyone who can’t afford it would probably suck for society. We’d need some good scholarship type programs to help out there. Honestly we could probably use those now, I don’t know how realistic a lot of these things are under our current system.
We have far, far too many liberal arts graduates. There is a huge labor shortage that we need those people to fill in fields like restaurants, plumbing, nursing, construction, farming, etc.
There's no labor shortage. There's only a wage shortage. Restaurants are a particularly egregious example, as someone with firsthand experience. Restaurants treat their employees like shit, work them to the bone, and then pay them as little as humanly possible. I got out and never looked back, because it turns out people are willing to shower you in cash if you can string together 3 lines of Python.
Healthcare as a whole baffles me. They pay well enough, sometimes, but they also just treat their employees like absolute crap. Would it really break the bank to hire 25% more staff instead of having your entire workforce getting paid overtime week after week?
Healthcare as a whole baffles me. They pay well enough, sometimes, but they also just treat their employees like absolute crap. Would it really break the bank to hire 25% more staff instead of having your entire workforce getting paid overtime week after week?
+1 to no labor shortage in the construction industry. Good luck getting trained as a tradesman outside the unions. Joining a union is a practical impossibility if you're a white male. You'll be subsidizing your non-union employers with your own savings as an apprentice well into your journeyman career. You'll be sitting idle unpaid in between jobs, when it's raining or snowing, when your car doesn't start... Even when employed, you'll have no benefits, no health insurance, no paid vacation. You'll be competing for the scarce work with people who're in this country without a work permit. Guess what the going wage is for your services.
> Healthcare as a whole baffles me. They pay well enough, sometimes, but they also just treat their employees like absolute crap. Would it really break the bank to hire 25% more staff instead of having your entire workforce getting paid overtime week after week?
Them stocks gotta to up, mang.
Take a look at the Fortune 500, and look at how many healthcare companies are publicly traded and in the top 100.
Them stocks gotta to up, mang.
Take a look at the Fortune 500, and look at how many healthcare companies are publicly traded and in the top 100.
I think your point is valid and worth looking into - there are also many non profit hospitals in the same situation. That being said, I'm sure it's part of the equation, but I'm not 100% convinced everything can be blamed on Wall St with this one.
There would just be fewer students in this major, they wouldn’t disappear entirely.
Sorry, my comment was more snark than content. If tuition was limited to student income the universities would be incentivized to cut departments that don't produce high-income graduates.
Good, the world doesn't need that many liberal arts graduates. Quality over quantity should be the focus in fields where there aren't that many employment opportunities and potential for successful entrepreneurship.
Besides, nothing prevents one from pursuing a career in most liberal arts without a degree, assuming you don't want to be a researcher. You can always be a nurse or an engineer with arts related side-job, but doing it the other way around is hard.
Besides, nothing prevents one from pursuing a career in most liberal arts without a degree, assuming you don't want to be a researcher. You can always be a nurse or an engineer with arts related side-job, but doing it the other way around is hard.
> the world doesn't need that many liberal arts graduates
If I were to make a list of the problems with the world, having too many people with liberal arts degrees would not be anywhere near that list.
Too few, yes. Too many business school graduates, yeah. Too many law school graduates, probably. Too many STEM field graduates, maybe. Too many graduates who look at people as a resource to be extracted, or an abstraction to be ignored. But damnit, we need more people who care about the quality of human experience.
If I were to make a list of the problems with the world, having too many people with liberal arts degrees would not be anywhere near that list.
Too few, yes. Too many business school graduates, yeah. Too many law school graduates, probably. Too many STEM field graduates, maybe. Too many graduates who look at people as a resource to be extracted, or an abstraction to be ignored. But damnit, we need more people who care about the quality of human experience.
I agree.
I think the proper way to characterize the situation is as follows.
The university were founded largely for the sake of teaching the liberal arts, that is, the free arts (as opposed to the servile arts). I am using the traditional meaning of "liberal arts", and not the tragedy we have now. The university was supposed to educate the man, to mature him intellectually, to free him to be able to pursue the truth and to do so effectively which meant also the ability to draw from and participate in the tradition.
The feverish mission to push everyone through college is a fool's errand. It is not for everyone. The result is that universities had to change to make this possible, thus failing their founding mission. But at the same time, they aren't good at vocational training. So for most people, it's a waste of time and money.
We would be much better off with a system of vocational schools and apprenticeships. This would unburden universities and free them to pursue their original mission, and it would enable vocational schools/apprenticeships to provide excellent training for workers.
Primary education is, frankly, in an awful state as well, as it, too, is supposed to educate the man, and it is here where the vocational stuff is still not necessary to learn even for those who will eventually enter the vocations.
We're seeing some interesting developments in both primary education (with the spread of classical education) and the founding of small colleges that aim to avoid the failure of the university. Some try to combine intellectual formation with an apprenticeship program to try to reconcile the desire to form the man with the need to find a job. Apprenticeship is also used to cover at least part of the costs of the education.
Ballooning costs are a symptom of corruption and bloat. The mission is lost, so it's a numbers game now. There's no reason a university education should cost anywhere near what it costs today, especially given the mediocrity of the education. I don't really see much will to change the status quo among those in power, so we'll probably see a combination of hamfisted maneuvers like debt cancellation to maintain the status quo, but ultimately, probably a collapse of the system.
The university were founded largely for the sake of teaching the liberal arts, that is, the free arts (as opposed to the servile arts). I am using the traditional meaning of "liberal arts", and not the tragedy we have now. The university was supposed to educate the man, to mature him intellectually, to free him to be able to pursue the truth and to do so effectively which meant also the ability to draw from and participate in the tradition.
The feverish mission to push everyone through college is a fool's errand. It is not for everyone. The result is that universities had to change to make this possible, thus failing their founding mission. But at the same time, they aren't good at vocational training. So for most people, it's a waste of time and money.
We would be much better off with a system of vocational schools and apprenticeships. This would unburden universities and free them to pursue their original mission, and it would enable vocational schools/apprenticeships to provide excellent training for workers.
Primary education is, frankly, in an awful state as well, as it, too, is supposed to educate the man, and it is here where the vocational stuff is still not necessary to learn even for those who will eventually enter the vocations.
We're seeing some interesting developments in both primary education (with the spread of classical education) and the founding of small colleges that aim to avoid the failure of the university. Some try to combine intellectual formation with an apprenticeship program to try to reconcile the desire to form the man with the need to find a job. Apprenticeship is also used to cover at least part of the costs of the education.
Ballooning costs are a symptom of corruption and bloat. The mission is lost, so it's a numbers game now. There's no reason a university education should cost anywhere near what it costs today, especially given the mediocrity of the education. I don't really see much will to change the status quo among those in power, so we'll probably see a combination of hamfisted maneuvers like debt cancellation to maintain the status quo, but ultimately, probably a collapse of the system.
I love this. There was a school that had this model, it failed, but it did try.
I thought that there was a cap on federal student loans. Isn't it like $6k a year?
Universities have Zero incentives to change things. They get the benefit of all the enrollment of the students that wouldn't otherwise enroll, also.
What I have never understood is why career counselors aren't advising students against the downside of getting into so much debt so early in life. Going to your dream school is nice but not if you have to pay for it the rest of your life. My counselor was all about applying to the best schools with little talk about costs.
Why aren't student's suing the counselors for malpractice?
What I have never understood is why career counselors aren't advising students against the downside of getting into so much debt so early in life. Going to your dream school is nice but not if you have to pay for it the rest of your life. My counselor was all about applying to the best schools with little talk about costs.
Why aren't student's suing the counselors for malpractice?
> Currently, Universities have no incentives to control costs in any way.
Most universities are the supporters of the existing government structure, so it seems to be a mutually beneficial relationship.
Most universities are the supporters of the existing government structure, so it seems to be a mutually beneficial relationship.
> lenders that are taking on too much risk
The lenders are taking no risks since these loans cannot be discharged through bankruptcy. There are also very large late fees and penalties that can triple (or more) the amount owed.
The lenders are taking no risks since these loans cannot be discharged through bankruptcy. There are also very large late fees and penalties that can triple (or more) the amount owed.
Now I read that Wall Street is creating CDO's based on these loans, like they (continue to) do on mortgages. Some people die "early" without paying back these loans, and sometimes, they will owe more than they took out. Given the mounting problems with the numbers here, it seems a whole generation of people in the middle of this bubble are going to go to the grave while still owing on these loans. What happens to these CDO's? Are we headed for a smaller "meltdown?"
I went to school from 87-91. I could already see the problem starting. I was hoping this bubble would burst before my own children went to school. Two of three have gone to public schools so far, and we've paid through the nose for it. We are pushing our third towards some sort of trade school.
I went to school from 87-91. I could already see the problem starting. I was hoping this bubble would burst before my own children went to school. Two of three have gone to public schools so far, and we've paid through the nose for it. We are pushing our third towards some sort of trade school.
> Now I read that Wall Street is creating CDO's based on these loans
The official term is SLABS: Student Loan Asset Backed Securities. Here's a recent paper on the subject.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3631953
The official term is SLABS: Student Loan Asset Backed Securities. Here's a recent paper on the subject.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3631953
Have we learned...nothing?
We learned that people like to gamble and that it’s easy to push things forwards.
Also, better jump on the loan band wagon, or you’ll be left out. Anyone without a mortgage + houw which appreciated has basically been robbed by people who do
This is why I’m 100% sure we’re headed towards another real estate meltdown sooner or later. Real estate prices and rates have skyrocketed. The number of people who could afford 500k mortgages at 3% is much higher than people who can afford 750k mortgages at 7%.
But lenders aren’t going to suddenly go from approving 100 loans a month to just 10 a month. The incentive structures are designed to weasel and lie to pump out flattering bottomlines every quarter.
You can trot out the statistics but you can’t change human behavior without changing the incentives.
But lenders aren’t going to suddenly go from approving 100 loans a month to just 10 a month. The incentive structures are designed to weasel and lie to pump out flattering bottomlines every quarter.
You can trot out the statistics but you can’t change human behavior without changing the incentives.
Looked at this a bit ago and share the sentiment. Vancouver, BC was an excellent case study. House prices average: ~$1.1M. Loan rate average: ~5%. Month payment: $5900. Yearly: $71k. Avg Salary: $60k (before tax). After tax: Maybe $48k or less. Result: No normal worker can afford the loan, and the bank won't give you the loan. You pay everything you can each year, and you owe more. This isn't even with property taxes, utilities, other basic Maslow's heirarchy stuff taken out.
The problem with that is there still is very strong demand for new home buyers, many of whom just couldn't find anywhere to buy.
Yes prices are crazy but if demand is still not being met, then prices are meant to be crazy.
Yes prices are crazy but if demand is still not being met, then prices are meant to be crazy.
It's crazy to see homes still selling with an increase in value of 10% from a year ago and interest rates more than doubled.
Wonder what percentage of this demand is organic home owners vs. investors (including foreign investors).
There’s been massive capital movement across the globe. Money moving out of China and Russia in particular. And the gulf countries with a surplus of cash thanks to multiple years of expensive oil.
There’s been massive capital movement across the globe. Money moving out of China and Russia in particular. And the gulf countries with a surplus of cash thanks to multiple years of expensive oil.
There might be something to that. Russia has become a bad place to invest money, while china’s real estate bubble looks to finally be popping. It could be that Russians and Chinese are accelerating on capital flight from their own countries due to current circumstances.
But it’s really just speculation. I haven’t noticed an influx of ore Chinese buyers into my market.
But it’s really just speculation. I haven’t noticed an influx of ore Chinese buyers into my market.
You can track political developments in China, Russia, and Saudi by the price of BTC and foreign housing (esp. places like Vancouver, Canada, or London, England).
Well, students can't default on their loans, so this time round it's more interesting.
Effectively a stealth tax for most graduates, if they can't ever hope to repay it. But regressive if you're rich enough to pay it off… or never have need for it to begin with.
Loan forgiveness is the way of defaulting for student loans.
What were they supposed to learn? They got bailed out and noone went to jail or anything
Greed's gonna greed
One of the core elements of the 2008 meltdown was when someone abandoned a house, all the other houses in the neighborhood would see a substantial drop in their value. This made it more likely that other people would go underwater on their mortgage and also walk away.
Education doesn’t have this kind of contagion. If you stop paying your student loans it has very little impact on the value on my education.
Education doesn’t have this kind of contagion. If you stop paying your student loans it has very little impact on the value on my education.
> Education doesn’t have this kind of contagion.
It's never been more true that education is overpriced and underdelivers.
The contagion may not be "house goes bust and my house value goes down"... but there is a contagion: My degree is now no better than the degrees for the mills pumping out idiots while lowering standards and full of soft degrees filling the markets with "educated" people that aren't qualified to fill a coffee cup at starbucks.
If you don't see a market flooded with lower value results as devaluing the worth of higher education then you're not looking closely enough.
It's never been more true that education is overpriced and underdelivers.
The contagion may not be "house goes bust and my house value goes down"... but there is a contagion: My degree is now no better than the degrees for the mills pumping out idiots while lowering standards and full of soft degrees filling the markets with "educated" people that aren't qualified to fill a coffee cup at starbucks.
If you don't see a market flooded with lower value results as devaluing the worth of higher education then you're not looking closely enough.
It doesn't need to be contagious to create a crisis, just correlated, e.g. if there is a big macroeconomic shock that makes many students unable to pay their loans all at once.
If you can't pay your loan back because of poor education quality, then your fellow students will have the exact same problem.
I think it could ripple, somehow. People just giving up and stop paying, suicide, homelessness, crime, tax evasion etc.
Same time frame for me. Adjusted for inflation, I paid $56,000. That same college is now charging almost $130k for the same degree.
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Excuse my ignorance, but isn’t the point of public schools that they are free?
That would be nice, wouldn't it?
US community colleges (usually 2-year) tend to have low tuition and may offer flexible scheduling so you can pay as you go and/or work through school. Housing can still be expensive though.
US public universities may have lower fees for in-state students. UC Berkeley costs some $41K+ per year (including on-campus housing, food, etc.) for CA residents - not particularly affordable to begin with - but charges an extortionate $33K "nonresident tuition fee" on top of that for non-resident students (including any students under 24 whose parents live out of state.)
US community colleges (usually 2-year) tend to have low tuition and may offer flexible scheduling so you can pay as you go and/or work through school. Housing can still be expensive though.
US public universities may have lower fees for in-state students. UC Berkeley costs some $41K+ per year (including on-campus housing, food, etc.) for CA residents - not particularly affordable to begin with - but charges an extortionate $33K "nonresident tuition fee" on top of that for non-resident students (including any students under 24 whose parents live out of state.)
Public in what sense? Elementary through Secondary aka K-12 is, but is mandatory for students unless they take extra-ordinary measures to not be there, e.g. homeschooling, or dropping out at 16. Funding through this is usually handled on the state and local level, often by local property taxes.
Public Universities are ones funded by the state, to varying degrees.
Private Unis have their own funding, usually through a mix of tuition and large endowments.
Public Universities are ones funded by the state, to varying degrees.
Private Unis have their own funding, usually through a mix of tuition and large endowments.
K-12 are "free" (funded in large part by property taxes, as I understand it). Higher Education is not, though public colleges tend to be cheaper, from what I've seen.
I’m a newbie, what’s a CDO?
It's a combination of loans. The idea is let's say I have 100 identical loans I made (in reality, there are averages). Further, we agree 5-15% are likely to default. I'm going to get paid 85-95% of the interest + principle. But I want that money now. You want to invest in future cashflow, so I want to sell you a loan. Buying one from me is kinda risky, you may get back 100% or 0% of the interest + principle you expect. So instead I sell all 100 as a lump sum, and you and 99 other people each get 1%.
But, CDOs go a step further. You may have more or less risk tolerance. So we chop it up. You can buy something that gets paid back if 70% of the loans are good, or only if over 70% or over 80%, or even over 90%. The less likely you are to get paid back, the more you make.
So the person who absolutely wants to get paid back gets a small interest rate. The person who only gets paid back if literally every loan pays off gets a much higher rate.
In 2008, what happened is all those people buying the "very safe" 75-85% failure rate sections also were getting wiped out.
But, CDOs go a step further. You may have more or less risk tolerance. So we chop it up. You can buy something that gets paid back if 70% of the loans are good, or only if over 70% or over 80%, or even over 90%. The less likely you are to get paid back, the more you make.
So the person who absolutely wants to get paid back gets a small interest rate. The person who only gets paid back if literally every loan pays off gets a much higher rate.
In 2008, what happened is all those people buying the "very safe" 75-85% failure rate sections also were getting wiped out.
Collateralized Debt Obligation, sort of like a bond that's composed from many loans on something you can repossess, like houses or boats. They're notorious because they were involved in the 2008 financial crisis.
https://www.investopedia.com/terms/c/cdo.asp
Or if you prefer the Big Short explanation:
https://youtube.com/watch?v=EEXTqtH-Oo4
https://www.investopedia.com/terms/c/cdo.asp
Or if you prefer the Big Short explanation:
https://youtube.com/watch?v=EEXTqtH-Oo4
The Big Short also has an earlier explanation of a non-synthetic CDO ("we just repackage it [low-quality risky debt] along with a bunch of other shit that didn't sell and put it into a CDO"):
https://youtu.be/xbiDrzTd8fE?t=260s
https://youtu.be/xbiDrzTd8fE?t=260s
https://en.wikipedia.org/wiki/Collateralized_debt_obligation
You take a bunch of loans and bundle them together and securitize the bundle to sell to the public. Mortgage CDOs crashed the global economy in 2007-8.
You take a bunch of loans and bundle them together and securitize the bundle to sell to the public. Mortgage CDOs crashed the global economy in 2007-8.
Seems wrong to influence your son's decision based on your financial situation rather than his desires/passions. Of course if he's naturally interested in the trades then sure.
One has to think the ROI for any financial investment in someone <25 YO towards things like education pays off more than similarly-sized investments later in life.
Regardless of whether the parent can support that tuition cost or the kid has to take on loans themselves, it should be up to the individual whether they take on that risk irrespective of the parent's financial situation, which is I think where this heavily-downvoted reply was going.
As somebody who's education was way less supported than the rest of my family, who came out with a better job than all of those others in spite of that, there's a decent chance your kid will resent being "held back" by such a choice for a very long time if you give them trade school as their only option in life.
Lots of people find ways to be successful in the arts by eventually finding something cross-disciplinary, and with the direction most non-white-collar jobs in the US are heading I wouldn't bet my kid's life on trade school. What made sense as a sentiment on Mike Rowe's "Dirty Jobs" 10+ years ago doesn't quite hold up as well today, and those projects were funded by the Koch brothers and the whole "trade school is just as good" thing should be taken with a mountain of salt. I'd love to see more data proving trade school proves better today, especially for young adults with educational backgrounds and access to learning and job opportunities whose parents are in the economic class to be browsing HN
Regardless of whether the parent can support that tuition cost or the kid has to take on loans themselves, it should be up to the individual whether they take on that risk irrespective of the parent's financial situation, which is I think where this heavily-downvoted reply was going.
As somebody who's education was way less supported than the rest of my family, who came out with a better job than all of those others in spite of that, there's a decent chance your kid will resent being "held back" by such a choice for a very long time if you give them trade school as their only option in life.
Lots of people find ways to be successful in the arts by eventually finding something cross-disciplinary, and with the direction most non-white-collar jobs in the US are heading I wouldn't bet my kid's life on trade school. What made sense as a sentiment on Mike Rowe's "Dirty Jobs" 10+ years ago doesn't quite hold up as well today, and those projects were funded by the Koch brothers and the whole "trade school is just as good" thing should be taken with a mountain of salt. I'd love to see more data proving trade school proves better today, especially for young adults with educational backgrounds and access to learning and job opportunities whose parents are in the economic class to be browsing HN
Passion doesn't pay the bills. It's good to be passionate about something, but many passions are not marketable.
Many have drowned in student debt following their passions, but this wouldn't be so in many countries that have university education fully covered or significantly subsidized by taxes.
Many have drowned in student debt following their passions, but this wouldn't be so in many countries that have university education fully covered or significantly subsidized by taxes.
The countries that have "free" university education also steer young people into career paths starting in middle school. If you're not the sort of person who will succeed at university, you get directed into vocational or trade school or apprenticeships, etc.
If passion doesn't pay the bills, it certainly can't pay taxes. Why should engineers and plumbers and garbagemen pay taxes to send someone to art school for years?
Once something is paid for with tax money, then the people paying the taxes want a say in how it's spent -- which is not just reasonable, it's a requirement of a liberal democracy.
Once something is paid for with tax money, then the people paying the taxes want a say in how it's spent -- which is not just reasonable, it's a requirement of a liberal democracy.
Of course, countries with tax-funded higher education ration degrees. There are limited slots, and art courses are usually at the bottom of funding considerations.
Exactly! Passions are good hobbies. Many people who take their passion and turn it to make it their source of income regret the decision because it sours the passion —it become a job.
His grades do not warrant the gamble on the expense, either mine or his. He's very artistically inclined, rather than academically.
Most people desire not being poor over most other things.
There are a lot of ways to make money. Picking a job based on money is a good way to be absolutely miserable. My parents pushed me towards making money my entire life and there is nothing I regret more than following that advice. Every day I wake up dreading going to work and it seeps into every aspect of my life.
Presumably you have enough money now to switch to something that makes you happy?
Personally, if you’re going to be miserable anyway (as most Americans are these days), it’s probably better to be miserable with money than without money, lol
Personally, if you’re going to be miserable anyway (as most Americans are these days), it’s probably better to be miserable with money than without money, lol
I'm 29 and have 500k saved up (live in Santa Monica which is quite expensive), but yes I think I will quit my next stock vest which is Friday.
And idk. My best friend from high school moved out here with me and he's a waiter making 40k a year and seems totally happy. Works like 30 hours a week, no mental stress, able to work out and work on himself. I think money is highly overrated.
And idk. My best friend from high school moved out here with me and he's a waiter making 40k a year and seems totally happy. Works like 30 hours a week, no mental stress, able to work out and work on himself. I think money is highly overrated.
Making 40K a year is only sustainable while you're in good health and don't have a family to support. I remember my carefree twenties as well, but things can change as you get older. There is no retirement plan on that kind of income other than waiting tables till you die. At least you should recognize that your relationship to money is very different than theirs. Having half a mil in savings is a completely different ballgame.
I think both situations are unsustainable. I'm not financially stable because I hate my job and might quit at any time and he doesn't make enough money.
But I think my main point is both of us have a way of becoming sustainable so you might as well do what makes you happy instead of working a job you hate for 8 years. Being a waiter making 40k isn't enough long term, but working your way into a higher end establishment or management is. A girl I dated started out as barista, became a store manager, and is now the regional manager and makes ~125k a year and more importantly she is a perfect fit for the job and enjoyed it the entire time.
All I'm trying to say is there are a lot of paths to a sustainable life even when following your natural inclinations.
But anyway OP responded his son's not super interested in college anyway so his plan sounds good to me anyway.
But I think my main point is both of us have a way of becoming sustainable so you might as well do what makes you happy instead of working a job you hate for 8 years. Being a waiter making 40k isn't enough long term, but working your way into a higher end establishment or management is. A girl I dated started out as barista, became a store manager, and is now the regional manager and makes ~125k a year and more importantly she is a perfect fit for the job and enjoyed it the entire time.
All I'm trying to say is there are a lot of paths to a sustainable life even when following your natural inclinations.
But anyway OP responded his son's not super interested in college anyway so his plan sounds good to me anyway.
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I was happy with a low income until I had a kid. Then the calculus shifts. Same with physical disability or taking on caregiving responsibilities.
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how do you have that much saved up at 29 ? faang salary / vest schedules ?
Yes, but your top regret would have been different had you chosen a different path. And perhaps your top regret would be worse than your current.
> every day I wake up dreading going to work
This sounds terrible. But at least you have a job. Many people wake up with dread every day for whether they or their baby will starve to death.
Also, it’s never too late to change.
> every day I wake up dreading going to work
This sounds terrible. But at least you have a job. Many people wake up with dread every day for whether they or their baby will starve to death.
Also, it’s never too late to change.
The world is cruel and wants to see us all ground to dust. The typical HN denizen might know this at an intellectual level, but few of us have the lived experience. I sincerely hope you never have to learn how much of a privileged perspective you have.
You may regret it even more if you hadn’t made money.
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If you don't want to be poor, don't go to university.
Academia should be a place for people who run away from money, because it's the last thing upon the list of interests for them. Academia should be a place for joy in learning concepts, and in some circumstances, which strive to be useless. Mathematics is one of the most exemplary fields for this, which is summed up quite nicely with the following quote:
"The mathematician does not study pure mathematics because it is useful. He studies it because he delights in it, and he delights in it because it is beautiful."
Never go to a university expecting to improve your wealth status, because it very likely won't happen. Turn elsewhere to find wealth.
Academia should be a place for people who run away from money, because it's the last thing upon the list of interests for them. Academia should be a place for joy in learning concepts, and in some circumstances, which strive to be useless. Mathematics is one of the most exemplary fields for this, which is summed up quite nicely with the following quote:
"The mathematician does not study pure mathematics because it is useful. He studies it because he delights in it, and he delights in it because it is beautiful."
Never go to a university expecting to improve your wealth status, because it very likely won't happen. Turn elsewhere to find wealth.
Meanwhile in the real world, large companies and public jobs all have practically mandatory education requirements. Your pay as a public employee in Germany is literally determined based on whether you have a BSC or MSC or none.
How many kids do you have?
Interests are all well and good, but costs are real. Following passion is for rich people (or people who get unlimited student loans).
Interests are all well and good, but costs are real. Following passion is for rich people (or people who get unlimited student loans).
> Following passion is for rich people (or people who get unlimited student loans).
I think this is a truism that people want to be false.
But in any developed country, most poor people are pretty rich when compared to the world, and it offers them lots of freedom to choose what field they want to work in, where they want to work (both city and company), etc. There isn't the expectations that sons take their fathers' jobs and that daughters take their mothers' (often being a homemaker).
It still sucks to be relatively poor in a developed country, but most are rich enough that they can follow their passions in ways their grandparents never could and half the world can't today.
I think this is a truism that people want to be false.
But in any developed country, most poor people are pretty rich when compared to the world, and it offers them lots of freedom to choose what field they want to work in, where they want to work (both city and company), etc. There isn't the expectations that sons take their fathers' jobs and that daughters take their mothers' (often being a homemaker).
It still sucks to be relatively poor in a developed country, but most are rich enough that they can follow their passions in ways their grandparents never could and half the world can't today.
Giving the benefit of the doubt here, I assumed the push toward trade school is because that makes the most sense for the child in question. College is not for everyone, including a lot of people pushed into attending.
It really baffles me sometimes how readily we assume our conclusions apply to others. Most serious decisions in life require balancing multiple difficult trade-offs. To think that our particular biases, experiences, resources and difficulties are anywhere close to another's is a huge leap.
It's fine to speak from one's experience, but to say that someone else should make the decision one thinks is wise based on a single comment is either ignorant, arrogant or both.
Edit: I replied to you @allenrb, but I'm not directing these thoughts toward you. I'm just pointing out a general behavior I see (but wish I didn't) on the internet and HN.
It's fine to speak from one's experience, but to say that someone else should make the decision one thinks is wise based on a single comment is either ignorant, arrogant or both.
Edit: I replied to you @allenrb, but I'm not directing these thoughts toward you. I'm just pointing out a general behavior I see (but wish I didn't) on the internet and HN.
At $6k a year like in Canada or Europe... sure, follow the passion.
At $60k per annum... that's crippling debt.
At $60k per annum... that's crippling debt.
Education is an investment, period, end of story.
If you don't do a modicum of Research before you take on tens or hundreds of thousands in debt to invest in something, that's on you and you alone.
If people were not bailed out and subsidized we would not have these issues of this magnitude.
If you don't do a modicum of Research before you take on tens or hundreds of thousands in debt to invest in something, that's on you and you alone.
If people were not bailed out and subsidized we would not have these issues of this magnitude.
Seems like if we don't think 18 year olds are not legally responsible enough to drink alcohol, then perhaps we shouldn't allow them to take on life-destroying amounts of debt.
you mean like this one?
https://en.wikipedia.org/wiki/Subprime_mortgage_crisis
https://en.wikipedia.org/wiki/Subprime_mortgage_crisis
Not that it touches on your other points but
> Two of three have gone to public schools so far, and we've paid through the nose for it. We are pushing our third towards some sort of trade school.
Jesus Christ. You're gonna give child one and two full opportunity to realize whatever potential they have, but steer child three?
> Two of three have gone to public schools so far, and we've paid through the nose for it. We are pushing our third towards some sort of trade school.
Jesus Christ. You're gonna give child one and two full opportunity to realize whatever potential they have, but steer child three?
Well the CDOs are probably tranched, so there will be some portions that are safe. But in general, you'd think the student loans would only be in trouble if there's a large increase in the unemployment rate. You'd get a meltdown if the government were to announce a change in the laws.
> the CDOs are probably tranched, so there will be some portions that are safe
The mortgage CDO's where tranched in 2008 also.
The mortgage CDO's where tranched in 2008 also.
Sort of. They took the shitty bottom tranches from the mortgage CDOs and repackaged them as new CDOs. The credulous ratings agencies gave these new CDOs the same rating as the old ones but it took only a modest market downturn to wipe out even the top tier of these second level CDOs. Even this might not have been a problem if the whole thing hadn't been massively leveraged. The fact that mortgages were involved was nearly irrelevant. This shitshow could have been built on anything. The regulatory reforms that tackled the mortgage market were missing the point.
> But in general, you'd think the student loans would only be in trouble if there's a large increase in the unemployment rate.
I thought the government guarantees these loans, but maybe I mis-read that, mis-understood, or something changed. I think the borrower is still on the hook and accrues fees if they don't pay but I also thought the federal government literally paid to keep the bank whole.
I thought the government guarantees these loans, but maybe I mis-read that, mis-understood, or something changed. I think the borrower is still on the hook and accrues fees if they don't pay but I also thought the federal government literally paid to keep the bank whole.
Even if you can't discharge the loan in bankruptcy, if someone can't pay, you as the lender have a problem. The balance in your favour might keep increasing with the borrower totally screwed, but that doesn't really help you if nothing is being paid.
Have to wonder how this interacts with the US healthcare system. As people get older they are more likely to have health problems that prevent them from working and cost a bunch of money.
Have to wonder how this interacts with the US healthcare system. As people get older they are more likely to have health problems that prevent them from working and cost a bunch of money.
>The balance in your favour might keep increasing with the borrower totally screwed, but that doesn't really help you if nothing is being paid.
The secret is to lend money and then make people spend it on something worthless. You know, the easiest way is to lend someone money so they can gamble the money away. You might now argue that this is terrible for the lender, but only if the lender doesn't own the casino. Then the gambler ends up in massive debt for no benefit. It doesn't matter if the borrower repays the loan or not because the lender didn't lose a single penny and every payment results in profit.
This is just a hypothesis because I am not aware of any banks or financial institutions operating an educational institution, except maybe lambda school which was heavily incentivized to get people to sign up for income sharing agreements but then only deliver some low quality MOOCs with the only source of support being TAs who themselves are former lambda school graduates.
The secret is to lend money and then make people spend it on something worthless. You know, the easiest way is to lend someone money so they can gamble the money away. You might now argue that this is terrible for the lender, but only if the lender doesn't own the casino. Then the gambler ends up in massive debt for no benefit. It doesn't matter if the borrower repays the loan or not because the lender didn't lose a single penny and every payment results in profit.
This is just a hypothesis because I am not aware of any banks or financial institutions operating an educational institution, except maybe lambda school which was heavily incentivized to get people to sign up for income sharing agreements but then only deliver some low quality MOOCs with the only source of support being TAs who themselves are former lambda school graduates.
This is why I'm asking. If that's the case, then I think even I would want to invest heavily in them. As long as the US government continues to make the money printer go BRRRR, this is an investment vehicle that simply cannot fail. (Until it does, in which case it will do so in a most-spectacular fashion.)
Presumably they're also priced with that taken into account, so you're not exactly going to be making bank.
Very good point.
There are some loans the government guarantees and other loans that the government merely makes immune to bankruptcy. Obviously, they have different risk profiles.
Student loans can be discharged through bankruptcy, if you pass hardship requirements.
- https://studentaid.gov/manage-loans/forgiveness-cancellation...
- https://www.consumerfinance.gov/about-us/blog/busting-myths-...
- https://studentaid.gov/manage-loans/forgiveness-cancellation...
- https://www.consumerfinance.gov/about-us/blog/busting-myths-...
I'd love to see numbers on how many are actually discharged. My understanding is this is almost as akin to saying that the lottery does, in fact, pay out.
There's more paths to discharging than bankruptcy.
Somebody I know had a medical emergency while in their repayment period. They were unable to work and went on to disability insurance, and eventually had their loans forgiven. I think they had to be on disability for a certain period of time (measured in years, iirc) before they were discharged.
Eventually, they recovered sufficiently to be able to return to the work force debt-free. I'm not sure if the hurdle for loan forgiveness ought to be "you have to basically die", but it's at least that high for now.
There's also the well-known "public servant" path. I'm sure there's some ironic joke to be made comparing the two.
Somebody I know had a medical emergency while in their repayment period. They were unable to work and went on to disability insurance, and eventually had their loans forgiven. I think they had to be on disability for a certain period of time (measured in years, iirc) before they were discharged.
Eventually, they recovered sufficiently to be able to return to the work force debt-free. I'm not sure if the hurdle for loan forgiveness ought to be "you have to basically die", but it's at least that high for now.
There's also the well-known "public servant" path. I'm sure there's some ironic joke to be made comparing the two.
Thanks for sharing the anecdotes.
Doesn't it seem like a society shouldn't encourage people to financially self-immolate in order to start their adult life?
I mean, giving the self-immolators some tweaky hacks to prevent being lit on fire is not really the best solution.
Doesn't it seem like a society shouldn't encourage people to financially self-immolate in order to start their adult life?
I mean, giving the self-immolators some tweaky hacks to prevent being lit on fire is not really the best solution.
I totally agree, I think most level-headed people do.
It's a tricky problem. We want people to have equal opportunity to pursue college, even if their parents can't afford it. But at the same time, we don't want to subsidize cost creep.
Clearly the current solution doesn't work. Alas, we're deeply invested in it (literally), and each passing year the entanglement grows.
I think you can make a strong case for govt-funded tuition at public universities. But I don't know how to get to there from here without making a handful of people very unhappy.
It's a tricky problem. We want people to have equal opportunity to pursue college, even if their parents can't afford it. But at the same time, we don't want to subsidize cost creep.
Clearly the current solution doesn't work. Alas, we're deeply invested in it (literally), and each passing year the entanglement grows.
I think you can make a strong case for govt-funded tuition at public universities. But I don't know how to get to there from here without making a handful of people very unhappy.
> I think they had to be on disability for a certain period of time (measured in years, iirc) before they were discharged.
In other words, basically borderline poverty for years before people realized it was never going to happen, and got lucky enough to get out of disability -- cuz a lot of people don't.
In other words, basically borderline poverty for years before people realized it was never going to happen, and got lucky enough to get out of disability -- cuz a lot of people don't.
I don't have numbers but I've read enough stories about it that I think it's far more likely than winning the lottery.
The bigger problem is that people _think_ it won't work and they don't bother trying. How many folks could have met the hardship burden but didn't apply?
We need to stop repeating the falsehood and instead be truthful: Student loans CAN be discharged via bankruptcy, if the applicant meets a hardship threshold.
The bigger problem is that people _think_ it won't work and they don't bother trying. How many folks could have met the hardship burden but didn't apply?
We need to stop repeating the falsehood and instead be truthful: Student loans CAN be discharged via bankruptcy, if the applicant meets a hardship threshold.
To be fair, I was unfair to compare it to the lottery. That is clearly not paying out often. Such that, if you are comparing to that, you had best be favorable.
I'm assuming it pays out at 100x lottery numbers. But, again, that is still basically zero. Is why I don't regularly buy 100 lottery tickets.
I'm assuming it pays out at 100x lottery numbers. But, again, that is still basically zero. Is why I don't regularly buy 100 lottery tickets.
Do we have any numbers for how many applicants get their debt forgiven? The requirements seem pretty wishy-washy and easy for courts to just deny out of hand if they want. And while that could go both ways for someone, Americans in general are pretty obsessed with people paying debts in full regardless of how fair or not or manipulative or scammy the deal originally was or the circumstances that brought it about.
Every other debt having your bankruptcy approved is proof enough that you were under undue hardship and couldn't crawl your way back out. But student loans are special and need further proof, which means they are definitely not that easy to get out from.
Every other debt having your bankruptcy approved is proof enough that you were under undue hardship and couldn't crawl your way back out. But student loans are special and need further proof, which means they are definitely not that easy to get out from.
My mom’s “City College” MBA student loans were somehow discharged when she went on medical disability. It is totally possible, but she was really not in a good spot after 50 health wise.
In other words, the government gave the leaders license to do "predatory".
In other words, the government has become a predatory lender with some intermediaries.
Which I find really weird, they take this stance against education but businesses don’t have to deal with such predatory loans - in fact govt loans for businesses tend to have low interest rates, or forgiven like the PPP loans.
Why do we take anti-individual stances, but pro-business stances? Is that a byproduct of capitalism, or am I misreading the world?
Why do we take anti-individual stances, but pro-business stances? Is that a byproduct of capitalism, or am I misreading the world?
PPP loans weren't really loans. It was known they would be forgiven before taking them out. If that had not been the case, most businesses would not of participated. I believe they were structured as loans providing a mechanism for congress to pass the aid immediately.
Actual business loans require assets/collateral, even those from the SBA. At least this has been my personal experience with my businesses. You can't get a loan with no credit or assets (like a student can).
Actual business loans require assets/collateral, even those from the SBA. At least this has been my personal experience with my businesses. You can't get a loan with no credit or assets (like a student can).
That’s the part that doesn’t make sense to me. Businesses make way more money than an individual, so why charge the individual more APR?
And PPP really should not have been forgivable - if you run a business, then it’s your responsibility to have enough money in the coffers to survive any economic downturns. Individuals get punished way more harshly than businesses when things go south.
And PPP really should not have been forgivable - if you run a business, then it’s your responsibility to have enough money in the coffers to survive any economic downturns. Individuals get punished way more harshly than businesses when things go south.
That's not really true imho. If we are going to be pedantic and talk about the pandemic, almost all taxpayers received individual stimulus checks in the thousands. On top of that those with children received a lot more. The vast majority of PPP loans went to small business and it was to make up for the government shutting down parts of the economy (it wasn't simply an economic downturn). I don't agree with how hastily and sloppy it was administered, you'd think we would have plans in place beforehand. But hey it's the government.
As far as interest rates, I had six figures of student loans and they were at 2.88%. Rates today are higher, but that's because they very loosely follow the federal funds rate. This is no different for business loans. But loosely speaking, interest rates on federal student loans are pretty low compared to other types of loans.
In fact, the reason the stock market reacts so badly to interest rate increases is precisely because it increases the cost of borrowing for business.
As far as interest rates, I had six figures of student loans and they were at 2.88%. Rates today are higher, but that's because they very loosely follow the federal funds rate. This is no different for business loans. But loosely speaking, interest rates on federal student loans are pretty low compared to other types of loans.
In fact, the reason the stock market reacts so badly to interest rate increases is precisely because it increases the cost of borrowing for business.
I would kill for such a low interest rate. I graduated soon after the financial crisis and the cheapest loan I had was 4.88%, with the average being 6%, and some were even 8%. I can (could have?) finance a car for cheaper, which is a bit ridiculous to me. Personally, there should be a cap or a set interest rate for education loans but I understand that it’s a contentious statement.
Yeah there were stimulus checks, and I saw a lot of people say something like “wow look at all these handouts people are getting, they don’t deserve it all!” but then they turn around and say the PPP was the greatest thing ever and businesses deserved them.
I think we are too critical of individual choices nowadays, but not critical enough of the terrible choices that businesses make. That’s probably the gist of my discontent.
Yeah there were stimulus checks, and I saw a lot of people say something like “wow look at all these handouts people are getting, they don’t deserve it all!” but then they turn around and say the PPP was the greatest thing ever and businesses deserved them.
I think we are too critical of individual choices nowadays, but not critical enough of the terrible choices that businesses make. That’s probably the gist of my discontent.
> And PPP really should not have been forgivable - if you run a business, then it’s your responsibility to have enough money in the coffers to survive any economic downturns. Individuals get punished way more harshly than businesses when things go south.
If that business goes under, how many individuals are out of a job?
The PPP loans were intended to keep _individuals_ employed.
If that business goes under, how many individuals are out of a job?
The PPP loans were intended to keep _individuals_ employed.
Where are we taking anti-individual stances? I'm pretty sure you are misreading the world here. Nobody mentioned individuals at all - the question is just how much you blame businesses vs lawmakers.
I claim that the blame here really rests on big government for creating this fucked up system, not the businesses that work within it. By the way, I blame the government for the PPP fiasco too.
None of this is particularly pro-business, but a lot of people are apologists for big government and need to be disabused of that notion.
I claim that the blame here really rests on big government for creating this fucked up system, not the businesses that work within it. By the way, I blame the government for the PPP fiasco too.
None of this is particularly pro-business, but a lot of people are apologists for big government and need to be disabused of that notion.
you are right basically -- with the caveat that "business has shown the ability to be responsible with money" while individuals fail at this for a large variety of reasons. However, in many societies past and elsewhere, not every single individual adult has to manage money like a business. Zoom out a bit and you might imagine that government now treats corporations as a person, and persons like they have to behave like a business.
> Why do we take anti-individual stances, but pro-business stances?
You're presuming a fact that's not in evidence. I know it's the flavor of the month whataboutism to point to PPP as an excuse to forgive student debt, but PPP was wildly unpopular amongst people who didn't directly benefit from it as well. I have full faith the SBA makes terrible loans as well.
Also, anti-student loan isn't exactly an anti-individual stance. It can also be interpreted as anti-University subsidy. And when you look at the absurd wages professors and administrators can command at these places, I wouldn't blame someone for thinking these loans are distorting the market so badly that it harms consumers/taxpayers while enriching professors and administrators.
You're presuming a fact that's not in evidence. I know it's the flavor of the month whataboutism to point to PPP as an excuse to forgive student debt, but PPP was wildly unpopular amongst people who didn't directly benefit from it as well. I have full faith the SBA makes terrible loans as well.
Also, anti-student loan isn't exactly an anti-individual stance. It can also be interpreted as anti-University subsidy. And when you look at the absurd wages professors and administrators can command at these places, I wouldn't blame someone for thinking these loans are distorting the market so badly that it harms consumers/taxpayers while enriching professors and administrators.
I 100% agree that universities are not incentivized to keep their costs low, and there are so many that could run on a much leaner funding.
> You're presuming a fact that's not in evidence. I’m not so sure about that. How many executives get paid remarkably well, even though they fail miserably? Sometimes even with tax payer money.
> You're presuming a fact that's not in evidence. I’m not so sure about that. How many executives get paid remarkably well, even though they fail miserably? Sometimes even with tax payer money.
The fact that's being presumed is that "people" approve of corporate welfare.
Comically, the government is the direct lender and is charging “predatory” rates. My loans are all through DEd. At time of issuance, they were double the 30 year mortgage and many multiples of prime. My payments go directly to the governments payment processor (AidVantage/Navient) and on to DEd.
And yet, some lenders (Navient is the big one) have now lost so much money due to COVID forbearance that they've exited that industry entirely.
There's inherent risk to everything, everywhere. Making the loans undischargable in bankruptcy doesn't negate the risk of non-repayment; it just hides it. Until, eventually, all the band-aids fall off, reality bares its ugly head, and we all wish we hadn't-a done that. Yet, in thirty years we'll forget about it and do it all over again, in some new, crazy, way.
There's inherent risk to everything, everywhere. Making the loans undischargable in bankruptcy doesn't negate the risk of non-repayment; it just hides it. Until, eventually, all the band-aids fall off, reality bares its ugly head, and we all wish we hadn't-a done that. Yet, in thirty years we'll forget about it and do it all over again, in some new, crazy, way.
I mean, you can't get blood out of a turnip. If the borrower has no money to pay, they aren't going to pay, bankruptcy or not.
Since there is pretty much no social safety net, people are probably going to find some sort of work even if they have a lot of student loan debt. And, the debt servicer can garnish those wages. You are essentially selling yourself into slavery if you take a student loan! (And the reasoning is so weird to me; I went to a state school and tuition was $750/semester. Why are people paying more unless they are extremely gifted and they want to go into a highly regulated field like civil engineering or medicine?)
Student loans not being dischargeable through bankruptcy creates a moral hazard, much like bailing out banks. Banks will lend an infinite amount of money for student loans, because there is no risk to them. Creating free money always devalues it; if you have to work for your money, an education is priced $X because that's the maximum people will pay. If everyone gets unearned money to pay for education, it becomes worth $X + $Y. This is just the SaaS model for people. (Consider AWS; "oh you want to make money selling a SaaS service? we'll take 10% of your revenue for servers." Student loans are the same thing, "oh, you want to go into a high-earning field? we'll take 30% of your income for the next 10 years.")
Compare this to things where banks could lose money, like mortgages. If you bid $1,000,000 on a property that's worth $200,000, the bank will simply require a down payment of $840,000. They have no interest in your starry-eyed games. If you walk away, they can close out your loan by selling the property at the appraised value, and they're happy. Banks have the right amount of paranoia about lending for this kind of purchase; their goal is to never lose money. Student loans should be no different; current grades and expected job prospects should play heavily into the decision as to whether or not to lend money. This will reduce the cost of education because selling a $600,000 art history degree to straight-C students won't be viable in the market anymore. (Universities will fight hard against this, because the degrees are cheap and everyone pretends they have some value. If people realize degrees don't have much value, the cash cow dries up. But we have to kind of look at the effect on society as a whole and realize that work experience is actually what we value. After the first 4 years of your career, nobody cares about your GPA or where you went to school anymore. And incidentally, 4 years is exactly how long college takes!)
Student loans not being dischargeable through bankruptcy creates a moral hazard, much like bailing out banks. Banks will lend an infinite amount of money for student loans, because there is no risk to them. Creating free money always devalues it; if you have to work for your money, an education is priced $X because that's the maximum people will pay. If everyone gets unearned money to pay for education, it becomes worth $X + $Y. This is just the SaaS model for people. (Consider AWS; "oh you want to make money selling a SaaS service? we'll take 10% of your revenue for servers." Student loans are the same thing, "oh, you want to go into a high-earning field? we'll take 30% of your income for the next 10 years.")
Compare this to things where banks could lose money, like mortgages. If you bid $1,000,000 on a property that's worth $200,000, the bank will simply require a down payment of $840,000. They have no interest in your starry-eyed games. If you walk away, they can close out your loan by selling the property at the appraised value, and they're happy. Banks have the right amount of paranoia about lending for this kind of purchase; their goal is to never lose money. Student loans should be no different; current grades and expected job prospects should play heavily into the decision as to whether or not to lend money. This will reduce the cost of education because selling a $600,000 art history degree to straight-C students won't be viable in the market anymore. (Universities will fight hard against this, because the degrees are cheap and everyone pretends they have some value. If people realize degrees don't have much value, the cash cow dries up. But we have to kind of look at the effect on society as a whole and realize that work experience is actually what we value. After the first 4 years of your career, nobody cares about your GPA or where you went to school anymore. And incidentally, 4 years is exactly how long college takes!)
You're entirely right, but if I have $200K in debt for my useless undergrad degree, and I can only find a job at Starbucks, garnishment or not the bank is not getting their money back. The court will order some kind of payment, sure, but they'll prioritize me paying for rent and food.
I agree with that. Having that money taken out of your paycheck just makes you extra miserable; you're in debt, you get yelled at for not making Karen's coffee right for 8 hours in a row, and you don't even have enough spending money to go see a movie or whatever. It's just miserable and I don't like it; if you have to take a shitty job to feed yourself, you shouldn't have to live a completely miserable life 24/7. That just doesn't seem right to me.
Hopefully for you the court's prioritizing will actually allow enough $$$ for your rent and food and medical expenses and transportation and clothing and etc. And adjust that when inflation hits the costs of those things.
As I have written in another comment. This scheme only works if the college is owned by the bank and the college is spending a tiny fraction of the tuition on the student.
Garnishment is capped by law and most judges are favorable to former students over the banks, so it's usually well below that.
> I went to a state school and tuition was $750/semester.
I paid about $800 per quarter in 1996. Even at tax subsidized state schools, tuition has gotten much more expensive since then.
> I went to a state school and tuition was $750/semester.
I paid about $800 per quarter in 1996. Even at tax subsidized state schools, tuition has gotten much more expensive since then.
I believe that was the posters original point, because the lenders have no more risk it means that the market solution has been put out of balance, and the current situation is arguably a logical consequence of that imbalance.
Right, this is what I meant by them having captured the market.
But your comment seems to blame them for taking on risk, which they aren’t. Maybe reword it?
I can see that read. I meant that we should not have built a situation where lending money is risk free. It is a perverse incentive to do more lending, and ignores the actual risks that people will be unable to repay.
Just because the loan cannot be discharged doesn't mean there are no risks. The money doesn't just appear out of nowhere if the borrower doesn't already have the money.
What "lenders," and what "market" are you talking about? 92% of all student debt was issued by the federal government. As a matter of social policy, the government does not meaningfully consider credit risk when issuing student loans.
The government taking credit risk into account would have such regressive results it would be hilarious. The cost of college would dramatically plunge for kids from rich families taking CS and finance classes and skyrocket for everyone else
You're saying this as if it hasn't happened already.
Less money for borrowing means students can only afford lower tuitions and colleges are incentivized to efficiently use your money.
Less money for borrowing means students can only afford lower tuitions and colleges are incentivized to efficiently use your money.
That would be great if cost of college plunged for CS and finance students.
where does that exact figure come from?
https://www.bestcolleges.com/research/average-student-loan-d...
Look at footnotes 1 and 3, which rely on the Department of Education’s and the Fed’s own numbers. $1.64 trillion/1.77 trillion = 92.6%.
Look at footnotes 1 and 3, which rely on the Department of Education’s and the Fed’s own numbers. $1.64 trillion/1.77 trillion = 92.6%.
It's also frustrating to see politicians trumpeting efforts to help Americans pay rip-offs like health insurance and tuition, instead of putting a stop to the rip-offs themselves. It's hugely wrong-headed and makes the problem worse.
I went to a major private university, and several years after I graduated they raised the tuition 24% in one shot. When asked why, they basically answered, "Everyone else did it."
It's time to revoke universities' tax exemptions when they pull shit like this, or are rolling in massive endowments, windfalls from sports programs, whatever. The regression of education in the USA at all levels marks the continuing decline of our society. We've gone back to book-burning in some areas. Now college is unreachable or a crushing burden. WTF.
I went to a major private university, and several years after I graduated they raised the tuition 24% in one shot. When asked why, they basically answered, "Everyone else did it."
It's time to revoke universities' tax exemptions when they pull shit like this, or are rolling in massive endowments, windfalls from sports programs, whatever. The regression of education in the USA at all levels marks the continuing decline of our society. We've gone back to book-burning in some areas. Now college is unreachable or a crushing burden. WTF.
> all the while ignoring the lenders that are taking on too much risk. At least, they would be taking on too much risk, if they hadn't captured the market so effectively
The lenders? Risk? 93% of all student loan debt is owned by the US Government. What risk?
How is it everybody pretends it's the Big Evil Bankers making all the money on this racket? It's equivalent to the false narrative about private prisons driving the high US incarceration rate (when in fact it was over 95% government prisons across the decades that the rate was skyrocketing).
It's a government replacement funding system for the entitlement programs that are bleeding out. They had to find a new funding source as entitlements dipped red, so they're strapping young people with massive debt (forever rising interest payments) they can't discharge and that derives from magic fiat dollars the US Government 'prints' at will.
This is another case of the government abusing the population.
Anti abortion laws? Government.
Anti gay marriage laws? Government.
Anti trans laws? Government.
Segregation laws? Government.
The war on drugs? Government.
The war on terrorism? Government.
Foreign adventurism wars? Government.
Vast illegal domestic espionage? Government.
Non-existent social security 'lock box' (not filled with $10+ trillion like it should be; should be the world's largest sovereign wealth fund)? Government theft.
How many examples do you all need?
The lenders? Risk? 93% of all student loan debt is owned by the US Government. What risk?
How is it everybody pretends it's the Big Evil Bankers making all the money on this racket? It's equivalent to the false narrative about private prisons driving the high US incarceration rate (when in fact it was over 95% government prisons across the decades that the rate was skyrocketing).
It's a government replacement funding system for the entitlement programs that are bleeding out. They had to find a new funding source as entitlements dipped red, so they're strapping young people with massive debt (forever rising interest payments) they can't discharge and that derives from magic fiat dollars the US Government 'prints' at will.
This is another case of the government abusing the population.
Anti abortion laws? Government.
Anti gay marriage laws? Government.
Anti trans laws? Government.
Segregation laws? Government.
The war on drugs? Government.
The war on terrorism? Government.
Foreign adventurism wars? Government.
Vast illegal domestic espionage? Government.
Non-existent social security 'lock box' (not filled with $10+ trillion like it should be; should be the world's largest sovereign wealth fund)? Government theft.
How many examples do you all need?
People hate Comcast for raising their rate $10/month but when the government prints trillions causing you to lose 20% of your income and assets to inflation it’s not a big deal.
It’s easy to miss the connection between printing money and the affect of printing money since there is always a time period between cause and affect. The example of comcast raising hour bill is immediate. Well comparatively.
Eventually and hopefully people will wise up.
Eventually and hopefully people will wise up.
It is easy to miss because there is hardly any money printing going on. Physical cash is nowadays pretty insignificant.
I honestly don't know what you are trying to say here. Government debt has been discharged before. Look into the number of cities that have declared bankruptcy. (That is, you don't even have to look at failed nation states. Plenty of places in the US have done this.)
That is, no amount of lending is ever risk free. To pretend that you can hedge all risk out of a loan is the problem. It doesn't matter who issues it. It doesn't matter why they issued it.
So, to put the question back to you, why would you feel there is no risk in lending to students to go to college?
That is, no amount of lending is ever risk free. To pretend that you can hedge all risk out of a loan is the problem. It doesn't matter who issues it. It doesn't matter why they issued it.
So, to put the question back to you, why would you feel there is no risk in lending to students to go to college?
It's not about getting the risk to zero. It's about managing it. Right now anyone can take on massive debt to go to college programs they almost certainly will not finish. There's no risk evaluation for individual students, no qualification process that decides to only give loans to those with a history of performance that indicates they will finish. And almost 40% of student loan defaults are people that didn't finish [0].
Whether they finish or not, it surges the demand for education and makes it more expensive for the people that did perform well in high school and achieved a minimum level of personal organization to succeed in an academic environment.
[0] https://www.wral.com/story/fact-check-how-many-student-loan-...
Whether they finish or not, it surges the demand for education and makes it more expensive for the people that did perform well in high school and achieved a minimum level of personal organization to succeed in an academic environment.
[0] https://www.wral.com/story/fact-check-how-many-student-loan-...
If I loaned out a ton of money to people that couldn't repay it, the system would rightfully tell me that I took on too much risk in lending the money out and that I earned the losses. To that end, the system works as designed and desired. People, by and large, are not capable of putting others in absurd debts that they are unable to get out of.
The way these loans are done, the "risk" is supposedly managed down to zero by some byzantine limits on how much people can take out. This is silly, at face value, as the limits on how much a family can take out are basically non-existent. Yes, we have limits on individuals, but those seem to be little more than token talking points.
That said, reading your post again, feels like we are in agreement?
The way these loans are done, the "risk" is supposedly managed down to zero by some byzantine limits on how much people can take out. This is silly, at face value, as the limits on how much a family can take out are basically non-existent. Yes, we have limits on individuals, but those seem to be little more than token talking points.
That said, reading your post again, feels like we are in agreement?
>It is frustrating to hear the discourse over the inappropriate students that are taking on too much debt, all the while ignoring the lenders that are taking on too much risk
But as you point out, the lenders are not taking on risk. The only ones who are silly in the deal are the students.
The system is really messed up. But when it comes to your individual student making that deal, it's often a dumb idea.
But as you point out, the lenders are not taking on risk. The only ones who are silly in the deal are the students.
The system is really messed up. But when it comes to your individual student making that deal, it's often a dumb idea.
Aren’t they government issued loans? That’s how it worked over here
Yes. It's not the bankers doing it, it's the US Government - the Feds are the market, they own 93% of student debt. What a coincidence they dictate whether you can discharge the debt too, not too difficult to spot the gigantic conflict of interest.
It's designed by the US Government to bring in massive, on-going funding to help fill in the red ink in the entitlement programs now that those are no longer funding sources to steal from (entitlements used to produce persistent surplus funding the politicians used to steal from for decades). That's why they'll never allow it to be dischargeable. Their margin on the loans is de facto 100%: it's all magic printed dollars or otherwise taxpayer dollars (makes no difference to them).
It's designed by the US Government to bring in massive, on-going funding to help fill in the red ink in the entitlement programs now that those are no longer funding sources to steal from (entitlements used to produce persistent surplus funding the politicians used to steal from for decades). That's why they'll never allow it to be dischargeable. Their margin on the loans is de facto 100%: it's all magic printed dollars or otherwise taxpayer dollars (makes no difference to them).
> It's designed by the US Government to bring in massive, on-going funding to help fill in the red ink in the entitlement programs
Massive? Even before COVID and the lockdowns (and the pause on repayment), the student loan program was operating at a _loss_.
The Dept. of Education has presumed (because they're incompetent AND corrupt) the program would be net positive but only to $114B over 25 years -- that's an average $4.5B per year. In 2019, the federal government spent $4.4T, so the _expected_ return from student loans would have only been 0.1% of the federal budget.
That money couldn't fill squat.
----
"From 1997 to 2021, the Education Department estimated that payments from federal direct student loans would generate $114 billion for the government. But the GAO found that, as of 2021, the program has actually cost the government an estimated $197 billion.
"A percentage of that shortfall, $102 billion, stems from the unprecedented federal student loan payment pause that began under the CARES Act in 2020."
https://www.npr.org/2022/07/29/1114560119/student-loan-progr...
https://en.wikipedia.org/wiki/2019_United_States_federal_bud...
Massive? Even before COVID and the lockdowns (and the pause on repayment), the student loan program was operating at a _loss_.
The Dept. of Education has presumed (because they're incompetent AND corrupt) the program would be net positive but only to $114B over 25 years -- that's an average $4.5B per year. In 2019, the federal government spent $4.4T, so the _expected_ return from student loans would have only been 0.1% of the federal budget.
That money couldn't fill squat.
----
"From 1997 to 2021, the Education Department estimated that payments from federal direct student loans would generate $114 billion for the government. But the GAO found that, as of 2021, the program has actually cost the government an estimated $197 billion.
"A percentage of that shortfall, $102 billion, stems from the unprecedented federal student loan payment pause that began under the CARES Act in 2020."
https://www.npr.org/2022/07/29/1114560119/student-loan-progr...
https://en.wikipedia.org/wiki/2019_United_States_federal_bud...
The cost of studying is amazing in the USA. I did three degrees and I think it cost me around around $2.300 per year. I do think the prices differ between foreigners and local students.
Some of the interest rates I've seen on federal student loans - 7+% - seem exorbitant in general but particularly because the lender takes no risk.
7% interest on a loan in a year with 3% inflation (the real cost of having money that year) that is guaranteed to be repaid seems like evidence of corruption to me. But maybe I think too simplistically.
7% interest on a loan in a year with 3% inflation (the real cost of having money that year) that is guaranteed to be repaid seems like evidence of corruption to me. But maybe I think too simplistically.
8% is the usual rate for a "qualifiziertes Nachrangdarlehen" in Germany which is an equity based loan that is paid out only when the company is profitable. So you are right. The interest rate is too high.
It's not true to say the Federal government does not take on risk loaning to students. Students are frequently unable to pay. 7% probably does not cover costs.
> lenders
AFAIK virtually every financial institution has been pulled from student loans.
The U.S. government is now the only major lender.
AFAIK virtually every financial institution has been pulled from student loans.
The U.S. government is now the only major lender.
It makes little sense to treat student loan dollars differently from regular dollars.
The simple solution is to remove student loans from that small list you mentioned.
But then, how do you secretly replace the billions in bribes to your friends in the universities?
But then, how do you secretly replace the billions in bribes to your friends in the universities?
The first I had heard about this was from libertarians complaining about the government backing causing the tuition increase.
This was among a debate where people were asking for more federal and state funding.
Its crazy to see this point become so mainstream. I suppose it was inevitable if it was the truth.
This was among a debate where people were asking for more federal and state funding.
Its crazy to see this point become so mainstream. I suppose it was inevitable if it was the truth.
From an outside point of view, it looks like just another problem of the duality of the American self-image.
"We want everyone to have a chance at school, but public schools are government indoctrination so we'll just make sure people are in un-releasable debt to private companies."
"We don't want to see people dying in the streets, but universal health care is "socialist", so we're create these convoluted insurance systems, but still require hospitals to provide free ER care (that has to be covered by everyone else in the end)."
"We're afraid of immigrants, but our agricultural industry is dependent on their cheap labor, so we'll make legal immigration difficult, and keep pretending that we're going to restrict illegal immigration, but never actually do anything effective to curb it."
(I also want to add that mentalities like this are not at all exclusive to the US - you can find similar inconsistencies in every countries self-image, the US just seems to have them in more fundamental issues that other countries made a decision on long ago)
"We want everyone to have a chance at school, but public schools are government indoctrination so we'll just make sure people are in un-releasable debt to private companies."
"We don't want to see people dying in the streets, but universal health care is "socialist", so we're create these convoluted insurance systems, but still require hospitals to provide free ER care (that has to be covered by everyone else in the end)."
"We're afraid of immigrants, but our agricultural industry is dependent on their cheap labor, so we'll make legal immigration difficult, and keep pretending that we're going to restrict illegal immigration, but never actually do anything effective to curb it."
(I also want to add that mentalities like this are not at all exclusive to the US - you can find similar inconsistencies in every countries self-image, the US just seems to have them in more fundamental issues that other countries made a decision on long ago)
Germany does this with their export policy. The country exports products to Greece which can only be financed by cheap loans from Germany and then when Greece can't pay they turn around and chastise it for buying German products.
It's maddeningly frustrating to see such short-sighted greed dragging down the class of people meant to lead the future.
They are and they aren't. Student loans can also be forgiven once you've paid them for a long enough time
The loans are mostly owned by the government too :)
Curious for your opinion: do you think it’s really hard to discharge a student loan in personal bankruptcy in the US, or impossible?
Eh I think the impact of the federal government on undergraduate costs is largely overstated. The limits for dependent students, which is most undergrads, is really small over 4 years.
https://studentaid.gov/understand-aid/types/loans/subsidized...
You can only borrow $31k over 4 years. That isn't a lot at all.
https://studentaid.gov/understand-aid/types/loans/subsidized...
You can only borrow $31k over 4 years. That isn't a lot at all.
This is wrong. You’re mixing up subsidized loans with the ability to get loans.
People can get unsubsidized loans that still come with the same constraints around inability to discharge in bankruptcy for vastly more money.
It’s essentially all unsecured student loans (i.e. effectively the entire student loan market) that have this risk free model for lenders.
It would all be completely toxic trash otherwise that no lender would issue. A student with no assets, no income, and no credit history to preserve has no downside to just declare bankruptcy after school and get $200k or whatever essentially for free.
People can get unsubsidized loans that still come with the same constraints around inability to discharge in bankruptcy for vastly more money.
It’s essentially all unsecured student loans (i.e. effectively the entire student loan market) that have this risk free model for lenders.
It would all be completely toxic trash otherwise that no lender would issue. A student with no assets, no income, and no credit history to preserve has no downside to just declare bankruptcy after school and get $200k or whatever essentially for free.
No its not
Literally says "Subsidized and Unsubsidized Aggregate Loan Limit $31,000-No more than $23,000 of this amount may be in subsidized loan"
Just confirms most people have no clue how small the limits actually are.
Literally says "Subsidized and Unsubsidized Aggregate Loan Limit $31,000-No more than $23,000 of this amount may be in subsidized loan"
Just confirms most people have no clue how small the limits actually are.
I am afraid you are woefully confused. A good friend had $150k in debt from undergrad and $200k in additional debt from law school, and this was 10 years ago.
Your friend spent the cost of a new house on education, lol. There's only one country where I hear of things like this...
South Africa: now you've heard of two.
Looked up the prices just now. Undergrad + postgrad can come up to the price of small town houses.
Looked up the prices just now. Undergrad + postgrad can come up to the price of small town houses.
That would have likely been a mixture of direct loans (which have the current 31k limit for undergrad) and private loans.
Again - the rules about student loans during bankruptcy apply to all student loans, including from private lenders.
That is not as clear cut as you make it. There have been rulings in the last several years that have allowed some private loans to be discharged in bankruptcy proceedings.
> In January 2020, the U.S. Bankruptcy Court for the Southern District of New York discharged over $200,000 of student loan debt for one borrower. Then, in August 2020, a ruling by the 10th circuit federal appeals court based in Denver, Colorado eliminated $200,000 for a Colorado couple who held 11 private student loan accounts. And in September 2020, a judge for the U.S. Bankruptcy Court for the Southern District of New York ruled to enforce a prior bankruptcy discharge of a borrower’s $400,000 of federal student loans that a servicer had failed to carry out.
> These decisions could serve as a precedent for future bankruptcy cases involving student loans, says John Rao, an attorney with the National Consumer Law Center.
> "A lot of people, even some of the lawyers who represent consumers, thought for years that you really shouldn’t even try because there's not a chance you’ll win, but I think everyone is looking at it now with sort of a fresh look," Rao says.[0]
[0] https://www.nerdwallet.com/article/loans/student-loans/stude...
> In January 2020, the U.S. Bankruptcy Court for the Southern District of New York discharged over $200,000 of student loan debt for one borrower. Then, in August 2020, a ruling by the 10th circuit federal appeals court based in Denver, Colorado eliminated $200,000 for a Colorado couple who held 11 private student loan accounts. And in September 2020, a judge for the U.S. Bankruptcy Court for the Southern District of New York ruled to enforce a prior bankruptcy discharge of a borrower’s $400,000 of federal student loans that a servicer had failed to carry out.
> These decisions could serve as a precedent for future bankruptcy cases involving student loans, says John Rao, an attorney with the National Consumer Law Center.
> "A lot of people, even some of the lawyers who represent consumers, thought for years that you really shouldn’t even try because there's not a chance you’ll win, but I think everyone is looking at it now with sort of a fresh look," Rao says.[0]
[0] https://www.nerdwallet.com/article/loans/student-loans/stude...
Granted, this is getting very close to "the exceptions prove the rule." :D And this rule is spelled out fairly directly to be as hard as possible to discharge.
Those don't include private loans which can be co-signed by parents if needed, nor do they include PLUS loans where parents also take out loans. Colleges are also quite helpful in what you need to do to be declared independent for financial aide purposes, which almost doubles that limit.
Graduate students are where it gets wild though.
Graduate students are where it gets wild though.
Private loans aren’t backed by the government though.
They do have protections in bankruptcy as student loans though so it isn't a normal unsecured risk for lenders. They're also not hard to get, which goes back to the point of easy money inflates tuition.
That’s the limit directly from the government. Depending on what you’re studying for, that might end up being lower than what you actually need.
For instance, when I was in college (undergrad) I took the maximum, but it wasn’t enough for me to pay tuition, rent, etc. Also those loans don’t pay during the summer, so you’ve to budget for that as well. My part time job tended to cut hours because there’s a high influx of kids who also want summer jobs, which meant less money overall for me. I ended up taking some more loans from Wells Fargo to make ends meet.
In hindsight, I should have got a better job instead of retail - some sort of office job. But I didn’t have a car, so I was limited in how far I could go.
For instance, when I was in college (undergrad) I took the maximum, but it wasn’t enough for me to pay tuition, rent, etc. Also those loans don’t pay during the summer, so you’ve to budget for that as well. My part time job tended to cut hours because there’s a high influx of kids who also want summer jobs, which meant less money overall for me. I ended up taking some more loans from Wells Fargo to make ends meet.
In hindsight, I should have got a better job instead of retail - some sort of office job. But I didn’t have a car, so I was limited in how far I could go.
There is no limit for dependent students of federal support through loans: the limits you cite are the limits for loans to the student for students whose parents are able to get PLUS loans.
But PLUS loans themselves have no cap, so the amount of potential federal impact on potential costs for this population—which, as you note, is most undergraduate students—is infinite, not $31K over four years.
But PLUS loans themselves have no cap, so the amount of potential federal impact on potential costs for this population—which, as you note, is most undergraduate students—is infinite, not $31K over four years.
Wait, what? That is a misleading read of that page. Only if you have parents/guardians that can get a PLUS loan is that the limit. You have to look at the other column for everyone else.
And that is the principal. With a short limit on how much of that can be subsidized, meaning the rest is accruing interest from day 1. Such that they amount you would owe will be laughably higher than even that number after your school. And that is assuming you don't have to then delay repayment for financial hardships.
And that is the principal. With a short limit on how much of that can be subsidized, meaning the rest is accruing interest from day 1. Such that they amount you would owe will be laughably higher than even that number after your school. And that is assuming you don't have to then delay repayment for financial hardships.
how is it misleading? most undergrads are considered dependent, which means they can only borrow $31k in total over 4 years. beyond that they would need to tap alternative sources.
> how is it misleading?
Because the limit cited only applies to students whose parents can get (federal, direct, and capped only by the school’s estimate of costs) PLUS loans, and yet is characteized as a limit of the impact of federal subsidies on school costs.
A cap that only applies where another unlimited federal loan stream is available to the same student is, well, not a limit at all, when discussing federal impact on prices.
Because the limit cited only applies to students whose parents can get (federal, direct, and capped only by the school’s estimate of costs) PLUS loans, and yet is characteized as a limit of the impact of federal subsidies on school costs.
A cap that only applies where another unlimited federal loan stream is available to the same student is, well, not a limit at all, when discussing federal impact on prices.
The cap when PLUS loans are not available is $57,500.
The impact on prices is not just the direct, but the general understanding that private educational loans also could not be discharged in bankruptcy that was created by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Courts have started to push back against that but there are only a handful of precedents.
The impact on prices is not just the direct, but the general understanding that private educational loans also could not be discharged in bankruptcy that was created by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Courts have started to push back against that but there are only a handful of precedents.
Another misleading point, though? As you can then go on to get 138500 for graduate/professional school.
I'm interested in how many students aren't able to have their family go in on PLUS loans. As that is still a gaping hole to relying on the page and limits linked.
I'm interested in how many students aren't able to have their family go in on PLUS loans. As that is still a gaping hole to relying on the page and limits linked.
I'm interested in numbers backing up that claim? But, even with that, student debt is almost certainly including PLUS loans which, "The maximum PLUS loan amount you can receive is the cost of attendance (determined by the school) minus any other financial aid received." So... yeah, very misleading read of that page.
This for federal loans.
But the government has "protected" all loans - private education loans are also unable to be discharged by bankruptcy, for example.
But the government has "protected" all loans - private education loans are also unable to be discharged by bankruptcy, for example.
> But the government has "protected" all loans - private education loans are also unable to be discharged by bankruptcy,
Private education loans are mostly an issue for non-accredited schools, since usually you can cover the full costs, with better terms, with federal loans at accredited schools. They are also less than 8% of the volume of student loans. They are basically a whole different (and much smaller) policy issue.
Private education loans are mostly an issue for non-accredited schools, since usually you can cover the full costs, with better terms, with federal loans at accredited schools. They are also less than 8% of the volume of student loans. They are basically a whole different (and much smaller) policy issue.
yeah, and we're talking about federal loans here.
the government is not on the hook if a student defaults on a private loan. the critique was that tax payers were somehow on the hook for most undergraduate costs when $31k over 4 years barely pays for rent at this point.
the government is not on the hook if a student defaults on a private loan. the critique was that tax payers were somehow on the hook for most undergraduate costs when $31k over 4 years barely pays for rent at this point.
The CBO estimates that the government is indeed “on the hook” for about 93%[0] of ALL student loans, despite not necessarily being the originator or servicer.
There essentially is no such thing as a “private” student loan anymore.
[0]: see sibling investopedia link
There essentially is no such thing as a “private” student loan anymore.
[0]: see sibling investopedia link
No, this is incorrect. The federal government is also the backstop for a majority of private student loans as well. https://www.investopedia.com/articles/personal-finance/08121...
I can see how you think we were only talking of federally "backed" loans, but I did intend my expansion to be all loans the government has "protected." Which, as the other poster points out, is basically all of them.
Federal loans are basically all of them to start with (over 92% of outstanding balances).
I had thought that I had private loans back in the day. Been a long time since I paid all of mine off, though, so I can't remember who they were through. (And, I fully grant that, even if I was private loans, 8% is still a non-zero number...)
Before federal loans were all direct (Ford loans), there were federal loans issued through third-party lenders (Stafford loans) that otherwise worked the same way with the same kinds of loans (subsidized, unsubsidized, PLUS; for a while, both Stafford and Ford were offered at the same time, with identical terms.) These are collectively “federal” loans (and there are still balances on loans originated as Stafford loans) distinct from “private” loans.
I remember I maxed out my Stafford allocation, and then also had to get extra loans to cover my last year. Memory being what it is, I wouldn't be shocked if I am misremembering some.
Regardless, I got them all payed off; and still have a massive distaste at how most discourse over this goes.
Regardless, I got them all payed off; and still have a massive distaste at how most discourse over this goes.
I would disagree that 31K is not a lot of money, but then again, maybe it is not a lot of money and my opinion is warped. I think if the government took a few points off for performance as a preferred return on the massive endowments, all of this would go away.
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it's $8k a year. that wouldn't even cover rent for a school year at this point.
i think a lot of people seem to believe that the federal government is handing out $50k+ a school year when theres a very small limit. people who need to borrow likely have to tap private lenders.
i think a lot of people seem to believe that the federal government is handing out $50k+ a school year when theres a very small limit. people who need to borrow likely have to tap private lenders.
Please stop. You’re completely misinformed here on how much is available for students to loan. I know multiple people that took out massive PLUS loans from the government that carry interest, are not discharged in bankruptcy, and far exceeded the limits you are talking about ($70k a year for grad schools).
I would also add that a lot of loans end up rolled up into a package, which you are given no forbearance.
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I cannot imagine a more sinister, callus, and destructive way to punch down on some of the most vulnerable people. 18 year olds did not elect any of the people making these laws, every adult before them parrots “go to college”, financial aid offices don’t care what people do as long as they pay tuition, etc.
But grants, you say! We can avoid loans. Not so fast. If your parents made a certain amount, they are fully expected to pay a certain amount for their now adult children to go to college. To qualify for any aid, you need your parents’ income, demanding that A middle class family may still be fully expected to pay multi-thousands of dollars. The student must then take out loans to pay for the rest, which might be the full amount.
This is certified, nonsensical, bullshit. No credit system in history has been given the grace to royally fuck over generations of students, saddling them with loans that cannot be discharged, whose amount is effectively dictated by the institution that is charging tuition. This is a scam at the highest level, sanctioned by the federal government, and perpetuated by every adult figure in the students’ life.
But grants, you say! We can avoid loans. Not so fast. If your parents made a certain amount, they are fully expected to pay a certain amount for their now adult children to go to college. To qualify for any aid, you need your parents’ income, demanding that A middle class family may still be fully expected to pay multi-thousands of dollars. The student must then take out loans to pay for the rest, which might be the full amount.
This is certified, nonsensical, bullshit. No credit system in history has been given the grace to royally fuck over generations of students, saddling them with loans that cannot be discharged, whose amount is effectively dictated by the institution that is charging tuition. This is a scam at the highest level, sanctioned by the federal government, and perpetuated by every adult figure in the students’ life.
True, although I expect that the US healthcare system is more than competitive if we consider its bad outcomes and overall inefficiency per dollar spent.
Systems where there is competition, but where efforts are made to make the service providers not really have big advantages for cutting costs, will get you bad outcomes. It's just unfortunate that avoiding needing healthcare, or going into many careers without paying for the very expensive college degree, is such a big gamble.
A fully public system would be very different. An unsubsidized market system would also be very different. Either one would be dramatically cheaper than what we have, which gives us the worst incentives of both worlds.
Systems where there is competition, but where efforts are made to make the service providers not really have big advantages for cutting costs, will get you bad outcomes. It's just unfortunate that avoiding needing healthcare, or going into many careers without paying for the very expensive college degree, is such a big gamble.
A fully public system would be very different. An unsubsidized market system would also be very different. Either one would be dramatically cheaper than what we have, which gives us the worst incentives of both worlds.
I’m very pro-free market but I would be happy to see this structure replaced with almost anything else. We chose the worst possible combination/bastardization of systems: colleges are given a massive amount of funding by the federal government and the same government guarentees student loans via a debt shackle, lenders are incentivized to lend to students, colleges are incentivized charge exactly what the market will “tolerate” which is horribly skewed due to the abundance of money available to be loaned. This is a losing system for students, even for those who don’t take on debt are spending an absolute insane amount tuition, books, housing, and other living expenses.
Private high school costs have also gone up astronomically and there are no federal loans for them.
[0] https://educationdata.org/average-cost-of-private-school
[0] https://educationdata.org/average-cost-of-private-school
This says that the average private highschool tuition is $15,645.
In 2003, the average private highschool tuition was $8,412 (Snyder, Dillow, & Hoffman, 2008), or $14,079 (in today's dollars).
Please correct me if I've made some mistake, but plugging those numbers in shows that the annualized real increase in price is 0.5% per year over 20 years. Looks like doing the same thing for public 4 year college over the same timespan results in an annual real increase in 2.1%
Please correct me if I've made some mistake, but plugging those numbers in shows that the annualized real increase in price is 0.5% per year over 20 years. Looks like doing the same thing for public 4 year college over the same timespan results in an annual real increase in 2.1%
The first bullet says: “$23,839 is the average annual tuition among the nation’s private K-12 schools.”
Edit: it looks like there is an error on this page. The bar chart the numbers are much higher. Anecdotally, private high school is always more expensive than private elementary. That is what the bar chart shows but not the bullets.
Edit: it looks like there is an error on this page. The bar chart the numbers are much higher. Anecdotally, private high school is always more expensive than private elementary. That is what the bar chart shows but not the bullets.
In your post, you said "private high school."
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I think the average high school price is incorrect. I would love to see better data. I edited my previous bullet to reflect this.
Where does it say that?
Btw private school looks quite affordable. I used to think my neighbor was rich, they were, but for only $20k/yr you can send 2 kids to private school? That is cheaper than daycare.
Btw private school looks quite affordable. I used to think my neighbor was rich, they were, but for only $20k/yr you can send 2 kids to private school? That is cheaper than daycare.
If you're paying $20k for daycare and there's not really a free option, that's just what you have to do.
If you're paying $20k for private school, and there's a free option (public school) - you obviously have a healthy amount of disposable income.
If you're paying $20k for private school, and there's a free option (public school) - you obviously have a healthy amount of disposable income.
> If you're paying $20k for private school,
The link says the average for HS is $15.6k; if that's a mathematical mean, that's going to be driven up by a handful of very expensive schools.
> and there's a free option (public school)
Most public schools in the US are garbage.
> - you obviously have a healthy amount of disposable income.
Or make frugal choices elsewhere, or receive scholarships/ financial aid, likely both.
Yes, that's right, parents can drive an older car and skip buying a bigger TV and cook at home and save money in all kinds of ways, and private schools offer scholarships and financial aid to advance missions of service.
The link says the average for HS is $15.6k; if that's a mathematical mean, that's going to be driven up by a handful of very expensive schools.
> and there's a free option (public school)
Most public schools in the US are garbage.
> - you obviously have a healthy amount of disposable income.
Or make frugal choices elsewhere, or receive scholarships/ financial aid, likely both.
Yes, that's right, parents can drive an older car and skip buying a bigger TV and cook at home and save money in all kinds of ways, and private schools offer scholarships and financial aid to advance missions of service.
> Or make frugal choices elsewhere, or receive scholarships/ financial aid, likely both.
Most people are already doing that and still can't spend $20k to send their children to a non-"garbage" school.
Most people are already doing that and still can't spend $20k to send their children to a non-"garbage" school.
But once you've become sensitized to the impact of paying for daycare on your budget, it's easy to logically just continue the same budget and funnel the same money to a different school.
This. I put my kid into daycare because it didn't cost more than daycare and I'd been paying it this long, what was paying it forever when I'm financially stable. My kid is special needs and the public school would have never accommodated her like this private school has.
Depends on the city… in Los Angeles private schools can push $70k/yr/student easily; In the Bay Area I would imagine even higher. In Dallas, where I grew up and went to the same school for much less, tuition is now around $40k/student/year for top private schools.
The highest I've found in the bay area are a small handful of residential private schools (e.g. Athenian is $82k for boarding students). Most of the top private day schools are still <$50k/yr, but I strongly suspect they top that once fees & "discretionary" expenses are added.
There is a chart at the bottom. Costs doubled over twenty years since 1999, directly comparable to the college rate over the same period and well above inflation.
According to that chart, by "well above inflation" you mean "<20% above inflation" and by "comparable to the college rates" you mean ">100% above inflation".
Your use of generalizations seems radically inconsistent.
Your use of generalizations seems radically inconsistent.
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Daycare is considered by many to be very expensive and a lot of parents would prefer not to (or can't!) pay daycare prices until their kids leave the house.
The private school near me is 55k per child. And that’s typical for this area
And what is your point. Average rates were noted.
The study also does average and median prices and increases.
Of course there is variability. What does you living in a higher cost of living area have to do with the points in this thread. Are you distributing?
Or just wanted to note that there are outliers that factor into the average? Maybe there’s something noteworthy about your private schools, but please add more info.
The study also does average and median prices and increases.
Of course there is variability. What does you living in a higher cost of living area have to do with the points in this thread. Are you distributing?
Or just wanted to note that there are outliers that factor into the average? Maybe there’s something noteworthy about your private schools, but please add more info.
This is not wrong (despite being common and the de facto explanation) but it isn't complete either. The reason I say this is because people that often say this (or read this) also conclude that the way to fix this is to just get rid of government backed loans. The issue is that this model doesn't question why the government backed loans in the first place. How they were seen as an investment in the people, as higher education was already prohibitively expensive. The solution failed because it did not account for a feedback loop, relying on competition to keep prices low rather than implicit coordination (sometimes explicit collusion). Mostly being due to momentum and prestige having an ineffable market value.
So we need to resolve that issue as well if we're to stop federally backed loans. There's more things at play as well and the convoluted mess is the real reason we haven't solved the problem. Realistically, this is probably true about most of the larger issues we face. I'm concerned that over simplifying the problem statement results in an over simplification of the solution and it just causes us to argue (which can be supported by evidence) or take ineffective/theatrical action rather than actually resolving the problem (meeting the intended goals (plural)).
We can keep having this conversation over and over, but it has happened for well over a decade now and no real progress has been made. We gotta start looking at the actual complexity of the situation as first order modeling isn't good enough.
So we need to resolve that issue as well if we're to stop federally backed loans. There's more things at play as well and the convoluted mess is the real reason we haven't solved the problem. Realistically, this is probably true about most of the larger issues we face. I'm concerned that over simplifying the problem statement results in an over simplification of the solution and it just causes us to argue (which can be supported by evidence) or take ineffective/theatrical action rather than actually resolving the problem (meeting the intended goals (plural)).
We can keep having this conversation over and over, but it has happened for well over a decade now and no real progress has been made. We gotta start looking at the actual complexity of the situation as first order modeling isn't good enough.
Easy access to credit is a good thing. I cannot believe I am saying this on HN. The problem as I see it, as a non-American, is that university in the US is a business trying to turn a profit. Even if most universities are technically non-profits, they are managed like businesses by MBAs. In the EU many countries offer guaranteed loans for Uni education, but this has not spiked the cost of education because Universities are not run with the aim to turn a profit.
IMHO, easy access to credit is one of the best things about the American economy, and hiring MBAs to manage things that aren't for profit corporations, one of its worst aspects.
IMHO, easy access to credit is one of the best things about the American economy, and hiring MBAs to manage things that aren't for profit corporations, one of its worst aspects.
Not-for-profit businesses in the US are not legally allowed to turn a profit. There are no financial owners to be paid a profit. So, everything you wrote about that is BS.
Not-for-profit businesses are still businesses; they need to take in as much as they spend, whether it's through fees for service (e.g. tuition) or donations. Colleges and universities in the US spend a lot of time begging alumni to donate money.
And yes, there is education and training specific to running a not-for-profit _business_, and many GOOD leaders have MBAs. I have watched a lot of them fail because the folks at the top did not manage money well.
Not-for-profit businesses are still businesses; they need to take in as much as they spend, whether it's through fees for service (e.g. tuition) or donations. Colleges and universities in the US spend a lot of time begging alumni to donate money.
And yes, there is education and training specific to running a not-for-profit _business_, and many GOOD leaders have MBAs. I have watched a lot of them fail because the folks at the top did not manage money well.
I think you and the GP may be getting tripped on word choices. Most private universities in the US are organized as 501c3 organizations. There are numerous requirements[0] to be a 501c3. This however does not prevent a non-profit from being run like a for-profit business.
One of the most crucial components of operating a 501c3 is the financial statements reporting requirements[1]. From an accounting perspective, the organization cannot keep retained earnings (owner’s equity) balance at year end since there are no owners. Rather than having retained earnings, 501c3s deal with net assets, which no person can have ownership of.
The crucial thing here is that the business does not retain profits at the end of the accounting period. However, it can earn what we would call profit in a non-501c3 scenario and then use that money for business activities, paying employee wages, investing, etc. Accordingly, a 501c3 can take in more than it needs to spend. It just has to properly handle that excess money to meet the accounting standards.
See the Wikimedia Foundation’s financial statements[2] for a great example. They spend a minuscule amount of their net assets on actual business expenses. They spend quite a bit on wages, travel and conferences, and various other things that are arguably unnecessary to serve their core mission. However, they follow all of the accounting guidelines and are therefore granted reasonable assurance that they are fairly representing their financials according to KPMG.
Back to the initial topic, it’s now clearer to see why and how a university such as Harvard can be a 501c3 and bring in exorbitant amounts of “profit” that probably do not better serve their core mission as an education center. However, it’s all about following rules and how you spin it. Harvard isn’t begging alumni for donations because they need it. They had $61B in net assets at year end[3]. I think it’s completely fair to argue that Harvard doesn’t need that much money while they deliberately stay at their current size. In fact, I would argue one step further that they have so much money on hand, they shouldn’t even be charging tuition. Their $59B investment portfolio makes up the bulk of their net assets. From a book perspective, they are essentially an investment fund with a university attached.
Looking at a public university, the University of Texas ended the year with a $66B net position[4]. They paid their football coach over $5[5] from their massive pool of assets and are still paying their former head football coach tens of millions of dollars.
I would be interested in hearing if there are universities in Europe that operate like this. Quickly looking up the aggregated statement of financial activities for all Oxford colleges[6], I see that they had a 63M£ expenditure (loss) but carried forward 1.35B£ to end the year with positive funds carried forward of 1.36B£ (after a prior year funds adjustment). That’s incomparable to Harvard. As a CPA (who is not an expert on UK tax law), Oxford’s financial statement appears much more inline with the spirit of what I imagine a non-profit university should be. Harvard and the University of Texas look like two of the most successful companies in America to me.
[0] https://www.irs.gov/charities-non-profits/charitable-organiz...
[1] https://www.fasb.org/document/blob?fileName=ASU_2016-14.pdf
[2] https://upload.wikimedia.org/wikipedia/foundation/2/26/Wikim...
[3] https://finance.harvard.edu/files/fad/files/fy22_harvard_fin...
[4] https://www.utsystem.edu/sites/default/files/documents/repor...
[5] https://www.texastribune.org/2021/02/22/steve-sarkisian-sala...
[6] http://d307gmaoxpdmsg.cloudfront.net/collegeaccounts2122/agg...
One of the most crucial components of operating a 501c3 is the financial statements reporting requirements[1]. From an accounting perspective, the organization cannot keep retained earnings (owner’s equity) balance at year end since there are no owners. Rather than having retained earnings, 501c3s deal with net assets, which no person can have ownership of.
The crucial thing here is that the business does not retain profits at the end of the accounting period. However, it can earn what we would call profit in a non-501c3 scenario and then use that money for business activities, paying employee wages, investing, etc. Accordingly, a 501c3 can take in more than it needs to spend. It just has to properly handle that excess money to meet the accounting standards.
See the Wikimedia Foundation’s financial statements[2] for a great example. They spend a minuscule amount of their net assets on actual business expenses. They spend quite a bit on wages, travel and conferences, and various other things that are arguably unnecessary to serve their core mission. However, they follow all of the accounting guidelines and are therefore granted reasonable assurance that they are fairly representing their financials according to KPMG.
Back to the initial topic, it’s now clearer to see why and how a university such as Harvard can be a 501c3 and bring in exorbitant amounts of “profit” that probably do not better serve their core mission as an education center. However, it’s all about following rules and how you spin it. Harvard isn’t begging alumni for donations because they need it. They had $61B in net assets at year end[3]. I think it’s completely fair to argue that Harvard doesn’t need that much money while they deliberately stay at their current size. In fact, I would argue one step further that they have so much money on hand, they shouldn’t even be charging tuition. Their $59B investment portfolio makes up the bulk of their net assets. From a book perspective, they are essentially an investment fund with a university attached.
Looking at a public university, the University of Texas ended the year with a $66B net position[4]. They paid their football coach over $5[5] from their massive pool of assets and are still paying their former head football coach tens of millions of dollars.
I would be interested in hearing if there are universities in Europe that operate like this. Quickly looking up the aggregated statement of financial activities for all Oxford colleges[6], I see that they had a 63M£ expenditure (loss) but carried forward 1.35B£ to end the year with positive funds carried forward of 1.36B£ (after a prior year funds adjustment). That’s incomparable to Harvard. As a CPA (who is not an expert on UK tax law), Oxford’s financial statement appears much more inline with the spirit of what I imagine a non-profit university should be. Harvard and the University of Texas look like two of the most successful companies in America to me.
[0] https://www.irs.gov/charities-non-profits/charitable-organiz...
[1] https://www.fasb.org/document/blob?fileName=ASU_2016-14.pdf
[2] https://upload.wikimedia.org/wikipedia/foundation/2/26/Wikim...
[3] https://finance.harvard.edu/files/fad/files/fy22_harvard_fin...
[4] https://www.utsystem.edu/sites/default/files/documents/repor...
[5] https://www.texastribune.org/2021/02/22/steve-sarkisian-sala...
[6] http://d307gmaoxpdmsg.cloudfront.net/collegeaccounts2122/agg...
"Able to pay", but where is the "Want to pay?"
I feel you also need to argue: "18 year olds don't realize they are being ripped off", or "college is actually worth that much". It's probably a different answer for different students.
I feel you also need to argue: "18 year olds don't realize they are being ripped off", or "college is actually worth that much". It's probably a different answer for different students.
Society is better off as a whole with a well educated populace. We shouldn't optimize for college only for kids who can learn to program or whatever.
Most other developed nations manage to send every smart kid to college for ten thousand dollars per kid or less. Once again, it is only the US that thinks it is a special butterfly that can't somehow manage to give kids college. Sure, most European colleges don't spend one billion tax dollars on a football stadium, but that is also a good thing.
And no, those sports complexes largely DON'T pay their own way. A significant amount of college sports don't make much money, and don't give it back to the campus as a whole, and that's WITH literal free labor of NCAA athletes.
Most other developed nations manage to send every smart kid to college for ten thousand dollars per kid or less. Once again, it is only the US that thinks it is a special butterfly that can't somehow manage to give kids college. Sure, most European colleges don't spend one billion tax dollars on a football stadium, but that is also a good thing.
And no, those sports complexes largely DON'T pay their own way. A significant amount of college sports don't make much money, and don't give it back to the campus as a whole, and that's WITH literal free labor of NCAA athletes.
Define well educated populace.
Does this mean ability to read, write, and do arithmetic? Does this mean the ability to speak and read Latin with an understanding of the classics and the Bible? The ability to fix a car and build an engine? Program a computer?
One could argue that a university does very little to make a populace more educated, since they can already read, write and do basic math (or should be able to) to get into school. Is taking psychology making one better educated? Maybe? Maybe not.
Does this mean ability to read, write, and do arithmetic? Does this mean the ability to speak and read Latin with an understanding of the classics and the Bible? The ability to fix a car and build an engine? Program a computer?
One could argue that a university does very little to make a populace more educated, since they can already read, write and do basic math (or should be able to) to get into school. Is taking psychology making one better educated? Maybe? Maybe not.
It's not a "congratulations, you are now well-educated" mark. The more educated the population is, the better. Now, at some point there are trade-offs and diminishing returns (if your entire population is busy studying philosophy and everybody starves, that's bad), but considering how much absolutely worthless shit society dumps money into, we have plenty of slack.
> One could argue that a university does very little to make a populace more educated, since they can already read, write and do basic math
Universities build on this so that people can do more than just the three R’s…
> Is taking psychology making one better educated?
Yes, without a doubt.
Universities build on this so that people can do more than just the three R’s…
> Is taking psychology making one better educated?
Yes, without a doubt.
Well educated isn't so clearly defined: In general, though, it is having been exposed to a varying number of subjects, be able to read a varying amount of things, have enough general knowledge that they can understand the reason there are "chemicals" in food and the reasons not to mix some household chemicals together. In addition, the person has been able to dive into a particular subject more deeply than the other ones, and understand that other folks have different specialties. While doing this, you are generally exposed to an array of people and if your institutions are fair, they come from mixed backgrounds.
Realistically, the basic information will be similar (basic science, health, reading, history, and so on) but we'll have different areas of interest and skill, so the exact subjects will be individualized to an extent and will definitely change over time as the world changes. You can't say for certain that psychology will make you better educated, but an introduction to the basic field might open someone's mind to being educated in that field, which helps society at large. Other things will be more esoteric: Go to art school, work in retail, and happily make art doesn't have the same sort of immediate payback - but chances are, they are more likely to be a bit compassionate just by having the education.
Realistically, the basic information will be similar (basic science, health, reading, history, and so on) but we'll have different areas of interest and skill, so the exact subjects will be individualized to an extent and will definitely change over time as the world changes. You can't say for certain that psychology will make you better educated, but an introduction to the basic field might open someone's mind to being educated in that field, which helps society at large. Other things will be more esoteric: Go to art school, work in retail, and happily make art doesn't have the same sort of immediate payback - but chances are, they are more likely to be a bit compassionate just by having the education.
I am not sure if university is an effective place to do this. I think tricking the younger minds at primary/secondary school to be more curious and well-rounded person is much better. Once you get the ball rolling, they will hopefully keep being that way into their adulthood. For example, how do you teach a young adult to be kind when they aren't? Teaching them about kindness via multiple sessions of lectures ain't gonna cut it. You would have to "trick" and "manipulate" them into being so to bypass ego/whatever else which is much harder to do for adults.
University is a piece of it. A large piece.
No matter how curious you are, you tend to benefit from learning from others. There is more to university than learning from books. You wind up being around folks you wouldn't otherwise be with. For some folks, it is their first experience being without supervision. And stuff like that. It doesn't need to be university for all so long as there is some sort of schooling that meets these needs for folks. We can start doing adult-lite at 15/16 and have people move into dorms their last couple of years. Doesn't mean that a lot of folks wouldn't benefit from university or something akin to it: A chance to have an intensive course learning another language, for example, with the goal of fluency.
You can't force anyone into being kind, and some folks are simply going to be sour. We do start teaching folks as children, after all. Make peace with the fact that some individuals aren't going to be: That's OK so long most folks are and it shows in society and programs that help others.
No matter how curious you are, you tend to benefit from learning from others. There is more to university than learning from books. You wind up being around folks you wouldn't otherwise be with. For some folks, it is their first experience being without supervision. And stuff like that. It doesn't need to be university for all so long as there is some sort of schooling that meets these needs for folks. We can start doing adult-lite at 15/16 and have people move into dorms their last couple of years. Doesn't mean that a lot of folks wouldn't benefit from university or something akin to it: A chance to have an intensive course learning another language, for example, with the goal of fluency.
You can't force anyone into being kind, and some folks are simply going to be sour. We do start teaching folks as children, after all. Make peace with the fact that some individuals aren't going to be: That's OK so long most folks are and it shows in society and programs that help others.
The education needed for a functioning society should be delivered by the end of high school. A few generations ago it was delivered by the end of 8th grade.
And yes, college sports on the whole does pay for itself. Those stadiums are built by donated money, and revenue from ticket sales. Yes taken in isolation there are a lot of sports that don't make money, but they are subsidized by those that do (chiefly football and basketball). Sports stadiums are not the reason tuition has inflated by 700%. They are two separate pools of money. If you got rid of sports entirely it would not affect the finances of the academic side of the university at all.
And yes, college sports on the whole does pay for itself. Those stadiums are built by donated money, and revenue from ticket sales. Yes taken in isolation there are a lot of sports that don't make money, but they are subsidized by those that do (chiefly football and basketball). Sports stadiums are not the reason tuition has inflated by 700%. They are two separate pools of money. If you got rid of sports entirely it would not affect the finances of the academic side of the university at all.
It’s a question of what kind of “functioning society” you want to have. Those 8th grade education jobs still exist, but they’re in China, Bangladesh and other developing economies. And no offense to those people either. A lot of manufacturing depends on them.
Those are certainly “functioning societies” but their economies are much less advanced than in the US. It’s not realistic to say that an advanced economy can get by with education ending at age 18.
Those are certainly “functioning societies” but their economies are much less advanced than in the US. It’s not realistic to say that an advanced economy can get by with education ending at age 18.
That's a popular opinion, but how do you quantitatively prove it? While the formal education of a population may correlate with wealth, I think it would be harder to prove a causal link.
It's about what is necessary for DEMOCRACY to work well. I don't care what provides a higher ROI to some rich owner-class people, I care about a society that represents its people.
It really depends on what you mean by that. Plenty of people get bachelor’s degrees with little to no civics or history education included. And historically, college degrees were rare. Only 28% of the Silent Generation had any college. Now, 67% of Millennials do. Did democracy not function before?
https://www.pewresearch.org/social-trends/2019/02/14/millenn...
However, to the extent that education enables better income opportunities I agree. Education can reduce economic inequality which is a huge barrier to social cohesion and civic trust. However education isn’t the only path to better wealth distribution.
https://www.pewresearch.org/social-trends/2019/02/14/millenn...
However, to the extent that education enables better income opportunities I agree. Education can reduce economic inequality which is a huge barrier to social cohesion and civic trust. However education isn’t the only path to better wealth distribution.
Democracy gets harder the more technologically advanced the world is.
In the decades of newspapers and limited information it was much easier to control information, placing the burden of information flow on a limited set of journalists.
Now that burden is put on each and everyone of us with social media and other alternative media. People from the Silent Generation are drowning in todays information age.
Now that burden is put on each and everyone of us with social media and other alternative media. People from the Silent Generation are drowning in todays information age.
City and community colleges exist, and are mostly free. But for most people, colleges are more than just an education. College is about signaling their aptitude. And so people keep trying to pile into expensive private school for the prestige.
> City and community colleges exist, and are mostly free.
Tuition, usually. Books, maybe. Room and board, ha!
As an anecdote, it cost less for one of my kids to go out of state to a private college than in-state to a public university; tuition at the public university would've been free, but the private college offered scholarships and financial aid that fully covered tuition and most of on-campus room and board.
Sure, my kid could've gone to a community college and lived at home, but the education would have been far worse, food isn't free, and it's harder to build a community when folks have to leave in the evening to travel 30-60 minutes in any direction.
Tuition, usually. Books, maybe. Room and board, ha!
As an anecdote, it cost less for one of my kids to go out of state to a private college than in-state to a public university; tuition at the public university would've been free, but the private college offered scholarships and financial aid that fully covered tuition and most of on-campus room and board.
Sure, my kid could've gone to a community college and lived at home, but the education would have been far worse, food isn't free, and it's harder to build a community when folks have to leave in the evening to travel 30-60 minutes in any direction.
> private college offered scholarships and financial aid
That's the thing that people don't understand about private universities' tuition prices: They're not real. The really rich kids are paying more, through donations and the like, and most students are being offered substantial discounts through both need and merit based scholarships. The inflated tuitions are all about A) signalling prestige and B) redistributing money from the rich and dumb to the smart and less wealthy.
That's the thing that people don't understand about private universities' tuition prices: They're not real. The really rich kids are paying more, through donations and the like, and most students are being offered substantial discounts through both need and merit based scholarships. The inflated tuitions are all about A) signalling prestige and B) redistributing money from the rich and dumb to the smart and less wealthy.
It's unfortunate, but to me this feels like half of the root of the problem.
One half is easy access to loans, the other half is student debt relief programs.
Between the two, colleges know they can charge absurd prices and pocket the money.
It's awful, and I wish someone was doing something to stop this. It cannot go like this forever.
One half is easy access to loans, the other half is student debt relief programs.
Between the two, colleges know they can charge absurd prices and pocket the money.
It's awful, and I wish someone was doing something to stop this. It cannot go like this forever.
>the other half is student debt relief programs
...which student debt relief programs?
Afaik there are no widely used student debt relief programs.
...which student debt relief programs?
Afaik there are no widely used student debt relief programs.
It's buried in Excel sheets, but looks like quite a few folks:
https://studentaid.gov/data-center/student/loan-forgiveness/...
Work for a public organization or certain non-profits while making 10 years of regularly scheduled payments and you may be qualified for student loan forgiveness. Lots of physicians I know took advantage of this since most of their training is at public academic institutions, and I believe many teachers do as well.
Do you have data on how many take advantage of it? My anecdotes are that everyone who tries this gets trapped in some bureaucratic hell hole that tends to prevent it from actually being used.
NPR did some reporting on this a couple years ago: https://www.npr.org/2019/07/11/739860400/broken-promises-tea...
"By the department's last count, only 1% of the people who think they've made their 10 years of payments and apply for loan forgiveness are getting approved.
If you took all the people getting rejected and got them together in one place, Peterson says, you'd have "football stadiums full of nurses, firefighters, teachers, law enforcement officers that are seeking to have their debts forgiven.""
"By the department's last count, only 1% of the people who think they've made their 10 years of payments and apply for loan forgiveness are getting approved.
If you took all the people getting rejected and got them together in one place, Peterson says, you'd have "football stadiums full of nurses, firefighters, teachers, law enforcement officers that are seeking to have their debts forgiven.""
The PLSF has been significantly overhauled since 2019, and continues to be made easier to qualify (and be approved) for.
Yep, 2019 was the first year people would have become eligible for this, as I recall. There's has been federal focus on streamlining the application process since then.
There is an answer that "just" requires the political will: instead of doing public K-12, do public K-16.
I think the solution is to just grant some money to schools and cap tuition costs. The current incentives are just so misaligned.
Its only half the problem because you'll still see inflated housing as well but at least its something.
Its only half the problem because you'll still see inflated housing as well but at least its something.
Or just go all the way and make education free, paid for using tax money - with a fixed per-student payout of course.
This is a common theme on HN, but it's not obvious to me if it reflects this entire period we're talking about here. Were government loans growing from 1980 to 2000? I know they have been in the last 20 years, but tuition was clearly growing before that (as you can see for yourself in the graphs of the original article).
This was predicted by the then Secretary of Education in 1987.
https://www.nytimes.com/1987/02/18/opinion/our-greedy-colleg...
Here is something interesting:
https://www.ed.gov/category/keyword/borrower-defense
https://www.nytimes.com/1987/02/18/opinion/our-greedy-colleg...
Here is something interesting:
https://www.ed.gov/category/keyword/borrower-defense
Two things you have to do to keep tuition costs down nowadays, by my estimation, unless you get a full ride scholarship or accepted by the an Ivy League:
- Do your first two years at community college. A lot of states have zero tuition costs for community college credits. I think in all 50 states its the absolute cheapest way to do get your first two years done
- Enterprising students may realize that if you're married, FAFSA (which is used to compute both federal and state aid) will use your married income and not your parents. Most students make little to money while in school. This automatically games the algorithm in your favor. Tricky to manage socially.
- Do your first two years at community college. A lot of states have zero tuition costs for community college credits. I think in all 50 states its the absolute cheapest way to do get your first two years done
- Enterprising students may realize that if you're married, FAFSA (which is used to compute both federal and state aid) will use your married income and not your parents. Most students make little to money while in school. This automatically games the algorithm in your favor. Tricky to manage socially.
2+2 plans are really, really questionable in my observation. Most students I know ended up doing either 2+3 or 3+3, which since as you pointed out CC are so, so, so much cheaper than university did save them money none the less. However, if you're going into a field that has any kind of improved earning potential from a degree, you have to look at the opportunity cost, taking into account the fact that if they had just gone straight to a 4 year they would have had an extra 1-2 years of making substantially higher wages than they could before they graduated.
If you have a kid who doesn't really know if they want to, say, be an engineer, then a 2+2 plan that they realize they aren't cut out for during the cheap years probably is a huge price save. But for the kid with the tools to succeed in school, a passion for a field that pays well, and the opportunity to get into a 4 year, they should absolutely just go for it off the bat.
The other problem with the 2+2 is that you're sacrificing 2 years of one of the biggest advantages of going to competitive universities: meeting other students who could get into competitive universities. I met most of my friends I made in college in the first 2 weeks, freshman year. It's probably the single easiest time in anyone's life to make new friends and acquaintances. And those friends, beyond being invaluable to me for social and romantic reasons, also have benefited me financially: one friend's dad got me an internship, which I was able to leverage into my first job. I got my second job by no small part thanks to the recommendation of another friend who already worked there. Looking back in time, the ROI on the bottle of vodka I brought to the dorm nextdoor move-in weekend is likely in the ~10,000,000% range.
Transfer students get a greatly diminished version of that opportunity. By their upper-division levels, most students are spending a lot more time on school work, and much less time randomly meeting their dorm-hall mates. It's still possible to meet people, and my high-school friends who did the transfer route did meet some people, but there's a much greater than 50% loss in networking opportunity.
If you have a kid who doesn't really know if they want to, say, be an engineer, then a 2+2 plan that they realize they aren't cut out for during the cheap years probably is a huge price save. But for the kid with the tools to succeed in school, a passion for a field that pays well, and the opportunity to get into a 4 year, they should absolutely just go for it off the bat.
The other problem with the 2+2 is that you're sacrificing 2 years of one of the biggest advantages of going to competitive universities: meeting other students who could get into competitive universities. I met most of my friends I made in college in the first 2 weeks, freshman year. It's probably the single easiest time in anyone's life to make new friends and acquaintances. And those friends, beyond being invaluable to me for social and romantic reasons, also have benefited me financially: one friend's dad got me an internship, which I was able to leverage into my first job. I got my second job by no small part thanks to the recommendation of another friend who already worked there. Looking back in time, the ROI on the bottle of vodka I brought to the dorm nextdoor move-in weekend is likely in the ~10,000,000% range.
Transfer students get a greatly diminished version of that opportunity. By their upper-division levels, most students are spending a lot more time on school work, and much less time randomly meeting their dorm-hall mates. It's still possible to meet people, and my high-school friends who did the transfer route did meet some people, but there's a much greater than 50% loss in networking opportunity.
Agreed about community college. It’s unfortunate though that, like so many things, it’s essentially a lottery on where you’re born. Some community colleges are wonderful, others not.
I’ve heard of other FAFSA games as well - last I heard the parents’ cars and primary residence were excluded from the FAFSA expected contribution calculation so middle class folks with a fat savings account might decide to buy new cars or pay off the mortgage or do something similar to make the cash “disappear”. Deferred compensation plans are used along the same lines for income. The fact that such games are viable is a shame but probably unavoidable unless we have government foot the bill for college.
I’ve heard of other FAFSA games as well - last I heard the parents’ cars and primary residence were excluded from the FAFSA expected contribution calculation so middle class folks with a fat savings account might decide to buy new cars or pay off the mortgage or do something similar to make the cash “disappear”. Deferred compensation plans are used along the same lines for income. The fact that such games are viable is a shame but probably unavoidable unless we have government foot the bill for college.
That's not the worst part. Rich families had their kids legally emancipated prior to age 16 so that the kids could legally show zero income and zero family net worth on their FAFSA applications.
The FAFSA is such a load of horseshit I don't even know where to begin with it.
The FAFSA is such a load of horseshit I don't even know where to begin with it.
It only makes sense if you believe education is just like any other commodity whose price should be driven by market forces. Should government have any say in whether its citizenry gets educated? Is there a public interest in it?
I can’t think of an easier way for e.g. China to win the 21st century. American undergrad enrollment is already down. As the world gets more technical, that is not a good sign.
When an entire generation of Americans are priced out of higher education, who is going to develop the technologies of tomorrow? Should we assume foreign students will always want to come to our schools and stay to work in our companies? It’s not sustainable.
I can’t think of an easier way for e.g. China to win the 21st century. American undergrad enrollment is already down. As the world gets more technical, that is not a good sign.
When an entire generation of Americans are priced out of higher education, who is going to develop the technologies of tomorrow? Should we assume foreign students will always want to come to our schools and stay to work in our companies? It’s not sustainable.
The rise in prices has largely been driven by schools going on real estate binges and bloating administrations.
Right before I graduated, my school decided to build a new football stadium, because they decided using the city's stadium wasn't attractive enough for students. They promised tuition wouldn't be used to pay for it, and it wasn't. We just got something like $500 added to student "fees" instead.
I have no sympathy for universities and colleges in the US, only for the students who were duped into thinking they didn't have another choice.
Right before I graduated, my school decided to build a new football stadium, because they decided using the city's stadium wasn't attractive enough for students. They promised tuition wouldn't be used to pay for it, and it wasn't. We just got something like $500 added to student "fees" instead.
I have no sympathy for universities and colleges in the US, only for the students who were duped into thinking they didn't have another choice.
Ultimately it doesn’t matter if the cause is administrative bloat, government-backed student loans that can’t be defaulted on, or space aliens. What is not debatable is that higher education is necessary in an advanced economy, and starving the job market of highly skilled workers is a fast track to companies shifting to other places where they are more abundant.
Either the US will figure it out like every other developed nation has seemed to do, or there will be grave geopolitical consequences. Whether the US political/economic machine can figure it out is a question that only time can answer.
Either the US will figure it out like every other developed nation has seemed to do, or there will be grave geopolitical consequences. Whether the US political/economic machine can figure it out is a question that only time can answer.
When I went to school ages ago when it was reasonably priced, they did a breakdown of the tuition. Half of it was stupid bullshit the student government voted on over the years.
"Too many piglets, not enough tits" -AL
"Too many piglets, not enough tits" -AL
> Should government have any say in whether its citizenry gets educated? Is there a public interest in it?
That's a very dangerous road.
Governments are not some benevolent creature which always acts in the best interests of the People. As a practical matter, governments are usually incompetent and corrupt (usually in that order), and try to get the masses to further the interests of the politicians, the bureaucrats and the donor class.
I want an educated populace. For that reason, I want government as far away from it as possible.
That's a very dangerous road.
Governments are not some benevolent creature which always acts in the best interests of the People. As a practical matter, governments are usually incompetent and corrupt (usually in that order), and try to get the masses to further the interests of the politicians, the bureaucrats and the donor class.
I want an educated populace. For that reason, I want government as far away from it as possible.
Strangely, almost all other advanced economies have been able to provide affordable education for their citizenry without it devolving into Nineteen Eighty Four. I wonder what makes the US government so uniquely malevolent.
The loans:
1) Increased demand.
2) Increased what the market could bear.
The result is Economic 101. There are no surprises here.
p.s. Note: Roughly the same applies to mortgages. The idea that more affordable mortgages (i.e., 30 yr) was going to make homes more affordable, is comical at best. With a relatively fixed supply, increasing demand is only going to have one effect on price. And the solution? The 40 yr or 50 yr mortgage.
Round and round we go.
1) Increased demand.
2) Increased what the market could bear.
The result is Economic 101. There are no surprises here.
p.s. Note: Roughly the same applies to mortgages. The idea that more affordable mortgages (i.e., 30 yr) was going to make homes more affordable, is comical at best. With a relatively fixed supply, increasing demand is only going to have one effect on price. And the solution? The 40 yr or 50 yr mortgage.
Round and round we go.
That is obvious, but it used to be that admission needed some tests which most people simply cannot get past. Colleges lowered the bar of entry to make more money and that caused your point 2 and as well massively lowered the quality of the education making the diplomas not very worthwhile (known exceptions are there of course). Keep the bar to entry very high and you cannot have a reason for upping prices. Get a loan when you are actually really good and otherwise don’t get in, even if your parents have billions.
An economist would say the bar lowered to meet the demand. Demand that was willing to bear a higher and higher and higher price.
Agreed. The real question is: do they produce a net positive effect for society?
If the government needing to grant mass amnesty from loans / loan payment then that's a net positive, yes? Lol
If that's the case, that the federal government backing the loans is what permits the increases, then why not just have the federal government pay up front and cut out the loan portion? Might give them more power to negotiate lower prices. Though I suppose the loan industry wouldn't like getting cut out of their middleman position, eh, and politicians probably wouldn't stand for that egregious cutting of profits.
> Makes sense when you have student loans backed by the federal government.
Everyone says that, but I've not seen much actual evidence.
I tried to find evidence, by looking for tuitions of various major universities over time and seeing if there was any clear difference in the tuition growth rates before Federal loans and after.
I know the data is available. Most schools list tuition in their catalog, and have their old catalogs in their library, but it wasn't turning up in. Google searches.
I was only able to find historical data for Stanford, giving tuition by decade, and one big state school whose name I don't remember. Here's a graph of log10(Stanford_tution) over time [1]. I don't have a copy of the graph for the other school but recall it was similar. It looks like it has been growing about the same for a century.
I also remember comparing tuition rate increases to inflation, and found that tuition has grown pretty consistently at roughly 2x inflation both before and after Federal backed loans.
[1] https://imgur.com/fXnjDNn
Everyone says that, but I've not seen much actual evidence.
I tried to find evidence, by looking for tuitions of various major universities over time and seeing if there was any clear difference in the tuition growth rates before Federal loans and after.
I know the data is available. Most schools list tuition in their catalog, and have their old catalogs in their library, but it wasn't turning up in. Google searches.
I was only able to find historical data for Stanford, giving tuition by decade, and one big state school whose name I don't remember. Here's a graph of log10(Stanford_tution) over time [1]. I don't have a copy of the graph for the other school but recall it was similar. It looks like it has been growing about the same for a century.
I also remember comparing tuition rate increases to inflation, and found that tuition has grown pretty consistently at roughly 2x inflation both before and after Federal backed loans.
[1] https://imgur.com/fXnjDNn
It's worth mentioning that degree granting institutions numbered ~3500 in 1980 and total enrollment was almost 10 million, and in 2022 there were just over 4000 such institutions serving 17 million students, and that number of institutions is actually declining from its peak in ~2016. This alone is bound to drive up prices.
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More likely cause is the mentality that says universities are a for profit institutions That should squeeze as much as possible.
Instead of "socialist" subsudised school, you give loans...
The reality in many cases is that total cost per student has actually decreased; meanwhile, governmental funding of universities has flatlined for decades. If enrolment doubles and funding remains stable, there's only one solution: Increased tuition.
Easy access to loans may create large amounts of debt, but increased tuition fees are mostly -- though I admit my research isn't exhaustive -- a function of an effective decrease in governmental funding per student.
Easy access to loans may create large amounts of debt, but increased tuition fees are mostly -- though I admit my research isn't exhaustive -- a function of an effective decrease in governmental funding per student.
If only governments could make…laws to restrict the price of University. Or…could limit the maximum loan size thus encouraging Universities to not charge more than that.
Price controls are one of the few things that economists on both sides of the political aisle agree do not work, and/or have unintended consequences which are worse than the problem they attempt to resolve.
https://www.econlib.org/the-consensus-on-price-controls/
https://www.econlib.org/the-consensus-on-price-controls/
> Price controls are one of the few things that economists on both sides of the political aisle agree do not work, and/or have unintended consequences which are worse than the problem they attempt to resolve.
Australia effectively has price controls on both health and tertiary education. It isn’t perfect but it is hardly terrible.
I know the US pharmaceutical industry hates it - the Australian government uses its monopsony power to limit drug prices and hence drug company profits - and is forever lobbying the US government to use trade negotiations to pressure to undermine it (but hasn’t yet succeeded)
Universities can charge as much as they want - but if they want students to have full eligibility for government student loans and government tuition subsidies, there is a maximum they can charge. Students want that full eligibility, so for the majority of places they stick to the maximum
Australia effectively has price controls on both health and tertiary education. It isn’t perfect but it is hardly terrible.
I know the US pharmaceutical industry hates it - the Australian government uses its monopsony power to limit drug prices and hence drug company profits - and is forever lobbying the US government to use trade negotiations to pressure to undermine it (but hasn’t yet succeeded)
Universities can charge as much as they want - but if they want students to have full eligibility for government student loans and government tuition subsidies, there is a maximum they can charge. Students want that full eligibility, so for the majority of places they stick to the maximum
Sometimes it feels like economists come up with these ideas in an ivory tower, detached from reality. Any kind of price control seems to make economists very upset, rent control being another example.
Reality is that there are so many other factors that it’s probably better to have some sort of price control as a form of regulation, instead of only focusing on supply/demand levers.
I’m not an economist so I’m happy to be proven wrong, but the stance of “x,y and z policies need to be implemented so supply/demand is changed to mitigate these issues”, but the reality is that politicians and the business landscape doesn’t incentivize such changes. For example, colleges aren’t incentivized to keep the cost low, housing construction isn’t incentivized because NIMBYs control what can be built where, etc.
So when someone says “well the economists don’t agree on that”, it really rubs me the wrong way.
Reality is that there are so many other factors that it’s probably better to have some sort of price control as a form of regulation, instead of only focusing on supply/demand levers.
I’m not an economist so I’m happy to be proven wrong, but the stance of “x,y and z policies need to be implemented so supply/demand is changed to mitigate these issues”, but the reality is that politicians and the business landscape doesn’t incentivize such changes. For example, colleges aren’t incentivized to keep the cost low, housing construction isn’t incentivized because NIMBYs control what can be built where, etc.
So when someone says “well the economists don’t agree on that”, it really rubs me the wrong way.
I'd wager econlib is cherry picking https://mediabiasfactcheck.com/the-library-of-economics-and-...
Mainstream economists have thought very different things at different times. The current mainstream orthodoxy is largely free market fundamentalists that took over in the 80's. There are heterodox economists that disagree with this view. Practically, there are also many examples of price and rent controls and de-commodification "working" throughout modern history and currently on other countries.
Mainstream economists have thought very different things at different times. The current mainstream orthodoxy is largely free market fundamentalists that took over in the 80's. There are heterodox economists that disagree with this view. Practically, there are also many examples of price and rent controls and de-commodification "working" throughout modern history and currently on other countries.
I'd wager they aren't.
https://en.wikipedia.org/wiki/Price_controls
https://en.wikipedia.org/wiki/Price_controls
If you actually read the rest of my comment, I acknowledge mainstream (that is to say, neoclassical) economists don't like price controls, which is almost exactly what the wiki page says.
I did read your comment, and I blithely responded with another source supporting my original claim. In hindsight though, you're right: I should have simply picked apart your original argument instead of providing another source, as your argument is self-contradictory.
You argued that econlib cherry-picked economists to generate a biased result, which you then followed up by acknowledging that "mainstream" economists do not support price controls, which is exactly what the survey showed.
There is, in fact, a broad consensus among economists that price controls are generally counterproductive. The econlib survey showed it, the wikipedia links support that, and you apparently agree. So... thanks?
You argued that econlib cherry-picked economists to generate a biased result, which you then followed up by acknowledging that "mainstream" economists do not support price controls, which is exactly what the survey showed.
There is, in fact, a broad consensus among economists that price controls are generally counterproductive. The econlib survey showed it, the wikipedia links support that, and you apparently agree. So... thanks?
I think it goes without saying that if you don't include any voices of dissent, you get a remarkably consistent answer. That is still a bias.
I don't think you understand what bias is in this context.
To illustrate this, consider the following hypothetical survey.
Survey:
"Is murdering babies wrong"?
End Survey
Essentially everyone will respond with a strong yes.
By your logic, if I don't include a dissenting opinion, the poll is necessarily biased.
Of course that's not correct.
The purpose of a poll is to understand the opinions of a population by understanding the opinions of a randomly selected sample of the population. If the population has strong opinions on a given topic, the survey will return lopsided results. That does not make the survey biased.
If however you seek out people with opinions to the contrary for the sake of including unpopular opinions, THAT DOES bias the survey, because the survey sample is then no longer randomly selected.
To illustrate this, consider the following hypothetical survey.
Survey:
"Is murdering babies wrong"?
End Survey
Essentially everyone will respond with a strong yes.
By your logic, if I don't include a dissenting opinion, the poll is necessarily biased.
Of course that's not correct.
The purpose of a poll is to understand the opinions of a population by understanding the opinions of a randomly selected sample of the population. If the population has strong opinions on a given topic, the survey will return lopsided results. That does not make the survey biased.
If however you seek out people with opinions to the contrary for the sake of including unpopular opinions, THAT DOES bias the survey, because the survey sample is then no longer randomly selected.
I don't think you understand how diverse different schools of thought are in economics. To build on your example, it would be like asking "is abortion wrong?" to a group of religious fundamentalists. Ask a post-Keynesian what they think about price controls, or really, any school that's not a free market fundamentalist.
I don't think you understand how surveys work. The goal of a survey isn't to include everyone's opinion. The goal of a survey is to understand the overall opinion of the population. This is not difficult to understand, I feel like you're being deliberately obtuse to avoid having to admit you're wrong.
> Any kind of price control seems to make economists very upset, rent control being another example.
They're probably upset the same way that climate scientists get upset when people dispute climate change; that is, it's a widely-studied phenomenon by economists of all political persuasions with lots of evidence to back it up.
A price ceiling causes a shortage, like cars lining up at gas stations during the 70s oil crisis or the 10+ years of wait time in Stockholm apartments. A price floor causes a surplus, like unemployed workers at the minimum wage.
They're probably upset the same way that climate scientists get upset when people dispute climate change; that is, it's a widely-studied phenomenon by economists of all political persuasions with lots of evidence to back it up.
A price ceiling causes a shortage, like cars lining up at gas stations during the 70s oil crisis or the 10+ years of wait time in Stockholm apartments. A price floor causes a surplus, like unemployed workers at the minimum wage.
That is not a good comparison. Scientists that disagree with climate change are like a couple percent at max. Meanwhile nearly every economic topic, including price controls, would have double digits of economists disagreeing with it. Economics is not a hard science where you can take anything in absolutes.
Disagree. Climate science and economics are quite similar in this context, in that both an economy and a global environment are so massive and massively complex that neither can be isolated and studied in a controlled environment.
In such cases, when there does exist a consensus, it's probably correct.
In such cases, when there does exist a consensus, it's probably correct.
If you as an armchair expert disagree with a broad consensus of actual experts - i.e. people who study something as a lifetime pursuit, your first thought should be that your knowledge is lacking, not that they are wrong. And if you find yourself seriously believing that they are wrong without first understanding how they are wrong, then that should be a strong indicator that your thinking is clouded by bias.
That's not quite true. See for example the existence of the billions of $ of corporate agricultural subsidies, essentially creating an artificial price floor.
The primary reason price ceilings are criticized by "both sides" is because the shifting Overton window has resulted in both the Republican and Democratic parties having quite neoliberal views. In an international context the two sides of the aisle can be described as "right" and "far-right".
The primary reason price ceilings are criticized by "both sides" is because the shifting Overton window has resulted in both the Republican and Democratic parties having quite neoliberal views. In an international context the two sides of the aisle can be described as "right" and "far-right".
You won't find many economists arguing against farm subsidies, which are a form of price control. This is among the oldest practices of statecraft in history.
Seems to work well in the UK. Fees are set by the government and the government provides the loans. Private Uni's can set their own price but the government loan will only only fund about £6k (£3k less than the public Uni fee). Because of this, many private Uni's set their fees at £6k and then make their money on international students.
I don't think that's a fair take on the suggestion. What if it was something like Medicare where services were tax funded and costs are negotiated but fixed?
Paraphrasing the Onion -- "This policy doesn't work", agree politicians on both sides of the aisle in only country that has this problem.
That depends on what it means for this to be "working"
Easy fix - include education, health care, and housing costs into inflation indices.
They could easily limit the loan size...
Proper solution is government to stop guaranteeing the loans and to allow people to put them in bankruptcy.
Prices will collapse to what people are willing to pay in real time, or save up for.
Prices will collapse to what people are willing to pay in real time, or save up for.
That's how things used to be. It means that only rich people can go to college, because they are the only ones who can afford it. Prices can only come down so far. The college still has to pay professors and maintain facilities.
There needs to be a middle ground where we support poor but promising students in a way that doesn't inflate prices. I don't know what that solution is.
There needs to be a middle ground where we support poor but promising students in a way that doesn't inflate prices. I don't know what that solution is.
> It means that only rich people can go to college, because they are the only ones who can afford it.
I hear this a lot, but I don't understand the argument to be honest. If someone is poor today, then they can take an exorbitant amount of debt that they can't discharge in order to attend university.
In a world where loans are dischargeable in bankruptcy and the federal government limits subsidizes loans, we'd expect prices to fall somewhat and rates to rise somewhat. It seems like we would still expect the poor student to be able to take on a large amount of debt to attend university, though, no?
I hear this a lot, but I don't understand the argument to be honest. If someone is poor today, then they can take an exorbitant amount of debt that they can't discharge in order to attend university.
In a world where loans are dischargeable in bankruptcy and the federal government limits subsidizes loans, we'd expect prices to fall somewhat and rates to rise somewhat. It seems like we would still expect the poor student to be able to take on a large amount of debt to attend university, though, no?
The interest rates would be so high that it wouldn't make sense for a promising student to take that loan. If you're a loan company and someone comes to you asking for $100,000, and they have no credit and no family with assets, even with a 4.0 GPA and perfect SATs, they are still a huge risk.
This seems fine to me. If someone has no assets and no reasonable prospects to pay back $100,000 of debt, then saddling them with $100,000 of debt is a bad idea.
Additionally, discharging student loans in bankruptcy should absolutely not be a way to get off scot-free, it's meant as an escape valve. If your options are the terrible downsides of declaring bankruptcy and the terrible downsides of a life in extreme debt, neither option is great, but having the choice is useful.
Additionally, discharging student loans in bankruptcy should absolutely not be a way to get off scot-free, it's meant as an escape valve. If your options are the terrible downsides of declaring bankruptcy and the terrible downsides of a life in extreme debt, neither option is great, but having the choice is useful.
Right but see the problem is how does a really smart poor person get an education so they can become a really smart rich person?
They study in a field which has a high likelihood of loan repayment, or study at a less expensive school.
If a really smart poor person wants to become a really smart rich person by pursuing a degree in film studies, it's reasonable (in my opinion) for a bank to say "borrowers whose only education is a bachelors in film studies tend to have trouble paying back loans, so we won't lend you very much".
If that very smart poor person is pursuing a degree in accounting or engineering, though, most banks can do the actuarial work to determine that the likelihood of payment is pretty good.
This all seems totally fine and fair to me. And if the really smart person does have trouble paying back their loan, bankruptcy can be the absolute last option they resort to, just as it is with most other loans.
If a really smart poor person wants to become a really smart rich person by pursuing a degree in film studies, it's reasonable (in my opinion) for a bank to say "borrowers whose only education is a bachelors in film studies tend to have trouble paying back loans, so we won't lend you very much".
If that very smart poor person is pursuing a degree in accounting or engineering, though, most banks can do the actuarial work to determine that the likelihood of payment is pretty good.
This all seems totally fine and fair to me. And if the really smart person does have trouble paying back their loan, bankruptcy can be the absolute last option they resort to, just as it is with most other loans.
> They study in a field which has a high likelihood of loan repayment, or study at a less expensive school.
What you're saying here is that only rich people get to go for degrees which don't have a guaranteed return on investment. Is that the kind of society you want to live in? Where only the rich can study philosophy, or history?
Alternatively, university could be paid for like K-12 is and everyone could have a chance to go, or go into a trade school. You'll have a much more educated, diverse society and kids don't need to worry about bankruptcy and crushing loans.
What you're saying here is that only rich people get to go for degrees which don't have a guaranteed return on investment. Is that the kind of society you want to live in? Where only the rich can study philosophy, or history?
Alternatively, university could be paid for like K-12 is and everyone could have a chance to go, or go into a trade school. You'll have a much more educated, diverse society and kids don't need to worry about bankruptcy and crushing loans.
I'm not sure loan companies want to get into the business of rating specific programs at specific universities and their ability to produce students who can get good jobs.
And also if they did do that, we get back to other problem which is that schools will only offer programs that lead to high paychecks making them just job training and not places of overall learning.
And also if they did do that, we get back to other problem which is that schools will only offer programs that lead to high paychecks making them just job training and not places of overall learning.
Loan companies might not want to do that, but it's absolutely part of the due diligence they have to do. If I borrow a few hundred thousand for a home, the loan company does a deep dive to ensure that my home is a sensible buy (e.g. appraisal) and that I'm in a position to pay back the loan (e.g. credit check, historical performance). It's absolutely wild that we'd absolve loan companies from this due diligence for young adults with less credit history and no ability to default on the loans.
Also, you may be right that schools start to prioritize programs that allow borrowers to earn enough to repay their debt. Why is this a bad thing? I would absolutely argue that a poor student would be better off being unable to obtain loans for a degree with poor returns then they would be taking on mountains of debt that they can never discharge.
For the rich, those talented enough to earn scholarships, and those willing to accommodate loan companies' stringent conditions on risky borrowing, degrees with poor monetary returns will absolutely stick around as they always have.
Also, you may be right that schools start to prioritize programs that allow borrowers to earn enough to repay their debt. Why is this a bad thing? I would absolutely argue that a poor student would be better off being unable to obtain loans for a degree with poor returns then they would be taking on mountains of debt that they can never discharge.
For the rich, those talented enough to earn scholarships, and those willing to accommodate loan companies' stringent conditions on risky borrowing, degrees with poor monetary returns will absolutely stick around as they always have.
> It's absolutely wild that we'd absolve loan companies from this due diligence for young adults with less credit history and no ability to default on the loans.
We haven't absolved them per se. At first they tried to get the data and make smart decisions, but there just wasn't enough data for them to make good decisions, so they denied everyone. That's why the government got into the business of backing the loans in the first place -- it was the only way to get the loan companies to make the loans.
> For the rich, those talented enough to earn scholarships, and those willing to accommodate loan companies' stringent conditions on risky borrowing, degrees with poor monetary returns will absolutely stick around as they always have.
There wouldn't be enough students to support that, because amongst those people, many would still choose the lucrative majors.
> Also, you may be right that schools start to prioritize programs that allow borrowers to earn enough to repay their debt. Why is this a bad thing?
Now we have a philosophical debate. Do we want to live in a society where no one studies philosophy, poetry, art, music, creative writing, and so on? Ironically, someone who studied philosophy would probably be more suited to answering this question than I am.
We haven't absolved them per se. At first they tried to get the data and make smart decisions, but there just wasn't enough data for them to make good decisions, so they denied everyone. That's why the government got into the business of backing the loans in the first place -- it was the only way to get the loan companies to make the loans.
> For the rich, those talented enough to earn scholarships, and those willing to accommodate loan companies' stringent conditions on risky borrowing, degrees with poor monetary returns will absolutely stick around as they always have.
There wouldn't be enough students to support that, because amongst those people, many would still choose the lucrative majors.
> Also, you may be right that schools start to prioritize programs that allow borrowers to earn enough to repay their debt. Why is this a bad thing?
Now we have a philosophical debate. Do we want to live in a society where no one studies philosophy, poetry, art, music, creative writing, and so on? Ironically, someone who studied philosophy would probably be more suited to answering this question than I am.
“Hi bank. I want to open a coffee bar in Antarctica.”
After Rounds of laughter. “If I failed to pay, the government will pay you back.”
Bank. “Here’s 10 million dollars. Let us know if you’d like more. “
Banks and other lenders do basic sue diligence all the time. It’s government that screws this up.
After Rounds of laughter. “If I failed to pay, the government will pay you back.”
Bank. “Here’s 10 million dollars. Let us know if you’d like more. “
Banks and other lenders do basic sue diligence all the time. It’s government that screws this up.
Why wouldn't it be the first resort? I have a degree in hand, increasing my earning potential by, say, $50k a year. I also have 100k in student debt, and approximately zero assets to my name. Why wouldn't I declare bankruptcy the day my diploma arrives in the mail? It's not like they can repossess my knowledge.
The same reason you don't go on a drunken gambling traveling adventure on the multitude of credit cards you can get at 25 and then just declare bankruptcy, because now you are going to have a bankruptcy status over your head for the next 7 years and you won't be able to buy a house or get decent rent or get a car loan or even be able to sign up for a cell phone without fronting them the entire cost in cash ahead of time.
Well, as a start states can start refunding their colleges and universities, to levels that used to be common [until roughly the 90s].
After that, it becomes more prescriptive around roles of operation, and that's murkier. For example, I'd be happy to see hard caps on $ of operational budget spent on admin. I'd also be happy if sports was budgeted for separately and that student athletes were separately admitted to both their sport(s) and for academic study. There are many things states could do that would impact how schools are managed, regardless of the federal government's rules for student loan lending.
After that, it becomes more prescriptive around roles of operation, and that's murkier. For example, I'd be happy to see hard caps on $ of operational budget spent on admin. I'd also be happy if sports was budgeted for separately and that student athletes were separately admitted to both their sport(s) and for academic study. There are many things states could do that would impact how schools are managed, regardless of the federal government's rules for student loan lending.
Now that we have a student loan system, I'm sure that the students who are good bets will continue to have access to credit. You would be insane to not give a student loan to an MIT CS student, for example.
Also, prices should fall a lot, making school a lot more affordable.
Also, prices should fall a lot, making school a lot more affordable.
A good first start would be to ban college sports as a commercial endeavor
Not sure how this helps? In most schools the sports programs subsidize attendance for a lot of kids, and proportionally more underprivileged kids.
Right, let the market decide interest rate charged for them based on risk of default. this will also quickly filter out pointless degrees without much carrier prospect because interest rate would be high. right now basically govt has created a fully protected predatory loan that can follow you to your grave. IDK why is this so hard to understand.
> Proper solution is government to stop guaranteeing the loans and to allow people to put them in bankruptcy.
Proper thing is for the government to stop issuing the loans, and instead do need-based grants plus establish cost and quality controls for institutions that wish to be grant eligible, while prioritizing federal institutional funding other than direct student aid for institutions that, whether througj grant eligibility or their own pricing and in-house aid programs, or both, meet set financial accessibility standards.
Proper thing is for the government to stop issuing the loans, and instead do need-based grants plus establish cost and quality controls for institutions that wish to be grant eligible, while prioritizing federal institutional funding other than direct student aid for institutions that, whether througj grant eligibility or their own pricing and in-house aid programs, or both, meet set financial accessibility standards.
The government cannot and will not do that, because such a policy would have racially disparate impacts.
The government actually can do, and often does, policy with racially disparate impacts. Disparate impact is not a Constitutional limit on government discrimination, its a judicially-created rule in the application of certain statutory anti-discrimination laws.
(And the disparate impact rule is politically and legally unpopular with the same faction that currently dominates the Supreme Court and whose members on the Court have shown an unusual willingness to discard precedent, so its quite likely it won’t be a limit on discriminatiom under those statutes much longer, either.)
(And the disparate impact rule is politically and legally unpopular with the same faction that currently dominates the Supreme Court and whose members on the Court have shown an unusual willingness to discard precedent, so its quite likely it won’t be a limit on discriminatiom under those statutes much longer, either.)
The disparate impact rule is challenging to begin with because literally every policy has a disparate impact, because there is and always will be an uneven distribution of people of whatever cultural or ethnic subgroup they can be divided into in whatever social roles that exist. It should rightly be rid of. There are many other better ways to address discrimination.
> The disparate impact rule is challenging to begin with because literally every policy has a disparate impact
“Disparate impact” prohibited by the rule isn't just unequal impact, its unequal impact without sufficient justification (what qualifies for that differs between the employment and housing contexts where the rule is applied.)
“Disparate impact” prohibited by the rule isn't just unequal impact, its unequal impact without sufficient justification (what qualifies for that differs between the employment and housing contexts where the rule is applied.)
I didn’t say it’s a constitutional issue. It’s a political non-starter.
> I didn’t say it’s a constitutional issue. It’s a political non-starter
And I said your argument for that is nonsense, since the government does lots that has racially disparate impacts.
And I said your argument for that is nonsense, since the government does lots that has racially disparate impacts.
There are many things that the government doesn't guarantee loans for. Why is not-guaranteeing for higher education more of a racially disparate action than not-guaranteeing for e.g. vehicle loans?
Govt can totally do that. but you are right in that only congress can do that via legislation. every policy that effects poor has racially disparate impact so that argument can rally be applied anywhere.
Also helps to drop standards like SAT/ACT. If you don't need grades or money to get into school, well, that includes just about everyone.
Purely out of interest: what do they do with all that money? Does it increase the quality of education and/or research?
Administration.
There’s a growth in admin [0] that I think is the proliferation of the most bullshit of bullshit jobs. It’s weird that I think the issue is much worse by basically funding all these admin positions that pay more than actual instructors and researchers yet I’m not sure what they really do.
I’d like to see universities advertise low admin:student and admin:instructor as measured of quality.
[0] https://yaledailynews.com/blog/2021/11/10/reluctance-on-the-...
There’s a growth in admin [0] that I think is the proliferation of the most bullshit of bullshit jobs. It’s weird that I think the issue is much worse by basically funding all these admin positions that pay more than actual instructors and researchers yet I’m not sure what they really do.
I’d like to see universities advertise low admin:student and admin:instructor as measured of quality.
[0] https://yaledailynews.com/blog/2021/11/10/reluctance-on-the-...
Yale is not a representative college. It makes 4x the income from its endowment than from tuition, room, and board. It also has multiple research labs and a hospital. They don't break down the staff (admin) by department, but 2/3 of all faculty are in the school of Medicine, most on the clinical side. I would assume most of the staff (admin) are also working at the hospital.
https://oir.yale.edu/data-browser/faculty-staff/faculty/facu...
Universities are not just educational institutions. You can't just compare students numbers to employee numbers without also examining what the university does.
https://oir.yale.edu/data-browser/faculty-staff/faculty/facu...
Universities are not just educational institutions. You can't just compare students numbers to employee numbers without also examining what the university does.
Of course Yale isn’t representative, it’s just one data point in a national trend.
I don’t understand your point.
Do you dispute that admin staff have grown at a high rate?
My point is that universities have too much admin and that it’s growth quickly. I think it’s perfectly reasonable to compare this trend without knowing exactly what specific universities do.
I agree that comparing medical system admin staff wouldn’t make sense, and the article I linked excludes medical system and other non-university staff.
I don’t understand your point.
Do you dispute that admin staff have grown at a high rate?
My point is that universities have too much admin and that it’s growth quickly. I think it’s perfectly reasonable to compare this trend without knowing exactly what specific universities do.
I agree that comparing medical system admin staff wouldn’t make sense, and the article I linked excludes medical system and other non-university staff.
My point is that Universities don't just teach. They also perform research, which requires staff. Yale is researched focused and has more grad students than undergrads. Grad students and research faculty require more administrative staff than undergrads. An increase in admin staff could be caused by a shift to more research rather than bloat in undergrad.
For example, a teaching university like Central Washington University has 500 faculty, 500 admin, 11.4k undergrads, and 900 post-grads. They do research at CWU, but their primary focus is teaching.
https://en.wikipedia.org/wiki/Central_Washington_University
In comparison, UTHealth Houston is a medical university and has 2.1k faculty, 5.3k admin, and 5.2k students. UTHealth requires far more staff than CWU because it has a different focus.
https://en.wikipedia.org/wiki/University_of_Texas_Health_Sci...
Finally, Stanford is a mix of the two and has 2.3k faculty, 15.3k admin!, and 17.2k students. (Stanford includes the clinic staff in their numbers. I think that clinical staff is split between Yale proper and the New Haven hospital.)
https://facts.stanford.edu/wp-content/uploads/sites/20/2021/...
---
This brings me back to Yale. From the article:
> In 2003: 5,307 undergraduate students ... 3,500 administrators and managers. In 2019, before the COVID-19 pandemic’s effects on student enrollment, only 600 more students were living and studying at Yale, yet the number of administrators had risen by more than 1,500 — a nearly 45 percent hike.
So the first issue is with the student number. Yale had 12,438 students in 2019, an increase of 1278. This isn't a huge issue because the % increase is the same, but leaving out grad students is a huge oversight.
> 2003-p19(21) 11,160 students; 5,307 undergraduate, and 5,853 ... Graduate [students]
https://your.yale.edu/sites/default/files/2002-2003_annual_f...
> 2019-p7(9) 5,964 undergraduate students ... 3,032 Graduate [students] ... 3,442 [professional] students
https://your.yale.edu/sites/default/files/annual-report-2018...
Secondly, the admin:faculty ratio has decreased. Yale expanded their faculty from 3.2k to 4.9k, which is +1.7k (+53%). This tells me that Yale increased their research focus and are not (necessarily) bloating their undergrad program.
> 2003-p22(24) The University employs approximately 3,200 faculty, 3,500 managerial and professional staff, and 4,000 unionized clerical, technical, service, and maintenance personnel.
https://your.yale.edu/sites/default/files/2002-2003_annual_f...
> 2021-p13(15) With 4,937 faculty, 1,428 postdoctoral associates, 5,066 managerial and professional staff, and 5,205 clerical, technical, service, and maintenance personnel
https://your.yale.edu/sites/default/files/2020-2021-yale-uni...
For example, a teaching university like Central Washington University has 500 faculty, 500 admin, 11.4k undergrads, and 900 post-grads. They do research at CWU, but their primary focus is teaching.
https://en.wikipedia.org/wiki/Central_Washington_University
In comparison, UTHealth Houston is a medical university and has 2.1k faculty, 5.3k admin, and 5.2k students. UTHealth requires far more staff than CWU because it has a different focus.
https://en.wikipedia.org/wiki/University_of_Texas_Health_Sci...
Finally, Stanford is a mix of the two and has 2.3k faculty, 15.3k admin!, and 17.2k students. (Stanford includes the clinic staff in their numbers. I think that clinical staff is split between Yale proper and the New Haven hospital.)
https://facts.stanford.edu/wp-content/uploads/sites/20/2021/...
---
This brings me back to Yale. From the article:
> In 2003: 5,307 undergraduate students ... 3,500 administrators and managers. In 2019, before the COVID-19 pandemic’s effects on student enrollment, only 600 more students were living and studying at Yale, yet the number of administrators had risen by more than 1,500 — a nearly 45 percent hike.
So the first issue is with the student number. Yale had 12,438 students in 2019, an increase of 1278. This isn't a huge issue because the % increase is the same, but leaving out grad students is a huge oversight.
> 2003-p19(21) 11,160 students; 5,307 undergraduate, and 5,853 ... Graduate [students]
https://your.yale.edu/sites/default/files/2002-2003_annual_f...
> 2019-p7(9) 5,964 undergraduate students ... 3,032 Graduate [students] ... 3,442 [professional] students
https://your.yale.edu/sites/default/files/annual-report-2018...
Secondly, the admin:faculty ratio has decreased. Yale expanded their faculty from 3.2k to 4.9k, which is +1.7k (+53%). This tells me that Yale increased their research focus and are not (necessarily) bloating their undergrad program.
> 2003-p22(24) The University employs approximately 3,200 faculty, 3,500 managerial and professional staff, and 4,000 unionized clerical, technical, service, and maintenance personnel.
https://your.yale.edu/sites/default/files/2002-2003_annual_f...
> 2021-p13(15) With 4,937 faculty, 1,428 postdoctoral associates, 5,066 managerial and professional staff, and 5,205 clerical, technical, service, and maintenance personnel
https://your.yale.edu/sites/default/files/2020-2021-yale-uni...
Research is done by professors and students, not admins.
The overall average trend in the US is for administration costs to increase and instruction costs, relative to admin, to decrease [0]. Some universities will vary, but the trend is important to look at overall.
The overall average trend in the US is for administration costs to increase and instruction costs, relative to admin, to decrease [0]. Some universities will vary, but the trend is important to look at overall.
My point is that the article you linked to is not a data point supporting your assertion that tuition cost increases are caused by more admins.
A) Yale is a research-heavy university so the admin:student ratio shouldn't be expected to be constant. B) Yale's admin:faculty ratio decreased from 2003-2021, directly contradicting your claimed trend.
A) Yale is a research-heavy university so the admin:student ratio shouldn't be expected to be constant. B) Yale's admin:faculty ratio decreased from 2003-2021, directly contradicting your claimed trend.
A lot of the increase was driven by the "arms race" to attract the best students by building ever more facilities to make their ever glossier brochures more attractive. My school when I was leaving in the early 2000s was on a $200 million dollar building spending spree- a new library, a new sciences building, etc. I don't have a citation for this, but I had read somewhere awhile back that the administrative ranks have swelled at these schools and they are making tons more money than they used to in the past as well.
And I assume there is nothing preventing this student-loan backed tuition money from funding university endowments.
So the easier solution then since the government is effectively already paying for anyone who doesn't pay back their loan (a dead person for example) then is to just pay for everyone's college education (Public Universities).
I've been saying this for a while and no one has ever agreed. They are always like you think they are that greedy. YES I DO. It's not complicated.
If one can get bailed out, one can do what ever they want.
You're missing another driver of the growth in tuition though: many colleges are only superficially "not for profit" and in reality are being run as profit maximizing institutions.
I hope to see the day where interest bearing loans are recognized by the rest of the world as the evil they are. Muslims and Jews know this fact quite well.
Abrahamic religions in general - Jesus was also not a fan.
>Jesus went into the temple courtyard and threw out everyone who was buying and selling there. He overturned the moneychangers’ tables and the chairs of those who sold pigeons. He told them, “Scripture says, ‘My house will be called a house of prayer,’ but you’re turning it into a gathering place for thieves!”
- Matthew 21:12-13
>If you lend money to my people—to any poor person among you—never act like a moneylender. Charge no interest.
- Exodus 22:25
KJV used the word "usurer", but it's the same idea.
>Jesus went into the temple courtyard and threw out everyone who was buying and selling there. He overturned the moneychangers’ tables and the chairs of those who sold pigeons. He told them, “Scripture says, ‘My house will be called a house of prayer,’ but you’re turning it into a gathering place for thieves!”
- Matthew 21:12-13
>If you lend money to my people—to any poor person among you—never act like a moneylender. Charge no interest.
- Exodus 22:25
KJV used the word "usurer", but it's the same idea.
Serious question: what would incentive anyone to lend to people who have any risk at all (i.e. everyone)?
The same incentive you'd have to do something for someone without receiving payment - a desire to help. I'd imagine the fact that people in that time had stronger familial ties to others in their village also helped increase payback rates.
And both religious created a way to indirectly pay interest by turning it into a business partnership.
i.e. when you are helping someone (a friend, relative) you don't pay interest. But when it's a business loaning the money that desire to help doesn't exist, and it becomes a business partnership instead.
https://en.wikipedia.org/wiki/Loans_and_interest_in_Judaism specifically: "Heter iska". And https://en.wikipedia.org/wiki/Murabaha for Muslims (I think there are other forms as well). A copy of a Heter Iska: http://www.jlaw.com/Forms/iska_d.html
i.e. when you are helping someone (a friend, relative) you don't pay interest. But when it's a business loaning the money that desire to help doesn't exist, and it becomes a business partnership instead.
https://en.wikipedia.org/wiki/Loans_and_interest_in_Judaism specifically: "Heter iska". And https://en.wikipedia.org/wiki/Murabaha for Muslims (I think there are other forms as well). A copy of a Heter Iska: http://www.jlaw.com/Forms/iska_d.html
You're supposed to use Mudarabah[0] preferentially, which is dramatically less of a lazy hack around usury rules than Murabaha. (Also as a English speaker, those words are very hard to distinguish.)
[0] https://en.wikipedia.org/wiki/Profit_and_loss_sharing
[0] https://en.wikipedia.org/wiki/Profit_and_loss_sharing
Assuming such a rule would mean "all mandatory fees are prohibited" and that we're talking about profit driven ventures (not cooperatives or patrons that might have other reasons to want to lend money than monetary profits), you can be creative and charge money in ways that technically doesn't count as interest.
The Medici bank gained lots of their money from foreign exchange speculation issuing a sort of option for buying foreign currencies at a specific date (this would probably be a lot harder to do today), you could also charge late fees with the social understanding that paying a loan back on time is really bad for your credit score. I guess a modern conglomerate might make money by putting certain terms in effect: You want to build a house but need some money to do so? I will lend you the money if you contract my contractors to build your house. A university could lend you the money but keep charging extortionate tuitions as long as the cost for the education service is unregulated.
The Medici bank gained lots of their money from foreign exchange speculation issuing a sort of option for buying foreign currencies at a specific date (this would probably be a lot harder to do today), you could also charge late fees with the social understanding that paying a loan back on time is really bad for your credit score. I guess a modern conglomerate might make money by putting certain terms in effect: You want to build a house but need some money to do so? I will lend you the money if you contract my contractors to build your house. A university could lend you the money but keep charging extortionate tuitions as long as the cost for the education service is unregulated.
One of the major dangers with interest is it compounds in bad times. Someone gets laid off for 6 months and suddenly owes more money, this is especially problematic if someone gets injured and can no longer make the same income etc.
Fees are one option. If you agree to a 2 year loan of 100$ as long as they pay you back 110$ that’s acceptable, the difference being if it takes them 3 years you still only get 110$. Obviously this runs into problems with inflation and people skipping payments etc, but it’s one socially “fair” way to handle loans between friends and family.
Fees are one option. If you agree to a 2 year loan of 100$ as long as they pay you back 110$ that’s acceptable, the difference being if it takes them 3 years you still only get 110$. Obviously this runs into problems with inflation and people skipping payments etc, but it’s one socially “fair” way to handle loans between friends and family.
Well if you're a credit union that operates in Shithole Town, USA... then in theory if you lend money to people who improve the community, you'll reap the benefits everyone else does by living in a more desirable place (more valuable property, more customers for businesses, etc).
Almost impossible to imagine given the current state of the economy where every possible thing you can imagine has been commodified.
Almost impossible to imagine given the current state of the economy where every possible thing you can imagine has been commodified.
The fact that default risk and time value of money exist are immutable, irrespective of whether you think that's evil. Modern Islamic banks in Sharia jurisdictions still recoup that risk and time value through various means, irrespective of whether you call that interest. (Some forms of "Islamic mortgages" charge you "rent" based on LIBOR/SOFR, which is just interest with extra steps.)
This seems good in theory but hard in reality. The modern economy is built on debt being used for new investments. The problem is high interest rates, not interest rates in general.
Something never asked is whether what the modern economy is built on makes sense for longer than a couple hundred years. It seems premature to assume that the modern economy is sustainable ad infinitum.
Debt is being used for new investment? That can’t be right - it’s gotta be some form of credit, right? Maybe I’m mistaken.
Of course, it’s credit. The word “new” is redundant.
Christianity also used to have many restrictions on charging interest, but that got lost somewhere around the 19th century.
It is where the whole "Jews are greedy bankers" stereotype comes from: during the Middle Ages Jews were allowed to charge interest to non-Jews, so they were essentially the only people who could act as bankers for Christians. Combine that with a large dose of racism keeping them out of a lot of other jobs, and you end up with a lot of Jewish bankers.
It is where the whole "Jews are greedy bankers" stereotype comes from: during the Middle Ages Jews were allowed to charge interest to non-Jews, so they were essentially the only people who could act as bankers for Christians. Combine that with a large dose of racism keeping them out of a lot of other jobs, and you end up with a lot of Jewish bankers.
Another problem with student loans is that they are frequently issued for way more than bare minimum required to pay tuition and study materials. This extra amount just exacerbates the problem and gives universities room to get to that money via tuition increases. Students may legitimately use that extra cash for living expenses, but most of the time it is just fun money expense.
> Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan
This is the exact problem. Whoever makes the loan has an incentive for eternally increasing prices.
This is the exact problem. Whoever makes the loan has an incentive for eternally increasing prices.
false narrative, two counter points:
1. State govs have reduced funds to all public colleges. 2. Fed gov has refused to increase grants such as Pell on inflation basis.
And that is way before the other forces of price increases and demand increases.
1. State govs have reduced funds to all public colleges. 2. Fed gov has refused to increase grants such as Pell on inflation basis.
And that is way before the other forces of price increases and demand increases.
You're right that state govs have definitely reduced funding in many places for public colleges. And although this started decades ago in some cases, it is significantly exacerbated by the size of loans that students can easily access (due directly to federal backing of such loans). Therefore, states can reduce spending on colleges with the knowledge that the colleges can easily increase tuition to make up the difference.
It is free money for lenders because backed by the Govt AND protected against bankruptcy. It is Free money for colleges because they know they will get paid regardless.
Remove this "free money guarantee" and watch how market corrects itself. When students can file for bankruptcy and/or the debt is not guaranteed by Govt, lenders would now use the same criteria they use to issue credit cards to 18 year olds. Hint: It's tough to get your 1st credit card if you have no credit history in the US and most lenders will not even entertain that idea. Some will do if you put in a collateral like $500 of actual cash deposit to guard against the default risk.
When lenders stop lending or get strict, colleges will have to consider how quickly and by how much they keep raising costs.
Remove this "free money guarantee" and watch how market corrects itself. When students can file for bankruptcy and/or the debt is not guaranteed by Govt, lenders would now use the same criteria they use to issue credit cards to 18 year olds. Hint: It's tough to get your 1st credit card if you have no credit history in the US and most lenders will not even entertain that idea. Some will do if you put in a collateral like $500 of actual cash deposit to guard against the default risk.
When lenders stop lending or get strict, colleges will have to consider how quickly and by how much they keep raising costs.
> Hint: It's tough to get your 1st credit card if you have no credit history in the US and most lenders will not even entertain that idea. Some will do if you put in a collateral like $500 of actual cash deposit to guard against the default risk.
Is that true these days? At my university 20 years ago, the credit card companies would bribe 18-year-old freshmen to sign up for their cards.
Is that true these days? At my university 20 years ago, the credit card companies would bribe 18-year-old freshmen to sign up for their cards.
Same here. 25 years ago I got a $500 AMEX card and a bag of M&Ms. A $1,000 Citi card and a T-shirt. And another card—Discover, $2,000!—along with a free CD I think?
The conventional wisdom at the time was that (a) we were college students and were therefore more likely to have earnings in the near future to cover those small credit limits, and (b) we were college students and were therefore more likely to have parents to bail us out if we got in trouble with the credit card, and (c) there's no better time to snag a lifetime customer than at the very beginning of their adult lives.
The conventional wisdom at the time was that (a) we were college students and were therefore more likely to have earnings in the near future to cover those small credit limits, and (b) we were college students and were therefore more likely to have parents to bail us out if we got in trouble with the credit card, and (c) there's no better time to snag a lifetime customer than at the very beginning of their adult lives.
There is also a massive difference between a $500 credit limit of hypothetical spending for a credit card and actually giving out $100,000 in an unsecured loan. At the worst case scenario, your credit card loss will probably on average be $50 per customer if not much less, but for unsecured student loans it will be much higher, which will require higher interest rates that further increase defaults.
The reason student loans aren’t dischargeable in bankruptcy is because it’s basically literally impossible to collect on them, you can’t repo a college education
The reason student loans aren’t dischargeable in bankruptcy is because it’s basically literally impossible to collect on them, you can’t repo a college education
> The reason student loans aren’t dischargeable in bankruptcy is because it’s basically literally impossible to collect on them, you can’t repo a college education
You can revoke the degree. Given that most people out of school don’t remember most of school anyways this should be enough for most.
You can revoke the degree. Given that most people out of school don’t remember most of school anyways this should be enough for most.
It’s not like employers would suddenly say, “oh, your degree was revoked? I guess that knowledge you acquired is gone and we can’t hire you.”
I mean some would. Usually the jobs where people care about having a degree would. Like research. The rest of us, sure. But then again, that means you waisted money.
I got a Discover and a Citi Mastercard.
The students working in the mail-room of my dorm were ... less than meticulous about sorting. My bills occasionally went to the wrong box, leaving insufficient time for me feel safe that my payment would arrive on time. When this happened with Discover, I just called customer service and they said they'd waive the late-fee since I called in advance. It happened once with Citi, I called and they said I would have to do an electronic payment with a $10 service charge. paid the bill and immediately canceled the Citi card.
Guess which (of Discover and Citi) I'm a lifetime customer of, and which one I will never sign up for again.
P.S.
After re-reading the above, it strikes me how much of a "period piece" the comment is. The bill arrived in the mail, I had to mail in payment, and I spoke with a person on the phone when I called the credit card company.
The students working in the mail-room of my dorm were ... less than meticulous about sorting. My bills occasionally went to the wrong box, leaving insufficient time for me feel safe that my payment would arrive on time. When this happened with Discover, I just called customer service and they said they'd waive the late-fee since I called in advance. It happened once with Citi, I called and they said I would have to do an electronic payment with a $10 service charge. paid the bill and immediately canceled the Citi card.
Guess which (of Discover and Citi) I'm a lifetime customer of, and which one I will never sign up for again.
P.S.
After re-reading the above, it strikes me how much of a "period piece" the comment is. The bill arrived in the mail, I had to mail in payment, and I spoke with a person on the phone when I called the credit card company.
> ... it strikes me how much of a "period piece" the comment is...
Ha. I mean, I got a free CD, which itself dates the story. But even more old-timey? That Citi card I referenced above was actually an AT&T Universal Card. The "Universal" was because it was also a calling card! On the back was a separate number I could use to place calls from a payphone, at cheaper rates than dropping coins into it.
It's been many years since the card had that feature, but the branding relationship must be strong, because it's still called that, and my card still sports an AT&T logo on the front.
Ha. I mean, I got a free CD, which itself dates the story. But even more old-timey? That Citi card I referenced above was actually an AT&T Universal Card. The "Universal" was because it was also a calling card! On the back was a separate number I could use to place calls from a payphone, at cheaper rates than dropping coins into it.
It's been many years since the card had that feature, but the branding relationship must be strong, because it's still called that, and my card still sports an AT&T logo on the front.
I was able to get a credit card with a relatively low limit ($1200) as my first one, partly because I had a higher than average income during school as a private tutor. Many people do get secured cards if they are on a low income though.
That was a “student card,” so optimized for people who don’t have a credit history. After having that for a while I was able to leverage it into standard rewards cards.
That was a “student card,” so optimized for people who don’t have a credit history. After having that for a while I was able to leverage it into standard rewards cards.
I had an unsecured student credit card, 20 years now. Its limit was $800, no deposit required; just enough to pay for books, lab supplies, and a few meals. I know because I kept it as my last resort emergency card all these years later. Or use it on sketchy kiosk/online shopping sites. Every few years BoA asks me to increase the limit, which I decline to do.
I'm still FB friends with the girl that gave me a free t-shirt for signing up. LOL.
I'm still FB friends with the girl that gave me a free t-shirt for signing up. LOL.
Off topic: 20 years ago, FB didn't exist.
All my FB friends are friends I've made through physical contact. Most of us have been separated through location, time and obligations. Even though we haven't seen each other in over a decade we're still FB friends.
I had 0 credit history in 2016. Didn't have student loans and had avoided credit cards. Absolutely screwed me when I needed an Auto loan for a used car that I was willing to pay a heaft chunk up front. Couldn't get credit cards either, only one that would offer me one was a $100 secured card from Discover. Took me a year and luck that a loan agent at a credit union took pity on me before I could get that auto loan.
I got my first credit card when I was twelve years old. This was back in the year 2000. It had something like a $10,000 credit limit.
My parents didn’t co-sign, though I did use their incomes for the “household income,” which I don’t believe was a lie.
My parents didn’t co-sign, though I did use their incomes for the “household income,” which I don’t believe was a lie.
My first credit card was a $200 secured card. They offered me a real card after about 6 months of usage.
This was about 5 years ago.
This was about 5 years ago.
This isn't going to happen because the whole point of the current government back student loan program is to give kids from not-ideal backgrounds access to credit, and hence access to the full range of schools available.
Crazy idea, but how about the gov just gives kids from not-ideal backgrounds access to grants and scholarships, rather than credit.
They do though. I was a Pell Grant recipient. All I did was fill out the FAFSA and the grant was automatically applied. That got me through community college debt free.
When I transferred to a 4-year, I once again filled out the FAFSA and was eligible for an interest-free loan which covered the difference between tuition and my Pell Grant.
When I transferred to a 4-year, I once again filled out the FAFSA and was eligible for an interest-free loan which covered the difference between tuition and my Pell Grant.
Pell grants are tiny though.
Really, the current grant system doesn't work.
We should tell the universities they must provide needs-based grants on their own and prohibit using ability to pay during admissions - or they don't receive federal grants. This way they aren't incentivized to continue to bloat costs (as happens now), since now the school is responsible for the costs.
Really, the current grant system doesn't work.
We should tell the universities they must provide needs-based grants on their own and prohibit using ability to pay during admissions - or they don't receive federal grants. This way they aren't incentivized to continue to bloat costs (as happens now), since now the school is responsible for the costs.
The tuition for my university (state school) is about $7,000 per year which is coincidentally close to the maximum you can receive through the pell grant.
What university? In PA, Penn State's in state tuition and fees come to almost 20k and out of state is almost twice that: https://admissions.psu.edu/costs-aid/tuition/
Well rarely do you see someone on a Pell grant moving states to go to school, cause now room and board and food come into play.
There’s at least one site showing (oddly enough) private schools with lower tuition than Penn State as well as some non-private [1], but you’re still over the max of a Pell grant
1: https://www.bestvalueschools.org/cheapest-colleges-in-pennsy...
There’s at least one site showing (oddly enough) private schools with lower tuition than Penn State as well as some non-private [1], but you’re still over the max of a Pell grant
1: https://www.bestvalueschools.org/cheapest-colleges-in-pennsy...
> Pell grants are tiny though.
No, tuition rates at some schools are absurd. Max Pell Grant is enough to cover tuition at the three universities closest to me.
No, tuition rates at some schools are absurd. Max Pell Grant is enough to cover tuition at the three universities closest to me.
Tuition rates are much higher near me and the other states I've lived in. PA and CA... and I went to a private university. Silly me.
I'm wondering when and where you went to college and what other circumstances affected the size of your Pell grant.
I went to community college in 2009. I filed my FAFSA and if I recall correctly, my Pell grant was $300/term. Meanwhile, tuition was $115/credit. My full-time class load was nearly $2,000/term once you included the books.
When I transferred to the state University, tuition was double that and my Pell barely changed.
I was 27 years old when I started college, working at a Subway restaurant for $10/hr, had no savings, and parents that did not give me a dime after I moved out at 21.
I finished my degree with $45K in debt.
I went to community college in 2009. I filed my FAFSA and if I recall correctly, my Pell grant was $300/term. Meanwhile, tuition was $115/credit. My full-time class load was nearly $2,000/term once you included the books.
When I transferred to the state University, tuition was double that and my Pell barely changed.
I was 27 years old when I started college, working at a Subway restaurant for $10/hr, had no savings, and parents that did not give me a dime after I moved out at 21.
I finished my degree with $45K in debt.
My Pell grant was around $1200/term. It was enough to cover tuition, supplies and still have enough for a refund at the end of the term of about $200.
The amount you get is based on your financial need amongst other things, so likely your parent could afford some amount of tuition from the govs perspective.
Max for a Pell grant is about $7k/yr atm
The amount you get is based on your financial need amongst other things, so likely your parent could afford some amount of tuition from the govs perspective.
Max for a Pell grant is about $7k/yr atm
> so likely your parent could afford some amount of tuition from the govs perspective.
Oh, they absolutely could have, but they didn't. Pretty sure the FAFSA even had a line about money coming from others, and I put $0.
And so I get a little salty when my peers talk about being short on money because they're paying for their kids' college.
Whatever, though. I'm making good money now, and I can accurately say that I'm a self-made man.
Oh, they absolutely could have, but they didn't. Pretty sure the FAFSA even had a line about money coming from others, and I put $0.
And so I get a little salty when my peers talk about being short on money because they're paying for their kids' college.
Whatever, though. I'm making good money now, and I can accurately say that I'm a self-made man.
Another crazy thought than. How about government simply pays for education. Sort of like universal income, but with education. No grants, no loans, just free education.
Then how do you decide who gets a bachelors, masters or PhD? What if I want to have a PhD in computer science but work a normal job? Will the gov pay for it or force me into research? What if I want to be an MD? Will the government pay for that MD while denying others that want a PhD? What happens when someone fails out of school? How do you avoid people using school to avoid the selective service?
It doesn’t work like that. Lots of countries have free education, some even pay students in higher educations stipends (and some make you pay it back if you drop out without a degree, for better or for worse). Students are free to pursue whichever degree they want, and leave academia for whichever job they can get whenever they want.
Think about free education like you think about universal income, except free education is not an experiment with limited data to back up it’s value, but rather a tried and trusted policy with ample data to back up it’s success.
Think about free education like you think about universal income, except free education is not an experiment with limited data to back up it’s value, but rather a tried and trusted policy with ample data to back up it’s success.
Yea I don’t want to pay taxes for someone pursuing something worthless. You missed the point.
You probably already do. If you are American, you probably paid much more taxes to pursue a worthless invasion into Iraq and Afghanistan. If you live in a capitalist country, you are probably paying taxes to pursue worthless bailouts of corporations, or whatever infrastructure these corporations want the state to pay for them.
It is also a bit unfortunate that you view education that doesn’t lead directly to a career to be “worthless”. You learn a lot of skills when you get university education, including but not limited to knowledge about the field at hand. If you get education in one field and then go into industry in another area, you will take those skills with you, and the industry at whole will benefit from having a wider skillset among its workers.
It is also a bit unfortunate that you view education that doesn’t lead directly to a career to be “worthless”. You learn a lot of skills when you get university education, including but not limited to knowledge about the field at hand. If you get education in one field and then go into industry in another area, you will take those skills with you, and the industry at whole will benefit from having a wider skillset among its workers.
I agree with all of those, but not paying for a degree in underwater basket weaving. Sorry.
Your counterpoint is made up. I’m not aware of any universities—neither free nor paid for—which offer a degree in underwater basket weaving. I assume you are creating a scarecrow to make your argument against free education more convincing. I’m not gonna grant you this, and instead—in the spirit of HN—assume you meant normal basket weaving, and respond to the strongest plausible interpretation .
For sure there are crafts programs and vocational schools which teach basket weaving, surely you must see the value in maintaining the craft of basket weaving and for there to be skilled basket weavers out there weaving quality baskets, and those interested getting into the industry of weaved basket, there should be an available avenue to learn this skill.
For sure there are crafts programs and vocational schools which teach basket weaving, surely you must see the value in maintaining the craft of basket weaving and for there to be skilled basket weavers out there weaving quality baskets, and those interested getting into the industry of weaved basket, there should be an available avenue to learn this skill.
How is that different from the current system?
People from low or mid-income families have access to scholarships and funding. Kids from ideal backgrounds don’t take out loans.
If you’re saying schools get a blank check via grants and scholarships, then I’m not seeing how that fixes the issue.
This problem feels super similar to the Us health care system. Those with blank checks for pre-negotiated prices (have health insurance), pay low healthcare costs, and those without pay insane prices. Overall everyone is paying insane prices.
Can you explain your reasoning more?
People from low or mid-income families have access to scholarships and funding. Kids from ideal backgrounds don’t take out loans.
If you’re saying schools get a blank check via grants and scholarships, then I’m not seeing how that fixes the issue.
This problem feels super similar to the Us health care system. Those with blank checks for pre-negotiated prices (have health insurance), pay low healthcare costs, and those without pay insane prices. Overall everyone is paying insane prices.
Can you explain your reasoning more?
> People from low or mid-income families have access to scholarships and funding
It might be relatively common for low income to get full rides or near full rides, but anyone in mid-income is getting saddled with tons of debt.
I applied to college in 2011 with a household income of like 95k, with an older sibling already in college, and most "financial aid" packages from state universities added up to between $60k-$160k total debt for four years. Going out of state to places like Ohio State, Maryland, etc. was already $50k/year back then.
This was inclusive of significant amounts of merit-based scholarships. Most (all?) schools do not allow you to stack merit scholarships with need-based grants. If you earn a merit-based scholarship, they reduce your need-based aid by that exact amount.
It might be relatively common for low income to get full rides or near full rides, but anyone in mid-income is getting saddled with tons of debt.
I applied to college in 2011 with a household income of like 95k, with an older sibling already in college, and most "financial aid" packages from state universities added up to between $60k-$160k total debt for four years. Going out of state to places like Ohio State, Maryland, etc. was already $50k/year back then.
This was inclusive of significant amounts of merit-based scholarships. Most (all?) schools do not allow you to stack merit scholarships with need-based grants. If you earn a merit-based scholarship, they reduce your need-based aid by that exact amount.
> It might be relatively common for low income to get full rides or near full rides, but anyone in mid-income is getting saddled with tons of debt.
Because the government has determined that you or your parents make enough to pay for school on your own should you prioritize it financially. The low income people could not. For reference, my families household income was near $25k/yr and I got the first two years covered by a Pell. For $95k/yr you could certainly afford college.
Because the government has determined that you or your parents make enough to pay for school on your own should you prioritize it financially. The low income people could not. For reference, my families household income was near $25k/yr and I got the first two years covered by a Pell. For $95k/yr you could certainly afford college.
Edit: nevermind. Saw the rest of your comments it's all bad faith BS about how the affordable education = government coercion. But also, somehow you went to school for $5 a year.
No. For 95k a year for a four-person household you certainly could not afford to send two children to universities that were $50-70k/year - which was the price of standard state universities at the time. Not without going into significant debt.
My parents scrimped and saved for decades and commuted hours every day to teach in higher-paying school districts while living in a low-cost-of-living areas and I was awarded all kinds of academic scholarships and I still had to go into debt and work all the way through college. And they were lucky enough to be working when the school districts would still give yearly raises, which has all dried up now.
The financial aid calculations that determine "ability to pay" are just bullshit to make you take out loans.
No. For 95k a year for a four-person household you certainly could not afford to send two children to universities that were $50-70k/year - which was the price of standard state universities at the time. Not without going into significant debt.
My parents scrimped and saved for decades and commuted hours every day to teach in higher-paying school districts while living in a low-cost-of-living areas and I was awarded all kinds of academic scholarships and I still had to go into debt and work all the way through college. And they were lucky enough to be working when the school districts would still give yearly raises, which has all dried up now.
The financial aid calculations that determine "ability to pay" are just bullshit to make you take out loans.
Ah no, I never said it was affordable, that’s putting words in my mouth and you’re now bowing out because you found out you weren’t poor. Education isn’t affordable but I still think people should pay their loans, especially if their parents made $95k/yr
Maybe start with what city you lived in yea?
Maybe start with what city you lived in yea?
I never said I was poor, that's putting words in my mouth.
I said I was mid-income (just below the median household income for our area at the time) and that it's the mid-income families that get saddled with tons of debt, and the idea that there's financial aid and scholarships to cover that gap in the middle income range is a fairy tail.
I said I was mid-income (just below the median household income for our area at the time) and that it's the mid-income families that get saddled with tons of debt, and the idea that there's financial aid and scholarships to cover that gap in the middle income range is a fairy tail.
If you’re not poor, you can afford college. Period.
I am still not understanding how offering blank checks to more people (mid-income) will fix the problem of sky rocketing tuition.
Assuming this is a Supply vs Demand problem, blank checks to more people will increase the demand for the services, but does not modify supply or competition for the demand.
Increasing demand with static supply will keep tuition increasing.
Assuming this is a Supply vs Demand problem, blank checks to more people will increase the demand for the services, but does not modify supply or competition for the demand.
Increasing demand with static supply will keep tuition increasing.
I didn't say to give blank checks. I'm just saying that the idea that there's nearly enough need-based aid to cover gaps is a load of BS.
There already is tons of that. The issue is the "full range of schools" part. You can be from a family with a 400 credit score and combined income of $45k, and get loans to go to a $50k/yr university.
If the government is going to step in and provide direct funding, it will almost certainly only apply towards community colleges followed by local state schools.
If the government is going to step in and provide direct funding, it will almost certainly only apply towards community colleges followed by local state schools.
If it is grant for all regardless of performance, it basically means giving subsidy, which government already does afaik.
Why not just make it free? Kids from not-ideal backgrounds can compete on merit alone. The way this Supreme Court intended?
there's nothing like pure merit if you are talking about not-ideal backgrounds. those folks are already heavily disadvantaged. Making it "merit" is just compounding their disadvantage while advantaging those already with advantages.
The myth of pure meritocracy lives on usually perpetuated by those blind to their own privileges.
> there's nothing like pure merit if you are talking about not-ideal backgrounds. those folks are already heavily disadvantaged.
I’m guessing you’re not from this background?
Low income people have a huge amount of programs available to them that decrease or entirely remove that disadvantage. as one example over 20 years my school district placed imacs and cable internet connections into low income homes for everybody in the district that qualified, and paid the internet bill for a year.
I’m guessing you’re not from this background?
Low income people have a huge amount of programs available to them that decrease or entirely remove that disadvantage. as one example over 20 years my school district placed imacs and cable internet connections into low income homes for everybody in the district that qualified, and paid the internet bill for a year.
Meritocracy really is the worst system. Except for all the other ones we've tried.
The Supreme Court did nothing of the sort.
What is "merit" for access to education?
What is "merit" for access to education?
There is currently a shortage of people for the military, so let them join that for the education. Can pay for their schooling with service.
Pretty sure that has always been the case in US.
>Remove this "free money guarantee" and watch how market corrects itself.
While I agree, I can't imagine what it would be like for the first generation of students under such change. The reason they are government backed is to make college a possibility to begin with.
First ones in line would probably get massively screwed, no?
While I agree, I can't imagine what it would be like for the first generation of students under such change. The reason they are government backed is to make college a possibility to begin with.
First ones in line would probably get massively screwed, no?
> First ones in line would probably get massively screwed, no?
No, College education will become cheaper, mechanically. Right now, it's the government that is highly distorting the education market with that loan system under pretense of allowing everybody to get an education.
No, College education will become cheaper, mechanically. Right now, it's the government that is highly distorting the education market with that loan system under pretense of allowing everybody to get an education.
I can vividly recall having this exact conversation in my grandmother's apartment, in 1995.
If you don't repay your student loan, it dies with you.
They won't go after your estate for the balance.
They won't go after your estate for the balance.
Sure, but the bulk of those consequences are decades away so effectively they don’t exist (or are at least invisible).
So schools and lenders are acting as if it’s true.
So schools and lenders are acting as if it’s true.
Hospice and long-term care would have already picked through those bones. Unless you're rich there isn't much of an estate to go after.
At great sacrifice to your credit score
Death makes your credit score somewhat irrelevant.
Dead people don't have or need credit scores
Speak for yourself, in my town you can't get a decent plot without at least a 760 FICO
I'm pretty sure the government is the lender in the case of federal student loans. There aren't any banks getting "free money".
Yeah but I'm not so comfortable with a technocracy where universities become advanced trade schools, purely to increase your chances of getting a job. As the late Kaczynski said, students are grudgingly pursuing these subjects because it's the only way to survive in a country without real social services.
There needs to be some formal patronage of the arts, but I have no idea how to pursue that.
There needs to be some formal patronage of the arts, but I have no idea how to pursue that.
> When students can file for bankruptcy
Agree with everything you say, except for this.
Allowing student loans to be discharged in bankruptcy will result in millions of students pulling that lever as soon as they graduate. They, of course, get to keep their degrees and use them to make money their entire lives.
If you file for bankruptcy and, for example, want to keep your car (which has a loan), you have to reaffirm that debt and continue paying. Same with your home, etc.
Student loans provide you with a valuable life-long asset. Allowing discharge simply isn't right and is economically destructive. How about I BK, discharge my mortgage and keep my house forever? Same thing.
I agree 100%, government has to get the hell out of the student loan business. Universities and students need to be forced into a situation where risk is assessed and loans are issued --or not-- accordingly. The university has to have risk. And students have to be held to their commitments.
The other problem the current system causes is what I call "course padding". Most degrees in the US have a year (or slightly more) of coursework unrelated to the field of study. In the case of STEM degrees, students spend a year or more on non-STEM courses.
This is detrimental on many fronts.
First, the time to graduation rate for undergrad is 33% longer than it would be without this irrelevant coursework. No employer cares about this stuff for STEM degrees. Some might differ wit this. OK. Let the free market decide then. If Google wants engineers who have taken three semesters of Underwater Basket Weaving History, the free market will drive students to take those courses as enhancements to the required curriculum. They should NOT be conditions for graduation at all.
This would reduce a typical engineering degree from four years to three.
Second, these non-major courses add 33% to the cost of a typical STEM degree. Whatever a year costs at a school (including housing, etc.), that's what they add to the student loan. That could mean $30K to $70K. This is horrific, unnecessary and counterproductive. If the student wants to take these courses because they add value and become additive to their career, they can make that decision --not be forced by government into it.
If government wasn't in this business, bullshit degrees and bullshit unnecessary courses would cost a ton less and some would completely evaporate from our universities. A few weeks ago I was watching a show where this guy helps people deal with debt. This poor fellow had over $250K in student debt for a degree that might not even make him $50K a year. The only way that happens is in a distorted market, one that is distorted by government in favor of what usually ends-up being political agendas disguised as good intentions.
The other element of this equation is our failures in K-12 education. Again, government (and union) meddling has caused much of this.
Our 18 year old's graduate high school devoid of marketable skills. They are useless to most businesses without training and, generalizing, are ignorant about most things that matter as they transition into adulthood.
For example, they have no understanding of money and finances and no skills to help them make sound decisions. So, someone throws a $200K loan at them for a degree on Basket Weaving and they take the ride, not understanding they are going to make just above minimum wage and have signed-on to financial hell for the rest of their lives.
That is a failure in pre-college education. And a serious one at that.
Not everyone has to go to college. Our K-12 path fails that population as well. The average US high school graduate requires training to stack boxes on shelves and make coffee. That sure sounds like a formula for societal success, doesn't it?
At the end of the day, the problem might very well be that education, in the US, has become a political punching bag. One could come-up with dozens of scenarios to understand why we seem to insist on destroying our nation by not doing a good job educating our kids. All of them would seem insane to even suggest. And yet, here we are, it's 2023 and our kids rank below third-world-nation levels almost across the board.
This is insane. What are we doing?
Agree with everything you say, except for this.
Allowing student loans to be discharged in bankruptcy will result in millions of students pulling that lever as soon as they graduate. They, of course, get to keep their degrees and use them to make money their entire lives.
If you file for bankruptcy and, for example, want to keep your car (which has a loan), you have to reaffirm that debt and continue paying. Same with your home, etc.
Student loans provide you with a valuable life-long asset. Allowing discharge simply isn't right and is economically destructive. How about I BK, discharge my mortgage and keep my house forever? Same thing.
I agree 100%, government has to get the hell out of the student loan business. Universities and students need to be forced into a situation where risk is assessed and loans are issued --or not-- accordingly. The university has to have risk. And students have to be held to their commitments.
The other problem the current system causes is what I call "course padding". Most degrees in the US have a year (or slightly more) of coursework unrelated to the field of study. In the case of STEM degrees, students spend a year or more on non-STEM courses.
This is detrimental on many fronts.
First, the time to graduation rate for undergrad is 33% longer than it would be without this irrelevant coursework. No employer cares about this stuff for STEM degrees. Some might differ wit this. OK. Let the free market decide then. If Google wants engineers who have taken three semesters of Underwater Basket Weaving History, the free market will drive students to take those courses as enhancements to the required curriculum. They should NOT be conditions for graduation at all.
This would reduce a typical engineering degree from four years to three.
Second, these non-major courses add 33% to the cost of a typical STEM degree. Whatever a year costs at a school (including housing, etc.), that's what they add to the student loan. That could mean $30K to $70K. This is horrific, unnecessary and counterproductive. If the student wants to take these courses because they add value and become additive to their career, they can make that decision --not be forced by government into it.
If government wasn't in this business, bullshit degrees and bullshit unnecessary courses would cost a ton less and some would completely evaporate from our universities. A few weeks ago I was watching a show where this guy helps people deal with debt. This poor fellow had over $250K in student debt for a degree that might not even make him $50K a year. The only way that happens is in a distorted market, one that is distorted by government in favor of what usually ends-up being political agendas disguised as good intentions.
The other element of this equation is our failures in K-12 education. Again, government (and union) meddling has caused much of this.
Our 18 year old's graduate high school devoid of marketable skills. They are useless to most businesses without training and, generalizing, are ignorant about most things that matter as they transition into adulthood.
For example, they have no understanding of money and finances and no skills to help them make sound decisions. So, someone throws a $200K loan at them for a degree on Basket Weaving and they take the ride, not understanding they are going to make just above minimum wage and have signed-on to financial hell for the rest of their lives.
That is a failure in pre-college education. And a serious one at that.
Not everyone has to go to college. Our K-12 path fails that population as well. The average US high school graduate requires training to stack boxes on shelves and make coffee. That sure sounds like a formula for societal success, doesn't it?
At the end of the day, the problem might very well be that education, in the US, has become a political punching bag. One could come-up with dozens of scenarios to understand why we seem to insist on destroying our nation by not doing a good job educating our kids. All of them would seem insane to even suggest. And yet, here we are, it's 2023 and our kids rank below third-world-nation levels almost across the board.
This is insane. What are we doing?
> This is insane. What are we doing?
expecting academia to be a job training program, reprimanding higher level general eduction as "33%" waste, trying to address the symptom (high loans) instead of the disease (why are they high) and pretending that cutting required courseloads wouldn't also reciprocate to higher tuition costs like every single time financial aid services like FAFSA increase, repeatedly posting out-of-touch "basket weaving" examples instead of allegedly any single other degree path with "bullshit degrees", having your only argument to discharging loans be that you can't repossess knowledge like you can cars, pretending this is an issue about students not holding "commitments" instead of addressing targeted bilking of a vulnerable group of people, trying to set up a cringe libertarian stance about government stepping in to "force" you to take courses and "distortions" from "political agendas" and anti-union sentiments completely irrelevant to any other issues anyone is talking about, creating huge fake scenarios of being hundreds of thousands in debt for fake degrees and passing this off as an even slightly applicable scenario to others, ... etc
> Our 18 year old's graduate high school devoid of marketable skills
it's really unfortunate for them that they had dead weight watching over them for 18 years, waiting for them to fail and to then immediately turn blame on someone else. it's not unknowable what they're being taught. the problem more and more seems to be that people like you have a voice in the world that someone might be fooled into believing is valid.
expecting academia to be a job training program, reprimanding higher level general eduction as "33%" waste, trying to address the symptom (high loans) instead of the disease (why are they high) and pretending that cutting required courseloads wouldn't also reciprocate to higher tuition costs like every single time financial aid services like FAFSA increase, repeatedly posting out-of-touch "basket weaving" examples instead of allegedly any single other degree path with "bullshit degrees", having your only argument to discharging loans be that you can't repossess knowledge like you can cars, pretending this is an issue about students not holding "commitments" instead of addressing targeted bilking of a vulnerable group of people, trying to set up a cringe libertarian stance about government stepping in to "force" you to take courses and "distortions" from "political agendas" and anti-union sentiments completely irrelevant to any other issues anyone is talking about, creating huge fake scenarios of being hundreds of thousands in debt for fake degrees and passing this off as an even slightly applicable scenario to others, ... etc
> Our 18 year old's graduate high school devoid of marketable skills
it's really unfortunate for them that they had dead weight watching over them for 18 years, waiting for them to fail and to then immediately turn blame on someone else. it's not unknowable what they're being taught. the problem more and more seems to be that people like you have a voice in the world that someone might be fooled into believing is valid.
> the problem more and more seems to be that people like you have a voice in the world that someone might be fooled into believing is valid.
Wow.
It sounds like North Korea Would be fantastic for you. You never have to hear from anyone with any opinion outside the officially approved. You’d fit right in. Highly recommended.
Wow.
It sounds like North Korea Would be fantastic for you. You never have to hear from anyone with any opinion outside the officially approved. You’d fit right in. Highly recommended.
i dunno, I think denigrating vulnerable citizens as a way to justify irrational reductions to your countries education system as a result of learned propoganda from a political party that values having power over it's citizens would make you infinitely closer to the average north korean sympathizer than I am
i also notice you skipped any prior points to give a vapid reply while also doing the same thing you accuse me of (https://en.wikipedia.org/wiki/Accusation_in_a_mirror), so I'll correct myself from cringe libertarian to cringe lite-republican and highlight that point here as a way to lightly confirm that you don't have anything of substance to contribute besides mindless outrage
i also notice you skipped any prior points to give a vapid reply while also doing the same thing you accuse me of (https://en.wikipedia.org/wiki/Accusation_in_a_mirror), so I'll correct myself from cringe libertarian to cringe lite-republican and highlight that point here as a way to lightly confirm that you don't have anything of substance to contribute besides mindless outrage
> Allowing student loans to be discharged in bankruptcy will result in millions of students pulling that lever as soon as they graduate.
What happened in the days before student loans become exempt from bankruptcy?
What happened in the days before student loans become exempt from bankruptcy?
Prior to 1976?
That might as well be another century. My guess is not many loans discharged by BK. I would also guess loan amounts were not insane, as they are today. I would further guess the no-discharge rule had to have origin in excessive defaults. Nothing happens in a vacuum.
That might as well be another century. My guess is not many loans discharged by BK. I would also guess loan amounts were not insane, as they are today. I would further guess the no-discharge rule had to have origin in excessive defaults. Nothing happens in a vacuum.
I’d bet (without evidence sadly) that credit cards have a higher rate of default and you can declare bankruptcy for CC debt.
Surprisingly (some) student loan debt can be discharged under bankruptcy per the CFPB: https://www.consumerfinance.gov/about-us/blog/busting-myths-...
What a mess.
Surprisingly (some) student loan debt can be discharged under bankruptcy per the CFPB: https://www.consumerfinance.gov/about-us/blog/busting-myths-...
What a mess.
One thing that was mentioned in the article, but which seems to be missing from the discussion is the decrease in state funding for higher education.
When I was looking for colleges in the 80s, the most expensive private schools were on the order of $20K all in. Those same schools are on the order of $85K all in, which is an increase of "only" (hah) 450%.
However, my alma mater (SUNY Buffalo) has increased in-state tuition 830% ($1300 to 10.8K). When I went to school there, minimum wage was $3.35/hr. That means that I could work 10 weeks at 40hr/week and pay for my tuition. That's the main reason I graduated without student loan debt. The NYS min. wage is $15/hr, so a student today would have to work 18 weeks to pay for their tuition.
We need to increase state funding for higher education.
When I was looking for colleges in the 80s, the most expensive private schools were on the order of $20K all in. Those same schools are on the order of $85K all in, which is an increase of "only" (hah) 450%.
However, my alma mater (SUNY Buffalo) has increased in-state tuition 830% ($1300 to 10.8K). When I went to school there, minimum wage was $3.35/hr. That means that I could work 10 weeks at 40hr/week and pay for my tuition. That's the main reason I graduated without student loan debt. The NYS min. wage is $15/hr, so a student today would have to work 18 weeks to pay for their tuition.
We need to increase state funding for higher education.
Indeed. I attended a talk by one of the presidents of a local state university about a decade ago, and she showed a plot showing that the overall cost to educate a student hadn't changed in 30 years (inflation adjusted). What had changed was the state support per student. As it dwindled, the university continually increased the tuition such that the overall cost remained constant.
It's one university, so I don't know if it applies to the others, but drops in state support is often excluded from these conversations.
It's one university, so I don't know if it applies to the others, but drops in state support is often excluded from these conversations.
This is absolutely correct. For public universities, the amount of state funding hasn't kept up with the increase in the number of students.
While tuition at private institutions have also gone up, so has the amount of financial aid (scholarships) that they've made available:
https://www.brookings.edu/articles/college-prices-arent-skyr...
The result is that the net price hasn't increased all that much for the average student.
While tuition at private institutions have also gone up, so has the amount of financial aid (scholarships) that they've made available:
https://www.brookings.edu/articles/college-prices-arent-skyr...
The result is that the net price hasn't increased all that much for the average student.
Take home after taxes is only 77% at $15/hr or $1830/month if working 40 hours/week https://smartasset.com/taxes/new-york-paycheck-calculator#eI...
As of July 2023, the average rent for a 1-bedroom apartment in SUNY College Purchase, NY is $2,696. This is a 12% increase compared to the previous year. https://www.zumper.com/rent-research/near-suny-college-purch...
As of July 2023, the average rent for a 1-bedroom apartment in SUNY College Purchase, NY is $2,696. This is a 12% increase compared to the previous year. https://www.zumper.com/rent-research/near-suny-college-purch...
Minor quibble: the tax rate is a touch lower if you don't work year round. If you earn $10.8k in a calendar year, you'll take home 81%.
IDK that we _need_ to increase state funding, but it absolutely explains the tuition trend. I don't feel particularly bad about people graduating with student debt if they have high paying jobs on the other side.
What does feel bad is turning qualified students away, like one school I know used to do.[1] Every year they would pick a GPA cutoff to admit more engineering students to the upper level classes you need to graduate, not based on evidence of students failing but on faculty headcount. It's a total bait and switch, and thankfully it seems they ended the practice right before the pandemic.
And it's tricky, we run teaching universities because we think there's some benefit to students being taught by practicing researchers. But the reality is that, especially in STEM, research funding is what matters more than tuition funding. Which in essence means in order to admit more students we need more research labs and buildings, because the 3/3 teaching load of a tenure track faculty member will not yield competitive wages.
[1]: https://today.oregonstate.edu/news/osu-college-engineering-c...
What does feel bad is turning qualified students away, like one school I know used to do.[1] Every year they would pick a GPA cutoff to admit more engineering students to the upper level classes you need to graduate, not based on evidence of students failing but on faculty headcount. It's a total bait and switch, and thankfully it seems they ended the practice right before the pandemic.
And it's tricky, we run teaching universities because we think there's some benefit to students being taught by practicing researchers. But the reality is that, especially in STEM, research funding is what matters more than tuition funding. Which in essence means in order to admit more students we need more research labs and buildings, because the 3/3 teaching load of a tenure track faculty member will not yield competitive wages.
[1]: https://today.oregonstate.edu/news/osu-college-engineering-c...
Its made worse by the fact that pure-teaching positions at public institutions are frequently filled by adjuncts, so there's next to no benefits or job security, and the pay is often atrocious.
It's really screwy that a great many universities have essentially said there can be no long-term work situation for teachers if they aren't also researchers.
It's really screwy that a great many universities have essentially said there can be no long-term work situation for teachers if they aren't also researchers.
This seems relevant:
https://www.nytimes.com/1982/12/28/science/california-weighs...
Apparently University of California used to be free.
https://www.nytimes.com/1982/12/28/science/california-weighs...
Apparently University of California used to be free.
They didn't want an educated, unemployed proletariat (their words, not mine): https://theintercept.com/2022/08/25/student-loans-debt-reaga...
> “If not,” Freeman continued, “we will have a large number of highly trained and unemployed people.” Freeman also said — taking a highly idiosyncratic perspective on the cause of fascism —“that’s what happened in Germany. I saw it happen.”
What a damaging thought for him to put out there.
What a damaging thought for him to put out there.
Adding to this: we should be looking at the actual amount paid by students have receiving financial aid. Analyses of tuition - average financial aid show that the actual amount paid has been relatively flat at private institutions. A lot of private institutions (mine included) give a 50% scholarship to most students.
Increased costs at public universities are driven largely by lack of state funding. This is also in part because the number of students attending public universities has gone up tremendously but state funding hasn't kept up.
https://www.brookings.edu/articles/college-prices-arent-skyr...
Increased costs at public universities are driven largely by lack of state funding. This is also in part because the number of students attending public universities has gone up tremendously but state funding hasn't kept up.
https://www.brookings.edu/articles/college-prices-arent-skyr...
In 1975, large state state universities (like Michigan State and U Virginia) cost about $1500 for tuition and another $1500 for room and board.
Since you could earn about $1500 working each summer, your maximum shortfall was $1500 per year (assuming no loans or grants), or $6000 per bachelor degree. At the CPI's 194% inflation, today that would equate to less than $12k of debt.
I'd also like to know how much nonacademic college costs like R&B have inflated -- when provided by the rapacious university system. They should have followed the CPI. But I'd lay strong odds they haven't.
Since you could earn about $1500 working each summer, your maximum shortfall was $1500 per year (assuming no loans or grants), or $6000 per bachelor degree. At the CPI's 194% inflation, today that would equate to less than $12k of debt.
I'd also like to know how much nonacademic college costs like R&B have inflated -- when provided by the rapacious university system. They should have followed the CPI. But I'd lay strong odds they haven't.
The only service category that has outpaced higher education is hospital services.
https://www.aei.org/carpe-diem/chart-of-the-day-or-century/
https://www.aei.org/carpe-diem/chart-of-the-day-or-century/
I generally see charts like this in relation to Baumol's cost disease, I'm surprised the linked article never mentions Baumol, but goes on to talk about government regulation and foreign competition.
https://en.wikipedia.org/wiki/Baumol_effect (See also section on education https://en.wikipedia.org/wiki/Baumol_effect#Education)
Basically as scalable goods and services get cheaper, non-scalable goods and services become relatively more expensive. In terms of hospital services and college tuition, this is a much more intuitive explanation than government regulation, although I'm open to more informed opinions.
https://en.wikipedia.org/wiki/Baumol_effect (See also section on education https://en.wikipedia.org/wiki/Baumol_effect#Education)
Basically as scalable goods and services get cheaper, non-scalable goods and services become relatively more expensive. In terms of hospital services and college tuition, this is a much more intuitive explanation than government regulation, although I'm open to more informed opinions.
Thanks for pointing this out -- I've heard some people back this claim, but I still find it confusing.
In a graph in that wikipedia article, we see that from 1998-2018, average hourly earnings increased by less than 100%, but tuition increased by more than 150%. If wages for university staff (who aren't becoming more productive) are rising to match wages for those who _are_ becoming more productive, why should tuition costs rise significantly faster than the rise in other wages?
https://en.wikipedia.org/wiki/Baumol_effect#/media/File:Pric...
Further, one statement in the education section sounds right to me:
> The economists Gary Rhoades and Joanna Frye went further in a 2015 study and argued that the Baumol effect could not explain rising tuition costs at all, as "relative academic labor costs have gone down as tuition has gone up".
And we know there's a trend towards shifting teaching responsibilities from tenure-track faculty to cheaper adjuncts. And from anecdata, I get the impression that in the humanities especially, salaries _are_ quite low and raises are currently below inflation.
And my understanding is also that the trend at many schools is towards larger classes e.g. when UC Berkeley increased the freshman class size by a third, there was not an across-the-board increase for departments to hire a proportional increase in faculty and staff, nor did existing faculty and staff get a raise ... so the same people are asked to just teach larger classes (does that count as a productivity increase?), and students just get less interaction with their professors.
In a graph in that wikipedia article, we see that from 1998-2018, average hourly earnings increased by less than 100%, but tuition increased by more than 150%. If wages for university staff (who aren't becoming more productive) are rising to match wages for those who _are_ becoming more productive, why should tuition costs rise significantly faster than the rise in other wages?
https://en.wikipedia.org/wiki/Baumol_effect#/media/File:Pric...
Further, one statement in the education section sounds right to me:
> The economists Gary Rhoades and Joanna Frye went further in a 2015 study and argued that the Baumol effect could not explain rising tuition costs at all, as "relative academic labor costs have gone down as tuition has gone up".
And we know there's a trend towards shifting teaching responsibilities from tenure-track faculty to cheaper adjuncts. And from anecdata, I get the impression that in the humanities especially, salaries _are_ quite low and raises are currently below inflation.
And my understanding is also that the trend at many schools is towards larger classes e.g. when UC Berkeley increased the freshman class size by a third, there was not an across-the-board increase for departments to hire a proportional increase in faculty and staff, nor did existing faculty and staff get a raise ... so the same people are asked to just teach larger classes (does that count as a productivity increase?), and students just get less interaction with their professors.
Much of the money is going to construction or capital improvements, i.e. shiny new buildings.
Now look at the board of trustees of your local University, and play spot the construction firms...
Now look at the board of trustees of your local University, and play spot the construction firms...
Cost disease can't be the primary cause here. Cost disease happens when wages need to rise for people who have jobs that cannot become more efficient. But the wages of people teaching college courses have not gone up 710%. In fact, more and more of the teaching work is being done for lower pay and with more ruthless efficiency through the use of adjuncts or teaching faculty who teach 5/5s or worse.
If Baumol was solely the reason for increased prices, I expect the increase to be more in line with the increase in prices for hiring tradespeople or other professional services.
FWIW Alex Tabarrok (economist) wrote a small book analyzing this and came away with the conclusion that it's mostly Baumol; if you're interested in a deeper dive:
https://www.lesswrong.com/posts/FCMfToFnRXhsfpfQB/book-revie...
https://www.lesswrong.com/posts/FCMfToFnRXhsfpfQB/book-revie...
Is that lack of scalability in hospital services and education completely inevitable due to the constraints of reality or is it mostly artificial? For example, would completely uncapping medical residencies increase the supply of doctors enough to significantly reduce the rate at which medical costs increase?
Hospital costs would benefit from some transparency/breakdown, but for medicine in general it's the increased complexity, more scans, more things to test for. But these tests are not cheap (nor fast enough). Manual labor is still required (to draw blood, to ship the vials, to put it into the test machine, to collect the results, upload it, review it, consult with the patient.
Then there's a lot more old people with a lot of complicated cases, which require a lot of person-hours.
And we still don't really have turnkey solutions. Sure, we have nice vaccines, but they are not 99.99%, there still are complications, there still are ridiculous inefficiencies (why do we still don't have combined yearly multivalent boosters for influenza+covid+others)?
Education also suffers from this overcomplication, but it's mostly because of credentialism. It's perfectly possible to watch lectures at home, complete coursework at home, and then go to some place fill out a test, and then do oral and practical exams. Grading can standardized (high-school exam is already done this way here in Hungary, there's a PDF booklet issued to teachers conducting the exam; and profs and TAs already do the same basically verbally).
Then there's a lot more old people with a lot of complicated cases, which require a lot of person-hours.
And we still don't really have turnkey solutions. Sure, we have nice vaccines, but they are not 99.99%, there still are complications, there still are ridiculous inefficiencies (why do we still don't have combined yearly multivalent boosters for influenza+covid+others)?
Education also suffers from this overcomplication, but it's mostly because of credentialism. It's perfectly possible to watch lectures at home, complete coursework at home, and then go to some place fill out a test, and then do oral and practical exams. Grading can standardized (high-school exam is already done this way here in Hungary, there's a PDF booklet issued to teachers conducting the exam; and profs and TAs already do the same basically verbally).
Related: https://www.aei.org/carpe-diem/chart-of-the-day-administrati...
I always thought the issue was in admin body count. However, just picking the largest universities in Germany and US on wikipedia we see:
Ludwig Maximilian University of Munich Academic staff: 5,565 Administrative staff: 8,208 Students: 51,606
Michigan State University Academic staff: 5,703 Administrative staff: 7,365 Students: 49,809
Those look pretty comparable, so what is going on?
I always thought the issue was in admin body count. However, just picking the largest universities in Germany and US on wikipedia we see:
Ludwig Maximilian University of Munich Academic staff: 5,565 Administrative staff: 8,208 Students: 51,606
Michigan State University Academic staff: 5,703 Administrative staff: 7,365 Students: 49,809
Those look pretty comparable, so what is going on?
Michigan state is a public university, which generally aren't as bad because their mission tend towards providing low cost education to residents.
Stanford University, for example: Academic staff: 2,279; Administrative staff: 15,314, Students: 17,246 - that's basically 1:1
A less prestigious private university like University of Southern California: Academic staff: 4,706; Administrative staff: 16,614; Students: 49,318 - that's about 1:2.5
Stanford University, for example: Academic staff: 2,279; Administrative staff: 15,314, Students: 17,246 - that's basically 1:1
A less prestigious private university like University of Southern California: Academic staff: 4,706; Administrative staff: 16,614; Students: 49,318 - that's about 1:2.5
But both of those universities are quasi-private (I don't consider any university to be truly private unless proven otherwise) so it's less of a concern. That being said w.r.t administrative staff some of those staff may be research scientists that work with academic staff, or maybe they're dual-employed at Meta and Stanford, or something like that.
You have to really break down the administrative staff number (if that's what's of concern here) to see what people are doing to make an informed argument (not saying you are making an uninformed argument or anything like that).
-edit-
For a while I was in on the administrative staff thing and I certainly think there is bloat and just flat out incompetence at many universities in this area, but I also think it's a bit of a red herring to avoid other issues like funding reductions, etc.
You have to really break down the administrative staff number (if that's what's of concern here) to see what people are doing to make an informed argument (not saying you are making an uninformed argument or anything like that).
-edit-
For a while I was in on the administrative staff thing and I certainly think there is bloat and just flat out incompetence at many universities in this area, but I also think it's a bit of a red herring to avoid other issues like funding reductions, etc.
Are adjuncts included in those numbers? Universities use a ton of contract labor to teach classes and those adjuncts aren't actually employees.
Limited budget vs uncapped budget.
The way student loans are structured is the cause.
The way student loans are structured is the cause.
And interestingly both have predominantly grown in "administrative" costs
No no don't let the Physician cartel get out of this.
Year over year they get at least 5% pay increases with US tax dollars. Not to mention, they get private pay increases by weaponizing the ACGME to keep residency slots low.
Residency does not need to be paid. Outside of the Medical industry, people pay for their college. For some reason Physicians make tax payers pay for their education and a decent salary.
Year over year they get at least 5% pay increases with US tax dollars. Not to mention, they get private pay increases by weaponizing the ACGME to keep residency slots low.
Residency does not need to be paid. Outside of the Medical industry, people pay for their college. For some reason Physicians make tax payers pay for their education and a decent salary.
Medical school is education, and in the US it’s astronomically expensive (some people graduate with half a million dollars of debt).
Residency is more like on-the-job training (a hospital still makes money when a resident sees and treats you). It just takes longer to train a physician because there are human lives at stake.
Yes, teaching fellows and others in academia are often taken advantage of and work for free, but that doesn’t mean physicians are evil for getting paid during residency.
Residency is more like on-the-job training (a hospital still makes money when a resident sees and treats you). It just takes longer to train a physician because there are human lives at stake.
Yes, teaching fellows and others in academia are often taken advantage of and work for free, but that doesn’t mean physicians are evil for getting paid during residency.
>It just takes longer to train a physician because there are human lives at stake.
Airbags?
Our electrical infrastructure?
Our plumbing?
Please, there are plenty of of industries that have lives at stake and we don't have a cartel controlling the supply of people. The issue is that we don't have enough Physician(By design), so they need to operate independently. Any other industry has multiple layers of qualified people checking to make sure things are safe.
I kind of dream of a world where you'd have 1 physician and a physician manager and a physician director all looking at your paperwork. Instead you get 1 total.
Airbags?
Our electrical infrastructure?
Our plumbing?
Please, there are plenty of of industries that have lives at stake and we don't have a cartel controlling the supply of people. The issue is that we don't have enough Physician(By design), so they need to operate independently. Any other industry has multiple layers of qualified people checking to make sure things are safe.
I kind of dream of a world where you'd have 1 physician and a physician manager and a physician director all looking at your paperwork. Instead you get 1 total.
I don’t want to trivialize the amount of work that goes into airbags, electrical infrastructure, or plumbing.
However, the human body is much more complicated. Would you trust the life of a loved one who, God forbid, has cancer or needs surgery to a person with a fraction of the education and training physicians receive?
By the way, I’m reminded of a joke: a doctor called a plumber for a faucet leak. The plumber fixed it in 5 minutes and charged $175. The doctor said “how can you charge that much for 5 minutes of work? I spend a whole hour with a patient and charge less!” The plumber said “that’s exactly what I used to say when I was a doctor.”
However, the human body is much more complicated. Would you trust the life of a loved one who, God forbid, has cancer or needs surgery to a person with a fraction of the education and training physicians receive?
By the way, I’m reminded of a joke: a doctor called a plumber for a faucet leak. The plumber fixed it in 5 minutes and charged $175. The doctor said “how can you charge that much for 5 minutes of work? I spend a whole hour with a patient and charge less!” The plumber said “that’s exactly what I used to say when I was a doctor.”
> Would you trust the life of a loved one who, God forbid, has cancer or needs surgery to a person with a fraction of the education and training physicians receive?
False dichotomy.
Right now the ACGME limits the number of residents. This causes a lower supply, so instead of having 6 surgeons working on you, you have 1-3. Do you only want a few people fresh from residency working on you? Or a bunch of physicians with various experience?
Also, plot twist, we own a medical company. (not physicians, but a different cartel that is paid way less and got a pay cut since 2016) You can treat 7 people per 37 minutes, each paying between $40-$125. Physicians is way worse, you can charge $250 for 5-10 minutes.
(Note that this ignores documentation costs/times, but it should give you an order of magnitude to play with.)
We don't do that blatant 7 people per 37 minutes, its more like 1 person per every 60 minutes, but as the clinic grows we've had 2 people per 60 minutes out of necessity. The hospital/other clinics do this.
I need to do an AMA on owning a medical clinic. My wife, the primary doctor, isnt exactly happy that I bite the hand that feeds. We already lost our chiropractor referrals because I couldn't handle their mysticism and spoke out against it.
False dichotomy.
Right now the ACGME limits the number of residents. This causes a lower supply, so instead of having 6 surgeons working on you, you have 1-3. Do you only want a few people fresh from residency working on you? Or a bunch of physicians with various experience?
Also, plot twist, we own a medical company. (not physicians, but a different cartel that is paid way less and got a pay cut since 2016) You can treat 7 people per 37 minutes, each paying between $40-$125. Physicians is way worse, you can charge $250 for 5-10 minutes.
(Note that this ignores documentation costs/times, but it should give you an order of magnitude to play with.)
We don't do that blatant 7 people per 37 minutes, its more like 1 person per every 60 minutes, but as the clinic grows we've had 2 people per 60 minutes out of necessity. The hospital/other clinics do this.
I need to do an AMA on owning a medical clinic. My wife, the primary doctor, isnt exactly happy that I bite the hand that feeds. We already lost our chiropractor referrals because I couldn't handle their mysticism and spoke out against it.
> a hospital still makes money when a resident sees and treats you
Hospitals lose money on residencies. That's why there aren't enough and the ones that do exist need to be subsidized by the federal government.
Hospitals lose money on residencies. That's why there aren't enough and the ones that do exist need to be subsidized by the federal government.
How does this actually work? I have never worked in a medical context and am ignorant of their internals so this is a genuine question.
I _have_ been a patient going to a specialist appointment where the only doctor I saw was a resident, and I don't think I or my insurance were charged any less. So if their work brings in the same amount of revenue for the same services, and if resident often do a lot of hours (I seem to recall several years ago their hours were capped to not be _dangerous_ but are still a lot), and they're paid less during their residency than after it ... why _don't_ hospitals make money off residents? Is there some training going on parallel to seeing/treating patients which is really expensive?
I _have_ been a patient going to a specialist appointment where the only doctor I saw was a resident, and I don't think I or my insurance were charged any less. So if their work brings in the same amount of revenue for the same services, and if resident often do a lot of hours (I seem to recall several years ago their hours were capped to not be _dangerous_ but are still a lot), and they're paid less during their residency than after it ... why _don't_ hospitals make money off residents? Is there some training going on parallel to seeing/treating patients which is really expensive?
My source is my father who is a physician who chairs a residency. He’s always complaining about the business analysts wanting to cut the program because it’s not making enough. My understanding is that yes there are a lot of highly paid doctors at the residency who are basically just supervising the residents so you end up in a situation where you have just as many full doctors plus the resident costs to treat the same number of people. The residency also does a bunch of non revenue generating stuff like retreats and training every Friday which hurts margins.
I looked for a credible source for this claim. Hospitals say they’re losing money on residencies but there doesn’t appear to be an easy way to verify this. What if the federal government is falling for/complicit in a big lie (wouldn’t be the first time, see PPP “loans” when COVID started)?
Average medical school costs are ~230K.
Residency is not college, residents are practicing physicians that are providing considerable value to society and in many cases they are paid appallingly little for the amount that they work.
Residency is not college, residents are practicing physicians that are providing considerable value to society and in many cases they are paid appallingly little for the amount that they work.
Postdocs are paid, and that's basically what a residency is. Or you can think of it as a co-op during a CS degree, which is also paid.
PhD students are paid as well, at least in research departments.
Postdocs/PhDs theoretically are supposed to be paid to advance scientific knowledge.
Physicians are not advancing scientific knowledge.
Also a co-op during a CS degree isnt paid with taxes.
Physicians are not advancing scientific knowledge.
Also a co-op during a CS degree isnt paid with taxes.
I think I understand where you're coming from, but even ignoring resident salaries the majority of other healthcare spending is already government-funded, and in my ideal world all of it would be, so it's hard for me to be upset about this.
I don't understand your point about scientific knowledge, in my mind keeping people alive is at least equally as important as advancing scientific knowledge.
I don't understand your point about scientific knowledge, in my mind keeping people alive is at least equally as important as advancing scientific knowledge.
> Physicians are not advancing scientific knowledge.
Yes, but they are providing a similarly valuable service. And, in fact, almost all medical practice contributes to the development of knowledge as well. Lot's of physicians (even residents) write papers.
Yes, but they are providing a similarly valuable service. And, in fact, almost all medical practice contributes to the development of knowledge as well. Lot's of physicians (even residents) write papers.
Physicians are some of the larger victims of this inflation, no? Also “they” are not doing anything with ACGME in general, that’s an entirely separate issue.
Who knew providers would raise prices with wild abandon when demand is firmly inelastic and debt without default risk is liberally provided? /s
Hopefully states experimenting with universal higher education legislation makes some improvement possible: https://apnews.com/article/minnesota-legislature-college-tui... ("Minnesota lawmakers reach deal for free college tuition")
Note for this article that private colleges have the highest drop out rate, and Minnesota's plan excludes such institutions:
> Qualifying students would have to attend a two- or four-year school in either the University of Minnesota or Minnesota State systems, or a tribal college. Private college tuition would not be covered.
> From 2008 through 2009, enrollment in private for-profit colleges rose disproportionately compared to private non-profit and public colleges. Private for-profit colleges have extraordinarily high rates of default, near 16% of borrowers default within 3 years.
https://educationdata.org/student-loan-default-rate
Hopefully states experimenting with universal higher education legislation makes some improvement possible: https://apnews.com/article/minnesota-legislature-college-tui... ("Minnesota lawmakers reach deal for free college tuition")
Note for this article that private colleges have the highest drop out rate, and Minnesota's plan excludes such institutions:
> Qualifying students would have to attend a two- or four-year school in either the University of Minnesota or Minnesota State systems, or a tribal college. Private college tuition would not be covered.
> From 2008 through 2009, enrollment in private for-profit colleges rose disproportionately compared to private non-profit and public colleges. Private for-profit colleges have extraordinarily high rates of default, near 16% of borrowers default within 3 years.
https://educationdata.org/student-loan-default-rate
Demand isn’t fully inelastic.
Many people are forgoing college that would’ve gone 20 years ago. It’s not huge yet, but it is happening.
The rest of your point stands though.
The rest of your point stands though.
Agreed, but they're forgoing college because they better opportunities without acquiring the traditional credential(s) due to a tight labor market, demographics and older folks retiring making trades and non college paths more lucrative, etc. The debt load is not worth the potential opportunity benefit.
The whole "get a college degree if you want to be middle class" scam is evaporating, which results in your observation.
https://reason.com/2023/03/31/poll-most-americans-dont-think...
https://apnews.com/article/skipping-college-student-loans-tr...
The whole "get a college degree if you want to be middle class" scam is evaporating, which results in your observation.
https://reason.com/2023/03/31/poll-most-americans-dont-think...
https://apnews.com/article/skipping-college-student-loans-tr...
If we get the government more involved in funding these things directly, it can only improve the outcome.
Funding directly by issuing a blank check to the vendors? No, it won't.
Funding directly by setting a price cap, and paying vendors that amount for services rendered? Seems to work for almost every other developed country in the world.
With the monetary savings of #2, it could even give every medical student a fully free ride.
Funding directly by setting a price cap, and paying vendors that amount for services rendered? Seems to work for almost every other developed country in the world.
With the monetary savings of #2, it could even give every medical student a fully free ride.
> Seems to work for
I love when someone says "seems to work". In the strict sense, that only ever means "does something". Not necessarily "does what someone wants"... and never "does what I want".
When it works for those other countries, does it "do what you want"? Because it doesn't "do what I want" at all.
> With the monetary savings of #2, it could even give every medical student a fully free ride.
Won't someone think of the millionaire heart surgeons in the 1%? They obviously needed free rides back when they started, it's why they're only single digit millionaires!
> Funding directly by setting a price cap,
Starving the people you want to provide your medical treatment isn't the brightest strategy. Increases to price caps are always reactive, after they've been complaining for years. The bureaucracy demands that it take years more to raise the price caps. And by the time that happens, they've been bleeding money the whole time. It's a strong incentive for them to do all sorts of things that you don't want... and if you do it for any length of time at all, it trains them to do these bad things so even if you realize the error of your ways and withdrawn the bad policy, they keep on doing the bad things.
Quite clearly, the problem with health insurance is that we need a gigantic insurance company larger than any other in history, and that it needs to be managed by the paragons of competency, the federal government. Of course, they'll need to staff up... and with all the layoffs in the private insurance industry, we'll hire all those empathetic, kind-hearted subject matter experts.
Should be the best thing ever. I can't possibly see anything that might go wrong.
I love when someone says "seems to work". In the strict sense, that only ever means "does something". Not necessarily "does what someone wants"... and never "does what I want".
When it works for those other countries, does it "do what you want"? Because it doesn't "do what I want" at all.
> With the monetary savings of #2, it could even give every medical student a fully free ride.
Won't someone think of the millionaire heart surgeons in the 1%? They obviously needed free rides back when they started, it's why they're only single digit millionaires!
> Funding directly by setting a price cap,
Starving the people you want to provide your medical treatment isn't the brightest strategy. Increases to price caps are always reactive, after they've been complaining for years. The bureaucracy demands that it take years more to raise the price caps. And by the time that happens, they've been bleeding money the whole time. It's a strong incentive for them to do all sorts of things that you don't want... and if you do it for any length of time at all, it trains them to do these bad things so even if you realize the error of your ways and withdrawn the bad policy, they keep on doing the bad things.
Quite clearly, the problem with health insurance is that we need a gigantic insurance company larger than any other in history, and that it needs to be managed by the paragons of competency, the federal government. Of course, they'll need to staff up... and with all the layoffs in the private insurance industry, we'll hire all those empathetic, kind-hearted subject matter experts.
Should be the best thing ever. I can't possibly see anything that might go wrong.
I suspect GP is referring to the fact that the US has the one of the worst health outcomes per dollar spent vs peer countries [1] [2].
If "better health outcomes per dollar" is not "what you want" -- how come?
[1] https://www.pgpf.org/blog/2022/07/how-does-the-us-healthcare... [2] https://www.piie.com/blogs/realtime-economic-issues-watch/wh...
If "better health outcomes per dollar" is not "what you want" -- how come?
[1] https://www.pgpf.org/blog/2022/07/how-does-the-us-healthcare... [2] https://www.piie.com/blogs/realtime-economic-issues-watch/wh...
The US's healthcare system is so bleak because we quite literally fund healthcare for the rest of the planet. Taxpayers in the US get access to the best treatment decades earlier if they're rich enough. Prices are increased on US citizens to account for the strong arming other governments do to get prices lower for their citizens. If the pharma companies couldn't do this, for example, they'd refuse to negotiate with other countries. A microcosm of this behavior is medicare here is the US. Yes, the US taxpayers even have to be charitable to them.
IMO, if the US decided to actually help its citizens every country the average progressive considers "great at healthcare" would likely implode under the sudden increase in cost. The cost of medication alone would likely nearly bankrupt several governments. Imagine if the price of insulin, almost completely funded by US citizens paying absurd prices, went up to its US price.
Much like with defense, the US taxpayer is the hero of the rest of the world's healthcare. Without US tax cattle the rest of the world would not be as nice as it is. It's just like when prices go up at your favorite store due to theft. The US is punished by insurance companies because other countries refuse to pay more.
IMO, if the US decided to actually help its citizens every country the average progressive considers "great at healthcare" would likely implode under the sudden increase in cost. The cost of medication alone would likely nearly bankrupt several governments. Imagine if the price of insulin, almost completely funded by US citizens paying absurd prices, went up to its US price.
Much like with defense, the US taxpayer is the hero of the rest of the world's healthcare. Without US tax cattle the rest of the world would not be as nice as it is. It's just like when prices go up at your favorite store due to theft. The US is punished by insurance companies because other countries refuse to pay more.
Almost everything you have said here is untrue. Pharma companies still make profits in other countries, they just make much more profit in the US. Much of medical research is in fact funded by the government to begin with.
By removing the for-profit system, you would actually be removing rampant rent-seeking on something that should be a human right.
> Imagine if the price of insulin, almost completely funded by US citizens paying absurd prices, went up to its US price.
A very strange example to select, considering it was first discovered by Canadians and the patent was later sold for $1. US citizens are certainly not "subsidizing" insulin elsewhere.
By removing the for-profit system, you would actually be removing rampant rent-seeking on something that should be a human right.
> Imagine if the price of insulin, almost completely funded by US citizens paying absurd prices, went up to its US price.
A very strange example to select, considering it was first discovered by Canadians and the patent was later sold for $1. US citizens are certainly not "subsidizing" insulin elsewhere.
Sure bud. What is it about HN'ers talking with such confidence they legitimately have no idea what they're even talking about? I googled it for you, and gave you two sources are probably amicable towards - there are THOUSANDS more[0][1]. It's exhausting that everyone here talks like they are an expert at everything. I thought I left that when I came here from reddit.
[0] https://www.pbs.org/newshour/economy/do-other-countries-pigg...
[1] https://www.washingtonpost.com/opinions/2022/11/29/us-health...
[0] https://www.pbs.org/newshour/economy/do-other-countries-pigg...
[1] https://www.washingtonpost.com/opinions/2022/11/29/us-health...
The example you selected with insulin does not support your argument.
Of course, anyone can do a google search and find some opinion pieces confirming their world view, that doesn't make it true.
The post article in particular just looks at the total revenue and essentially says "look how big it is compared to other countries, we must be subsidizing them". But this just justifies the extreme profit-seeking already in the sector, it's not an argument that it's necessary for innovation.
Of course, anyone can do a google search and find some opinion pieces confirming their world view, that doesn't make it true.
The post article in particular just looks at the total revenue and essentially says "look how big it is compared to other countries, we must be subsidizing them". But this just justifies the extreme profit-seeking already in the sector, it's not an argument that it's necessary for innovation.
This doesn't come close to supporting your claim that (most of?) the entire healthcare cost gap is due to subsidizing innovation, for the reasons I described in my other comment. (ie: Drugs are only ~10% of our healthcare costs.)
Even your own source [1] contradicts the idea that high costs are inevitably caused by this subsidization:
> Why doesn’t competition bring U.S. health-care prices down? The answer: America’s stagnant third-party payment system allows hospitals and doctors to avoid competing on price.
Even your own source [1] contradicts the idea that high costs are inevitably caused by this subsidization:
> Why doesn’t competition bring U.S. health-care prices down? The answer: America’s stagnant third-party payment system allows hospitals and doctors to avoid competing on price.
This could only be true if the majority of the healthcare spending diff came from payments to pharma/health dev cos, right? Do you know whether that's the case?
If we're paying more for nurse salaries, hospital administration, insurance company bureaucracy, and ineffective procedures near end-of-life with low probability of success, it's unlikely the cost diff is mainly due to "subsidizing innovation."
If we're paying more for nurse salaries, hospital administration, insurance company bureaucracy, and ineffective procedures near end-of-life with low probability of success, it's unlikely the cost diff is mainly due to "subsidizing innovation."
People making this argument tend to want 'better health outcomes for millionaires/healthy white collar people', either because they are one, or they think they will be one.
What I always point out is that markets are a form of rationing too. They are just form where people with money are allocated more goods than people without it, sometimes to the total exclusion of large parts of the population. Given that we set up polities for the common good, I'd argue that any necessity which markets fail to deliver to everyone should use some other kind of rationing strategy.
> If "better health outcomes per dollar" is not "what you want" -- how come?
Because I don't confuse "individual" with "group".
The fallacy here is to tally up every dollar spent on medical treatment in a given year, then saying "here we spent X on medical treatment, but it could only be 0.7X if the government were in charge".
But you never asked me how much I spent on medical treatment. What if I spent 0?
Well then, your plan has me spending more than I used to, to get me something I didn't want/need. It's not a good deal for me. And if it's a good deal for someone else, it's only because you shackled me up and made me work the fields for their benefit. No thanks.
Even if I was the sort to engage in that non-sense, the problem itself is insurance. And that holds true whether some private company (or many) is in charge of the insurance, or the government is in charge of it. You think BCBS rejects claims, but that the feds don't reject them? Wow, do I have a bridge to sell you.
When someone wants a good or a service, and they pay for it themselves, they are price-conscious. When they don't pay for it themselves (because the insurance company does, or the government), they aren't price conscious. But this encourages the goods-provider to raise their prices... even discourages them from keeping them low. Low prices signal low quality. This encourages the payers to reject claims, then once more the goods-providers to raise prices again to cover for all the rejected claims (bonus if they can go after the goods-buyers for the price too!).
And it all spirals out of control. There is nothing in this mechanism that makes it less ridiculous if the federal government owns the insurance company, and it is the only insurance company permitted by law.
I take that back, there is one thing different. Now you can introduce price caps, woohoo! That will certainly fix the problem. Some committee 2000 miles away and months-distance from the facts can magically determine a fair price for all physicians and surgeons nationwide for some procedure's medical code (not the procedure itself, these are always unique... but the little alphanumeric codes, nice and uniform so they fit in the database).
That definitely won't cause further meltdowns. Will it be blamed on nefarious capitalists hiding in the woodpile? Will it just be chalked up to disappointing reality "there can be no other way"? Probably will depend on just where we're at in the election cycle.
If you want to see prices drop (plummet really), outlaw all insurance. Make people pay cash, out of pocket, for everything. You starve if you can't sell your stuff to people who want it, and if those people only have 1/100th of what you used to ask, then you either learn to live with the 1/100th, or you starve. No one gives out bank loans for heart transplants.
Because I don't confuse "individual" with "group".
The fallacy here is to tally up every dollar spent on medical treatment in a given year, then saying "here we spent X on medical treatment, but it could only be 0.7X if the government were in charge".
But you never asked me how much I spent on medical treatment. What if I spent 0?
Well then, your plan has me spending more than I used to, to get me something I didn't want/need. It's not a good deal for me. And if it's a good deal for someone else, it's only because you shackled me up and made me work the fields for their benefit. No thanks.
Even if I was the sort to engage in that non-sense, the problem itself is insurance. And that holds true whether some private company (or many) is in charge of the insurance, or the government is in charge of it. You think BCBS rejects claims, but that the feds don't reject them? Wow, do I have a bridge to sell you.
When someone wants a good or a service, and they pay for it themselves, they are price-conscious. When they don't pay for it themselves (because the insurance company does, or the government), they aren't price conscious. But this encourages the goods-provider to raise their prices... even discourages them from keeping them low. Low prices signal low quality. This encourages the payers to reject claims, then once more the goods-providers to raise prices again to cover for all the rejected claims (bonus if they can go after the goods-buyers for the price too!).
And it all spirals out of control. There is nothing in this mechanism that makes it less ridiculous if the federal government owns the insurance company, and it is the only insurance company permitted by law.
I take that back, there is one thing different. Now you can introduce price caps, woohoo! That will certainly fix the problem. Some committee 2000 miles away and months-distance from the facts can magically determine a fair price for all physicians and surgeons nationwide for some procedure's medical code (not the procedure itself, these are always unique... but the little alphanumeric codes, nice and uniform so they fit in the database).
That definitely won't cause further meltdowns. Will it be blamed on nefarious capitalists hiding in the woodpile? Will it just be chalked up to disappointing reality "there can be no other way"? Probably will depend on just where we're at in the election cycle.
If you want to see prices drop (plummet really), outlaw all insurance. Make people pay cash, out of pocket, for everything. You starve if you can't sell your stuff to people who want it, and if those people only have 1/100th of what you used to ask, then you either learn to live with the 1/100th, or you starve. No one gives out bank loans for heart transplants.
> And [health care prices] all spirals out of control.
But... they don't. Peer countries with gvt subsidized/socialized care spend less than the US (per procedure and in aggregate).
But... they don't. Peer countries with gvt subsidized/socialized care spend less than the US (per procedure and in aggregate).
> Won't someone think of the millionaire heart surgeons in the 1%? They obviously needed free rides back when they started, it's why they're only single digit millionaires!
> Starving the people you want to provide your medical treatment isn't the brightest strategy
Gosh, it's almost like I pre-empted the latter complaint with the note that you've responded to above...
Expanding the number of doctors, and lowering doctor pay and workload, and lowering the cost of becoming a doctor will produce better health outcomes for everyone. Yes, some people will stand to lose from this, just like the current bloat of worthless administrators and billing clerks and other paper-pushers will stand to lose from a cleanup of the system.
I don't care about their well-being.
> I love when someone says "seems to work". In the strict sense, that only ever means "does something". Not necessarily "does what someone wants"... and never "does what I want".
> When it works for those other countries, does it "do what you want"? Because it doesn't "do what I want" at all.
This exact criticism can be levied on the current US system.
> Starving the people you want to provide your medical treatment isn't the brightest strategy
Gosh, it's almost like I pre-empted the latter complaint with the note that you've responded to above...
Expanding the number of doctors, and lowering doctor pay and workload, and lowering the cost of becoming a doctor will produce better health outcomes for everyone. Yes, some people will stand to lose from this, just like the current bloat of worthless administrators and billing clerks and other paper-pushers will stand to lose from a cleanup of the system.
I don't care about their well-being.
> I love when someone says "seems to work". In the strict sense, that only ever means "does something". Not necessarily "does what someone wants"... and never "does what I want".
> When it works for those other countries, does it "do what you want"? Because it doesn't "do what I want" at all.
This exact criticism can be levied on the current US system.
> Expanding the number of doctors, and lowering doctor pay and workload, and lowering the cost of becoming a doctor will produce better health outcomes for everyone.
So go do it. No one's cockblocking you. Well, except the AMA. Or are you saying that you'll only do this if you get your socialized medicare-for-all quackery?
Wouldn't be shocked if it was held hostage like that, but no thanks.
> This exact criticism can be levied on the current US system.
I never said it worked. Wouldn't catch me saying that ever.
So go do it. No one's cockblocking you. Well, except the AMA. Or are you saying that you'll only do this if you get your socialized medicare-for-all quackery?
Wouldn't be shocked if it was held hostage like that, but no thanks.
> This exact criticism can be levied on the current US system.
I never said it worked. Wouldn't catch me saying that ever.
People forget that fundamentally, these are services that become relatively more expensive over time (as other things get relatively cheaper). Both healthcare and education don't really benefit from cost-reduction from scaling. At the end of the day, its still one service provider to few service consumers. Productivity in that sense is unchanged in 30 years. Meanwhile, consumer goods can continue to drop precipitiously with technology and scale. As technology improves productivity in other sectors, Net result over time, is that things like healthcare and education and other services which don't scale will continue to get relatively even more expensive (i.e. grow faster than inflation).
I'm actually confused about the healthcare situation -- is it actually getting more expensive relative to the benefits? I've heard so many times that a bunch of surgeries that used to have really long recovery times can now be done on an out-patient basis, or laproscopically, and that some things which used to require surgery can now be treated with medication. Isn't that productivity growth? Even if the cost per day in the hospital goes up, if the same or better patient outcomes can be achieved with fewer/shorter hospital stays, that sounds like patients are "winning"?
Hopefully AI starts to bend the cost curve. Just like a huge chunk of doctor visits could be handled by a nurse/NP, probably AI could do a lot of triage work and/or improve labor productivity.
How cheap TVs are is unreal. I was looking at the display TVs at Target and the largest one was only about a grand, maybe a touch less. Ridiculous how big of a panel, complete with "smart" OS and etc, you can get for <=1k.
(Mind you, I know "largest" doesn't mean most expensive usually - indeed the most expensive TV was "only" 65" but was still <$2k.)
Capitalism has certainly worked really well for this one specific consumer good.
(Mind you, I know "largest" doesn't mean most expensive usually - indeed the most expensive TV was "only" 65" but was still <$2k.)
Capitalism has certainly worked really well for this one specific consumer good.
It probably helps that smart TVs provide one of the most lucrative environments for selling ads... although tbh I don't know if the hardware manufacturers get any kickback on that, but the people who develop the software where ads are shown almost certainly do.
They all develop their own smart tv functionality, originally at least. That was how they captured that ad revenue. The Vizio CEO actually stated the margins were non-existent but made up on the smart tv garbage.
There obviously is a different arrangement when you have companies like TCL putting in Google TV.
There obviously is a different arrangement when you have companies like TCL putting in Google TV.
Yeah it's weird explaining it to my kid:
"When dad was your age, TVs cost a heck of a lot of money, had terrible resolution, took several grown men to carry, and were almost as deep as they were tall"
"Last year I carried home a larger TV with 40x the number of pixels by myself, and paid for it with one day's work"
"When dad was your age, TVs cost a heck of a lot of money, had terrible resolution, took several grown men to carry, and were almost as deep as they were tall"
"Last year I carried home a larger TV with 40x the number of pixels by myself, and paid for it with one day's work"
With TVs specifically, aren't their costs subsidized by the SmartOS features?
Same with laptops and PCs. I'm actually in awe of how cheap they've become. For sub-$500, I can get a high-performing work laptop that pays for itself over and over again.
The US medical industry is the opposite of capitalism. Heck, most of our budget goes to Medicare and Medicaid.
No it's not. It's a state facilitated oligopoly situation, which is the ideal end state for any industry as part of capitalism short of a monopoly. Guaranteed high income for everybody involved and disruption essentially not possible.
I wonder why...
https://www.opensecrets.org/federal-lobbying/top-spenders?cy...
The medical cartels need to be destroyed.
https://www.opensecrets.org/federal-lobbying/top-spenders?cy...
The medical cartels need to be destroyed.
Most of the 'service' industry is subsidized by cheap foreign labor. Harder for Schools and Hospitals to hire illegal/unskilled workers.
Are you kidding me? Half the faculty at any college, no matter the price, are adjuncts, who earn $2500 or so PER CLASS PER SEMESTER, while the 30 students in that class are charged $2500 EACH for that class. It's as close as you can get to free labor for knowledge work, basically the original Gig economy; Uber for teaching.
Almost none of that is true
That adjunct pay seems low but not unheard of. Here is a thread I found on it [1]. The cost per student per class is not far off (at least at my state school). Assuming a 3-credit undergrad class at Penn State @$800 ($2400) [2].
[1] https://www.reddit.com/r/Professors/comments/un7uei/average_... [2] https://tuition.psu.edu/tuitiondynamic/tabledrivenrates.aspx...
[1] https://www.reddit.com/r/Professors/comments/un7uei/average_... [2] https://tuition.psu.edu/tuitiondynamic/tabledrivenrates.aspx...
That's what my mom got paid for being an adjunct, 10 years in a row
Government lending and a lack of price controls are the ultimate root cause. The government extends near-unlimited credit to student borrowers that goes way beyond their credit-worthiness, academic performance, graduation rates for the school, prospects for employment based on field of study, etc. And universities have clued into the fact that students who can pay any price, will pay any price. The ceiling of what students will pay, if they have sufficient access to credit, to join or maintain their status in the middle class is very very high. So universities hike the price year after year with little resistance because the availability of government borrowing takes the sting out and shifts the pain years or decades into the future of those students' lives.
I think some major force is needed to counter-act the runaway price growth without cutting off borrowing for students from low-income families. I think university prices should be capped by law at the inflation rate.
Think rent control for tuition.
I think some major force is needed to counter-act the runaway price growth without cutting off borrowing for students from low-income families. I think university prices should be capped by law at the inflation rate.
Think rent control for tuition.
> Think rent control for tuition.
The only thing economists from every politic view can agree is horrible?
The only thing economists from every politic view can agree is horrible?
There's no direct comparison to be made with housing shortages. The only scarce educational resources are those that convey high prestige, and there's no way to manufacture more of that through higher tuition payments because it's the scarcity that makes it prestigious. Harvard would be just as prestigious if it were free to attend as if it were $100k/yr to attend. Whereas in housing, if you had people lining up to pay $100k/yr, you'd be throwing up new buildings as quickly as possible.
In general there is a an oversupply of higher education capacity due to demographic downturn and a decline in enrollments since 2010. Smaller colleges have been closing because they cannot attract enough students.
In general there is a an oversupply of higher education capacity due to demographic downturn and a decline in enrollments since 2010. Smaller colleges have been closing because they cannot attract enough students.
The main reason correction is needed is a matter of economic and national strength. Increasingly we see students opt out of college because the cost benefit to them doesn’t make any sense.
You can argue that those people will learn skilled trades or online but university has always been and will continue to play an important role in economic output in the US. When only those in the highest tax bracket can afford college it exacerbates instability and undermines the economy.
You can argue that those people will learn skilled trades or online but university has always been and will continue to play an important role in economic output in the US. When only those in the highest tax bracket can afford college it exacerbates instability and undermines the economy.
Rent control results in slums and shortages.
The only thing that keeps a system functional is external pressure. Otherwise it will always turn into some weird messed up versions of itself that satisfies none of the original objectives but is somehow larger than ever.
Universities used to be separate systems, and you could opt out of one and into another, and most people wouldn’t even go to one at all. But now they are basically all parts of one whole (within the US, at least) and everyone is going and the universities are all failing in the same way.
It could be financial, but I think it’s because of the academic track and social status.
There’s a consensus that college is good and will turn you into a professional leader with a nice job title that reflects elite values (which happen to be a certain kind of liberal but it’s more about social status than politics philosophy). But it turns out the world only needs so many Environmental Justice Media Liaisons, so the universities are just making up these job titles to absorb their own graduates.
Of course, that doesn’t work well financially, so they pay them nothing for as long as possible and then close to nothing after that, and crank up the tuition promising the next batch the same deal.
The students put up with it because it’s hard to evaluate the numbers that they can actually expect from such a ridiculous job, and because it sounds like a cool (or at least acceptable) job title to announce at parties. The fact that a plumber makes three times as much is not worth acknowledging.
Universities used to be separate systems, and you could opt out of one and into another, and most people wouldn’t even go to one at all. But now they are basically all parts of one whole (within the US, at least) and everyone is going and the universities are all failing in the same way.
It could be financial, but I think it’s because of the academic track and social status.
There’s a consensus that college is good and will turn you into a professional leader with a nice job title that reflects elite values (which happen to be a certain kind of liberal but it’s more about social status than politics philosophy). But it turns out the world only needs so many Environmental Justice Media Liaisons, so the universities are just making up these job titles to absorb their own graduates.
Of course, that doesn’t work well financially, so they pay them nothing for as long as possible and then close to nothing after that, and crank up the tuition promising the next batch the same deal.
The students put up with it because it’s hard to evaluate the numbers that they can actually expect from such a ridiculous job, and because it sounds like a cool (or at least acceptable) job title to announce at parties. The fact that a plumber makes three times as much is not worth acknowledging.
I am beginning to believe that the root cause of tuition costs in the US exceeding inflation is based much more on FOMO on the benefits of college education rather than federal government guarantees on student loans.
My claim is that buyers (parents+children) of college degrees are maybe not behaving rationally with respect to cost.
High-cost schools position themselves as offering a "better" outcome or opportunity to students. I'm really conflicted about this viewpoint. I have two children in high school with one a rising senior. So my family is discussing colleges and college costs somewhat regularly. We have visited a small number of state schools and a small number of smaller private universities and colleges. The smaller schools do a VERY good job of selling extra opportunities easily available to students. My experience is that opportunities can be found by a motivated college student at any institution but the small private schools seem to make it almost hard for a student to NOT be involved in meaningful outside-of-the-classroom options.
My claim is that buyers (parents+children) of college degrees are maybe not behaving rationally with respect to cost.
High-cost schools position themselves as offering a "better" outcome or opportunity to students. I'm really conflicted about this viewpoint. I have two children in high school with one a rising senior. So my family is discussing colleges and college costs somewhat regularly. We have visited a small number of state schools and a small number of smaller private universities and colleges. The smaller schools do a VERY good job of selling extra opportunities easily available to students. My experience is that opportunities can be found by a motivated college student at any institution but the small private schools seem to make it almost hard for a student to NOT be involved in meaningful outside-of-the-classroom options.
The advantage of the larger school in my experience, is that its like going to a dozen small schools at once. Plenty of people I know where able to transfer from one good program to another in a completely opposite field once they learned what they actually liked (usually quite different than what you imagined as a highscooler especially if your parents have no concept of the field), because the school was large enough to offer so many good options and departments with a lot of interesting faculty. The class sizes are the same between big and small schools anyhow for the most part, but you also have an easier time scheduling classes (and taking certain ones “out of season” if need be) at the larger school. It scales horizontally rather than vertically as your student body increases, big schools have the pockets to hire more faculty and support more taships than smaller schools.
I think you and GP are using different definitions of "larger". One definition is "more programs". Another is merely "more students".
Generally, go for the one with the lower student:teacher ratio. My anecdote:
I and a friend both went to low ranked undergrad universities (state schools). Mine, however, had a low student:teacher ratio per class. Comparing notes with him, the main benefit was that professors actually cared about teaching. The number of students wasn't high enough to be a burden. They didn't repeat the same HW and exams every semester. The number of office hours per week per professor was 3-9 hours. They could be that generous because there simply weren't enough students to use up those hours.
We also didn't have TAs teaching any course.
(Also went to a top ranked university for grad school - very few professors cared about teaching).
Generally, go for the one with the lower student:teacher ratio. My anecdote:
I and a friend both went to low ranked undergrad universities (state schools). Mine, however, had a low student:teacher ratio per class. Comparing notes with him, the main benefit was that professors actually cared about teaching. The number of students wasn't high enough to be a burden. They didn't repeat the same HW and exams every semester. The number of office hours per week per professor was 3-9 hours. They could be that generous because there simply weren't enough students to use up those hours.
We also didn't have TAs teaching any course.
(Also went to a top ranked university for grad school - very few professors cared about teaching).
Yep, I attended a lower-ranked state school for an undergrad in CS and had a wonderful experience. Lots of positive interactions with faculty in CS and math. My undergrad school was also attended by a large population of highly motivated students for historical reasons. I stumbled into this school almost by accident and was really happy with my student peer group because most were quite ambitious.
I also then went to a well-known and ranked R1 university for grad school. I didn't enjoy it very much but also didn't match well with an advisor out of the gate. That colored my experience significantly and in hindsight was really mostly my fault.
Oddly enough, I returned to this school and work a somewhat hybrid staff/research software engineer job and have been here for more than a decade. Go figure.
I also then went to a well-known and ranked R1 university for grad school. I didn't enjoy it very much but also didn't match well with an advisor out of the gate. That colored my experience significantly and in hindsight was really mostly my fault.
Oddly enough, I returned to this school and work a somewhat hybrid staff/research software engineer job and have been here for more than a decade. Go figure.
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Agreed re: "large enough to offer so many good options and departments." This is definitely a big pro in our opinion. It is definitely true that smaller schools are more limited in offerings than big schools. During visits, smaller schools seem to carefully point out some flexibility in putting together a more personal course-of-study to offset this . . .
In the end college costs so much because people are willing to pay, because they think it's a good investment. Generally they have been right, college was the best investment you could possibly make historically. Now it's just an average investment, but the FOMO of not going puts it over the top.
Good take.
We are questioning if it is even an average investment, especially the truly high-cost and selective private schools where tuition sits at $80,000+ contrasted with $30,000 at our state's well-known and respected flagship university. The extra $200,000 in costs is breathtaking to consider.
We are questioning if it is even an average investment, especially the truly high-cost and selective private schools where tuition sits at $80,000+ contrasted with $30,000 at our state's well-known and respected flagship university. The extra $200,000 in costs is breathtaking to consider.
I think these statistics are meaningless without discussing how much state/federal funding has been removed. The article briefly mentions it, but gives no idea of what percentage of tuition was effectively state funded in 1980/1983. I'm not sure where to get that information, and I expect tuition costs will have risen faster than inflation + reversion to students paying the true cost, but without that information these numbers are misleading at best.
Surprised that nobody here mentioned community colleges yet. Not a silver bullet, but the total cost of someone commuting to a community college from home is an order of magnitude cheaper than going to college. In many cases, CCs have explicit transfer programs, and the chances of transferring to a decent university after year two are pretty high.
+1, and don't forget that they don't force you to pay room & board for your dorm your first two years.
I'm a product of the California Community College system and a lot of my teachers were teaching both in the UC and Cal State systems at the same time. I am happy with the quality of education I received.
I'm a product of the California Community College system and a lot of my teachers were teaching both in the UC and Cal State systems at the same time. I am happy with the quality of education I received.
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Or even just in state colleges. I went to a large public school. It was a great school, but so are the big public flagships found at any state. I knew a lot of people who were out of state, taking loans, to do things like business or premed they could literally do wherever they came from for over half off tuition before you even account for financial aid or scholarships. CCs really aren't that much cheaper than in state rates for public schools, and you can even take certain classes at the local CC and transfer the credits over to the public school to save a little bit per credit hour and have somewhat inflated grades (plenty of people I know did this for their physics or math requirements over a summer).
Another way to get free college is to just join the national guard program they have. A few friends did this as well. You do bootcamp which sucks, and like one weekend a month playing army in the woods during drill which I’m told also often sucks. But in the end you get free school and some pay. If you are used to doing hard work like manual labor, a weekend a month is not a bad deal. You can even land a job after through this experience and your degree e.g. in cybersecurity.
There are options, obviously not as good as affording it outright but there are things you can do that aren’t going out of state on a huge loan, so I’m surprised why so many people opt to take routes that put them in the same exact place by their mid 20s but with a massive debt over their heads versus these seemingly less glamorous routes. Maybe the marketing of “leaving the parents nest” is just that good?
Another way to get free college is to just join the national guard program they have. A few friends did this as well. You do bootcamp which sucks, and like one weekend a month playing army in the woods during drill which I’m told also often sucks. But in the end you get free school and some pay. If you are used to doing hard work like manual labor, a weekend a month is not a bad deal. You can even land a job after through this experience and your degree e.g. in cybersecurity.
There are options, obviously not as good as affording it outright but there are things you can do that aren’t going out of state on a huge loan, so I’m surprised why so many people opt to take routes that put them in the same exact place by their mid 20s but with a massive debt over their heads versus these seemingly less glamorous routes. Maybe the marketing of “leaving the parents nest” is just that good?
Tuition at my states flagship, UIUC, is now 20k a year. Combine book costs and other misc and youre looking at 100k of debt before even accounting for room and board.
CCs are perfect for students who might not know if they need to go to college or not. Better to only waste a few hundred dollars to realize college isn't for you. I had an amazing time at Community College, and even though I took off time to work I ultimately did get a 4 year degree for a pretty low price .
The biggest issue in my opinion would be all of the people who have tons of student loan debt but didn't exactly graduate. You have the worst of both worlds
The biggest issue in my opinion would be all of the people who have tons of student loan debt but didn't exactly graduate. You have the worst of both worlds
I'd like to see a new funding model for universities.
I'd like to see universities be able to register for a share of tax revenue from their students post-graduation.
For example "This course costs 5% extra income tax for 20 years".
Then, you pay nothing for the course, but after you graduate you pay a 5% higher tax rate, and that extra money goes to the university. The IRS would administer the scheme since they already have to do all the math anyway for every taxpayer.
This gives the university a strong incentive to make sure their students are productive. They'll help push students into studying finance rather than 'soccer studies'.
Obviously the university needs money now, not in 20 years, but private lenders can help cover that gap (and then the lender also has an incentive to make sure the university is doing a good job educating students).
I'd like to see universities be able to register for a share of tax revenue from their students post-graduation.
For example "This course costs 5% extra income tax for 20 years".
Then, you pay nothing for the course, but after you graduate you pay a 5% higher tax rate, and that extra money goes to the university. The IRS would administer the scheme since they already have to do all the math anyway for every taxpayer.
This gives the university a strong incentive to make sure their students are productive. They'll help push students into studying finance rather than 'soccer studies'.
Obviously the university needs money now, not in 20 years, but private lenders can help cover that gap (and then the lender also has an incentive to make sure the university is doing a good job educating students).
This is just an Income Share Agreement. https://en.wikipedia.org/wiki/Income_share_agreement
The one problem with this scheme is that it turns colleges into job training and nothing else. They would most likely drop any major that doesn't make a lot of future money.
There is still value in providing philosophy courses and music and art and all the other things that don't lead directly to high paying jobs.
There is still value in providing philosophy courses and music and art and all the other things that don't lead directly to high paying jobs.
Well some philosophy majors will still end up earning a decent amount.
So the philosophy department will still be earning - just less.
They could also charge a higher percentage of future income to make up for the loss of earnings.
So the philosophy department will still be earning - just less.
They could also charge a higher percentage of future income to make up for the loss of earnings.
This value is nowhere near 200 thousand dollars, and everyone knows it
For whom? John Lennon, Qunicy Jones, Yo-Yo-Ma might disagree with that. John WIlliams, Alicia Keys? It's fine to point out that almost nobody with that education gets to that level of fame, but, I dunno, I'd value it at well over $200k if I were Phillip GLass, Jonny Greenwood (of Radiohead), or Herbie Hancock.
I agree, the price must come down. But how do we get the price to come down while still making sure poor kids get a chance to study?
Yeah, that's an idea. Purdue used to have that, but at some point they stopped https://www.insidehighered.com/news/2022/06/23/purdue-pauses...
Ultimately, I think it's a market non-optimal way if you're the university since student loans allow you to decouple pricing entirely and completely derisk the student.
Ultimately, I think it's a market non-optimal way if you're the university since student loans allow you to decouple pricing entirely and completely derisk the student.
Fun fact, some schools do the opposite of this. Slightly oversimplifying, but the schools say "we'll raise your tuition by $x and give you ~$x in grants after you graduate if your income is below $y". It's most common for people in law school that know they'll be working for the government (eg prosecutor/public defender), so their income is mostly predetermined and they'll be eligible for loan forgiveness regardless. Win/win for the colleges and the students.
I think some places have tried it before, but if it's optional then people who think they will earn a lot will just get a traditional loan, and people who think they will earn less get the income based one. So it ends up not being economical to offer.
Can confirm. Currently attending a mid-tier public state school, and I'm looking at ~1200/mo (2000/mo, including housing - living w/ 3 roommates) out of pocket (since I'm trying to avoid taking out loans as much as possible). I've worked up to 2 jobs at the same time just to keep making ends meet. It's really rough out there, and my degree program doesn't even begin to cover fundamental CS concepts like P/NP-completeness, DFAs, etc. Waste of money IMHO.
> It's really rough out there, and my degree program doesn't even begin to cover fundamental CS concepts like P/NP-completeness, DFAs, etc
Then it's presumably not a CS degree...?
Then it's presumably not a CS degree...?
Main cause: Government-backed student loans.
While it is technically the student paying, in reality the money is going (indirectly) from the federal reserve to the universities.
Everyone loves free government money...
The fact the student may never pay off those loans (and hence the government foots the bill) is the cherry on top.
While it is technically the student paying, in reality the money is going (indirectly) from the federal reserve to the universities.
Everyone loves free government money...
The fact the student may never pay off those loans (and hence the government foots the bill) is the cherry on top.
I believe this is no accident. The government wants a world class education system and leading research.
They could just give money direct to universities - but then it's hard to ensure they're getting good value for money.
But by giving it to students to in turn give to universities they get better value for money.
One day someone has to pay for that - and the students paying it back via loan repayments isn't awfully different to citizens paying it back via taxes. But with the student route everyone is more invested in getting good value for money. And non-university users (who tend to be the poorest) don't end up paying. Win win.
They could just give money direct to universities - but then it's hard to ensure they're getting good value for money.
But by giving it to students to in turn give to universities they get better value for money.
One day someone has to pay for that - and the students paying it back via loan repayments isn't awfully different to citizens paying it back via taxes. But with the student route everyone is more invested in getting good value for money. And non-university users (who tend to be the poorest) don't end up paying. Win win.
A world-class education system where you can leave the $200k in debt and never exceed $100k in income.
We're at a point where going into college for non-STEM degree can (and likely will be) one of the biggest mistakes of your life.
We're at a point where going into college for non-STEM degree can (and likely will be) one of the biggest mistakes of your life.
But if the government paid for it, you would never see the $200k in debt. But you'd still be in debt - it would just be government debt. And as a citizen, your government's debt is still kinda your problem.
If it is 'free', then why are students in debt and liable for it?
(and don't confuse the issue with current debt relief bill. The current bill has not been in effect since 1983, it is trying to give relief for this situation, not causing it).
(and don't confuse the issue with current debt relief bill. The current bill has not been in effect since 1983, it is trying to give relief for this situation, not causing it).
It's free for universities who can rest easy knowing that if students don't pay then it doesn't affect them.
Ah, free in the sense that the University got its money and can now ignore any consequences?
It is NOT free to the student who is definitely affected. They are in debt and now crippled. But the university got it's money.
If you want to blame the government. Why is it the governments fault that Universities are now behaving like scammers and charging more for less and leaving the 'customer' stuck.
----
Lets say I go to a used car salesman, and they want to cheat me.
Lets say (before 1983) I would pay 2000$ for the car, but I'm scammed and out 2000$. I lost 2000$
Lets say figuratively now it is (2020), and I can't afford the car, so a rich uncle co-signs, and give me 30,000$.
I still get cheated, but now I'm out more money, AND now I'm in debt to my uncle (who lets say wants some 'payment' I feel uncomfortable performing).
The used car salesman is a cheat either way, for lesser money or more money, and either way they got my money.
And I'm in debt and blowing my uncle until it is paid off.
In the end, I (the student) am stuck. Is it my uncles fault? Is it the crooked salesman? Maybe my uncle didn't know the salesman was a cheat either (but like a bank, does want something in return)? Should I know the salesman was a cheat? Maybe I'm young and just starting out in life and not sure about the warning signs? Should we allow the young and in-experienced to be exploited?
It is NOT free to the student who is definitely affected. They are in debt and now crippled. But the university got it's money.
If you want to blame the government. Why is it the governments fault that Universities are now behaving like scammers and charging more for less and leaving the 'customer' stuck.
----
Lets say I go to a used car salesman, and they want to cheat me.
Lets say (before 1983) I would pay 2000$ for the car, but I'm scammed and out 2000$. I lost 2000$
Lets say figuratively now it is (2020), and I can't afford the car, so a rich uncle co-signs, and give me 30,000$.
I still get cheated, but now I'm out more money, AND now I'm in debt to my uncle (who lets say wants some 'payment' I feel uncomfortable performing).
The used car salesman is a cheat either way, for lesser money or more money, and either way they got my money.
And I'm in debt and blowing my uncle until it is paid off.
In the end, I (the student) am stuck. Is it my uncles fault? Is it the crooked salesman? Maybe my uncle didn't know the salesman was a cheat either (but like a bank, does want something in return)? Should I know the salesman was a cheat? Maybe I'm young and just starting out in life and not sure about the warning signs? Should we allow the young and in-experienced to be exploited?
> Why is it the governments fault that Universities are now behaving like scammers and charging more for less and leaving the 'customer' stuck.
Because the government is not doing its due diligence as a lender, because current voters and government employees have no problem soaking future taxpayers. And crippling uninformed 18 year olds’ futures.
Because the government is not doing its due diligence as a lender, because current voters and government employees have no problem soaking future taxpayers. And crippling uninformed 18 year olds’ futures.
> "Because the government is not doing its due diligence as a lender"
That is called regulation, and once you start putting in regulations, then everyone starts screaming about big government and over-regulation. There is no winning, put in protections and you are some big government commie bastard, don't put in protections and you are heartless and ineffectual.
And, I dare say, banks even in other areas where they could lose money (2008 real-estate), are just as eager to reel people in and ignore bad loans.
That is called regulation, and once you start putting in regulations, then everyone starts screaming about big government and over-regulation. There is no winning, put in protections and you are some big government commie bastard, don't put in protections and you are heartless and ineffectual.
And, I dare say, banks even in other areas where they could lose money (2008 real-estate), are just as eager to reel people in and ignore bad loans.
No, I would not call that regulations. Typically, regulations refers to the government restricting or requiring business activity.
The government offering loans in the first place is regulation, and choosing not to do underwriting is part of that regulation.
I.e. the government regulated that they would lend tens of thousands of dollars to any student, so student A can no longer bargain with the school for a lower price because student B, C, and D are lined up to pay whatever is asked.
The government offering loans in the first place is regulation, and choosing not to do underwriting is part of that regulation.
I.e. the government regulated that they would lend tens of thousands of dollars to any student, so student A can no longer bargain with the school for a lower price because student B, C, and D are lined up to pay whatever is asked.
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I will say it again:
Private high school costs have also gone up astronomically and there are no federal loans for them.
[0] https://educationdata.org/average-cost-of-private-school
Private high school costs have also gone up astronomically and there are no federal loans for them.
[0] https://educationdata.org/average-cost-of-private-school
This says that the average private highschool tuition is $15,645.
In 2003, the average private highschool tuition was $8,412 (Snyder, Dillow, & Hoffman, 2008), or $14,079 (in today's dollars).
Please correct me if I've made some mistake, but plugging those numbers in shows that the annualized real increase in price is 0.5% per year over 20 years.
In 2003, the average private highschool tuition was $8,412 (Snyder, Dillow, & Hoffman, 2008), or $14,079 (in today's dollars).
Please correct me if I've made some mistake, but plugging those numbers in shows that the annualized real increase in price is 0.5% per year over 20 years.
The first bullet says:
“$23,839 is the average annual tuition among the nation’s private K-12 schools.”
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kristopolous(1)
This said nothing about the number of seats in private schools versus public ones. If there are very few then we should expect private costs to increase dramatically as public costs increase. Not every student gets public loans, some students come from wealthy families that have other means of financing. If public is $100k, then these families would still likely choose the $120k private school for better outcomes. There is no reason for private to stay cheap.
Got a source for that claim?
Common sense?
Government (taxpayers) underwrite unlimited amounts to uninformed buyers paying informed sellers.
I am a seller (college boss), and I can boost my own income, and I know I have no competitive pressure to keep prices down, so why not increase the college budget and spending, hence justifying tuition increases.
Government (taxpayers) underwrite unlimited amounts to uninformed buyers paying informed sellers.
I am a seller (college boss), and I can boost my own income, and I know I have no competitive pressure to keep prices down, so why not increase the college budget and spending, hence justifying tuition increases.
Common sense is often wrong. I haven't found any reliable source yet that even mentions the availability government loans as being a driving factor. Based on the limited research I've done over the last few minutes, the main drivers appear to be:
1. A large increase in demand for College. I could imagine this may be, in part, due to more accessible student loans. But it appears that many factors have come into play, and the main one is the perception that you cannot get a liveable wage in this country without a college degree.
2. Less funding from state governments
3. Increased spending in administration and student services unrelated to education.
Here are the sources I've read through so far. https://www.bankrate.com/loans/student-loans/why-is-college-... https://manhattan.institute/article/a-new-approach-for-curbi...
1. A large increase in demand for College. I could imagine this may be, in part, due to more accessible student loans. But it appears that many factors have come into play, and the main one is the perception that you cannot get a liveable wage in this country without a college degree.
2. Less funding from state governments
3. Increased spending in administration and student services unrelated to education.
Here are the sources I've read through so far. https://www.bankrate.com/loans/student-loans/why-is-college-... https://manhattan.institute/article/a-new-approach-for-curbi...
> Based on the limited research I've done over the last few minutes, the main drivers appear to be:
All your drivers cannot cause a price increase if an 18 to 25 year old cannot get unlimited funding from a lender to make a stupid decision.
All your drivers cannot cause a price increase if an 18 to 25 year old cannot get unlimited funding from a lender to make a stupid decision.
3 is a side effect, not a primary effect.
In 1 you're talking about a self-reinforcing effect. "I have to put on makeup to look pretty because everyone puts on makeup to look pretty". When everyone believes it, it becomes true.
In 1 you're talking about a self-reinforcing effect. "I have to put on makeup to look pretty because everyone puts on makeup to look pretty". When everyone believes it, it becomes true.
Common sense is horseshit. You know what was common sense in the 1600s? A gentleman is clean, so he doesn't need to wash his hands between cutting open a corpse and delivering a baby, and oh gee why do so many women get awful infections after childbirth?
Common sense is the rallying cry of people who cannot backup their claim by other means.
Common sense is the rallying cry of people who cannot backup their claim by other means.
Because it is not 'free'.
It puts students in debt.
You are boosting your income by exploiting students through usury.
Lets say there is no government, then where was the 'competitive' pressure? How does government loans take away competition? Did they close schools to eliminate the competition?
You are boosting your income by exploiting students through usury.
Lets say there is no government, then where was the 'competitive' pressure? How does government loans take away competition? Did they close schools to eliminate the competition?
Good faith reading is that he means its risk free to the school, because they get paid up front even if the student doesn't graduate, much less earn enough to pay back his loan.
Googling it provides a quick-answer box that states this claim and provides a source:
https://www.google.com/search?q=what+percent+of+student+loan...
92% Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans is federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers.
I think it's then pretty fair game for a forum comment to then suggest there's a causal relationship between "an entity that can print the currency that denominates the debt is backing the debt" and "this drives the price of the thing up due to easier access to funding for it".
https://www.google.com/search?q=what+percent+of+student+loan...
92% Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans is federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers.
I think it's then pretty fair game for a forum comment to then suggest there's a causal relationship between "an entity that can print the currency that denominates the debt is backing the debt" and "this drives the price of the thing up due to easier access to funding for it".
No, it doesn't. That quick-answer doesn't even mention rising tuition costs. It's only tangentially related. The existence of government backed student loans does not in itself prove they are the main cause of increased tuition.
To prove that claim, you'd need to actually demonstrate some sort of causal relationship and have data to back it up
For example, you could make the argument that:
1. Demand is the primary cause of tuition increases
2. Government backed student loans are the primary cause for the increase in demand
I believe that 1 is almost certainly the main cause of tuition cost increases. What I haven't seen any evidence for is 2. If it's true, show me the evidence. I'm open to it.
From what this article states and the research I've done, the main driver of demand is not cheap government loans. It's the labor market. The best jobs in this country require a college degree. That is what is probably driving demand, the desire to earn a liveable wage. Not the fact that you can get a cheap loan.
To prove that claim, you'd need to actually demonstrate some sort of causal relationship and have data to back it up
For example, you could make the argument that:
1. Demand is the primary cause of tuition increases
2. Government backed student loans are the primary cause for the increase in demand
I believe that 1 is almost certainly the main cause of tuition cost increases. What I haven't seen any evidence for is 2. If it's true, show me the evidence. I'm open to it.
From what this article states and the research I've done, the main driver of demand is not cheap government loans. It's the labor market. The best jobs in this country require a college degree. That is what is probably driving demand, the desire to earn a liveable wage. Not the fact that you can get a cheap loan.
The article this post was about?
The article does not support this claim.
The claim: > Main cause: Government-backed student loans.
I've read the article. It discusses student loans and how they've skyrocketed, but never makes the claim that their availability is the cause. Instead, it argues a change in America's "labor profile" is to blame for the rise in demand (which, in turn, leads to higher tuition):
> Rising enrollment is also associated with a changing US labor profile; for example, manufacturing jobs were eclipsed by “business and professional services” jobs as well as healthcare, education, and retail jobs.
Going further, the author suggests we need to forgive/cancel the student loans:
> These loans should be forgiven/cancelled
To me, this implies the author does not believe federal student loans are to blame.
The claim: > Main cause: Government-backed student loans.
I've read the article. It discusses student loans and how they've skyrocketed, but never makes the claim that their availability is the cause. Instead, it argues a change in America's "labor profile" is to blame for the rise in demand (which, in turn, leads to higher tuition):
> Rising enrollment is also associated with a changing US labor profile; for example, manufacturing jobs were eclipsed by “business and professional services” jobs as well as healthcare, education, and retail jobs.
Going further, the author suggests we need to forgive/cancel the student loans:
> These loans should be forgiven/cancelled
To me, this implies the author does not believe federal student loans are to blame.
You have to look at net price not sticker price. faulty analysis. better data here https://usafacts.org/articles/college-tuition-has-increased-...
You only get the net price after applying and submitting a FAFSA. The net price is only useful if you intend to go there. It's functionally useless for any other purpose. If the price says $100 then for most everyone it's $100.
The number of people where the net price =/= sticker price is growing.
"In 2000, 44.4% of all undergraduates received grant aid, whereas in 2016, that number increased to 63.1%."
"In 2000, 44.4% of all undergraduates received grant aid, whereas in 2016, that number increased to 63.1%."
There are resources such as https://collegecost.ed.gov/net-price to help with the information.
College prices are about as real as hospital prices. Sure, some outliers literally pay that much, but the vast majority receive a discounted price for various reasons. When you factor in those discounts, the cost inflation is 2.5x instead of 17x as the article suggests. It's more than a forgettable idiosyncrasy. It's "how it works" and if the author of the article doesn't mention it, they're either so ignorant as to not be worth reading or they're being dishonest.
I thought it was important to give that context.
American higher Ed is often about prestige and branding. The pricing strategy is similar to luxury goods.
College prices are about as real as hospital prices. Sure, some outliers literally pay that much, but the vast majority receive a discounted price for various reasons. When you factor in those discounts, the cost inflation is 2.5x instead of 17x as the article suggests. It's more than a forgettable idiosyncrasy. It's "how it works" and if the author of the article doesn't mention it, they're either so ignorant as to not be worth reading or they're being dishonest.
I thought it was important to give that context.
American higher Ed is often about prestige and branding. The pricing strategy is similar to luxury goods.
I was offered a $10k/year academic scholarship in my state school offer letter, no application required.
I work IT for an institution that is currently kicking off a campaign to transform the business model of higher education. We're currently one of the more expensive private liberal arts schools in Michigan, and we want to pivot to fully funded tuition for all students. We have been talking a lot lately, just like OP, about how this cost trajectory in Higher Ed is unsustainable. We want to instead build a cycle of generosity.
1. https://hope.edu/forward
2. https://www.pushkin.fm/podcasts/revisionist-history/a-good-c...
3. https://youtu.be/A-c3h6J8ZKk
4. https://youtu.be/VssQtdXWqSs
1. https://hope.edu/forward
2. https://www.pushkin.fm/podcasts/revisionist-history/a-good-c...
3. https://youtu.be/A-c3h6J8ZKk
4. https://youtu.be/VssQtdXWqSs
The situation for students is pretty close to a double bind situation [1]:
- Get loans and go to school, or I (your family, society, the job market) will punish you.
- Do not get loans, or I (the economy, lenders, your credit score) will punish you.
- You must got to higher education and get a degree, but only if you want to. ("college isn't for everybody", except all we ever say is a HS education is a dead end).
- With a blaming tertiary of "You should have already know that and realized what an issue large student debt was before taking the loans. Why are you trying to act like such a victim?"
And I admit, I've fallen into this previously of "how did they borrow so much money?" Except its this same issue of "we put you in a bad situation, and then blame you for not escaping earlier."
[1] https://en.wikipedia.org/wiki/Double_bind
- Get loans and go to school, or I (your family, society, the job market) will punish you.
- Do not get loans, or I (the economy, lenders, your credit score) will punish you.
- You must got to higher education and get a degree, but only if you want to. ("college isn't for everybody", except all we ever say is a HS education is a dead end).
- With a blaming tertiary of "You should have already know that and realized what an issue large student debt was before taking the loans. Why are you trying to act like such a victim?"
And I admit, I've fallen into this previously of "how did they borrow so much money?" Except its this same issue of "we put you in a bad situation, and then blame you for not escaping earlier."
[1] https://en.wikipedia.org/wiki/Double_bind
Sshhhh your theory implies systemic issues. And everyone knows the individual is supposed to be the one to be blamed for that!
From 1991 to 2013, federal student loan issuances increased from $20 billion to over $100 billion (in 2013 dollars). And federal tax expenditures related to education increased from $2.5 billion to over $30 billion.
Growing tuitions are a predictable consequence of the federal government subsidizing higher education systems that they don't control (unlike state funding of state universities). The feds should impose price controls on any institution that receives federal funding (including from federal student loans): https://prospect.org/education/case-for-higher-education-pri.... Otherwise, costs will predictably skyrocket.
Growing tuitions are a predictable consequence of the federal government subsidizing higher education systems that they don't control (unlike state funding of state universities). The feds should impose price controls on any institution that receives federal funding (including from federal student loans): https://prospect.org/education/case-for-higher-education-pri.... Otherwise, costs will predictably skyrocket.
I wonder if there's any data comparing tuition growth rates at "normal" schools and those schools that don't accept federal funding of any kind (including federal loans). There's not many of them, and they're usually small, Christian-oriented schools[0], but I'd be curious to see if there's actually any obvious difference in growth rate. A quick google search didn't come up with any data.
[0] https://deanclancy.com/a-list-of-colleges-that-dont-take-fed...
[0] https://deanclancy.com/a-list-of-colleges-that-dont-take-fed...
Isn't part of the issue that state and federal funding for higher education hasn't kept up with costs, so the increase just goes straight to the students paying?
Harvard has 2,000 students per year and a $50 billion endowment.
That is enough to refund $500,000 to every student they've had for the past 50 years.
Why are universities hoarding so much money?
https://www.highereddive.com/news/how-20-largest-college-end...
Why are universities hiring so many administrators in relation to professors and students?
https://www.usnews.com/education/articles/one-culprit-in-ris...
That is enough to refund $500,000 to every student they've had for the past 50 years.
Why are universities hoarding so much money?
https://www.highereddive.com/news/how-20-largest-college-end...
Why are universities hiring so many administrators in relation to professors and students?
https://www.usnews.com/education/articles/one-culprit-in-ris...
Harvard admits 2,000 undergraduates per year, but it has almost 3x as many graduate students as undergraduates. As far as private universities go, Harvard is a really big school.
In the United States, the growth in spending on administrators from ~2000-present is more than the combined growth of spending on scholarships and professorships combined.
Academia in the US has become a business, and the business is being run by the secretaries.
Academia in the US has become a business, and the business is being run by the secretaries.
And yet, college is still worth it. While many folks like to point out the Baumol effect aka cost disease, it's also important to remember that college is overwhelmingly worth it, and the government ought to subsidize college educations. There's no better investment the government can make than subsidize more people to go to college. (Well, perhaps except for funding the IRS, but that's more of a zero-sum game.)
See: https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/c...
Lifetime net earnings increase for progressively higher levels of education, resulting in overall GDP growth and a wealthier society better able to pay for public goods and the social welfare of all. The vast majority of college students who attend a 2 or 4 year in-state program will net a significant increase in lifetime earnings and the amount they pay for that degree, even assuming they maximized their federal loans, will be dwarfed by their lifetime earnings increase.
Even for those folks getting masters degrees to the tune of hundreds of thousands of dollars, the Department of Education finds that the lifetime net earnings increase by nearly $1.5 million over a high school education, and yes, actually, around $300k over a Bachelor's degree.
See: https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/c...
Lifetime net earnings increase for progressively higher levels of education, resulting in overall GDP growth and a wealthier society better able to pay for public goods and the social welfare of all. The vast majority of college students who attend a 2 or 4 year in-state program will net a significant increase in lifetime earnings and the amount they pay for that degree, even assuming they maximized their federal loans, will be dwarfed by their lifetime earnings increase.
Even for those folks getting masters degrees to the tune of hundreds of thousands of dollars, the Department of Education finds that the lifetime net earnings increase by nearly $1.5 million over a high school education, and yes, actually, around $300k over a Bachelor's degree.
I would love to see comparative data on how the average college-educated worker's earnings have changed during the same time frame!
My guess is that the adjusted wages haven't risen much over time, or at least nowhere near as steeply as the associated education costs have.
My guess is that the adjusted wages haven't risen much over time, or at least nowhere near as steeply as the associated education costs have.
A better method to analyze college cost is to look at expected lifetime income gain for a college degree vs not having one. If it's significantly net positive, then college is a good investment.
Since 1980, that has gone up a lot. This method is
Since 1980, that has gone up a lot. This method is
Why is that better? Non graduates also have loan expenses for other things, e.g. businesses or mortgages acquired sooner. You'd want to compare paychecks net of debt payments to look at workable income.
College is either a good investment, or it is not. To evaluate, you look at expected returns, just like any investment.
Last time I ran numbers, it was one of the best investments one could make; better return than historical stocks, real estate, or just about any similar volatility asset class.
You also might want to figure in lifetime expected unemoloyment- there's usually a decent gap between college degreed unemployment rates vs non-degreed rates.
And the gains given to skilled vs unskilled are only increasing.
Last time I ran numbers, it was one of the best investments one could make; better return than historical stocks, real estate, or just about any similar volatility asset class.
You also might want to figure in lifetime expected unemoloyment- there's usually a decent gap between college degreed unemployment rates vs non-degreed rates.
And the gains given to skilled vs unskilled are only increasing.
Anecdata, but graduated in ‘08 and it looks like the chart roughly matches the doubling in tuition in the university I attended since then.
I used loans to pay for my education, and one effect that has from an individual level is that it really changes your appetite for risk during the payoff. From a macro level it’s probably nice to have indebted young people motivated to work; however, I’m sure it produces a lot fewer entrepreneurs willing to gamble on a great idea.
I used loans to pay for my education, and one effect that has from an individual level is that it really changes your appetite for risk during the payoff. From a macro level it’s probably nice to have indebted young people motivated to work; however, I’m sure it produces a lot fewer entrepreneurs willing to gamble on a great idea.
This data is what I used to convince my parents were very much anti-student loan forgiveness (we paid ours so you get to suffer too), that a certain level of it is appropriate. I honestly don’t think a lot of people realize just how bad its gotten. Couple this with the fact that somehow budget is limiting the number classes being offered with the extra 1.5 semesters on average of additional general education requirements, and you’ve created a system that predates new adults, pushing them underwater from the start. A bit ironic that we’ve had the lowest wage growth in 60+ years just as the cost to get a degree, the default requirement for almost any job, skyrocketed. These loans students took out to go to university cannot be dismissed and will follow you until the day you die. This debt bondage of people just turning 18, is pure horseshit. We supposedly outlawed indentured servitude but it’s still style alive and well, and our machiavellian, geriatric congress in the US has offered nothing besides cruel indifference, useless excuses, and is distracted arguing about shit like drag performance and bathrooms? Like what the fuck.
I would love to know how other HN parents are thinking about postsecondary education for your kids. I started undergrad in 1990, and I have a 12yo now.
I understand financial planning, but I'm having a hard time wrapping my head around how to think about college. Does anyone have insight beyond "Don't pay a tuition amount that's out of line with likely earnings"?
I understand financial planning, but I'm having a hard time wrapping my head around how to think about college. Does anyone have insight beyond "Don't pay a tuition amount that's out of line with likely earnings"?
Accreditation Boards
Textbook Publishers
University Tuition
It's a triangle scheme where one feeds the other and it's all fueled by non-dischargeable government loans.
Student Loans are the hill to die on. As someone who isn't eligible for Military Service, I don't get supplemental housing, free healthcare, free college education, hiring preferences, small business loan preferences, nor a lifetime of "OH THANK YOU FOR YOUR SERVICE!!", and that's if you aren't one of MILLIONS of Veterans gaming the VA disability system.
The military decided asthmatics and ADHD kids will forever be second class citizens because we can't join the drunken sexfest that is modern military service; which has essentially become a daycare for 18-24 year-olds.
It's absolutely unconstitutional for the military to relegate individuals to specific spectrums of society given how they were born. I'm not gay so I guess that doesn't matter. But, who cares? If the Constitution mattered we wouldn't be where we are today.
Textbook Publishers
University Tuition
It's a triangle scheme where one feeds the other and it's all fueled by non-dischargeable government loans.
Student Loans are the hill to die on. As someone who isn't eligible for Military Service, I don't get supplemental housing, free healthcare, free college education, hiring preferences, small business loan preferences, nor a lifetime of "OH THANK YOU FOR YOUR SERVICE!!", and that's if you aren't one of MILLIONS of Veterans gaming the VA disability system.
The military decided asthmatics and ADHD kids will forever be second class citizens because we can't join the drunken sexfest that is modern military service; which has essentially become a daycare for 18-24 year-olds.
It's absolutely unconstitutional for the military to relegate individuals to specific spectrums of society given how they were born. I'm not gay so I guess that doesn't matter. But, who cares? If the Constitution mattered we wouldn't be where we are today.
> can't join the drunken sexfest that is modern military service
Wait, what did I miss?
Wait, what did I miss?
Apparently you missed being social. Having worked with a number of vets it's absolutely true.
Here, in case you missed this too:
https://www.npr.org/sections/alltechconsidered/2014/11/19/36...
Here, in case you missed this too:
https://www.npr.org/sections/alltechconsidered/2014/11/19/36...
Sexfest is different from sexist
sir this is a wendys
I can't downvote you, but the fact you find huge segments of people being left behind and forced into predatory loans simply for an education they should have received in high school while the military industrial complex forces its tendrils into every facet of American life funny, I can only assume you realize how wrong it is and can't handle the dissonance.
There was a #1 hn submission some time ago about a theory of how/why things have risen is price i.e. cost of educating a child now vs 100 years ago, but exam results are no better, cost of keeping someone in prison etc. but crime is no lower, etc. it gave a name to the phenomenon.
I would like to find it, if that rings a bell with anyone..
My preferred solution is to establish an open university in the US (or make it borderless), through which anyone can earn a degree remotely for as little cost as possible -- like $5000 per year or $20k per degree.
Georgia Tech and others have shown this is possible (see their 13 MS degree programs in engineering). Certainly by enlisting the growing set of tools used for remote professional collaboration, it should be possible to cover a wide variety of subjects, especially if the staff is also remote (and not overpriced).
Compared to the $240K of almost all private colleges in the US, a viable alternative that costs only $20k should quickly reset the cost of advanced education to be a LOT more reasonable.
In addition, a cheap remote-only college system be a great resource for many people who want to take college courses but live nowhere near a full-time school, or who need retraining as they change careers or advance professionally.
Really, this solution is long overdue.
Georgia Tech and others have shown this is possible (see their 13 MS degree programs in engineering). Certainly by enlisting the growing set of tools used for remote professional collaboration, it should be possible to cover a wide variety of subjects, especially if the staff is also remote (and not overpriced).
Compared to the $240K of almost all private colleges in the US, a viable alternative that costs only $20k should quickly reset the cost of advanced education to be a LOT more reasonable.
In addition, a cheap remote-only college system be a great resource for many people who want to take college courses but live nowhere near a full-time school, or who need retraining as they change careers or advance professionally.
Really, this solution is long overdue.
See:
- Western Governors University (WGU)
- Open University (OU)
Both online; both relatively cheap.
N.B. Georgia Tech’s online masters programs are professional masters and not research/thesis masters — so unless you are getting paid by someone else to get them, they are almost certainly a waste of money (and there is negative selection pressure during hiring for people with these sorts of degrees).
- Western Governors University (WGU)
- Open University (OU)
Both online; both relatively cheap.
N.B. Georgia Tech’s online masters programs are professional masters and not research/thesis masters — so unless you are getting paid by someone else to get them, they are almost certainly a waste of money (and there is negative selection pressure during hiring for people with these sorts of degrees).
My 35 years of experience after a comparable part-time MS in CS says otherwise.
Professional masters are often compared to a BS curriculum, which is in no way a disability to hiring or advancement since most people in engineering don't have research degrees nor need them to thrive.
In fact, the presence of a research thesis in lieu of taking a couple more courses in useful subjects would be more of a waste in the real world than the reverse, IMHO.
Professional masters are often compared to a BS curriculum, which is in no way a disability to hiring or advancement since most people in engineering don't have research degrees nor need them to thrive.
In fact, the presence of a research thesis in lieu of taking a couple more courses in useful subjects would be more of a waste in the real world than the reverse, IMHO.
> there is negative selection pressure during hiring for people with these sorts of degrees
This is a great point.
This is a great point.
Much better data on changes in published and net tuition paid over time...
https://research.collegeboard.org/media/pdf/trends-in-colleg...
https://research.collegeboard.org/media/pdf/trends-in-colleg...
Yes, thank you. The OP analysis is terribly naive. Nameplate tuition has little relationship to what actual students pay. The net data from the college board is much better, and shows that actual tuition paid at many schools is flat over the past decade.
The OP also barely acknowledges the huge reductions in state funding for higher ed. In the 60s California paid 100% of educational costs for students. It's now down below 40%. Tuition has gone up to close the gap. https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...
> Long-term, controlling the underlying cost of higher ed itself is an imperative.
Nothing in the OPs analysis supports any increase in the underlying cost of higher ed. While there may be some, it's well well below the nameplate tuition increases. Here's the best data I have on expenditures by college on a per Full-Student basis, and they are nowhere near what the OP is claming: https://nces.ed.gov/programs/digest/d20/tables/dt20_334.10.a...
Lastly, while the argument for some student debt relief is a good one, and his points are well made, the correct policy is Biden's, a universal reduction in debt in the $20-30k range. This gives all students some relief, but doesn't give a regressive windfall relief to doctors, lawyers and other professional students with good career prospects and six-figure debt.
The OP also barely acknowledges the huge reductions in state funding for higher ed. In the 60s California paid 100% of educational costs for students. It's now down below 40%. Tuition has gone up to close the gap. https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...
> Long-term, controlling the underlying cost of higher ed itself is an imperative.
Nothing in the OPs analysis supports any increase in the underlying cost of higher ed. While there may be some, it's well well below the nameplate tuition increases. Here's the best data I have on expenditures by college on a per Full-Student basis, and they are nowhere near what the OP is claming: https://nces.ed.gov/programs/digest/d20/tables/dt20_334.10.a...
Lastly, while the argument for some student debt relief is a good one, and his points are well made, the correct policy is Biden's, a universal reduction in debt in the $20-30k range. This gives all students some relief, but doesn't give a regressive windfall relief to doctors, lawyers and other professional students with good career prospects and six-figure debt.
The sources cited in the “710%” chart don’t seem to have any data to support the thesis. What is the source for this data? (see https://educationdata.org/student-loan-debt-statistics and https://www.pewtrusts.org/en/research-and-analysis/fact-shee...)
As a single datapoint, in 1983 MIT tuition hit $10K -- highest in the nation according to a cartoon in the paper. It's currently $60K (total cost estimated $80K) so 7X is about right.
However there's another way to look at it: over the summer I would earn over $10K so roughly covered my tuition. Admittedly that was at the high end of summer job compensation due to the AI boom, but gives you a rough idea of where that tuition fee fit. I finished school with no debt.
These days I doubt anyone is getting $50K for a summer job.
However there's another way to look at it: over the summer I would earn over $10K so roughly covered my tuition. Admittedly that was at the high end of summer job compensation due to the AI boom, but gives you a rough idea of where that tuition fee fit. I finished school with no debt.
These days I doubt anyone is getting $50K for a summer job.
>These days I doubt anyone is getting $50K for a summer job.
Enter Citadel: https://fortune.com/2023/06/28/wall-street-citadel-summer-in...
Enter Citadel: https://fortune.com/2023/06/28/wall-street-citadel-summer-in...
More than Google!
It's possible some grad students in AI are getting that kind of money these days. I was talking about my undergrad.
It's possible some grad students in AI are getting that kind of money these days. I was talking about my undergrad.
Big tech and big-tech-competitive places will generally pay you around $30k pre-tax for a summer job. But of course, most college students don't have access to those jobs at all, let alone for each summer in college.
I'm not seeing it explicitly defined but I assume this is the standard asterisk: "In the United States" so I got curious what's happening elsewhere.
Average annual tuition in Canada in 2006: CAD $4,400. 2023: CAD $6,834. So I could see it also being in the ballpark of 710% since 1983 as well.
https://www.statista.com/statistics/542989/canadian-undergra...
Average annual tuition in Canada in 2006: CAD $4,400. 2023: CAD $6,834. So I could see it also being in the ballpark of 710% since 1983 as well.
https://www.statista.com/statistics/542989/canadian-undergra...
Here in Austria the increase has been 0% :)
Tuition and fees in California's CSU system are still only about $8k per year. The CSU system provides a very good education, in some ways better than the more prestigious UC system because there tends to be more opportunities for direct contact with instructors. In the sciences, there are often more research opportunities and spaces for undergraduate students in labs. It's a real bargain, and you can save even more money by doing your first two years at a community college.
Some of my favorite most professional colleges are from San Jose State, which is a part of CSU. Obviously, it is anecdotal, but I do see in them very practical no bullshit attitude, yet strong theoretical fundamentals.
Others have mentioned the proble of government backed loans, but the whole higher education system is broken.
People are going in to get a degree with a job, meanwhile there's a whole bunch of administrators and people that think universities should be for rounding out your knowledge so you're required to pay thousands more for courses not needed for your degree. If we really wanted to, I am sure we could condense a bachelors down to 1-2 years with 2-3 years of practical learning in the field.
People are going in to get a degree with a job, meanwhile there's a whole bunch of administrators and people that think universities should be for rounding out your knowledge so you're required to pay thousands more for courses not needed for your degree. If we really wanted to, I am sure we could condense a bachelors down to 1-2 years with 2-3 years of practical learning in the field.
The rounding out is absolutely intentional. If we want certificate programs that are shorter and career-focused, those already exist.
Not to mention the likes of McGraw-Hill and other textbook makers deciding that since students have to go to school, they're free to charge said students whatever they want. Those companies are for-profit and publicly traded, meaning they have to, by law, increase profits every quarter.
Reprinting a new edition every year with minimal changes but a nice $50 price increase (on top of the book already costing several hundred) is a nice way to do that.
Sick bastards, the lot of them.
Reprinting a new edition every year with minimal changes but a nice $50 price increase (on top of the book already costing several hundred) is a nice way to do that.
Sick bastards, the lot of them.
a counterpoint to this narrative: grants/scholarships have been rising rapidly, so actual net tuition prices are surprisingly flat in recent years.
> Between 2006-07 and 2019-20, COA [cost of attendance] increased by around 27% at both types of institutions, but declined by 7-8% in the few years after that. The recent decline occurred because colleges posted similar nominal COA increases as in the past, but inflation was higher. Overall, COA increased by almost 20% over those 16 years at both types of institutions.
> But average net prices rose at a considerably more modest pace. Between 2006-07 and 2019-20, average net price increased by 13% and 7% at public and private four-year institutions, respectively. Those increases reversed in the post-COVID years. Overall, average net prices are largely unchanged, adjusted for inflation, compared to 2006-07.
https://www.brookings.edu/articles/college-prices-arent-skyr...
in the past 15 years in particular, the big story of college pricing is that it has become more progressive, i.e. more expensive for those with higher incomes.
> Between 2006-07 and 2019-20, COA [cost of attendance] increased by around 27% at both types of institutions, but declined by 7-8% in the few years after that. The recent decline occurred because colleges posted similar nominal COA increases as in the past, but inflation was higher. Overall, COA increased by almost 20% over those 16 years at both types of institutions.
> But average net prices rose at a considerably more modest pace. Between 2006-07 and 2019-20, average net price increased by 13% and 7% at public and private four-year institutions, respectively. Those increases reversed in the post-COVID years. Overall, average net prices are largely unchanged, adjusted for inflation, compared to 2006-07.
https://www.brookings.edu/articles/college-prices-arent-skyr...
in the past 15 years in particular, the big story of college pricing is that it has become more progressive, i.e. more expensive for those with higher incomes.
I can vouch for this. My daughter went to Yale. I paid the "Yale tax" of 20% of my income. An that only because I made more than $100K. Below $100K parental salary and it's free.
"List Price" is meaningless at university.
"List Price" is meaningless at university.
Remove loans and make colleges and public universities free again. It worked before and worked quite well. All comes back to the failings of Reagan once again.
I think another reason for the increase is that it's one of the few industries where they can charge as much as possible. The price is basically determined by:
Student: How much does it cost to attend your school?
University: How much do you have?
The base cost is some ridiculously high value and can be brought down with grants/scholarships/loans, which are needs based.
Student: How much does it cost to attend your school?
University: How much do you have?
The base cost is some ridiculously high value and can be brought down with grants/scholarships/loans, which are needs based.
The core issue is that there isn't a free market at work here and there are conflicting motivations that are preventing progress toward that model. One the one hand, people want higher education to be affordable and cost effective (which requires a free market) but on the other hand they want higher education available to all even if that means taking on an ROI negative course of study.
For example, if we allowed student loans to be a bankruptable form of debt, then over time, certain schools and majors would be unable to get loans, which then could have a series of economic responses such as universities increase tuition for ROI positive majors to support ROI negative majors or some departments might close or we might see consolidation of universities specializing in certain types of education.
For example, if we allowed student loans to be a bankruptable form of debt, then over time, certain schools and majors would be unable to get loans, which then could have a series of economic responses such as universities increase tuition for ROI positive majors to support ROI negative majors or some departments might close or we might see consolidation of universities specializing in certain types of education.
We have two kids in the in-state university system which are considered "affordable" relative to private colleges ($35k all in for tuition/room/board/misc per student per academic year vs. $65k-$85k) but are laughably expensive compared to almost any other country in the world.
If we didn't set up 529 plans years ago loans would be our only option to pay for the quarter of a million dollars required for both of them. If they were in private colleges, the combined outlay would be well over half a million dollars.
FWIW we did look at Canadian schools which may be affordable to Canadians, but not to international students ... mid 40s pre-Covid when my oldest was applying.
If we didn't set up 529 plans years ago loans would be our only option to pay for the quarter of a million dollars required for both of them. If they were in private colleges, the combined outlay would be well over half a million dollars.
FWIW we did look at Canadian schools which may be affordable to Canadians, but not to international students ... mid 40s pre-Covid when my oldest was applying.
The problem isn't just that the government is backing the loan program and forcing borrowers to pay. The government also allowed tuition rates to rise. Colleges and Universities increased the price of tuition because they were allowed to.
I wonder why University Presidents/ Top Administrators get so much less flak from politicians compared to CEOs, while probably making decisions that further increase the University "profits" all while many make $1mil/year+.
Because CEOs contribute and control a lot more money going to lobbing and politician financing.
Universities are heavily subsidized industries with little or no oversight.
Any other industry has all kinds of regulations and consumer protections they have to comply with.
A university is allowed to sell degrees to unsophisticated buyers, and if the degree is worthless, they are not on the hook. Who else can do that?
Universities never experience recessions or any other kind of contraction, so they never have to shed dead weight. The administrator to student/faculty ratio is way out of whack.
Student loans should be guaranteed by the university, not by the government. If the university has enough confidence in admitting a person and conferring a degree, they should stand behind it.
Any other industry has all kinds of regulations and consumer protections they have to comply with.
A university is allowed to sell degrees to unsophisticated buyers, and if the degree is worthless, they are not on the hook. Who else can do that?
Universities never experience recessions or any other kind of contraction, so they never have to shed dead weight. The administrator to student/faculty ratio is way out of whack.
Student loans should be guaranteed by the university, not by the government. If the university has enough confidence in admitting a person and conferring a degree, they should stand behind it.
I watched the university I was in for graduate school add all sorts of campus buildings, luxury apartments, and new administrative titles and hierarchies. Handing out massive contracts is a good job, but it's all borne on the students backs, and most of that stuff was not necessary for a good education.
They do a lot of catering to student egos too to get them in the door - "ooh, you're so special and wonderful, we're going to help you make it with our programs", knowing full well that most of the degrees were garbage.
They do a lot of catering to student egos too to get them in the door - "ooh, you're so special and wonderful, we're going to help you make it with our programs", knowing full well that most of the degrees were garbage.
"In 2022, the relative values of $100.00 from 1983 ranges from $249.00 to $701.00.... A simple Purchasing Power Calculator would say the relative value is $294.00. This answer is obtained by multiplying $100 by the percentage increase in the CPI from 1983 to 2022." - https://www.measuringworth.com/calculators/uscompare/
Easy access to credit does that. You can see it in developing countries. Once banks start offering mortgages to regular people, home prices go up five or ten fold in a few years.
We are seeing the perverse incentives of subsidized and free education. There are few barriers to increasing the cost of something if neither the consumer or supplier have sensitivity to cost at the time the purchase is made. And loans defer the pain for students in a way that makes them basically insensitive to the eventual cost of their education.
People react to incentives. Systems react to incentives. America has been ignoring this for 50 years.
People react to incentives. Systems react to incentives. America has been ignoring this for 50 years.
I was just asking colleagues at work in response to the supreme court ruling on the student debt forgiveness stuff whether or not they experienced yearly tuition increases every single year they were enrolled--straight monotonic increase. I got many yes emoji's tagged onto that post so I knew I wasn't the only one. I can only imagine that treadmill never stopped for people.
If lenders actually had to evaluate their chances of getting paid back what percentage of students do you think would not receive a loan? 50%? We need to make student loan debt dischargable in bankruptcy and the problem will be solved overnight. Lenders will suddenly take a keen interest in determining which students are serious and have a reasonable chance for success.
a16z had a great article on govt interference raising costs through the roof.
710% rise in education costs is American exceptionalism and greed.
If the federal govt stopped backing loans and let the market play out, the prices would come down.
If they removed employment sponsored healthcare loophole, and allowed a transparent pricing (like the one you get from your car mechanic before they fix your car), prices would come down.
There’s nothing magically different in health insurance vs car insurance.
I’m gonna get downvoted for this. Democrats have a good heart, but when they start giving away money, it’s not well thought out on how supply will react to increased demand.
PPP loans were a huge clusterfuck of giving out free money.
Now they’ve blown the debt ceiling.
The goal should be to lower prices, not to doll out more free money.
Inflation in house prices is nuts.
So you’ve got young people who can’t afford to own their home, ridden in education debt they may not be able to pay, not having kids since they can’t afford em.
Doesn’t look like a bright economic future.
710% rise in education costs is American exceptionalism and greed.
If the federal govt stopped backing loans and let the market play out, the prices would come down.
If they removed employment sponsored healthcare loophole, and allowed a transparent pricing (like the one you get from your car mechanic before they fix your car), prices would come down.
There’s nothing magically different in health insurance vs car insurance.
I’m gonna get downvoted for this. Democrats have a good heart, but when they start giving away money, it’s not well thought out on how supply will react to increased demand.
PPP loans were a huge clusterfuck of giving out free money.
Now they’ve blown the debt ceiling.
The goal should be to lower prices, not to doll out more free money.
Inflation in house prices is nuts.
So you’ve got young people who can’t afford to own their home, ridden in education debt they may not be able to pay, not having kids since they can’t afford em.
Doesn’t look like a bright economic future.
A little anecdote that made me realize the college I went to was running a racket:
I remember getting lunch freshman year and one day, the signs in the student union cafeteria were printed on poster board and the next they were flat screen TVs. When I asked the on duty manager why, they just said "because it's more eco friendly."
My entire world view shifted in that moment.
I remember getting lunch freshman year and one day, the signs in the student union cafeteria were printed on poster board and the next they were flat screen TVs. When I asked the on duty manager why, they just said "because it's more eco friendly."
My entire world view shifted in that moment.
I don't know if my world view would shift from an answer given off the cuff by someone who is not an expert in that domain. There are many rationales for switching to screens including easier to update and may be seen as more up to date.
I think using the CPI is flawed. Especially because the formula to calculate it changed. Also, more efficient industries yield cheaper products. This puts downward pressure on the CPI. I don't think this can be applied to tuition in this magnitude.
For comparison, M2 money supply increased 10-fold the last 40 years.
Here in California you can go to JC almost if not completely free. Transfer to a UC school with TAP (guaranteed), and save considerable amounts of money. I will never recommend paying for a 4 year university, it's just not worth it when you can get the same exact diploma for half the price.
I couldn't tell from the article or the chart: is that sticker price of tuition or actual paid price? Because those 2 things are _very_ different. It is true that in either case, tuition has outpaced inflation, but I'm skeptical that actual paid tuition has increased by _that_ much.
I'm curious if anyone has run the numbers on tuition versus direct state spending on higher education. What is the trend for overall spending on public higher ed since 1983, for instance? How much of the increase in tuition fees is to make up for decreased direct subsidization?
The article lost me at the continued suggestion we forgive debt. If the gov wants to wholesale forgive debt, send everybody a check. Otherwise it isn’t fair to those who have no degree, couldn’t afford one or get loans, or already paid theirs off or paid cash.
Universities are the gatekeepers for good white-collar jobs, and will charge whatever the market will bear, which is quite a lot. Government subsidies are absorbed as pure profit. The money goes into cushy salaries for administrators and empire-building, specially in real estate.
My favorite idea that I have seen is allowed students to return their degrees for a 70% refund within 12 months of graduation. If the school is confident that the degree will be a great asset throughout the person's career it will be no problem.
This is how lemon laws work with cars.
This is how lemon laws work with cars.
I studied a year abroad in a US public university back in 2008. Annual tuition back then was around $10k. In local currency, that was about 400,000.
Today, that tuition is $28k. But the dollar has also appreciated so real cost in local currency is now 2,268,000 - an appreciation of 467%.
Today, that tuition is $28k. But the dollar has also appreciated so real cost in local currency is now 2,268,000 - an appreciation of 467%.
It's because universities have no incentive to lower costs. The majority of students get loans, which transfer to the university and they don't really care if it gets paid back or not.
The only way this will stop is if the universities are forced to take on the risk of the debt.
The only way this will stop is if the universities are forced to take on the risk of the debt.
Students will stop attending at some point. Kind of like people will stop paying markups on cars. Or it will become so unattainable that the middle class will protest rising costs.
During the same period the house prices have risen 586%
I think the way we calculate inflation is kinda weird.
I think the way we calculate inflation is kinda weird.
Kinda weird? That's a nice way to say "total bogus". It strikes me that the CPI is practically propaganda at this point, a way to placate the citizens by saying "oh look inflation is fine", distracting them from the mega-hyper asset price inflation that has been happening over the past 40 years.
Suppose it kind of makes sense, since the rich control the country, and they are the ones directly benefitting from the asset price inflation.
Suppose it kind of makes sense, since the rich control the country, and they are the ones directly benefitting from the asset price inflation.
I was thinking along similar lines. Overall cost of living as certainly increased by more than 200% during that timeframe.
We know what happens when it is other people's money.
Also fascinating is the increased room and board (square area requirement per student) due to the lack of experience sharing rooms in the family as family sizes have collapsed to sub replacement levels.
Also fascinating is the increased room and board (square area requirement per student) due to the lack of experience sharing rooms in the family as family sizes have collapsed to sub replacement levels.
Funny because all the other countries that use literal public funds to pay for all of college do not have this problem.
My understanding is that other countries that bankroll higher education also get to decide who even goes on to that level of study. Could you provide a list of countries you had in mind so we could see if they have that kind of process?
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Won't it go up more if colleges can be assured that students will be bailed out?
You're confused. Colleges and universities have made (poor) decisions that have increased their cost, ostensibly to attract enrollment because of all the tuition/fee dollars out there for the taking.
If those tuition/fee dollars dry up, then that money isn't out there floating around to chase after with poor decisions.
However, all the previous poor decisions were still made, and they're still paying for all the extra buildings and gardens and resort spa dorms thinking they'd have time to pay them off. Not to mention the absurd increases in (non-faculty) staff levels... those people might be looking at unemployment.
But, and this is the most important point: allowing bankruptcy is never a bail out. It's the acceptance of reality. Yeh, "loan forgiveness" is sort of screwed up, but why has bankruptcy been denied these people? Why is education debt such an important kind of lending that we must make an exception for it and allow the lender to do what we allow no other lenders to do?
If those tuition/fee dollars dry up, then that money isn't out there floating around to chase after with poor decisions.
However, all the previous poor decisions were still made, and they're still paying for all the extra buildings and gardens and resort spa dorms thinking they'd have time to pay them off. Not to mention the absurd increases in (non-faculty) staff levels... those people might be looking at unemployment.
But, and this is the most important point: allowing bankruptcy is never a bail out. It's the acceptance of reality. Yeh, "loan forgiveness" is sort of screwed up, but why has bankruptcy been denied these people? Why is education debt such an important kind of lending that we must make an exception for it and allow the lender to do what we allow no other lenders to do?
Did tuition grow that much more than inflation, or is inflation understated?
Inflation is lumpy. This is the localized rate of inflation in the higher education industry. As another commenter pointed out, TVs have a much more favorable rate.
Can we add "American" in the title? Not everyone on HN is from the US.
As someone who had access to various feeds of people in the university and their roles, well, the non-teaching staff numbers just kept going up and up as compared to everything else. Administrative bloat is real.
There are two broad solutions to these kinds of problems: demand-side and supply-side. This article is another data point in exactly why demand-side solutions are short term if they work at all. More likely they don't work.
A supply-side solution to education would be to create more spaces in quality higher education and to make those places cheap or free by government subsidy, often with price controls on the receiving institution. This is largely how most of the developed world works.
A demand-side solution is to make something more accessible, which has the net effect of increasing demand. This almost always raises prices. It's no surprise that money backed by the government has increased prices. It's inevitable. Demand for high-quality college places still exceeds supply so those colleges can (and do) respond by increasing costs. Sometimes that extra money benefits the students through better facilities (eg a new library, better and/or more dorms, etc). Often however it's lost in subsidizing college sports, which most colleges lose money on, and inflating administrative costs. Division 1 football coaches make millions a year for a supposedly amateur (that's what one of the As in NCAA stands for) competition. That extra money makes those programs more expensive to run too through the same means.
We see the same problem in housing. Nearly all legislative efforts are demand-side (eg programs to help first homebuyers) where what we need is simply to increase housing supply by building more units, making more current units available or both. But that runs afoul of vested interests where our homes have become retirement accounts.
It's worth noting that many elite colleges are sitting on eye-watering endowments that could easily be used to pay for tuition but they largely don't do that (outside of a few programs for students from poorer backgrounds).
Pretty much all of this is by design. Post-WW2 there was a concerted campaign to charge for things that were once cheap or free including health care and education. This is nothing more than economic bondage, the developed world's equivalent of Pakistani brick kilns. A person saddled with debt is a compliant worker who will show up to work and not complain or fight for better working conditions. That's literally the point.
It's why the prison population is used as cheap labor. It's why most states like illegal immigration. It's why states are enacting child labor laws. My point is that all of this, including spiralling student debt, is a systemic problem.
Education should be free.
A supply-side solution to education would be to create more spaces in quality higher education and to make those places cheap or free by government subsidy, often with price controls on the receiving institution. This is largely how most of the developed world works.
A demand-side solution is to make something more accessible, which has the net effect of increasing demand. This almost always raises prices. It's no surprise that money backed by the government has increased prices. It's inevitable. Demand for high-quality college places still exceeds supply so those colleges can (and do) respond by increasing costs. Sometimes that extra money benefits the students through better facilities (eg a new library, better and/or more dorms, etc). Often however it's lost in subsidizing college sports, which most colleges lose money on, and inflating administrative costs. Division 1 football coaches make millions a year for a supposedly amateur (that's what one of the As in NCAA stands for) competition. That extra money makes those programs more expensive to run too through the same means.
We see the same problem in housing. Nearly all legislative efforts are demand-side (eg programs to help first homebuyers) where what we need is simply to increase housing supply by building more units, making more current units available or both. But that runs afoul of vested interests where our homes have become retirement accounts.
It's worth noting that many elite colleges are sitting on eye-watering endowments that could easily be used to pay for tuition but they largely don't do that (outside of a few programs for students from poorer backgrounds).
Pretty much all of this is by design. Post-WW2 there was a concerted campaign to charge for things that were once cheap or free including health care and education. This is nothing more than economic bondage, the developed world's equivalent of Pakistani brick kilns. A person saddled with debt is a compliant worker who will show up to work and not complain or fight for better working conditions. That's literally the point.
It's why the prison population is used as cheap labor. It's why most states like illegal immigration. It's why states are enacting child labor laws. My point is that all of this, including spiralling student debt, is a systemic problem.
Education should be free.
What is the "best" thing for students to do?
What is the "best" thing for parents to do?
For "best", I'm interested in two things: making the system less broken, and the kiddos being ok as adults.
What is the "best" thing for parents to do?
For "best", I'm interested in two things: making the system less broken, and the kiddos being ok as adults.
Well, and wages haven't kept pace with inflation either. And I'm sure other categories aside from tuition vastly outpace inflation. Cost for health insurance for US folks, for example.
Well, speaking of loan forgivance - i am not really sure how it is supposed to work. Just allow to also let go of student debt when declaring bankruptcy, and revoking the degree?
If you look at the whole World: It's a country specific problem. There are even English speaking graduation programs with international degrees abroad from top universities everywhere. To give some examples study in Sweden, Denmark, Germany etc and spend nearly no money on tuition. Factor the cost of living in and it's overall still cheaper than studying in the US. And I have no doubt that people grow personally (beside the education side) if they spend a good amount of time in another country. It's just not super easy and super obvious to think out of the box.
Some companies even pay your study. You do a regular BS at a university (or college), work as an intern at the company between terms, and the company will pay you 1000€+ per month over a period of 3 to 5 years. This is not a scholarship, but a mixture of apprenticeship and study (called "dual study"), which is becoming increasingly popular at least in Germany.
What was the corresponding increase in teacher salaries?
Can we talk about the inflation related to the value of the degree as well? A college degree in 1983 is worth alot more than one in 2023.
This is something that always bothers me. People have completely lost sight of the forest for the trees.
The entire point of an education is to make you a good worker/citizen. That's it. People completely lose sight of this and think that the point of an education is to get a degree.
Therefore we end up with legions of kids trying to "get a degree" as opposed to "become a good worker/citizen".
The entire point of an education is to make you a good worker/citizen. That's it. People completely lose sight of this and think that the point of an education is to get a degree.
Therefore we end up with legions of kids trying to "get a degree" as opposed to "become a good worker/citizen".
Exactly the opposite. In 2023, a degree is a prerequisite (or effectively so) to a lot of jobs. This was less true in 1983 than it is now.
Not if you're independent, resourceful, and motivated to learn. Is there some risk in not going to college, yeah, maybe - but young adults have many years to 'figure it out'. Not all answers lie in institutional credentials.
I've worked with dozens of self taught programmers, designers, operators, etc. Look at how much more information is available via the web now vs what was available in 1983.
I've worked with dozens of self taught programmers, designers, operators, etc. Look at how much more information is available via the web now vs what was available in 1983.
Not disagreeing with anything you are saying. In fact, why get a job at all? Start a business during high school, make millions, and skip it all. There's plenty of information out there to make this a realistic option.
However, for people that did not pursue that route, it is also true that many employers require a college degree for many jobs. Some 19-year-olds may "pattern match" well enough to get some hiring managers to grant exceptions. But these are exceptions and by definition not good general advice.
> Not all answers lie in institutional credentials.
Also consider that the truth of this may depend on the specifics of a job-seeker's phenotype. YMMV.
However, for people that did not pursue that route, it is also true that many employers require a college degree for many jobs. Some 19-year-olds may "pattern match" well enough to get some hiring managers to grant exceptions. But these are exceptions and by definition not good general advice.
> Not all answers lie in institutional credentials.
Also consider that the truth of this may depend on the specifics of a job-seeker's phenotype. YMMV.
students per administrator has gone down down down
https://scaleatucla.weebly.com/uploads/2/9/9/2/29923337/4935...
stanford has more administrators than undergrads now.
administrator growth is like a cancer
https://scaleatucla.weebly.com/uploads/2/9/9/2/29923337/4935...
stanford has more administrators than undergrads now.
administrator growth is like a cancer
And in 1983 they were down how much since 1943? (Or some close pre-war point if you want, I'm not cherry-picking.)
I don't know anyone with half a brain who would believe real inflation was only 194% during this whole time.
Exactly. For example, house prices increased 7x. S&P 500 jumped 11x.
if we had to eat this elephant one bite at a time, one option to consider is completely seperating sports from colleges?
What would be the impact? What are the drivers that could enable youth to participate in sports run/administered by a 3rd party as well as attend college?
What would be the impact? What are the drivers that could enable youth to participate in sports run/administered by a 3rd party as well as attend college?
Stating that inflation is at 194% can be misleading - it all depends on which products you include in your calculation. It might be more meaningful to differentiate between predictable and measured inflation. Predictable inflation should be defined as the increase in the money supply, while measured inflation could refer to the currently published figures.
I love all of the creative ways they use to exclude inflation from the inflation statistics.
In the same time period, stay public university systems had their state funding also decimated. Federally sourced loans were favored over expanding grant programs.
The thought that public universities should “run like private businesses” is a disease of neoliberalism. They largely succeeded in running like businesses, but it’s all the wrong metrics. public goods should not be profit centers for state or federal government budgets.
The thought that public universities should “run like private businesses” is a disease of neoliberalism. They largely succeeded in running like businesses, but it’s all the wrong metrics. public goods should not be profit centers for state or federal government budgets.
*state public university systems.
Take away state funding, make it a business objective to capture students, add a abstraction of student loans and direct federal funding, and of course tuition increases.
Take away state funding, make it a business objective to capture students, add a abstraction of student loans and direct federal funding, and of course tuition increases.
Why is this understating the increase in overall inflation to such a large degree?
Where’s the money going? I’m not seeing evidence for 5x better research outcomes.
In england we refer to this as "pulling up the ladder behind you".
now we have wikipedia, stackoverflow, youtube, google, and gpt4.
rising tuition is bad, but if schools had retained the monopoly on education they had before it would be fatal instead of annoying.
internet and cheap laptops ftw.
rising tuition is bad, but if schools had retained the monopoly on education they had before it would be fatal instead of annoying.
internet and cheap laptops ftw.
Part of this is probably because real inflation has been undercounted.
Could it be because in capitalism, the seller tries to take as much money as possible from buyer and the price is not related to expenses?
Let me give an example that can illustrate this: a typical mobile plan from Verizon in US costs $45/month and gives you 15 Gb of traffic. At the same time in Russia one can get 30 Gb for $9/month. Are expenses for maintaining a cell network 5 times higher in US? Unlikely. It is just customers in US are richer and are ok to pay more for the same service.
I don't know how this effect is called, but couldn't the same thing happen to education, land or housing costs? These are obviously things that everyone needs desperately so the seller will squeeze the maximum they can, and the price is unrelated to how much the lecturer earns or how much the bricks cost. The house will cost you almost all your life's earnings no matter where you live.
Let me give an example that can illustrate this: a typical mobile plan from Verizon in US costs $45/month and gives you 15 Gb of traffic. At the same time in Russia one can get 30 Gb for $9/month. Are expenses for maintaining a cell network 5 times higher in US? Unlikely. It is just customers in US are richer and are ok to pay more for the same service.
I don't know how this effect is called, but couldn't the same thing happen to education, land or housing costs? These are obviously things that everyone needs desperately so the seller will squeeze the maximum they can, and the price is unrelated to how much the lecturer earns or how much the bricks cost. The house will cost you almost all your life's earnings no matter where you live.
I was with you until "It is just customers in US are richer and are ok to pay more for the same service." How did you reach that conclusion? The other reason (which seems more likely to me) is that it is because the free market is not functioning because of monopoly/duopoly created by regulatory capture.
Let me explain. If a Russian mobile provider would ask customers to pay $45 starting next month, then majority of users would say: "No thanks, I don't really need mobile data that much. Also by law you must provide us with free access to VK (social network) anyway so it makes no sense to pay you $45 for this". But is US, customers are paying and do not complain, because for them it is not that big price. This is what I meant by "customers are ok".
Yes, mobile providers market is not a free market, as there are small number of companies both in US and in Russia. But the price they charge customers is different in these countries despite they use similar equipment which probably has the same cost. So the difference in prices can be explained by what people in different countries consider "cheap" and "expensive". The provider charges as much as possible, but less than a customer would consider "too expensive".
And the same thing is about housing prices, they do not really correlate with expenses to build them. It takes the same amount of money to build an apartment in Moscow and in a small city in Siberia, but the price for the buyer will be very different.
Yes, mobile providers market is not a free market, as there are small number of companies both in US and in Russia. But the price they charge customers is different in these countries despite they use similar equipment which probably has the same cost. So the difference in prices can be explained by what people in different countries consider "cheap" and "expensive". The provider charges as much as possible, but less than a customer would consider "too expensive".
And the same thing is about housing prices, they do not really correlate with expenses to build them. It takes the same amount of money to build an apartment in Moscow and in a small city in Siberia, but the price for the buyer will be very different.
Also, regarding houses and land prices, there is no monopoly, but the prices are extremely high in large cities. So "it is a monopoly" doesn't sound like an explanation, but "charge the buyer as much as they can afford and a bit on top of that" is more realistic. And as for education, there seems to be no monopoly too.
Isn’t Russia capitalist too? I’m confused but your comparison. Sounds like you’ve just compared two markets without myriad variables.
The fact that student loans are backed by the government would in fact undermine this as a good example of a free market.
The fact that student loans are backed by the government would in fact undermine this as a good example of a free market.
Almost every country is capitalist, including Russia. I didn't try to compare capitalist vs non-capitalist countries, I tried to show that in capitalist countries the price of services is not related to expenses. In both countries mobile providers use similar equipment which probably cost the same, but the price they charge from consumers is significantly different.
Viewed in this light, grade inflation really hasn’t kept up.
Supply demand pricing has to be part of this equation
Should probably measure this before and after the US left the gold standard in 1971. The question is, which contributed more, leaving the gold standard, or some Reagan era policies?
Surely the problem will go away if President Biden simply uses US taxpayer money to pay off student’s loans. That’s the smartest course of action, not blatant pandering to young voters that will only perpetuate the underlying problems.
What's that compounded annually, though?
S&P has risen 2,200%+ since then as well
“Prices will rise to absorb any subsidies.”
And has the populace gotten more educated?
It is getting expensive to live.
what happened in 1980?
Universities finally figured out what happened in 1971, and started riding the Wall Street-Federal Government paper money wave.
Yup, so has everything else, everywhere.
this is corporate greed, end-stage capitalism and Bush's fault. Or is it Trump's fault? And Elon Musk's mgmt of twitter
Short-term, students need recourse. Defaulting on loans creates a cascade of consequences that necessarily harm borrowers earning potential for years (e.g. colleges can withholding proof of attendance, decline in credit score, wage garnishments, etc.) There are loans that are highly likely to default regardless after the COVID moratorium on payments ends .
no they don't, as mean as this may sound. The data shows that college grads earn way ore than non-grads, even after accounting for inflation and loans. people who fial to finish or fail to attend college do way worse. Thanks to an abundance of aid, scholarships, and other discounts, hardly anyone is paying these inflated tuition prices in full.
no they don't, as mean as this may sound. The data shows that college grads earn way ore than non-grads, even after accounting for inflation and loans. people who fial to finish or fail to attend college do way worse. Thanks to an abundance of aid, scholarships, and other discounts, hardly anyone is paying these inflated tuition prices in full.