Some colleges will soon charge $100k a year – how did this happen?(nytimes.com)
nytimes.com
Some colleges will soon charge $100k a year – how did this happen?
https://www.nytimes.com/2024/04/05/your-money/paying-for-college/100k-college-cost-vanderbilt.html
366 comments
I've always wondered why the family that pays full price for tuition does not get the tax credit for their charitable contribution to some other student whom they subsidize.
If I donated $20k to a university, I'd get to write that off as a charitable contribution in my taxes. If I pay full tuition and 1/3 of that goes to a student needing aid, I get no deduction.
If I donated $20k to a university, I'd get to write that off as a charitable contribution in my taxes. If I pay full tuition and 1/3 of that goes to a student needing aid, I get no deduction.
It's typically the opposite of what you say - the true expenses/student that a private university pays is much higher than even the richest kid pays (difference made up for by the endowment's income)
So the better question is why they don't raise prices such that the rich kids have to pay the true full price & have more money for aid for the less-rich.
So the better question is why they don't raise prices such that the rich kids have to pay the true full price & have more money for aid for the less-rich.
I have a hard time believing this. Every course I took in college had at least 15 people and usually 30-50 people. Large classes like Calculus 1-2, Linear Algebra, and Differential Equations had at least 300 people. There is no way you cannot pay the salary + legitimate overhead for 1 profess, and 1-10 TAs with these class sizes. My guess is a lot of the money does not go to instruction but goes to administration, sports palaces (stadiums), luxury dorms, etc. Colleges used to be MUCH cheaper in the 1950s, 1960s, and 1970s. The education was just as good but cost far less.
The big problem with colleges today is they are "non-profit" in name only. Instead, of giving profits to shareholders, they are giving them to employees and insiders. This hurts students and the United States. However, colleges do not care because they, their employees, and friends benefit.
The big problem with colleges today is they are "non-profit" in name only. Instead, of giving profits to shareholders, they are giving them to employees and insiders. This hurts students and the United States. However, colleges do not care because they, their employees, and friends benefit.
How much has state aid changed in 40 years? That’s also big
Sports more or less pays for itself in most cases and even brings in profits. That's why even public colleges have active sports programs. You are right about other luxury amenities. But even basic facilities cost pretty serious money, even if they are only built every 50-100 years or so. If I had to estimate, I'd say no school currently pays more than 25% of tuition on actual teaching. Administrators and luxury facilities account for most of the other spending.
The real cause of these escalating costs is easy credit for tuition. There would simply be no big market for the current overpriced programs if people couldn't get loans regardless of outcomes. I would like creditors to have to prove how the students will pay for the median salary of a person with the same degree before loaning the money. You should not be able to borrow hundreds of thousands of dollars for stupid stuff that will never pay off.
The real cause of these escalating costs is easy credit for tuition. There would simply be no big market for the current overpriced programs if people couldn't get loans regardless of outcomes. I would like creditors to have to prove how the students will pay for the median salary of a person with the same degree before loaning the money. You should not be able to borrow hundreds of thousands of dollars for stupid stuff that will never pay off.
There is exactly 1 college sport that typically pays for itself and every other sport at the university, with the slight possibility of a second sport contributing to the coffers ONLY if the college is a D1 school and competes regularly in March Madness.
For those unfamiliar with American college athletics, American Football is the money maker via shared revenue from broadcasting rights and Men's Basketball can be a net cash flow positive also via broadcasting if they're an elite team. Every other sport is a net cost for the school because nobody watches all the other sports shown on ESPN Ocho.
For those unfamiliar with American college athletics, American Football is the money maker via shared revenue from broadcasting rights and Men's Basketball can be a net cash flow positive also via broadcasting if they're an elite team. Every other sport is a net cost for the school because nobody watches all the other sports shown on ESPN Ocho.
Football is the most profitable and most colleges do make money on it. https://sports.usatoday.com/ncaa/finances Not only is sports usually profitable on the surface but it draws donations and new students. Administrators aren't as stupid as you think. Sports need not cost a huge amount of money. Stadiums used for one sport can easily be used for other purposes instead of letting it lay fallow in the time between football games.
It always amazes me that people simultaneously say that colleges are sharks when it comes to maximizing tuition and minimizing expenses, while also saying that sports are objectively a waste of money. They aren't stupid. If sports wasn't a desirable thing to invest in, they wouldn't do it. We could make the same complaint about luxury amenities too. The fact is that colleges have to compete with each other, and they charge enough to pay for everything.
Could tuition be lower if not for all of these luxuries? Maybe so. Should core education get more money? Perhaps. It certainly used to bother me that sports got more money than academics. But I really get that it's a legitimate business decision to allocate some money to sports. I don't even like sports much but I would not cut it out if I were them.
It always amazes me that people simultaneously say that colleges are sharks when it comes to maximizing tuition and minimizing expenses, while also saying that sports are objectively a waste of money. They aren't stupid. If sports wasn't a desirable thing to invest in, they wouldn't do it. We could make the same complaint about luxury amenities too. The fact is that colleges have to compete with each other, and they charge enough to pay for everything.
Could tuition be lower if not for all of these luxuries? Maybe so. Should core education get more money? Perhaps. It certainly used to bother me that sports got more money than academics. But I really get that it's a legitimate business decision to allocate some money to sports. I don't even like sports much but I would not cut it out if I were them.
sports only pays for itself in a minority of highly successful schools, and even then typically only Football or Basketball. So sure Penn State and Auburn football pull a profit, but the vast majority do not. Last I checked on these, the number of schools was <20 that were profitable.
You're wrong about that. See this for example: https://sports.usatoday.com/ncaa/finances
Not only is sports usually profitable on the surface but it draws donations and new students. Administrators aren't as stupid as you think.
Not only is sports usually profitable on the surface but it draws donations and new students. Administrators aren't as stupid as you think.
> If I had to estimate, I'd say no school currently pays more than 25% of tuition on actual teaching.
Is this based on anything at all? Any direct experience you have, any sources?
I don’t mean to be rude, and I don’t expect everyone to have expertise on something just to talk about it - but when people start using numbers as evidence for their claims, I think a higher standard is warranted.
Is this based on anything at all? Any direct experience you have, any sources?
I don’t mean to be rude, and I don’t expect everyone to have expertise on something just to talk about it - but when people start using numbers as evidence for their claims, I think a higher standard is warranted.
I had the same reaction you did, so I looked up the state university budget breakdown [1] for my home state of Florida. In 2021-2022, the most recent year for which they have final numbers, 35.6% of expenditures went to "E&G". That's "Education & General", which according to them is defined as:
"The Education and General budget funds the general instruction, research, and public service operations of the universities. A large portion of the system’s 2022-2023 beginning fund balance reserves ($420.8 million) is dedicated to meeting the 7% reserve requirement set forth in Section 1011.45(1) of the Florida Statutes. Additionally, millions of dollars have been reserved by the SUS to cover the costs associated with the hiring of faculty, maintenance of facilities and equipment, the maintenance of each university’s financial software system, various research enhancement programs and initiatives, and the potential for budget reduction shortfalls."
So this includes both the "actual teaching" and research and other related spending.
We can get more information on page 45, which provides a breakdown of that 35%: 61% of it (~22% of total) is "instruction and research", i.e., at most 22% of the total budget (and probably much less, since FL's public university sector is fairly research-heavy) is spent directly on instruction.
That's probably a little unfair, since instruction needs things like facilities and other admin expenses even in a system that isn't bloated, but the previous poster's 25% number passes a sanity check at least to my eye.
In case you're wondering, the other two big categories of expenses are C&G ("contracts and grants" - so more research expenditures mostly) and "local funds" (a weird mix that includes things like student activities, athletics, and financial aid).
[1] https://www.flbog.edu/wp-content/uploads/2022/12/2022-23-OB-...
"The Education and General budget funds the general instruction, research, and public service operations of the universities. A large portion of the system’s 2022-2023 beginning fund balance reserves ($420.8 million) is dedicated to meeting the 7% reserve requirement set forth in Section 1011.45(1) of the Florida Statutes. Additionally, millions of dollars have been reserved by the SUS to cover the costs associated with the hiring of faculty, maintenance of facilities and equipment, the maintenance of each university’s financial software system, various research enhancement programs and initiatives, and the potential for budget reduction shortfalls."
So this includes both the "actual teaching" and research and other related spending.
We can get more information on page 45, which provides a breakdown of that 35%: 61% of it (~22% of total) is "instruction and research", i.e., at most 22% of the total budget (and probably much less, since FL's public university sector is fairly research-heavy) is spent directly on instruction.
That's probably a little unfair, since instruction needs things like facilities and other admin expenses even in a system that isn't bloated, but the previous poster's 25% number passes a sanity check at least to my eye.
In case you're wondering, the other two big categories of expenses are C&G ("contracts and grants" - so more research expenditures mostly) and "local funds" (a weird mix that includes things like student activities, athletics, and financial aid).
[1] https://www.flbog.edu/wp-content/uploads/2022/12/2022-23-OB-...
Thanks for the numbers. It was honestly a lucky guess. I have thought about my own school when estimating it though. I once looked up salaries and tuition numbers and did a rough estimate.
Most undergraduate degrees don’t really require much in the way of infrastructure.
I went to school as an English major. I struggle to see why the cost of tuition has gone from 6k per semester when I attended to 35k now 20 years later.
Did salaries grow 6x?
I went to school as an English major. I struggle to see why the cost of tuition has gone from 6k per semester when I attended to 35k now 20 years later.
Did salaries grow 6x?
No but the dollar is worth about a third of what it was 20 years ago, at best.
You might not even realize the infrastructure that the school uses. Those big buildings are expensive and use tens of thousands of dollars in electricity every month. If your school has shuttles to take people back and forth to the dorms or parking, that is also a constant expense. The library has to pay tens of thousands of dollars for access to academic databases. Computer labs, printing, internet, security, and so on. It all adds up quick.
You might not even realize the infrastructure that the school uses. Those big buildings are expensive and use tens of thousands of dollars in electricity every month. If your school has shuttles to take people back and forth to the dorms or parking, that is also a constant expense. The library has to pay tens of thousands of dollars for access to academic databases. Computer labs, printing, internet, security, and so on. It all adds up quick.
https://www.usinflationcalculator.com/ tells me the dollar is worth 60% of what it was worth in 2004, that’s a lot more than a third. Where did you get that figure from?
The real rate of inflation is higher than what they say it is. Some products have gotten cheaper due to outsourcing but almost everything that matters (education, health care, housing) has exploded in price over the last 20 years. So has the money supply.
If you want more honest numbers, try https://www.shadowstats.com/alternate_data/inflation-charts
Realistically, prices are up 40% since the pandemic alone. That's a lot less than 20 years.
Not to be an ass, but if you weren't an adult in 2004, your opinion on this is going to be unduely skewed by propaganda I'm afraid. Not every old person has such a clear view of things either but having lived back then sure makes a big difference in perspective. Idk how anyone with basic number sense who has shopped for anything like a normal person can think inflation is less than 10% per year.
If you want more honest numbers, try https://www.shadowstats.com/alternate_data/inflation-charts
Realistically, prices are up 40% since the pandemic alone. That's a lot less than 20 years.
Not to be an ass, but if you weren't an adult in 2004, your opinion on this is going to be unduely skewed by propaganda I'm afraid. Not every old person has such a clear view of things either but having lived back then sure makes a big difference in perspective. Idk how anyone with basic number sense who has shopped for anything like a normal person can think inflation is less than 10% per year.
I don’t think your link is saying that.
It lists cumulative inflation at 64.x% for that year range.
For what I could buy for $1 in 2004
It would now cost me $1.64 in 2024.
It lists cumulative inflation at 64.x% for that year range.
For what I could buy for $1 in 2004
It would now cost me $1.64 in 2024.
You not liking how the money is spent doesn't mean the money's not spent on the product being sold to you. Tuition grants you access to the campus resources.
I don't like the CEO of global corp making a billion dollars, but it's still part of the price of the globowidgets that I buy.
At expensive schools, those large classes are usually much smaller.
I don't like the CEO of global corp making a billion dollars, but it's still part of the price of the globowidgets that I buy.
At expensive schools, those large classes are usually much smaller.
Given a typical professor's salary, it is... difficult to imagine that this is true, at least not without fantastically bloated administrative and overhead costs.
> fantastically bloated administrative and overhead costs
Indeed. Go check the trends on the ratio of non-teaching staff to students at these major name colleges.
Indeed. Go check the trends on the ratio of non-teaching staff to students at these major name colleges.
“non-teaching staff” includes all the research scientists, postdoc, and techs that help make the research happen. These universities are not especially good at teaching compared to SLACs. They are exceptionally good at research.
That’s not what most of these people are doing.
https://www.mindingthecampus.org/2023/01/05/more-employees-t...
https://www.mindingthecampus.org/2023/01/05/more-employees-t...
Those people are paid for out of research grants, not tuition.
I don't know -- MIT's tuition and educational expenditures roughly match (it's a slight loss). Of course it's also a minor percentage of the budget.
Tuition at my partner's New York private high school (she graduated 35 years ago) just hit $61K. OTOH my own high school (also private) spends over 70K/student and charges 20K tuition, though tuition revenue/student is under 10K. This might be an example of the subsidy.
Tuition at my partner's New York private high school (she graduated 35 years ago) just hit $61K. OTOH my own high school (also private) spends over 70K/student and charges 20K tuition, though tuition revenue/student is under 10K. This might be an example of the subsidy.
No that's not the better question.
If private universities are truly spending so irresponsibly and profligately that their sticker price isn't covering their expenses, then their entire administration should be thrown out and replaced. It's only incompetence or corruption that could excuse such costs.
If private universities are truly spending so irresponsibly and profligately that their sticker price isn't covering their expenses, then their entire administration should be thrown out and replaced. It's only incompetence or corruption that could excuse such costs.
Throwing out the entire administration and then only replacing a small fraction of it would work even better!
That’s the only thing that bothers you? :) How about we outlaw the price discrimination described in the parent comment? I think everything else just pushed the conversation deeper in the weeds and does us all a disservice.
So no more youth ticket prices, senior discounts, etc.? Price discrimination is a very commonly-used tactic, and it goes by many different names.
Senior discounts: When the median US senior citizen is significantly wealthier than younger adults, absolutely yes. https://www.cnbc.com/2023/10/28/americans-median-net-worth-b...
France grants free museum admission to adults under 26, which strikes me as a better policy than charging the highest price to access cultural works to the people who (a) have the least earned wealth, (b) the least lifetime exposure to those things.
France grants free museum admission to adults under 26, which strikes me as a better policy than charging the highest price to access cultural works to the people who (a) have the least earned wealth, (b) the least lifetime exposure to those things.
Yep, I think senior discounts are partly/largely about willingness to pay, not ability to pay. For example, senior citizens aren't the target demographic for most movies. Theaters get full freight from the 18-45 crowd, who want to see the movies the most. Then they entice senior citizens to come watch movies that they don't love by giving them better pricing.
Same applies for theme parks, where the target audience is young adults and families with small kids.
I'm not defending any of this — just pointing out that price discrimination is sometimes about ATP, and sometimes about WTP.
Same applies for theme parks, where the target audience is young adults and families with small kids.
I'm not defending any of this — just pointing out that price discrimination is sometimes about ATP, and sometimes about WTP.
Senior discounts are also used to smooth out/move usage.
"Seniors pay 20% less for movie tickets at Tuesday at 1 pm" sells tickets that few people with jobs would buy, regardless of price.
"Seniors pay 20% less for movie tickets at Tuesday at 1 pm" sells tickets that few people with jobs would buy, regardless of price.
The deal with being a senior, your net worth is falling, not rising. You basically have whatever you earned and saved before 65 plus some social security. Somebody who is only worth only $300k at 70 and is pretty healthy is in a lot of trouble if they live to be 85. Some better social safety nets would make this less of a concern, but we really don’t have those.
Demand for university degrees is relatively inelastic, though, so people will do what they have to do (pay exorbitant tuition for their kids, take on exorbitant loans for themselves) to get access to the kind of life opportunities that elite degrees provide. That, in my mind, makes it more unseemly - especially since many of these schools don’t actually need the money.
Nuance can be introduced. Allow aged based price discrimination but not descrimination that is based on actual income numbers?
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100%. There are revenue management consulting firms that boast of increasing price realization by 15%+ by managing admission rates, communication patterns, and "scholarship grants" to optimize bottomline price.
When the marginal cost of each student is probably $20K, anything over that is awesome. So even if you give a $30k "merit scholarship" to a full pay student you are making bank, as you are still clearing $50K+ as a university.
Perverse outcome of this is that the richer students will get more "merit aid."
Also, Ivy leagues + Stanford and MIT are a cartel, and don't give merit aid. So they use the "need based" aid system to even more increase their price realization from the richest folks.
(Ask me how I know: parent who went way too deep on this, and is now stroking a $85K check to an ivy.... lol.)
When the marginal cost of each student is probably $20K, anything over that is awesome. So even if you give a $30k "merit scholarship" to a full pay student you are making bank, as you are still clearing $50K+ as a university.
Perverse outcome of this is that the richer students will get more "merit aid."
Also, Ivy leagues + Stanford and MIT are a cartel, and don't give merit aid. So they use the "need based" aid system to even more increase their price realization from the richest folks.
(Ask me how I know: parent who went way too deep on this, and is now stroking a $85K check to an ivy.... lol.)
What makes you say the marginal cost of each student is $20k?
Is the marginal cost even well defined?
A lot of the expensive universities operate near capacity, where capacity is limited by housing, zoning, lecture hall space, capacity of the departments, etc. They have costs that look marginal (housing, teaching, food) and costs that look fixed (administration, management, some IT expenses, libraries). But, due to the approximately fixed class sizes, this whole breakdown seems a bit fictional.
A lot of the expensive universities operate near capacity, where capacity is limited by housing, zoning, lecture hall space, capacity of the departments, etc. They have costs that look marginal (housing, teaching, food) and costs that look fixed (administration, management, some IT expenses, libraries). But, due to the approximately fixed class sizes, this whole breakdown seems a bit fictional.
Seems reasonable, as that's about what K-12 costs at a public school.
That number is preceded by the word “if”, right?
It is not. I don't think it said "if" before, but it certainly doesn't say it now:
> When the marginal cost of each student is probably $20K
> When the marginal cost of each student is probably $20K
It’s the same system California is putting in place with income-based energy billing.
Income-based billing is rife for abuse!
Income-based billing is rife for abuse!
The main political realization I had with growing up lower class, still live in poorer areas, and making it to being high income is that basing government programs around income is terrible policy.
1. It's extremely unfair
2. It punishes those working to get ahead
3. It creates 'welfare cliffs' where people become worse off for getting jobs. Losing Medicaid is the best example of this.
4. It makes the program exponentially more expensive to maintain because you have to hire people to track who gets it and who doesn't, look for fraud, monitor for when the income threshold needs changed, etc..
It's just terrible policy all around. We learned this during covid. It's so much easier to write people a check and tax the the high earners more to make up for them getting a check.
1. It's extremely unfair
2. It punishes those working to get ahead
3. It creates 'welfare cliffs' where people become worse off for getting jobs. Losing Medicaid is the best example of this.
4. It makes the program exponentially more expensive to maintain because you have to hire people to track who gets it and who doesn't, look for fraud, monitor for when the income threshold needs changed, etc..
It's just terrible policy all around. We learned this during covid. It's so much easier to write people a check and tax the the high earners more to make up for them getting a check.
What we learned from COVID is that it's absolutely disastrous to send everyone a check, because most of that money gets stolen. Better to give away resources that are valuable to consume but expensive to transact in.
And what we learned from taxing high earners is that the highest earners hide their money and don't pay the expected taxes.
And what we learned from taxing high earners is that the highest earners hide their money and don't pay the expected taxes.
The money that was stolen wasn't sent to everyone. You can't steal money sent to everyone. It was the PPP 'Paycheck Protection Program' money that was stolen where tons of small businesses filed to get that money when it wasn't needed. That's not the same thing at all as putting money in the same bank accounts that file tax returns, which is the example I was providing.
CA tried something very close to that
https://www.npr.org/2022/10/18/1128561539/pandemic-fraud-bil...
https://edd.ca.gov/en/about_edd/fraud-response/
https://www.npr.org/2022/10/18/1128561539/pandemic-fraud-bil...
https://edd.ca.gov/en/about_edd/fraud-response/
> because most of that money gets stolen.
Huh? I'm out of the loop on this.
Huh? I'm out of the loop on this.
Not OP, but here is some data:
“We estimate that SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans. This means at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors.”
https://www.sba.gov/document/report-23-09-covid-19-pandemic-...
IRS also covered some:
https://www.irs.gov/newsroom/irs-criminal-investigation-rele...
“We estimate that SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans. This means at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors.”
https://www.sba.gov/document/report-23-09-covid-19-pandemic-...
IRS also covered some:
https://www.irs.gov/newsroom/irs-criminal-investigation-rele...
a program administered with poor oversight (may be due to time constraints or whatever reason) doesn't make that program a poor policy decision.
I think means tested welfare can backfire a lot in ways that locks people into dependency on the welfare and not look for a higher paying job.
I think means tested welfare can backfire a lot in ways that locks people into dependency on the welfare and not look for a higher paying job.
I don't remember all that well but I think there aren't really sharp welfare cliffs with financial aid. The expected contribution of you and your family is subtracted from the total cost, and you are eligible for aid to pay the rest. The money you get from working is supposed to be more than your financial aid deduction anyway. So say if you made an extra $10k, it ought to reduce your financial aid by less than that.
>It makes the program exponentially more expensive to maintain because you have to hire people to track who gets it and who doesn't, look for fraud, monitor for when the income threshold needs changed, etc..
We already have a system for that. It's called the IRS. The cost of a basic fraud detection system is less than the actual fraud would be of course. They have to worry about things like people enrolling and never going to class.
>It's just terrible policy all around. We learned this during covid. It's so much easier to write people a check and tax the the high earners more to make up for them getting a check.
It isn't easier or fairer to write everyone a check, because quite a lot of people don't need any help. The average wagie is not going to seriously be disincentivized from working a meaningful way because it might disqualify their kid from certain financial aid. The whole point of financial aid is to give hope to the hopeless and help the struggling, not give everyone benefits whether they need it or not. Taxing people who don't have kids to pay for people who can afford to pay their kids' tuition seems wrong all around.
>It makes the program exponentially more expensive to maintain because you have to hire people to track who gets it and who doesn't, look for fraud, monitor for when the income threshold needs changed, etc..
We already have a system for that. It's called the IRS. The cost of a basic fraud detection system is less than the actual fraud would be of course. They have to worry about things like people enrolling and never going to class.
>It's just terrible policy all around. We learned this during covid. It's so much easier to write people a check and tax the the high earners more to make up for them getting a check.
It isn't easier or fairer to write everyone a check, because quite a lot of people don't need any help. The average wagie is not going to seriously be disincentivized from working a meaningful way because it might disqualify their kid from certain financial aid. The whole point of financial aid is to give hope to the hopeless and help the struggling, not give everyone benefits whether they need it or not. Taxing people who don't have kids to pay for people who can afford to pay their kids' tuition seems wrong all around.
Healthcare is the easiest example. A birth of a child could easily cost 10k with health insurance, and that is only if there aren't complications, it's free with medicare. 10K is a pretty massive cliff.
If you have a large family losing Medicaid is easily thousands of dollars added to your new budget, and that's just counting out of pocket costs towards the massive deductible most healthcare care plans have now. You add the premium costs it is an obscenely a lot more money you are paying for what is free if with medicare
If you have a large family losing Medicaid is easily thousands of dollars added to your new budget, and that's just counting out of pocket costs towards the massive deductible most healthcare care plans have now. You add the premium costs it is an obscenely a lot more money you are paying for what is free if with medicare
Hot take: If you can't afford insurance you shouldn't be having a dozen kids, or at least shouldn't complain when others don't want to subsidize that. But $10k per kid for an average of 2 kids in a lifetime does not exactly make for a huge cliff. The income limit for Medicaid is so low in most places, getting any kind of job will disqualify you. But the money from the job will be of more utility than some bare minimum free healthcare. There's no way that a few healthy kids costs thousands per month. Maybe insurance could if you had more than 2 kids, but most people don't even need that much insurance. I never had medical insurance in my life until I got my first job out of college.
There may be some people who believe they will lose money overall by working, but they're usually wrong. Do taxes and losses of freebies reduce the marginal benefit of working more? I'd say so. But in most cases it is still a net benefit to work more.
There may be some people who believe they will lose money overall by working, but they're usually wrong. Do taxes and losses of freebies reduce the marginal benefit of working more? I'd say so. But in most cases it is still a net benefit to work more.
There is no way to say this without sounding rude, but you clearly don't understand how insane healthcare costs are when you have kids.
Premiums alone could be close to a 1k a month for a family plan. At best you're paying 500 a month in premiums, and that is guaranteed to have a 5k+10k deductible before anything is covered by insurance. Then you will probably still have a co-insurance.
The notion that Medicaid is so crappy is some terrible insurance is propaganda. Free vs paying tens of thousands of dollars, and still be flooded with medical bills, is all you need to know which one is better.
I know dozens of people with medicaid and they absolutely refuse to lose it, especially the ones with large families. If you, or someone in your family, have chronic health issues then you are basically guaranteed to be paying 10k in healthcare premiums and deductibles when you lose Medicaid and get private insurance.
Premiums alone could be close to a 1k a month for a family plan. At best you're paying 500 a month in premiums, and that is guaranteed to have a 5k+10k deductible before anything is covered by insurance. Then you will probably still have a co-insurance.
The notion that Medicaid is so crappy is some terrible insurance is propaganda. Free vs paying tens of thousands of dollars, and still be flooded with medical bills, is all you need to know which one is better.
I know dozens of people with medicaid and they absolutely refuse to lose it, especially the ones with large families. If you, or someone in your family, have chronic health issues then you are basically guaranteed to be paying 10k in healthcare premiums and deductibles when you lose Medicaid and get private insurance.
>The notion that Medicaid is so crappy is some terrible insurance is propaganda. Free vs paying tens of thousands of dollars, and still be flooded with medical bills, is all you need to know which one is better.
>There is no way to say this without sounding rude, but you clearly don't understand how insane healthcare costs are when you have kids.
I know how expensive the extremes are. Most kids don't need much healthcare. I'm not interested in arguing that with you. If you know, you know.
>Premiums alone could be close to a 1k a month for a family plan. At best you're paying 500 a month in premiums, and that is guaranteed to have a 5k+10k deductible before anything is covered by insurance. Then you will probably still have a co-insurance.
This is because people have "insurance" that pays for basic routine things. It's more like a price-gouging payment plan or a security blanket. If you got insurance only for severe situations with a high deductible, and paid for routine stuff out of pocket, you'd come out ahead I think. I happen to have a pretty good insurance plan with a low deductible but I didn't have one until I was almost 30. Nor did I qualify for Medicaid or anything else.
The free health care is not actually free. We all pay for it. Even poor people's taxes go toward healthcare that they might not use. Secondly, your choices on this "free" healthcare are somewhat limited. Good luck finding a doctor and getting an appointment in a timely fashion. And some of these doctors specifically maximize services and visits to milk the government for as much as they can.
>I know dozens of people with medicaid and they absolutely refuse to lose it, especially the ones with large families. If you, or someone in your family, have chronic health issues then you are basically guaranteed to be paying 10k in healthcare premiums and deductibles when you lose Medicaid and get private insurance.
Again I say, if you are poor you should not go out and start a large family. People who have expensive chronic conditions they can't help, or have like 1 kid with that, are kind of an exception.
Back to the original point. I think not working more because of Medicaid eligibility is stupid. If we're talking about the difference between working 5% more hours at the same job and not, then I get it. But we aren't gonna see people give up $40k+ jobs just so they can get Medicaid. Even if they were, it's not a problem with means testing in principle. Each person's circumstances are unique, and the system needs to make people pay when they can. Even as shitty as the system is, we can't afford it. It's on track to be in the red by tens of trillions of dollars. By the time all the bills come due, it might be quadrillions of dollars, due to inflation. I'm not even joking...
>There is no way to say this without sounding rude, but you clearly don't understand how insane healthcare costs are when you have kids.
I know how expensive the extremes are. Most kids don't need much healthcare. I'm not interested in arguing that with you. If you know, you know.
>Premiums alone could be close to a 1k a month for a family plan. At best you're paying 500 a month in premiums, and that is guaranteed to have a 5k+10k deductible before anything is covered by insurance. Then you will probably still have a co-insurance.
This is because people have "insurance" that pays for basic routine things. It's more like a price-gouging payment plan or a security blanket. If you got insurance only for severe situations with a high deductible, and paid for routine stuff out of pocket, you'd come out ahead I think. I happen to have a pretty good insurance plan with a low deductible but I didn't have one until I was almost 30. Nor did I qualify for Medicaid or anything else.
The free health care is not actually free. We all pay for it. Even poor people's taxes go toward healthcare that they might not use. Secondly, your choices on this "free" healthcare are somewhat limited. Good luck finding a doctor and getting an appointment in a timely fashion. And some of these doctors specifically maximize services and visits to milk the government for as much as they can.
>I know dozens of people with medicaid and they absolutely refuse to lose it, especially the ones with large families. If you, or someone in your family, have chronic health issues then you are basically guaranteed to be paying 10k in healthcare premiums and deductibles when you lose Medicaid and get private insurance.
Again I say, if you are poor you should not go out and start a large family. People who have expensive chronic conditions they can't help, or have like 1 kid with that, are kind of an exception.
Back to the original point. I think not working more because of Medicaid eligibility is stupid. If we're talking about the difference between working 5% more hours at the same job and not, then I get it. But we aren't gonna see people give up $40k+ jobs just so they can get Medicaid. Even if they were, it's not a problem with means testing in principle. Each person's circumstances are unique, and the system needs to make people pay when they can. Even as shitty as the system is, we can't afford it. It's on track to be in the red by tens of trillions of dollars. By the time all the bills come due, it might be quadrillions of dollars, due to inflation. I'm not even joking...
> It isn't easier or fairer to write everyone a check, because quite a lot of people don't need any help.
Why not? If you give everyone the same subsidy and adjust taxes accordingly, then the welfare cliff disappears, a marginal dollar of income is genuinely valuable, and a screwup in how someone’s need is measured doesn’t matter so much. As an added bonus, wealthier and more influential people might use more social benefits and thus apply pressure to make them better.
> Taxing people who don't have kids to pay for people who can afford to pay their kids' tuition seems wrong all around.
Why not? Healthy, well educated are a massive, and even essential, benefit to society. If nothing else, they’re the future taxpayers! Why, exactly, should their parents be the ones to bear almost all of the cost of producing them?
Why not? If you give everyone the same subsidy and adjust taxes accordingly, then the welfare cliff disappears, a marginal dollar of income is genuinely valuable, and a screwup in how someone’s need is measured doesn’t matter so much. As an added bonus, wealthier and more influential people might use more social benefits and thus apply pressure to make them better.
> Taxing people who don't have kids to pay for people who can afford to pay their kids' tuition seems wrong all around.
Why not? Healthy, well educated are a massive, and even essential, benefit to society. If nothing else, they’re the future taxpayers! Why, exactly, should their parents be the ones to bear almost all of the cost of producing them?
>Why not? If you give everyone the same subsidy and adjust taxes accordingly, then the welfare cliff disappears, a marginal dollar of income is genuinely valuable, and a screwup in how someone’s need is measured doesn’t matter so much. As an added bonus, wealthier and more influential people might use more social benefits and thus apply pressure to make them better.
There's no such thing as a perfect calculation for this. There is essentially no welfare cliff now. What you're proposing is to tax "wealthy" people so much that they have no choice but to lean on social benefits, and expect them to be thankful for the opportunity to participate in the welfare system. You say it very optimistically but it is actually an awful thing.
>Why not? Healthy, well educated are a massive, and even essential, benefit to society. If nothing else, they’re the future taxpayers! Why, exactly, should their parents be the ones to bear almost all of the cost of producing them?
Parents of kids get most of the benefits of having those kids. That's why they bear the cost of it. I can't believe I have to explain this... Other people's kids will not help me with my bills or tend to me when I'm sick. If they are somehow taxed to pay for my existence, I expect them to avoid that as much as possible. My own kids on the other hand might actually care about me, even with all the moral decline we have seen in out culture.
There's no such thing as a perfect calculation for this. There is essentially no welfare cliff now. What you're proposing is to tax "wealthy" people so much that they have no choice but to lean on social benefits, and expect them to be thankful for the opportunity to participate in the welfare system. You say it very optimistically but it is actually an awful thing.
>Why not? Healthy, well educated are a massive, and even essential, benefit to society. If nothing else, they’re the future taxpayers! Why, exactly, should their parents be the ones to bear almost all of the cost of producing them?
Parents of kids get most of the benefits of having those kids. That's why they bear the cost of it. I can't believe I have to explain this... Other people's kids will not help me with my bills or tend to me when I'm sick. If they are somehow taxed to pay for my existence, I expect them to avoid that as much as possible. My own kids on the other hand might actually care about me, even with all the moral decline we have seen in out culture.
>It isn't easier or fairer to write everyone a check, because quite a lot of people don't need any help
Is this some kind of joke? You pay taxes on that check, which means you effectively get less money as you earn more. Do people really not understand how negative income taxes work? The system is the same in terms of net payouts compared to any means tested scheme, because you can turn the knobs any way you like.
Is this some kind of joke? You pay taxes on that check, which means you effectively get less money as you earn more. Do people really not understand how negative income taxes work? The system is the same in terms of net payouts compared to any means tested scheme, because you can turn the knobs any way you like.
Exactly this. A check to the wealthy is basically a tax refund. The wealthy get a check every month already in social security, so it's literally already happening.
Wow what an attitude... dO YoU nOt UnDERsTaND brO?
Whether you pay taxes on the check itself that 100% comes from taxes is kind of a separate issue. Unemployment benefits are like that and it's stupid. In some situations, Social Security gets taxed or reduced too.
It would not make sense to send a check to a middle class family because they don't need it. People of means who don't have kids and never set foot in a college also should not have to pay extra so that families that don't need help can get kickbacks on college expenses.
>The system is the same in terms of net payouts compared to any means tested scheme, because you can turn the knobs any way you like.
Ok, if you're proposing a means-tested scheme that's different from what I responded to. The other comment suggested sending a check to everyone. These are two entirely different plans. If you pay people who don't need it, you also have to tax them more. And those extra taxes would be unfair to some people. The right thing is to make people pay more for their own expenses when they can afford more, but on a sliding scale.
Whether you pay taxes on the check itself that 100% comes from taxes is kind of a separate issue. Unemployment benefits are like that and it's stupid. In some situations, Social Security gets taxed or reduced too.
It would not make sense to send a check to a middle class family because they don't need it. People of means who don't have kids and never set foot in a college also should not have to pay extra so that families that don't need help can get kickbacks on college expenses.
>The system is the same in terms of net payouts compared to any means tested scheme, because you can turn the knobs any way you like.
Ok, if you're proposing a means-tested scheme that's different from what I responded to. The other comment suggested sending a check to everyone. These are two entirely different plans. If you pay people who don't need it, you also have to tax them more. And those extra taxes would be unfair to some people. The right thing is to make people pay more for their own expenses when they can afford more, but on a sliding scale.
It's not just price discrimination, but the process of applying and choosing a college is essentially an auction process designed to benefit colleges over students. US colleges all band together to participate in a single coordinated system (FAFSA, college ranking systems, the common app, Early decision rules, etc.) , acting almost like a cartel, so they get away with it. If you view the college application process through the lens of Mechanism Design you can see that colleges hold all the cards and so the entire system is designed to their benefit: https://en.wikipedia.org/wiki/Mechanism_design
What exactly is unfair about the process?
1. The colleges which most heavily implement price discrimination are the most desirable to attend and also tend to accept large portions of their student body through Early Decision applications that don't allow apply to most (not all) of the other most desirable colleges. This means that accepted ED applicants have no recourse beyond either accepting or rejecting the proposed "aid package".
2. Highly desirable colleges aim for high applicant "yield" for rankings/planning, which in aggregate makes it so most of their accepted students only get into one highly desirable college. Even outside of early decision applicants, this puts applicants in a bad bargaining position - they must choose between either paying more for the ~single highly desirable college they got into or less for a less desirable college.
3. You cannot generally bid between colleges even if you got into comparably desirable/expensive desirable colleges (you can't tell Dartmouth and Brown that each is proposing a cost of $40k/y and have them bid against each other). This is because they essentially operate as a cartel. This limits downward pressure on prices.
4. The application process operates in rounds with fixed dates, there aren't really do-overs within a given year, and waiting for the next year changes the process (you're either a transfer or gap year applicant). This puts a lot of pressure on applicants to accept the least-worst option and doesn't give them the ability to react to a bad outcome by eg applying to more places after the fact.
5. The acceptance criteria are opaque and in many cases subjective (eg your application essays). Applicants need to hedge their bets and deal with a lot of uncertainty. Any accepted offer from a highly desirable college then feels like a gift and not worth squandering/negotiating.
6. As you mention, colleges know exactly how well you'll be able to pay, and because they act as a cartel that disallows bidding wars or negotiation + all the other forced scarcity/time pressure I mentioned, they can essentially extract as much from applicants as they want, up to their sticker price.
It's worth mentioning that not all competitive colleges participate in the cartel to the same degree as the Ivy League. When I was applying to colleges, I remember MIT and Caltech had Early Application (not Early Decision) processes, didn't make applying in those rounds as beneficial as ED colleges, and didn't have as many athlete/legacy "backdoors" as the Ivy League.
I also remember that Duke and Vanderbilt offered full merit scholarships to some students who might've received no need-based aid, which I was fortunate enough to benefit from and am extremely grateful for, even if it was probably a self-serving policy to poach applicants away from the Ivy League/improve yield.
What exactly is unfair about the process?
1. The colleges which most heavily implement price discrimination are the most desirable to attend and also tend to accept large portions of their student body through Early Decision applications that don't allow apply to most (not all) of the other most desirable colleges. This means that accepted ED applicants have no recourse beyond either accepting or rejecting the proposed "aid package".
2. Highly desirable colleges aim for high applicant "yield" for rankings/planning, which in aggregate makes it so most of their accepted students only get into one highly desirable college. Even outside of early decision applicants, this puts applicants in a bad bargaining position - they must choose between either paying more for the ~single highly desirable college they got into or less for a less desirable college.
3. You cannot generally bid between colleges even if you got into comparably desirable/expensive desirable colleges (you can't tell Dartmouth and Brown that each is proposing a cost of $40k/y and have them bid against each other). This is because they essentially operate as a cartel. This limits downward pressure on prices.
4. The application process operates in rounds with fixed dates, there aren't really do-overs within a given year, and waiting for the next year changes the process (you're either a transfer or gap year applicant). This puts a lot of pressure on applicants to accept the least-worst option and doesn't give them the ability to react to a bad outcome by eg applying to more places after the fact.
5. The acceptance criteria are opaque and in many cases subjective (eg your application essays). Applicants need to hedge their bets and deal with a lot of uncertainty. Any accepted offer from a highly desirable college then feels like a gift and not worth squandering/negotiating.
6. As you mention, colleges know exactly how well you'll be able to pay, and because they act as a cartel that disallows bidding wars or negotiation + all the other forced scarcity/time pressure I mentioned, they can essentially extract as much from applicants as they want, up to their sticker price.
It's worth mentioning that not all competitive colleges participate in the cartel to the same degree as the Ivy League. When I was applying to colleges, I remember MIT and Caltech had Early Application (not Early Decision) processes, didn't make applying in those rounds as beneficial as ED colleges, and didn't have as many athlete/legacy "backdoors" as the Ivy League.
I also remember that Duke and Vanderbilt offered full merit scholarships to some students who might've received no need-based aid, which I was fortunate enough to benefit from and am extremely grateful for, even if it was probably a self-serving policy to poach applicants away from the Ivy League/improve yield.
The weirdest part in all this is that the people who architect the system are making essentially no money from it. All of extra tuition money just goes to pay random employees. A strange way for greedy provost to use ill gotton gains.
i think it's because it's not designed to have this outcome - it's emergent upon the rules and incentives of the system.
There's advertising/marketing incentive to make the college experience like a resort on campus. There's bureaucracy in administration that just grows because it's in the interest of each department lead to manage more people under themselves (think office politiking).
There's perceived prestige of the students from brand name colleges similar to Veblen good (https://en.wikipedia.org/wiki/Veblen_good) which makes charging more acceptable.
There's advertising/marketing incentive to make the college experience like a resort on campus. There's bureaucracy in administration that just grows because it's in the interest of each department lead to manage more people under themselves (think office politiking).
There's perceived prestige of the students from brand name colleges similar to Veblen good (https://en.wikipedia.org/wiki/Veblen_good) which makes charging more acceptable.
Beautiful reply. #3 can be pushed by aggressive negotiators, but requires "like for like" schools to make a mistake. Then you can leverage one school to ask for more money from another.
A fairer system would be SAT score weighted by contribution and legacy status, it makes it nice and fair for everyone.
Traffic citations in some municipalities do this.
College shouldn't be structured like a punitive sacrifice for poor behavior
College shouldn't be structured like a punitive sacrifice for poor behavior
Pretty much every company who does not list prices publicly in their website does this. If the vendor recognizes your company name, the price will be bigger :(
If you get food stamps or other services from the social safety net, then you have to show your financials. Requiring the same for educational subsidies seems to follow the same rationale.
There's a difference between "Show us how much you have, we will give you more until you have enough" and "Show me how much you have, we'll raise prices until you can barely afford it with a high interest loan."
That just goes to the immoral and unethical nature of means based assistance. It makes no sense to deprive people of aid because they make a dollar over some arbitrary line.
And the low-hanging counter argument says there are limited resources in the social safety net, and an arbitrary line is necessary for the administration of such assistance.
Funny enough this is exactly how vendor engagement goes when you are publicly traded. They can see your books more or less and charge wildly different numbers to different companies. It has nothing to do with how much you use the product or the resources you'll use and everything to do with what they think you are worth. We've had so many calls where we're like "brand new product with team of 10 wants your thing" and they come back with a high 6 figure saas contract. It's so fucking annoying that they don't have to show their prices online and can make all their customers sign pricing NDAs
I suppose it's karma for all the companies that refuse to publish the salary being offered for jobs upfront.
Imagine any other service where they demanded your bank statements
After being frustrated for many years by the rising cost of college, I've internally decided to flip the questions.
- Why would college tuition decrease?
- What's actually stopping the elite schools from doubling their tuition in a single year?
- What forces would actually cause colleges to lower their tuition?
It's unfortunately really hard to find good answers here IMO with the layout of the current "market conditions" for colleges that we've setup in America.
- Why would college tuition decrease?
- What's actually stopping the elite schools from doubling their tuition in a single year?
- What forces would actually cause colleges to lower their tuition?
It's unfortunately really hard to find good answers here IMO with the layout of the current "market conditions" for colleges that we've setup in America.
You'd think that college tuition would decrease in the US because university enrollment has actually been on a downward trend for over a decade. However, in the US university primarily serve as social signalling and an elite prestigious university is a very different type of product than a typical university (most of which are not particularly exclusive, admitting over 70% of applicants).
Presumably, competition prevents this. It would really depend on the applicants' other options. Between attending Vanderbilt at $200K per year and a moderately less prestigious state university for about an order of magnitude less a lot of students would pick the latter. The university could admit more students that are willing to pay the doubled tuition, but that'd probably result in lower graduate quality.
I'm not sure what could make elite universities lower their tuition save for legislation. As the Varsity Blues scandal demonstrated, families are willing to pay huge sums of money to get their kids into elite university. Besides laws, the only other answer I can think of is to reduce the prestige of elite universities. If an Ivy League, Stanford, or MIT diploma ceases to confer so much advantage in academia and the labor market then their ability to charge large sums would go down.
Presumably, competition prevents this. It would really depend on the applicants' other options. Between attending Vanderbilt at $200K per year and a moderately less prestigious state university for about an order of magnitude less a lot of students would pick the latter. The university could admit more students that are willing to pay the doubled tuition, but that'd probably result in lower graduate quality.
I'm not sure what could make elite universities lower their tuition save for legislation. As the Varsity Blues scandal demonstrated, families are willing to pay huge sums of money to get their kids into elite university. Besides laws, the only other answer I can think of is to reduce the prestige of elite universities. If an Ivy League, Stanford, or MIT diploma ceases to confer so much advantage in academia and the labor market then their ability to charge large sums would go down.
University enrollment is down way at the bottom end where schools are shutting down. So supply is dropping instead of prices, as economics expects.
> - What forces would actually cause colleges to lower their tuition?
Decoupling education from certification would work. Most people are willing to pay so much for college because they need certification; they're forced to pay for the education, whether or not they actually learn anything.
The Federal government could mandate that any school that's eligible for funds has to make the certification open to anyone, and also make sure that the certifications themselves around coupled together (you don't need a certification in Art History to get certified in Biochemistry). If people can pass the Harvard certification for, say, Harvard Astrophysics, then they get a Harvard Astrophysics degree the same as someone who took classes at Harvard and passed the certification.
It's known that bundling items together is usually a good way to force people to buy things they don't want. People talk about this all the time when it comes to cable bundles. But our higher education system is based on bundling a lot of things together, so when people are trying to acquire what they need, they're forced to pay for many things they don't.
Decoupling education from certification would work. Most people are willing to pay so much for college because they need certification; they're forced to pay for the education, whether or not they actually learn anything.
The Federal government could mandate that any school that's eligible for funds has to make the certification open to anyone, and also make sure that the certifications themselves around coupled together (you don't need a certification in Art History to get certified in Biochemistry). If people can pass the Harvard certification for, say, Harvard Astrophysics, then they get a Harvard Astrophysics degree the same as someone who took classes at Harvard and passed the certification.
It's known that bundling items together is usually a good way to force people to buy things they don't want. People talk about this all the time when it comes to cable bundles. But our higher education system is based on bundling a lot of things together, so when people are trying to acquire what they need, they're forced to pay for many things they don't.
The resulting certifications would be worth approximately the same amount as the existing online-only degrees. Basically ticking the box for "college educated", but be passed over on any further scrutiny than that.
Because the selling point of prestigious schools is the filtering and networking.
Because the selling point of prestigious schools is the filtering and networking.
I don't think you're wrong, but I think that food and accommodations would be better places to start the unbundling with.
A lot of US schools require you to live on campus and pay for campus food, which is a perfect example of bundling if there ever was one. As a European, the fact this is legal seems absurd and ridiculous to me.
A lot of US schools require you to live on campus and pay for campus food, which is a perfect example of bundling if there ever was one. As a European, the fact this is legal seems absurd and ridiculous to me.
>The Federal government could
But will it? No. Back to the drawing board.
But will it? No. Back to the drawing board.
I'm not opposed to any attempt to remove the need for these full college degrees as a hiring requirement, but this also ignores that the point of many colleges is the network. You are paying to be part of a club.
#2 and #3 both have simple answers - "Nothing," and "Eliminate the free money buffet of federally guaranteed loans that can't be discharged by anything short of death."
"Eliminate 80% of administrators" would also help with #3 but there's no incentive to do that, especially without the more direct answer to #3 happening first.
"Eliminate 80% of administrators" would also help with #3 but there's no incentive to do that, especially without the more direct answer to #3 happening first.
That’s just attacking the bottom of the ladder. Taking a resource away from the common people is not a nice policy to pursue. The schools are the ones raising prices. What exactly about teaching a bunch of kids in one room at a time has gotten (checks notes) 300%??? more expensive in the last 20 years?
The workforce is not even doing that good, the competition for few permanent positions is fierce and the compensation outside of management is low compared to other industries.
The workforce is not even doing that good, the competition for few permanent positions is fierce and the compensation outside of management is low compared to other industries.
IMO there is no hope. We have a culture that values college degrees, no matter how useless, as some kind of high moral good.
To take away student loans then is a form of evil.
First, you would have to ban discrimination against people without college degrees.
You can't discriminate against people without college degrees and then complain college degrees are expensive lol.
To take away student loans then is a form of evil.
First, you would have to ban discrimination against people without college degrees.
You can't discriminate against people without college degrees and then complain college degrees are expensive lol.
This is a great question.
- Why would college tuition decrease?
1) College tuition would decrease if it led to increased profit for the college. This could happen for many reasons including the case that they can't find enough students willing to pay.
- What's actually stopping the elite schools from doubling their tuition in a single year?
2) Mostly the fear that it would reduce profits - for example through bad publicity, increased regulation, or an inability to find students willing to pay
-What forces would actually cause colleges to lower their tuition?
3) market forces - on the demand side a decrease in students willing to pay, or maybe on the supply side an increase in competition for students. Or maybe government/regulatory interventions. Or possibly even a reduction in the costs of providing education.
- Why would college tuition decrease?
1) College tuition would decrease if it led to increased profit for the college. This could happen for many reasons including the case that they can't find enough students willing to pay.
- What's actually stopping the elite schools from doubling their tuition in a single year?
2) Mostly the fear that it would reduce profits - for example through bad publicity, increased regulation, or an inability to find students willing to pay
-What forces would actually cause colleges to lower their tuition?
3) market forces - on the demand side a decrease in students willing to pay, or maybe on the supply side an increase in competition for students. Or maybe government/regulatory interventions. Or possibly even a reduction in the costs of providing education.
What does it mean for a school like Harvard to make a profit? Why do they want to do that?
They won't call it a profit. What they will do is spend as much as they can on salaries (especially for the senior employees), increasing the size of the administration (more jobs for insiders), buildings, sports, etc.
Basically, people think non-profit means the organization works for the public or puts the public first. Unfortunately, what it often means is money goes to employees and insiders instead of shareholders. For colleges, it means the students (and the Federal Government which issued the student loads) comes last and the college's employees come first. Not great public policy.
Basically, people think non-profit means the organization works for the public or puts the public first. Unfortunately, what it often means is money goes to employees and insiders instead of shareholders. For colleges, it means the students (and the Federal Government which issued the student loads) comes last and the college's employees come first. Not great public policy.
This is why running things that aren't a business "like a business" is profoundly dangerous and destructive and anybody advocating it should be dismissed as ideologically driven.
but on the other hand, these private colleges do not ever claim to be run for the public (tho they are a non-profit, which carries with it the connotation of being run for the public good despite there not being any laws requiring it).
If college is expensive, students should choose not to go, or find a cheaper one. Choosing an expensive college, whether the outcomes are good for said student or not, is the choice of said student and therefore, subject to their rational utilitarian calculations. Choosing badly is always possible, just like any other life decisions.
If college is expensive, students should choose not to go, or find a cheaper one. Choosing an expensive college, whether the outcomes are good for said student or not, is the choice of said student and therefore, subject to their rational utilitarian calculations. Choosing badly is always possible, just like any other life decisions.
That's individual consumer based which is still part of the problem.
We need to collectively choose to structure education for the benefit of society because we want people to be educated.
It's not about consumer choices or utility functions. That type of thinking has zero place here.
We need to collectively choose to structure education for the benefit of society because we want people to be educated.
It's not about consumer choices or utility functions. That type of thinking has zero place here.
> We need to collectively choose to structure education for the benefit of society because we want people to be educated.
so it is done already with k-12 education. Not everybody agrees that tertiary education should be paid for by the state, but do agree that the state should help subsidize a bit.
This is the education loan system that is the collective decision.
so it is done already with k-12 education. Not everybody agrees that tertiary education should be paid for by the state, but do agree that the state should help subsidize a bit.
This is the education loan system that is the collective decision.
And that 56 year old decision by Governer Reagan should be revisited.*
A majority of people get a college degree these days. It isn't some effete luxury of the literati in country club colleges. If someone is willing to do the hard work of educating themselves we should support it without burdening them with a lifetime of debt.
You want a doctorate and are willing to put in the years of effort? Good, we need more. It should be free. It's not like information is a scarce resource these days. Spending years of your life to defend a dissertation is a big enough sacrifice.
* see https://theintercept.com/2022/08/25/student-loans-debt-reaga... or https://www.washingtonpost.com/made-by-history/2022/12/29/hi... . The same people who whine about h1-b workers also don't want to fund education to get more domestic ones. We need to stop pretending people with such incoherent policies deserve a seat at the table.
A majority of people get a college degree these days. It isn't some effete luxury of the literati in country club colleges. If someone is willing to do the hard work of educating themselves we should support it without burdening them with a lifetime of debt.
You want a doctorate and are willing to put in the years of effort? Good, we need more. It should be free. It's not like information is a scarce resource these days. Spending years of your life to defend a dissertation is a big enough sacrifice.
* see https://theintercept.com/2022/08/25/student-loans-debt-reaga... or https://www.washingtonpost.com/made-by-history/2022/12/29/hi... . The same people who whine about h1-b workers also don't want to fund education to get more domestic ones. We need to stop pretending people with such incoherent policies deserve a seat at the table.
I can see the logic of administrators wanting to spend money on their own remuneration, but why should they care about building new buildings?
Well typically employees at a college typically treat the facilities like their private country club. Instead of getting the family membership at the bouldering gym, just build a bouldering wall and now you can go anytime.
This could just be a case of the profit motive aligning with the good for society as a whole.
New buildings can house new students and academics which is good and also helps bring in more money in future.
New buildings also preserve the status of the university as a top institution - there is some level of competition for students and talented academics and if Harvard fell behind other universities it would be harder to bring in grants. Of course this is a good thing for the university but it's also good for any administrator who wants to preserve their pay.
New buildings can house new students and academics which is good and also helps bring in more money in future.
New buildings also preserve the status of the university as a top institution - there is some level of competition for students and talented academics and if Harvard fell behind other universities it would be harder to bring in grants. Of course this is a good thing for the university but it's also good for any administrator who wants to preserve their pay.
Not sure this answers your question but Harvard does make a profit (technically an operating surplus as they are not a for profit) which they then reinvest. Although technically it might not seem like a profit motive I can see how a lot of this money might find it's way into the pockets of the administration of the university (although I'm no expert on this - presenting this as a personal view, not a fact)
Https://finance.harvard.edu/financial-overview
"The University ended fiscal year 2023 with an operating surplus of $186 million compared to $406 million in fiscal year 2022, on an operating revenue base that increased 5% or $262 million, to $6.1 billion. The reduced surplus was not unexpected and was driven primarily by expenses associated with renewed return to campus activity and strategic investments in our workforce, with increased compensation for faculty and staff, a decrease in vacancy rates, and overall growth in new workers across campus."
Https://finance.harvard.edu/financial-overview
"The University ended fiscal year 2023 with an operating surplus of $186 million compared to $406 million in fiscal year 2022, on an operating revenue base that increased 5% or $262 million, to $6.1 billion. The reduced surplus was not unexpected and was driven primarily by expenses associated with renewed return to campus activity and strategic investments in our workforce, with increased compensation for faculty and staff, a decrease in vacancy rates, and overall growth in new workers across campus."
Sure, but that money isn’t going to shareholders is it? Why would the school’s management want to make that number bigger?
Actually on reflection perhaps I'm being too cynical here. The motivation of administration doesn't need to be lining their pockets. They may simply see increased revenue as a means to invest in staff and facilities which they can use to further the university's mission of research and education. There doesn't have to be any bad intent.
Certainly when I was a student, I got the impression that my university saw its purpose as supporting research and training new researchers. One reason to like scholarships is that being a researcher doesn’t actually pay well so saddling people with lots of debt by graduation might discourage them from becoming researchers, though I’m not sure how much the university thought of that. It did feel like the majority of undergraduates who were not going to become researchers were a bit of an afterthought. However people outside had different ideas about what the university was trying to do, and the university obviously hoped to solicit donations from those students who eventually left.
So that they can increase their own pay and benefits. Nonprofits still have to pay their staff and the amount of money some pay theirs can be rather... inflated.
The operating surplus is net of paying staff. If they increased their pay, wouldn’t it be lower?
The operating surplus says nothing about how they increased pay, except that they increased revenue more than they increased pay.
If you wanted to justify further pay increases this would be the best strategy - if you have an operating deficit you'll be under pressure to cut staff or pay.
Again I'm being very cynical here and I have no idea if this is actually happening. Just speculation.
If you wanted to justify further pay increases this would be the best strategy - if you have an operating deficit you'll be under pressure to cut staff or pay.
Again I'm being very cynical here and I have no idea if this is actually happening. Just speculation.
The same reasons as any other business enterprise under capitalism.
Businesses tend to distribute their profits to shareholders, either through dividends or buybacks. Boards try to structure the way businesses are governed to align the interests of management with those of shareholders. But Harvard has no shareholders, so I’m not sure what you’re trying to suggest.
But that’s the point: Harvard literally isn’t a “business enterprise under capitalism”. It’s a non-profit organization with no shareholders. Nobody has equity in Harvard.
>Harvard literally isn't a “business enterprise under capitalism”
It literally is. "Non-profit" is a particular way of doing accounting, categorizing funds, filing taxes, but the incentives and interests are no different.
It literally is. "Non-profit" is a particular way of doing accounting, categorizing funds, filing taxes, but the incentives and interests are no different.
The incentives and interests are hugely different. A for-profit business is controlled by shareholders who directly own claims to its revenue. A non-profit is not. Harvard has no shareholders and the members of its primary governing board are not compensated.
The gains come from (re)investing donations, not from tuition.
In big organizations (of any type, including companies, universities, hospitals, military), people's sense of importance is determined primarily by the number of people they manage, and/or the size of their budget.
People want to be more important.
People want to be more important.
Reduce the amount students can borrow for college, that’s it. If you give people ever increasing amounts of money to acquire something that society convinces them they need, the price will keep going up as the loan money available goes up.
It’s just being sucked into bullshit administration and infrastructure costs.
A university could be a few dozen professors, zero admin besides secretaries for the professors, and having the professors share whatever small organizational tasks are actually necessary.
Like think of how you would run a startup university. Do as little as possible outside of actual teaching and research, charge tuition to cover costs which would be much lower.
There’s not any competition though. So it’s not happening.
It’s just being sucked into bullshit administration and infrastructure costs.
A university could be a few dozen professors, zero admin besides secretaries for the professors, and having the professors share whatever small organizational tasks are actually necessary.
Like think of how you would run a startup university. Do as little as possible outside of actual teaching and research, charge tuition to cover costs which would be much lower.
There’s not any competition though. So it’s not happening.
I studied at a "startup university" that had just a few dozen professors. The total number of employees was still more than 100, and it wasn't all "bullshit administration".
There were assistants to the professors (1 assistant per 3 professors), the bigger research groups had post docs and lab technicians, there was an IT team (3 people), there was one person responsible for the sign up formalities of the students, a director of the institute, his assistant, one HR person, 3 or 4 people in the cafeteria, cleaning staff, head of microscopy lab, some scientific support technicians, people feeding rats and mice in the life science facility, a few people in the machine shop, a librarian (library was digital only; still took a dedicated person who made sure everyone got access to the literature they need), and those are just the people I met and remember.
That university only offered PhD programs, so there were only few lectures. If you wanted to do undergraduate courses as well, you'd need a lot more people than that.
Universities just need a lot of staff.
There were assistants to the professors (1 assistant per 3 professors), the bigger research groups had post docs and lab technicians, there was an IT team (3 people), there was one person responsible for the sign up formalities of the students, a director of the institute, his assistant, one HR person, 3 or 4 people in the cafeteria, cleaning staff, head of microscopy lab, some scientific support technicians, people feeding rats and mice in the life science facility, a few people in the machine shop, a librarian (library was digital only; still took a dedicated person who made sure everyone got access to the literature they need), and those are just the people I met and remember.
That university only offered PhD programs, so there were only few lectures. If you wanted to do undergraduate courses as well, you'd need a lot more people than that.
Universities just need a lot of staff.
I agree with the general thrust of your argument but it's oversimplifying the causes. A real university would not be able to run with just professors and secretaries, that's ludicrous. You need some administration to handle compliance, organization, finance, etc. You can both acknowledge the objective reality that a university is a complex organization that needs administration and that most universities today have 3-4x more administrators than they need.
And why couldn’t the professor or two who teach finance be responsible for the university’s finances?
Surely you're not implying that every person with a PhD in something is an excellent practitioner of that thing. Most aren't. They shouldn't be - their job is primarily research on that thing, and teaching that thing.
Not every finance professor can manage a multi-billion dollar budget, not every Political Science professor can manage a campaign or run for office, not every Comp Sci professor can maintain a university network, etc. Not to mention the fact that not every college will even have a professor for every discipline that you could theoretically use to replace an administrator.
Not every finance professor can manage a multi-billion dollar budget, not every Political Science professor can manage a campaign or run for office, not every Comp Sci professor can maintain a university network, etc. Not to mention the fact that not every college will even have a professor for every discipline that you could theoretically use to replace an administrator.
> and research
Why research? Why not go further and cut that bit out and just leave teaching?
I'm not convinced that the best place to teach student is necessarily the best place to do research at, and I'm pretty sure that your competence at being a good researcher has very little to do with your competence at being a good teacher.
Why research? Why not go further and cut that bit out and just leave teaching?
I'm not convinced that the best place to teach student is necessarily the best place to do research at, and I'm pretty sure that your competence at being a good researcher has very little to do with your competence at being a good teacher.
Because the purpose of a university isn’t teaching. And you really cap yourself at undergraduate education if all you want to do is teach. Not is the purpose of professors to be good teachers.
There are hundreds of colleges. That's competition. Why aren't any of them competing? Because there isn't actual profit in it. Except for the for-profit colleges that do exist, do compete, and occasionally get shut down because they turn out to be scams.
That sounds somewhat like the university of austin, or whatever it's called. They're launching this fall and trying to get accredited. It will be interesting to see how that plays out.
Tuition could decrease because of the growing sense that college is not 'worth it'.
> A poll published in 2022 asked parents if they would rather their child attended a four-year college or a three-year apprenticeship that would train them for a job and pay them while they learned. Nearly half of parents whose child had graduated from college chose the apprenticeship. [1]
> Nearly half of parents say they would prefer not to send their children to a four-year college after high school, even if there were no obstacles, financial or otherwise. Two-thirds of high-school students think they will be just fine without a college degree. [1]
When there is a large change in the demand for a product, the price often drops.
1: https://www.wsj.com/us-news/education/why-americans-have-los...
> A poll published in 2022 asked parents if they would rather their child attended a four-year college or a three-year apprenticeship that would train them for a job and pay them while they learned. Nearly half of parents whose child had graduated from college chose the apprenticeship. [1]
> Nearly half of parents say they would prefer not to send their children to a four-year college after high school, even if there were no obstacles, financial or otherwise. Two-thirds of high-school students think they will be just fine without a college degree. [1]
When there is a large change in the demand for a product, the price often drops.
1: https://www.wsj.com/us-news/education/why-americans-have-los...
> - Why would college tuition decrease?
in theory, because of a few factors
1) more kids doing online, or community college, degrees
2) more people opting to go into the trades, as AI eats knowledge workers and the cost-benefit doesn't make sense; or else skipping and going straight to certifications for things like IT
3) legal or structural changes impacting how many international and out-of-state students are allowed. many public universities operate at a loss for locals, but subsidize those costs with higher fees for out of state and international students.
4) the gub'mnt finally gets around to rejecting or capping a lot of student loan applications
Been seeing a lot of chat about #1 and #2, but until the last two get changed I don't think anything will drastically improve
in theory, because of a few factors
1) more kids doing online, or community college, degrees
2) more people opting to go into the trades, as AI eats knowledge workers and the cost-benefit doesn't make sense; or else skipping and going straight to certifications for things like IT
3) legal or structural changes impacting how many international and out-of-state students are allowed. many public universities operate at a loss for locals, but subsidize those costs with higher fees for out of state and international students.
4) the gub'mnt finally gets around to rejecting or capping a lot of student loan applications
Been seeing a lot of chat about #1 and #2, but until the last two get changed I don't think anything will drastically improve
> - Why would college tuition decrease?
The single change that would cause the largest downward pressure on college pricing would be removing federally subsidized student loans.
The single change that would cause the largest downward pressure on college pricing would be removing federally subsidized student loans.
Socialism makes a lot more sense when you realize that all the rigging to make people feel good about capitalism results in the same structure simply because anything else would not be permitted.
>> - What's actually stopping the elite schools from doubling their tuition in a single year?
It is effectively double -- the rest of the "tuition" is legacy contribution. There is an entire standard contribution schedule based on how many years out of college you are. Many legacy parents pay hoping this gets their children into the school when the time comes.
It is effectively double -- the rest of the "tuition" is legacy contribution. There is an entire standard contribution schedule based on how many years out of college you are. Many legacy parents pay hoping this gets their children into the school when the time comes.
Just in general I would like to say that flipping the question like this is a great way to look at all aspects of a problem. Similarly "why would the price of housing decrease?" etc
> What's actually stopping the elite schools from doubling their tuition in a single year?
If a school doubled tuition, it would be less competitive and fewer of the best students would choose to apply and enroll there. That would make that school less elite.
> What forces would actually cause colleges to lower their tuition?
Increased supply and/or lowered demand.
If a school doubled tuition, it would be less competitive and fewer of the best students would choose to apply and enroll there. That would make that school less elite.
> What forces would actually cause colleges to lower their tuition?
Increased supply and/or lowered demand.
Harvard could triple its tuition and the same people are going to apply to Harvard.
They might apply, but certainly won't attend if they are admitted to Stanford, Yale, etc. The higher the price differential, the more likely people would be willing to take a 'prestige' hit and go to the lower cost school.
Anyone applying from a family making 400k a year (top 2%) would still be sensitive to an 80k vs 240k/year sticker price change.
Anyone applying from a family making 400k a year (top 2%) would still be sensitive to an 80k vs 240k/year sticker price change.
Operation Varsity Blues (https://en.wikipedia.org/wiki/Varsity_Blues_scandal) suggests there are plenty of individuals willing to pay plenty more. Some would even break the law and risk prison. If it were legal, probably many more would pay.
There are just the people who got caught!
There are just the people who got caught!
This would be true for those whose contribution would be capped based on parental earnings/assets, since their effective price would not increase. And it would be true for extremely wealthy folks whose parents can spend $1M on college and not worry about it. But for the marginal applicants who would be paying full freight under the old price but can't easily toss out another $150k/yr on tuition, there would definitely be a drop in application rates.
Because not everything in life should be driven by optimizing profit?
Parent comment is probably not arguing in favor of overpriced college, just saying the situation won’t resolve naturally
This is a normative claim, which therefore cannot answer questions about what is, or what could be.
> - Why would college tuition decrease?
The only answer I can think of is strong and swift government regulation, and there's no appetite for that, so...I dunno man.
The only answer I can think of is strong and swift government regulation, and there's no appetite for that, so...I dunno man.
f321x_(1)
Because of government subsidies. The government subsidizes college prices by backing student loans. This creates a vicious circle. Colleges raise their prices, the government ensures those prices can be met, and students are on the hook for it.
This is also ultimately why house prices are high. The government subsidizes house prices by backing mortgage debt.
This is also ultimately why house prices are high. The government subsidizes house prices by backing mortgage debt.
Government also donates tax on mortgage interest to home sellers.
This at least notionally stopped in 2018, though you could argue it's hidden in the larger standard deduction.
It’s coming back as the trump tax cuts for non-companies expire with little hope of being renewed.
Because the government still wins no matter what in this arrangement. Property owners are a captive audience, government can siphon their money almost on a whim. It is free money.
One thing I have noticed in these conversations is some who say government-backed loans are the root cause of price increases. Even if this is technically correct, it ignores how we got here, which is also why going back on that is non-negotiable.
And from the other side, public college was never free in the US, but it didn’t have to be free to be affordable. We don’t have to make it free to solve the problem. In 1970 tuition at University of California schools was about $1000 in today’s dollars. It’s not nothing, but it also means you’re not making a huge financial mistake by going to college and not getting a degree.
Without student loans, a lot of families simply wouldn’t be able to afford to send kids to college. Meanwhile, as government (especially state governments) cut funding to schools, sticker price has skyrocketed even at public schools.
So really the only solution is more public funding for public universities. This will force prices down and force private schools to compete. Vanderbilt wouldn’t list their tuition at 100k if in state was $1000.
And from the other side, public college was never free in the US, but it didn’t have to be free to be affordable. We don’t have to make it free to solve the problem. In 1970 tuition at University of California schools was about $1000 in today’s dollars. It’s not nothing, but it also means you’re not making a huge financial mistake by going to college and not getting a degree.
Without student loans, a lot of families simply wouldn’t be able to afford to send kids to college. Meanwhile, as government (especially state governments) cut funding to schools, sticker price has skyrocketed even at public schools.
So really the only solution is more public funding for public universities. This will force prices down and force private schools to compete. Vanderbilt wouldn’t list their tuition at 100k if in state was $1000.
But this misses the fact that a huge, huge percent of the cost is going to luxuries and things that have no benefit to 99% of students.
The dorms, gyms, cafeterias and student centers built in the last decade are luxurious spaces compared to prior decades. Perfectly good buildings are torn down and rebuilt so that a new donor can put their name on the building. Budgets for sports, clubs, and other programs have skyrocketed.
If you were to start a new school from scratch and ask the question "How can we give students the best education for a reasonable price?" you could do so with a university with 1/10th the headcount of staff and a correspondingly lower tuition.
You just wouldn't have a 15-person committee meeting weekly to decide if the company the university hired to perform an audit of the mission statements of the companies the university hired to provide consulting services to the student affairs staffers were properly recorded in the new document management system that was transferred from the homegrown IT solution to the new vendor.
The dorms, gyms, cafeterias and student centers built in the last decade are luxurious spaces compared to prior decades. Perfectly good buildings are torn down and rebuilt so that a new donor can put their name on the building. Budgets for sports, clubs, and other programs have skyrocketed.
If you were to start a new school from scratch and ask the question "How can we give students the best education for a reasonable price?" you could do so with a university with 1/10th the headcount of staff and a correspondingly lower tuition.
You just wouldn't have a 15-person committee meeting weekly to decide if the company the university hired to perform an audit of the mission statements of the companies the university hired to provide consulting services to the student affairs staffers were properly recorded in the new document management system that was transferred from the homegrown IT solution to the new vendor.
Well according to the article, at least half of the funding goes to paying people. Even if we eliminated everything else and tuition was cut in half, it would still be too expensive imo.
Here's a simple solution- nix all the crazy administration bloat.
I could never understand how colleges employ hundreds or thousands of non-teachers and still fail so hard at every a student actually needs. Actually becoming antagonistic to the students.
Until I realized the administration is only there so service and increase the administration.
I could never understand how colleges employ hundreds or thousands of non-teachers and still fail so hard at every a student actually needs. Actually becoming antagonistic to the students.
Until I realized the administration is only there so service and increase the administration.
Sounds almost like an inefficient system employing way more people than is economically sustainable – not unlike that other vital system that almost every other country in the world manages to make available to its citizens with much less overhead.
> Perfectly good buildings are torn down and rebuilt so that a new donor can put their name on the building.
This is either extremely stupid or not a problem at all, depending on how much of that new building is paid for by the donor.
This is either extremely stupid or not a problem at all, depending on how much of that new building is paid for by the donor.
Not at all.
Go to one of those almost-free european colleges, and then compare the experience to a US college. The US colleges expect most students to come from far away, live on a big, expensive, beautiful campus and have massive efforts in student lifestyle. Sport facilities, museums, academic support, actual office hours... it's closer to expensive, private EU universities. Most EU universities don't do that, and they are ran to cut costs. The expense per student is low, on purpose.
They might both be called universities, but it's completely different goods. The transformations of European schools to be available to the masses just didn't happen in the US, and therefore the prices are through the roof. Give any American university the budget per student than a German or Spanish university has, and they'd have to just close, because they aren't built for it.
Go to one of those almost-free european colleges, and then compare the experience to a US college. The US colleges expect most students to come from far away, live on a big, expensive, beautiful campus and have massive efforts in student lifestyle. Sport facilities, museums, academic support, actual office hours... it's closer to expensive, private EU universities. Most EU universities don't do that, and they are ran to cut costs. The expense per student is low, on purpose.
They might both be called universities, but it's completely different goods. The transformations of European schools to be available to the masses just didn't happen in the US, and therefore the prices are through the roof. Give any American university the budget per student than a German or Spanish university has, and they'd have to just close, because they aren't built for it.
> live on a big, expensive, beautiful campus and have massive efforts in student lifestyle. Sport facilities, museums, academic support, actual office hours...
Interesting how you mention things actually relevant to academic quality towards the end of that enumeration!
> They might both be called universities, but it's completely different goods.
It almost sounds like one of them bundles a lot of things with education that are more of a lifestyle than an education.
I really don't doubt the academic quality of US colleges, and being able to actually talk to somebody that knows your name and is somewhat incentivized to care about your progress is something I'd love to see at European universities.
But all the other stuff... Are people in the US really happy with only getting all of that as a bundle deal, often resulting in crushing, non-bankruptable debt?
Interesting how you mention things actually relevant to academic quality towards the end of that enumeration!
> They might both be called universities, but it's completely different goods.
It almost sounds like one of them bundles a lot of things with education that are more of a lifestyle than an education.
I really don't doubt the academic quality of US colleges, and being able to actually talk to somebody that knows your name and is somewhat incentivized to care about your progress is something I'd love to see at European universities.
But all the other stuff... Are people in the US really happy with only getting all of that as a bundle deal, often resulting in crushing, non-bankruptable debt?
> Are people in the US really happy
i mean, they're doing it, so it must mean they're happy. Otherwise, they won't do it. It's not like someone forced these people to go into debt.
It's just that those students who do go into debt is doing so thinking they getting a prestigious degree would get them a good job and an easy life afterwards - a marketing tactic sold to a generation of young people that is not actually true any more (even if it was once true).
i mean, they're doing it, so it must mean they're happy. Otherwise, they won't do it. It's not like someone forced these people to go into debt.
It's just that those students who do go into debt is doing so thinking they getting a prestigious degree would get them a good job and an easy life afterwards - a marketing tactic sold to a generation of young people that is not actually true any more (even if it was once true).
I don’t agree with this logic at all. We didn’t have any other options. If you want a desk job, you need to go to a four year college.
The amenities and the prestige of the college are also not the same thing. Stanford was just as prestigious 50 years ago when it was a fraction of the cost.
The amenities and the prestige of the college are also not the same thing. Stanford was just as prestigious 50 years ago when it was a fraction of the cost.
In the same way that they are happy with the health care system, because otherwise why would anyone go to a doctor?
The healthcare system is not optional, unlike the tertiary education system.
Graduating high school is also optional I suppose. Not everyone does.
The question in my mind shouldn’t be “why didn’t people think harder about getting an advanced education” but rather “why is the US the only country in the world that accepts punishing debt for its brightest youth?”
Yes, at an individual level there is always the option to become a plumber rather than an accountant. But America cannot be a nation of plumbers.
The question in my mind shouldn’t be “why didn’t people think harder about getting an advanced education” but rather “why is the US the only country in the world that accepts punishing debt for its brightest youth?”
Yes, at an individual level there is always the option to become a plumber rather than an accountant. But America cannot be a nation of plumbers.
> In 1970 tuition at University of California schools was about $1000
And in 1970 one in five high school graduates went to college, whereas today it's nearly two thirds. And that was with a much lower high school graduation rate than today (55% vs 80%). So whatever changes have happened have had the result of getting a lot more people actually into college.
And in 1970 one in five high school graduates went to college, whereas today it's nearly two thirds. And that was with a much lower high school graduation rate than today (55% vs 80%). So whatever changes have happened have had the result of getting a lot more people actually into college.
The increased attendance rate of college and price don't have to be (and I would argue, aren't) related at all.
In other words, I have no idea what point you're trying to make
In other words, I have no idea what point you're trying to make
The point is it's much easier to subsidize college when 10% of the cohort goes to college than it is when 60% of the cohort goes to college. That seems obvious to me and I'm not sure how it doesn't make sense to you.
I believe a number of states trimmed state-run college and university funding during the 2008 housing crisis to help balance the books.
Worth remembering that ~2/3 of U.S. students in college are in public colleges and universities, not private ones like Vanderbilt. Prices have gone up there too (especially since state governments subsidize their public universities significantly less than they used to), but they are still pretty good deals given U.S. GDP per capita. In many states they can also be practically free depending on income level and typically provide excellent educations and career opportunities for most students.
Commercial goals and no regulation that desires everyone to pass the same accreditation, and only that same accreditation.
In theory, doing it 'better' than the competition is good, in practise this just means there will always only be a handful that are actually better and they will capitalise on that as much as possible. But purely regulating everything into the ground also doesn't help.
Not sure if this is even fixable, because it is a complete ecosystem that is highly lucrative (money, status, offloading HR to the schools) for everyone except the students and teachers (professors). You can also wonder if the goal of just providing good education is something people are even interested in, it's so much more geared towards a 'future fabrication factory' where the learning stuff part is secondary to the "follow this track go get a shot at job XYZ" part that everything is minmaxing for.
In theory, doing it 'better' than the competition is good, in practise this just means there will always only be a handful that are actually better and they will capitalise on that as much as possible. But purely regulating everything into the ground also doesn't help.
Not sure if this is even fixable, because it is a complete ecosystem that is highly lucrative (money, status, offloading HR to the schools) for everyone except the students and teachers (professors). You can also wonder if the goal of just providing good education is something people are even interested in, it's so much more geared towards a 'future fabrication factory' where the learning stuff part is secondary to the "follow this track go get a shot at job XYZ" part that everything is minmaxing for.
Federal student loans broke the market. People became price-inelastic.
This problem would be solved immediately by making student loans dischargeable in bankruptcy. The easy money would evaporate and a lot of colleges would have to figure out how to make money on lower tuitions.
Yes with loans that cannot be written off in bankruptcy, the lenders don't need to do due diligence and are incentivized to loan out as much money as possible. More money causes tuition to go up.
Last year about 7.5 million people attended public 4 year institutions and about the same number attended public two year institutions. Around 5 million attended private institutions. Over the last 25 years there has a been a steady decline in the public funding of public higher education on a per student basis.
Higher education is a large market and there are many, many forces at play. Blaming a single item is too simplistic an analysis.
https://nces.ed.gov/programs/digest/d13/tables/dt13_303.70.a...
Higher education is a large market and there are many, many forces at play. Blaming a single item is too simplistic an analysis.
https://nces.ed.gov/programs/digest/d13/tables/dt13_303.70.a...
The number of students is irrelevant. The government will secure your student loans and the only way you can get rid of them is to die. When a school can basically decide how much money they want, wave a magic wand and the money arrives in their bank account, it's going to skyrocket exactly like it has.
The number of students at public institutions vs. private institutions does matter. You do not know much about how higher education works. Public institutions generally can't just raise tuition as they see fit. They usually need the approval of state governments. Tuition has gone up at public institutions as state funding has gone down.
Student loans became non-dischargeable. That broke the market.
exactly, make them dischargable and observe gigantic changes. Incentives, incentives, incentives
"People became price-inelastic."
Isn't it the opposite? The tutution became increasingly inelastic. Consumers would technically be more elastic given the higher credit available.
Isn't it the opposite? The tutution became increasingly inelastic. Consumers would technically be more elastic given the higher credit available.
"A good's price elasticity of demand"
Yeah, so the tuition is more inelastic, not the people.
Yeah, so the tuition is more inelastic, not the people.
technically, it's demand that is meant here by what's elastic (or not). there's also a price elasticity of supply (eg, if tuition goes too low, some colleges will close).
the way the GP used the term was understandable to me, and how I'm used to seeing it used. it's basically shorthand for 'people's [demand for college degrees] became price-inelastic'. if you want to use it differently in your communication, it's up to you. just remember that people might understand something other than what you meant.
the way the GP used the term was understandable to me, and how I'm used to seeing it used. it's basically shorthand for 'people's [demand for college degrees] became price-inelastic'. if you want to use it differently in your communication, it's up to you. just remember that people might understand something other than what you meant.
Federal loan limits for the first year of undergrad are $5,500 for dependents and $9,500 for independents, so they can’t be blamed for a single year costing $100K.
Private loans aren't dischargeable in bankruptcy.
Wanna share why having loans make people price-ineslastic? Mortgages are a thing and people aren't indifferent to house prices.
Mortgages must be paid on time or your lender will foreclose on your home and liquidate it to pay off your debt.
That is impossible to do with an education. Add in loan forgiveness and income based repayment from the sibling comment, and the fact that a mortgage is securitized by collateral and it’s almost like a student loan and a mortgage have nothing in common aside from being loans.
That is impossible to do with an education. Add in loan forgiveness and income based repayment from the sibling comment, and the fact that a mortgage is securitized by collateral and it’s almost like a student loan and a mortgage have nothing in common aside from being loans.
Mortgages don't qualify for income-based repayment schemes or forgiveness for govt/nonprofit employees.
What is your price elasticity for your childrens' future?
Your comment highlights what I personally think is some of the reason for the extreme tuition increases: too many people believe that college is the singular best path for their children's future.
Including, unfortunately, the vast majority of employers and human resources people those children will encounter when attempting to get a job.
It (still), mathematically is.
The return on the investment of a college degree is absolutely worth it.
What's becoming much less clearly worth it is the value add of going to an elite school over a state school.
The return on the investment of a college degree is absolutely worth it.
What's becoming much less clearly worth it is the value add of going to an elite school over a state school.
College was/is/remains one of the biggest factors in determining incoming levels and general success in life.
I don't have kids, but I believe it. I have several close family members whose biggest regret is that they didn't go to college.
I can think of a much better use of 400k. I went to community college and a cheap state school and I make good money.
Colleges don't refund you if you can't finish or get a decent job afterwards.
The system as is doesn't make alot of sense. Just running though Harvard's cost calculator, if you have a family income of 300k you're out 86,666$. Drop that down to 175k and it's only 26k.
Given how bad the tax rates are at that level you might as well have one parent play golf all day.
300k is a very reasonable amount for two typical people. After income taxes takes 100k off top( assume a high tax state like Hawaii), you're talking about spending more than 1/3rd of your take home on one child's education.
Colleges don't refund you if you can't finish or get a decent job afterwards.
The system as is doesn't make alot of sense. Just running though Harvard's cost calculator, if you have a family income of 300k you're out 86,666$. Drop that down to 175k and it's only 26k.
Given how bad the tax rates are at that level you might as well have one parent play golf all day.
300k is a very reasonable amount for two typical people. After income taxes takes 100k off top( assume a high tax state like Hawaii), you're talking about spending more than 1/3rd of your take home on one child's education.
> 300k is a very reasonable amount for two typical people.
It's literally four times the median household income of the US. (And even after inflation, bananas still don't cost anywhere near $10 two decades on after that joke was made). This sort of statement is a bit out of touch if you ask me.
Here's where I'm certainly willing to accept that I'm a bit out of touch - I don't have children. So my question is, how much would you be willing to pay if you thought something would give them a significantly better future?
It's literally four times the median household income of the US. (And even after inflation, bananas still don't cost anywhere near $10 two decades on after that joke was made). This sort of statement is a bit out of touch if you ask me.
Here's where I'm certainly willing to accept that I'm a bit out of touch - I don't have children. So my question is, how much would you be willing to pay if you thought something would give them a significantly better future?
How will anyone have an extra 86k on a 300k a year salary ?
The numbers just don't make sense. I don't have kids so I'll probably cross that bridge if I get to it, but there's a limit.
You can have a great future with community college + state school.
The numbers just don't make sense. I don't have kids so I'll probably cross that bridge if I get to it, but there's a limit.
You can have a great future with community college + state school.
If I math this out right $300K - $100K taxes (your estimate) - $86K tuition = $114K which is still a lot higher than the median household income (which I'm pretty sure is still pre-tax). That said, I think you are onto something - these schools are for the elite; not the merely well-to-do or below.
I also went to state school, so I'm not really dissing the thing, though people here would probably laugh at me if I said how much money I make, so maybe your mileage may vary on that one. But my perception (which could certainly be mistaken) is that the elite degrees actually have a huge premium, which is why there is so much competition for them.
I also went to state school, so I'm not really dissing the thing, though people here would probably laugh at me if I said how much money I make, so maybe your mileage may vary on that one. But my perception (which could certainly be mistaken) is that the elite degrees actually have a huge premium, which is why there is so much competition for them.
114k isn't going very far in an expensive city. Plus a ton of people aren't doing great.
For example in LA the average income is only 76k.
https://www.census.gov/quickfacts/fact/table/losangelescityc...
At that point you'll never be able to afford to buy a home which used to be a Hallmark of the middle class.
It wouldn't be possible for a family making 300k to pay a mortgage in LA and send a kid to Harvard.
For example in LA the average income is only 76k.
https://www.census.gov/quickfacts/fact/table/losangelescityc...
At that point you'll never be able to afford to buy a home which used to be a Hallmark of the middle class.
It wouldn't be possible for a family making 300k to pay a mortgage in LA and send a kid to Harvard.
Then they'd have to choose one or the other. My parents told me in no uncertain terms that there was no money to send me to private school, so I didn't apply to them; I'm also quite allergic to debt.
I had a paper pointed out to me recently that I found enlightening.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5222535/
> The recent proliferation of studies examining cross-national variation in the association between parenthood and happiness reveal accumulating evidence of lower levels of happiness among parents than nonparents in most advanced industrialized societies.
It seems that the pressures we place on parents as a society have grown as we've advanced. I certainly am not built to deal with that kind of stress, and given the dropoff in fertility, I think that that's a more common view these days.
I had a paper pointed out to me recently that I found enlightening.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5222535/
> The recent proliferation of studies examining cross-national variation in the association between parenthood and happiness reveal accumulating evidence of lower levels of happiness among parents than nonparents in most advanced industrialized societies.
It seems that the pressures we place on parents as a society have grown as we've advanced. I certainly am not built to deal with that kind of stress, and given the dropoff in fertility, I think that that's a more common view these days.
I took a much different route. I barely got out of highschool ( although I was at the point where I would of taken a GED test and walked out).
Then I did well in community college, couldn't afford my last year of college, dropped out. Worked for a very cool startup for a bit, and I was making a very respectable salary without a degree.
Eventually I finished my degree at a very cheap state school, but it hasn't really mattered. My major is in some unrelated non sense. Gets me past HR filters though.
Ultimately I just really love programming, I learned enough to get my first job with an old laptop. I reckon anyone with a 100$ laptop ( install Linux on whatever you can find on eBay) can learn programming for free.
My real belief is college is a nice to have, but shouldn't be required to start a career. If anything I think most people should take a bit of time to work and figure out what they enjoy before commiting to school.
Then I did well in community college, couldn't afford my last year of college, dropped out. Worked for a very cool startup for a bit, and I was making a very respectable salary without a degree.
Eventually I finished my degree at a very cheap state school, but it hasn't really mattered. My major is in some unrelated non sense. Gets me past HR filters though.
Ultimately I just really love programming, I learned enough to get my first job with an old laptop. I reckon anyone with a 100$ laptop ( install Linux on whatever you can find on eBay) can learn programming for free.
My real belief is college is a nice to have, but shouldn't be required to start a career. If anything I think most people should take a bit of time to work and figure out what they enjoy before commiting to school.
>This sort of statement is a bit out of touch if you ask me.
Just a bit? It's wildly out of touch, $300,000/year is literally the 95th percentile of income for families[1]. Dude called income that's more than 95 PERCENT of the population "a very reasonable amount for two typical people."
Fucking hell!
[1] https://dqydj.com/household-income-percentile-calculator/
Just a bit? It's wildly out of touch, $300,000/year is literally the 95th percentile of income for families[1]. Dude called income that's more than 95 PERCENT of the population "a very reasonable amount for two typical people."
Fucking hell!
[1] https://dqydj.com/household-income-percentile-calculator/
So, sure, it's on the high end of things.
But what's your definition of "reasonable"?
Income is not a bell curve, but one standard deviation on a bell curve goes up to the 84th percentile, and two standard deviations go up to almost the 98th.
It's not a reasonable income to expect, but it's a reasonable income to have.
But what's your definition of "reasonable"?
Income is not a bell curve, but one standard deviation on a bell curve goes up to the 84th percentile, and two standard deviations go up to almost the 98th.
It's not a reasonable income to expect, but it's a reasonable income to have.
The issue here is if you make more you're problem in a HCOL area.
An adult making 150k with a partner who makes a similar amount is not rich in a city like NYC. I broke down the math above, but in no universe does the typical upper middle class family have an extra 86k per year to spend on school
An adult making 150k with a partner who makes a similar amount is not rich in a city like NYC. I broke down the math above, but in no universe does the typical upper middle class family have an extra 86k per year to spend on school
I think this adult was expected to save up a lot of the college money before the child turned 18.
Come on, dude. Get real.
Just tell your kids you aren't going to pay for Vanderbilt and they'd have to go somewhere cheaper if you are footing the bill. Plenty of options. My parents told me if I wanted to go to college I was completely on my own.
Just tell your kids you aren't going to pay for Vanderbilt and they'd have to go somewhere cheaper if you are footing the bill. Plenty of options. My parents told me if I wanted to go to college I was completely on my own.
If I ran the world I'd completely get rid of the expectation your parents should pay for college.
Right now tons of people who's parents just refuse to provide financial information don't get any aid at all. This is very common if you have a bad home life. I fell into this category.
I grew up on welfare and I'm at the level were if it worked out with either of my last 3 partners we'd be at 300k or more. Life is funny...
Right now tons of people who's parents just refuse to provide financial information don't get any aid at all. This is very common if you have a bad home life. I fell into this category.
I grew up on welfare and I'm at the level were if it worked out with either of my last 3 partners we'd be at 300k or more. Life is funny...
> What is your price elasticity for your childrens' future?
This is a silly question.
Silly answer: I would want my kid to be able to retire happily. If college debt prevents that, let's ditch it.
This is a silly question.
Silly answer: I would want my kid to be able to retire happily. If college debt prevents that, let's ditch it.
It's actually incredible how many engineers and designers I have met personally who believe that college was a waste of time, in comparison to the knowledge that can be gained just through internships, mentorship and forms of apprenticeship. Do you think someone with 4 years of interning around major tech companies is better equipped to work for those companies compared to a person who came directly out of college?
The rise of bootcamps and micro-certifications teach people 80% of the stuff in 20% (or less) of the time, and at fractions of the cost as well. Are university educations really that much better?
To me, the value of the university system seems to be the connections and networking that form rather than skills and acuity.
The rise of bootcamps and micro-certifications teach people 80% of the stuff in 20% (or less) of the time, and at fractions of the cost as well. Are university educations really that much better?
To me, the value of the university system seems to be the connections and networking that form rather than skills and acuity.
Personally I believe that theoretical CS/mathematics in college was a great use of my time, and that those subjects are hard to learn and truly internalize on the job. I've got a lot of value over the years from that kind of education, not only from the specific things I learned, but the way of thinking it ingrained and the broad exposure/skills it gave me (eg I might be able to recognize some problem as control theory and find and understand papers about it).
However, most of the practical skills I learned in college were not good uses of time. Classes in general weren't structured to teach you the kind of skills being an actual fulltime SWE gives you. Plus the industry changes so fast, and college is so unrepresentative of what actual problems people work on in the real world, that you may learn something soon/already obsolete.
So my advice, especially for people going into the software industry, is to learn as much foundational and theoretical content as you can. You may never get a better chance to learn graph algorithms, real analysis, abstract algebra, or theory of computation after college. Your professors may be experts on compilers or programming languages, and able to teach you the theory behind eg LISP better than you could teach yourself later.
Signup for the classes that will remap your brain and pay dividends for decades instead of "web dev 101", and you might find your college experience worthwhile (beyond the fun, personal growth, and networking - all important too).
However, most of the practical skills I learned in college were not good uses of time. Classes in general weren't structured to teach you the kind of skills being an actual fulltime SWE gives you. Plus the industry changes so fast, and college is so unrepresentative of what actual problems people work on in the real world, that you may learn something soon/already obsolete.
So my advice, especially for people going into the software industry, is to learn as much foundational and theoretical content as you can. You may never get a better chance to learn graph algorithms, real analysis, abstract algebra, or theory of computation after college. Your professors may be experts on compilers or programming languages, and able to teach you the theory behind eg LISP better than you could teach yourself later.
Signup for the classes that will remap your brain and pay dividends for decades instead of "web dev 101", and you might find your college experience worthwhile (beyond the fun, personal growth, and networking - all important too).
> The rise of bootcamps and micro-certifications teach people 80% of the stuff in 20% (or less) of the time, and at fractions of the cost as well.
It really depends on what you sorts of jobs you're talking about. There's a bunch of work available in the vast realm of "computer jobs" that are essentially on the intellectual level of plumbing or hvac repair and indeed, college is a waste of time for those sorts of jobs and boot camps are fine. I'm not denigrating it, that's mostly what I do. I wire together systems that other people mostly developed and do a bunch of troubleshooting and most of the value I bring is on-the-job experience with the systems involved.
There's also a lot of cutting edge R&D and dev work that does indeed benefit from an academic background, and you don't really have to look any further than open ai for that. But even outside of machine learning, a lot of people have built companies on taking academic research papers and turning them into products.
It really depends on what you sorts of jobs you're talking about. There's a bunch of work available in the vast realm of "computer jobs" that are essentially on the intellectual level of plumbing or hvac repair and indeed, college is a waste of time for those sorts of jobs and boot camps are fine. I'm not denigrating it, that's mostly what I do. I wire together systems that other people mostly developed and do a bunch of troubleshooting and most of the value I bring is on-the-job experience with the systems involved.
There's also a lot of cutting edge R&D and dev work that does indeed benefit from an academic background, and you don't really have to look any further than open ai for that. But even outside of machine learning, a lot of people have built companies on taking academic research papers and turning them into products.
Taking those students out of the college pool might also decrease the overall cost of college.
Those cutting edge jobs are not using material from university classes, they're inventing it whole cloth. University education, particularly undergraduate education, is a socioeconomic filter. It proves that you have some combination of family connections or money sufficient to be admitted and graduate.
I disagree, because in Europe university is basically free, so the function you ascribe to it does not apply there. The education and social experience you get there is very valuable and quite different from what you learn on the job. I regularly apply the thinking I learned in university in my job, and it’s generally noticeable when you have coworkers from a different educational background.
I think it really depends on what your goals are. If you're just aiming to get a job or make as much money as possible, then yeah I think college is often overrated. But as somebody who took the nontraditional route and is now interested in the "harder" aspects of computer science, there are absolutely gaps where my formally trained colleagues have a leg up. Formal academic bodies of knowledge, and getting exposure to them, absolutely have a use. But you for sure don't need them in many day-to-day jobs or to advance as a professional much of the time.
EDIT: this response assumes a good program / department. There are absolutely subpar college programs that are a giant waste of money and time.
EDIT: this response assumes a good program / department. There are absolutely subpar college programs that are a giant waste of money and time.
I totally feel you on this. One time I spent three nights writing a language parser before my Google wormhole showed me I was writing a lexer/tokenizer. My colleagues with CS degrees just looked at me like I was an alien when I shared my excitement.
I have never met an engineer in person who believes this, and without fail any one in my career I have talked to says college is invaluable.
The only place I see this thinking is on Reddit or among people who aren’t engineers. It’s something people want to believe from the outside.
There are probably rare exceptional people who grasped all of the fundamentals without college, but I have never met one.
The only place I see this thinking is on Reddit or among people who aren’t engineers. It’s something people want to believe from the outside.
There are probably rare exceptional people who grasped all of the fundamentals without college, but I have never met one.
I personally believe university is exactly what you make of it. I went for a full 4 years to an expensive private university with a good reputation in my field, and it’s done a lot to open doors for me. However, I don’t really believe that my accomplishments (work I have to show) from my time there is automatically better or higher quality than peers from state schools or self-taught people. But the words on the resume do work.
The truth to me seems that a lot of ego and subjective judgement comes from the prestige of university to begin with, and oftentimes any specific school is not a guarantor of quality or success. And if alumni from “good colleges” are not easily distinguishable after 5 years from alumni from “middle colleges”, then to me that calls into question the entire system as potentially dubious.
It’s not that university “doesn’t work”, it’s that it mostly just isn’t a good value of dollars-to-knowledge at todays prices.
The truth to me seems that a lot of ego and subjective judgement comes from the prestige of university to begin with, and oftentimes any specific school is not a guarantor of quality or success. And if alumni from “good colleges” are not easily distinguishable after 5 years from alumni from “middle colleges”, then to me that calls into question the entire system as potentially dubious.
It’s not that university “doesn’t work”, it’s that it mostly just isn’t a good value of dollars-to-knowledge at todays prices.
If your lens views Universities as a work training substitute their view would be accurate. If you view the University as Universus (Latin for Universe or everything) then what they offer is quite unique. Arguably all do not fulfill all of these.
1. A kinder gentler form of kicking your child out of the nest and learning to be on their own.
2. A no mac-education environment were students can participate in research and learn how to answer question that are not yet answered as opposed to regurgitation.
3. Learning to socializing as adults.
4. Meeting groups of people that spend their days thinking deeply about specific subjects. These people can then be used as resources for society as a whole to solve problems and make decisions.
5. Exposure to just about everything we know or think we know about everything.
If you do not view them as such then I would agree they are not worth the effort or expense. Industry can afford to train their own automatons. Which is one of the reasons they are salivating over AI at this very moment.
1. A kinder gentler form of kicking your child out of the nest and learning to be on their own.
2. A no mac-education environment were students can participate in research and learn how to answer question that are not yet answered as opposed to regurgitation.
3. Learning to socializing as adults.
4. Meeting groups of people that spend their days thinking deeply about specific subjects. These people can then be used as resources for society as a whole to solve problems and make decisions.
5. Exposure to just about everything we know or think we know about everything.
If you do not view them as such then I would agree they are not worth the effort or expense. Industry can afford to train their own automatons. Which is one of the reasons they are salivating over AI at this very moment.
Even universities advertise the job placement rates for their various majors. Kids aren't told by parents, teachers or counselors to go to college to become well rounded, they're told to go because they'll earn more money if they have a degree.
As for #2, that's a very rare thing to encounter in an undergraduate degree. Most of your classes are being fed information, then asked basic comprehension questions about it. Maybe some creative authorship skills in the form of writing courses, but nothing groundbreaking there either.
Many degrees are luxury goods that you either get paid for by someone else or become a wage slave to pay off in a decade or three, depending on how much you borrowed.
As for #2, that's a very rare thing to encounter in an undergraduate degree. Most of your classes are being fed information, then asked basic comprehension questions about it. Maybe some creative authorship skills in the form of writing courses, but nothing groundbreaking there either.
Many degrees are luxury goods that you either get paid for by someone else or become a wage slave to pay off in a decade or three, depending on how much you borrowed.
Depends on your perception of value. I would/could never pay millions for an NFT any sort. I simply see zero value in them. Others seem to have no hesitation in writing that check.
Don't get me wrong I would like to see that type of education available for a lot cheaper. We always seem to make enough money to not qualify for financial aid of any kind but not enough to pay college fees without having to give up something else. My house needs a paint job for example - going to wait 2 more years until my son is out of college. That's life I guess.
Don't get me wrong I would like to see that type of education available for a lot cheaper. We always seem to make enough money to not qualify for financial aid of any kind but not enough to pay college fees without having to give up something else. My house needs a paint job for example - going to wait 2 more years until my son is out of college. That's life I guess.
Social connections/networking are part of it, but so is the social/professional/international cachet of having a degree. Many people who express (quite legitimate) doubt about the value of their degree as an educational experience are oblivious to the numerous filters that get in the way of people who don't have a degree.
A bootcamp gets you the requisite education to be an entry-level engineer at a place like Google or Facebook. However, these jobs are mostly training (like a bootcamp) for you to become a more senior engineer, where you will actually be designing systems and coordinating with others. In a senior job, your job is more about communicating with people and making predictions about what will happen when you eventually build something.
The skills bootcamp graduates don't pick up are things like math, writing, and research skills. You don't use those skills as a code-slinging junior engineer, but when you start coordinating with other people and doing things like designing large-scale systems, you may find yourself doing a lot more math and writing than you think.
The skills bootcamp graduates don't pick up are things like math, writing, and research skills. You don't use those skills as a code-slinging junior engineer, but when you start coordinating with other people and doing things like designing large-scale systems, you may find yourself doing a lot more math and writing than you think.
> A bootcamp gets you the requisite education to be an entry-level engineer at a place like Google or Facebook.
Absolutely not. A bootcamp gets you the requisite skills to be an entry level employee at the local web design agency. Or, more often, the "#lookingforwork" ring on LinkedIn.
Absolutely not. A bootcamp gets you the requisite skills to be an entry level employee at the local web design agency. Or, more often, the "#lookingforwork" ring on LinkedIn.
Perhaps I have an even rosier view of bootcamps than I should. It used to be that Lambda School was a decent way to turn your humanities degree into a job at a decent tech company, but I guess those days are over.
> The rise of bootcamps and micro-certifications teach people 80% of the stuff in 20% (or less) of the time, and at fractions of the cost as well. Are university educations really that much better?
This is the wrong comparison IMO. All of the good engineers I've come across are autodidacts. This makes sense when you think about it. You aren't going to be among the best by learning at the pace of a class. Many of them went to college because culturally that's what smart people do in the US (hopefully this changes). They acquired their competency despite--not because of--being preoccupied with useless coursework.
Bootcamps and micro-certifications don't produce competency either, but the stakes are much lower, and it's much less time and money wasted.
> To me, the value of the university system seems to be the connections and networking that form rather than skills and acuity.
Yes some of it is networking, but it's really that universities function as rating agencies for humans. Getting into the university is the most important part. If everyone switched to putting the best school they got into on their resume instead of where they graduated from, very little would change. And it would provide roughly the same signal to employers.
This is the wrong comparison IMO. All of the good engineers I've come across are autodidacts. This makes sense when you think about it. You aren't going to be among the best by learning at the pace of a class. Many of them went to college because culturally that's what smart people do in the US (hopefully this changes). They acquired their competency despite--not because of--being preoccupied with useless coursework.
Bootcamps and micro-certifications don't produce competency either, but the stakes are much lower, and it's much less time and money wasted.
> To me, the value of the university system seems to be the connections and networking that form rather than skills and acuity.
Yes some of it is networking, but it's really that universities function as rating agencies for humans. Getting into the university is the most important part. If everyone switched to putting the best school they got into on their resume instead of where they graduated from, very little would change. And it would provide roughly the same signal to employers.
> Getting into the university is the most important part. If everyone switched to putting the best school they got into on their resume instead of where they graduated from, very little would change. And it would provide roughly the same signal to employers.
I understand some entrepreneurs who pitch VCs do just this. I know the practice is common among HS tutors and admissions counselors. Their resume includes all the schools they got into, not just the one where they enrolled.
I would be slightly more impressed by a kid who got into some Ivy but went to UCLA to save money (or even a lower-ranked private school with a huge scholarship) rather than just going to the Ivy.
I understand some entrepreneurs who pitch VCs do just this. I know the practice is common among HS tutors and admissions counselors. Their resume includes all the schools they got into, not just the one where they enrolled.
I would be slightly more impressed by a kid who got into some Ivy but went to UCLA to save money (or even a lower-ranked private school with a huge scholarship) rather than just going to the Ivy.
The purpose of college is to show people you can jump through four years of bureaucratic hoops with a smile on your face for no guaranteed reward.
This is actually a fantastic test for working in a large company. I always worry that anyone who can't finish college may not be a good fit for a large organization. I'm not always right but I'm right a lot.
Also it really does teach you how to learn. The content doesn't really matter.
This is actually a fantastic test for working in a large company. I always worry that anyone who can't finish college may not be a good fit for a large organization. I'm not always right but I'm right a lot.
Also it really does teach you how to learn. The content doesn't really matter.
If that's true (I do believe in it to some extent, but I'm not quite that cynical about it), European universities must be something right: You get a lot of Kafka-grade bureaucratic bang for your buck (often $0)!
It’s not too hard to imagine what it’s like when someone spends four years interning at tech companies. That’s basically one of the computer science courses at Waterloo. So you can just find people who graduated from those courses and see how it worked out for them. Though obviously there’s a lot of selection bias there.
Yet many people leave college with few connections and little networking ever done. So by your standards anyone without those social skills should consider college as a total waste of time and money. College: only worthwhile for extroverts.
One of my litmus tests for looking at prospective MBA programs is which ones require significant industry/career experience, versus those that promulgate a high school > college > MBA > management position with zero real world experience (i.e. are more driven to the consulting/networking audience).
That should lead to hopefully finding an MBA course that augments my knowledge on a technical level rather than a mindset of "I did this course so I must know more than you about how to do your job".
That should lead to hopefully finding an MBA course that augments my knowledge on a technical level rather than a mindset of "I did this course so I must know more than you about how to do your job".
Surely we can create a cheaper networking event if that's the main value.
In high school, I only worried about what college I could get into and what was the reputation of the college. Cost was irrelevant because I had no job (I had worked, but for only around minimum wage) and didn’t know what kind of job I could get after I graduated.
I had no ability to effectively price shop, to compare the value of the degrees of different colleges, and the ability to get reviews of each college seemed “impossible” (opaque and/or difficult to get started).
In retrospect, I was a terrible consumer of the college product, but I don’t know how I could have changed it at the time, given my situation. I know the US federal government required colleges to publish key metrics such as the average salary by degree/program and specific costs like tuition. Those are incredibly valuable compared to the info I had, but I’m curious if high school students today are any better at making value judgements before they have had a non-trivial paycheck.
I had no ability to effectively price shop, to compare the value of the degrees of different colleges, and the ability to get reviews of each college seemed “impossible” (opaque and/or difficult to get started).
In retrospect, I was a terrible consumer of the college product, but I don’t know how I could have changed it at the time, given my situation. I know the US federal government required colleges to publish key metrics such as the average salary by degree/program and specific costs like tuition. Those are incredibly valuable compared to the info I had, but I’m curious if high school students today are any better at making value judgements before they have had a non-trivial paycheck.
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Higher education in the US is hardly about learning the skills for a particular discipline or trade. The American university system is a class differentiation mechanism, and students are paying for access to the managerial professional class, often the highest class one can achieve without family connections.
Even if tuition costs more than can be earned back in wages, it’s still a good investment because the alternative is lower class jobs or unemployment. (There are a few counter examples of professions which pay well and don’t require a university degree).
Even if tuition costs more than can be earned back in wages, it’s still a good investment because the alternative is lower class jobs or unemployment. (There are a few counter examples of professions which pay well and don’t require a university degree).
Exactly. It’s literally a barrier to entry. Have you been accepted and then credentialed by an institution? Your resume will then meet the checkbox of has a degree.
How did it happen? Education in the US works on a freemium model.
The pay-to-win aspect is more obvious at the university level, but it occurs at K-12 too: it's just that there the cost is not directly charged by a school district, but occurs via the premium for housing in that district.
(take a null hypothesis: a world where school districts all offer the same education. Even in this case, should parents somehow agree on which the "good" district were, it would have a premium reflecting how much parents who care about education are willing to pay to live somewhere where their children's likely friends' parents also care about education. "the mother of Mencius chose a neighbourhood")
The pay-to-win aspect is more obvious at the university level, but it occurs at K-12 too: it's just that there the cost is not directly charged by a school district, but occurs via the premium for housing in that district.
(take a null hypothesis: a world where school districts all offer the same education. Even in this case, should parents somehow agree on which the "good" district were, it would have a premium reflecting how much parents who care about education are willing to pay to live somewhere where their children's likely friends' parents also care about education. "the mother of Mencius chose a neighbourhood")
These questions come down to a lack of doing a root cause analysis, and getting caught up in the existing framing of the issue.
So let's try an RCA here.
Why do people pay it? They think it'll pay off.
Why? Because it does. Employers respect it, thereby it gives them more employability than without it.
Why do employers respect it? Because it means they know what they need for the job? Of course not. It's because they've proved conscientiousness, intelligence, interest, and basic cultural match, by sticking through 4 years of that.
So what is the solution?
Obvious. Entrepreneurialism to offer competing services that satisfy the above screening for employers, while being faster, cheaper, and more effective on the employees' end. Throw in teaching something useful into the mix too and you're winning.
If an undercurrent of that gets going, the universities are toast.
But people keep talking about this like it's a political and cultural matter. The problem with that is you externalize the issue, make it the responsibility of others, and disempower yourself.
Everyone can join in in producing or aiding that competition, unilaterally and individually.
So let's try an RCA here.
Why do people pay it? They think it'll pay off.
Why? Because it does. Employers respect it, thereby it gives them more employability than without it.
Why do employers respect it? Because it means they know what they need for the job? Of course not. It's because they've proved conscientiousness, intelligence, interest, and basic cultural match, by sticking through 4 years of that.
So what is the solution?
Obvious. Entrepreneurialism to offer competing services that satisfy the above screening for employers, while being faster, cheaper, and more effective on the employees' end. Throw in teaching something useful into the mix too and you're winning.
If an undercurrent of that gets going, the universities are toast.
But people keep talking about this like it's a political and cultural matter. The problem with that is you externalize the issue, make it the responsibility of others, and disempower yourself.
Everyone can join in in producing or aiding that competition, unilaterally and individually.
Very few students will pay that price. Even those above financial aid thresholds will typically be offered a ~~sale price~~ merit scholarship. Also, if they have other offers they can try and price match. The sticker price is so high because it feels nice to get something for 50% off. Much more so if it was due to your "merit" rather than your coupon clipping prowess.
College tuition is expensive, much more than it should be, but the obsession over a sticker price that is almost never relevant is silly. People should be more concerned about the actual cost of attendance.
College tuition is expensive, much more than it should be, but the obsession over a sticker price that is almost never relevant is silly. People should be more concerned about the actual cost of attendance.
This sounds disturbingly like the health care market.
I was just about to say this.
What's the way back out? Finding a way for the US to stop producing (at a meta-level) highly inflated, price-inelastic markets backed up by powerful bureaucracies (following Pournelle's law) and somehow soft-landing the existing ones without throwing out the value they definitely provide seems like a big challenge going forward.
What's the way back out? Finding a way for the US to stop producing (at a meta-level) highly inflated, price-inelastic markets backed up by powerful bureaucracies (following Pournelle's law) and somehow soft-landing the existing ones without throwing out the value they definitely provide seems like a big challenge going forward.
We are at peak college tuition. AI is coming for higher education. Not Ivy League at first, but starting with community colleges and working its way up.
> AI is coming for higher education
As long as hiring managers continue to give more weight to resumes with name brand colleges, these universities will never be threatened.
As long as hiring managers continue to give more weight to resumes with name brand colleges, these universities will never be threatened.
Some places like Google and many state governments are publicly removing all requirements for college degrees. Whether they still choose degree holders anyways is an open question, but some are very openly proclaiming that it's not a requirement.
the internet already made college irrelevant. The second wave of AI is just cleaning it up.
While I was attending college in the 2010s. They were always pushing “new buildings”, “new rock wall climbing”, “renovations to college housing”, “lazy river!”. Apparently funded through higher tuition and fees.
At some point, a college degree will no longer be required which will be the death knell.
While I was attending college in the 2010s. They were always pushing “new buildings”, “new rock wall climbing”, “renovations to college housing”, “lazy river!”. Apparently funded through higher tuition and fees.
At some point, a college degree will no longer be required which will be the death knell.
The point of college is signaling. The internet has no answer for how to signal to employers.
How about employers pay to train their own employees?
Are they allowed to change employers after being trained, and do they have to pay them back if so? In that case, what's changed?
Then they leave
I think it won't be AI that causes the collapse of university attendance. It will be people deciding not to go to college.
Most people just want jobs. Many employers are finding out that people with or without college educations can perform at their tasks, think critically and do all the same functions at most jobs. Ergo, folks will choose not to go into student debt purgatory and just dive straight into the workplace.
Most people just want jobs. Many employers are finding out that people with or without college educations can perform at their tasks, think critically and do all the same functions at most jobs. Ergo, folks will choose not to go into student debt purgatory and just dive straight into the workplace.
In 2022 one of my kids wanted to take college classes online over the summer. We created a spreadsheet with the costs for each school, and what was surprising was the range of prices, from $900 per class for MassBay Community College and UC Berkeley, to $7,000 for Babson (a private college near Boston). The state universities were all over the map - UConn and UVM are both big flagship universities but UVM was >2x UConn, and even more than private colleges like Brandeis. We went with UC Berkeley.
UVM online $4,800
MassBay $900
Harvard Extension $3,500
Lasell online $1,600
Brandeis $3,290
Babson $7,000
B.C. Woods College $2,200
UConn online $1,800
Berkeley extension $900
Umass Boston $1,500 (in state rate)
UVM online $4,800
MassBay $900
Harvard Extension $3,500
Lasell online $1,600
Brandeis $3,290
Babson $7,000
B.C. Woods College $2,200
UConn online $1,800
Berkeley extension $900
Umass Boston $1,500 (in state rate)
Businesses will charge what the market will bear. And if 'the market' can get government loans to pay for tuition, then the market will bear an awful lot.
I went to my state school instead of a private university purely because of cost. It just never seemed worth it to spend so much for 4 years of my life.
It's funny too, since I went to a high school where everyone felt the need to go to expensive colleges. Guidance counselors would assume you were going to an out of state or private school. There was no push for in-state schools.
Other than technical reasons for college being so expensive, such as legislation making it extremely easy to take out huge loans, a big factor is "prestige" and social status.
Going to my school was extremely uncool where I lived. But over the years the school I went to has gotten more and more enticing for students, I'm guessing because more high schoolers are wondering what the purpose of spending so much on college is.
I suspect (or, at least hope) US state schools become something like public European universities, where they become increasingly more "prestigious" as costs increase.
It's funny too, since I went to a high school where everyone felt the need to go to expensive colleges. Guidance counselors would assume you were going to an out of state or private school. There was no push for in-state schools.
Other than technical reasons for college being so expensive, such as legislation making it extremely easy to take out huge loans, a big factor is "prestige" and social status.
Going to my school was extremely uncool where I lived. But over the years the school I went to has gotten more and more enticing for students, I'm guessing because more high schoolers are wondering what the purpose of spending so much on college is.
I suspect (or, at least hope) US state schools become something like public European universities, where they become increasingly more "prestigious" as costs increase.
Basically it's because of unlimited/unconditional student loans that are 100% backed by the government. If students had to pay out of pocket, the market for useless and expensive programs would collapse. If lenders had to bear the risk of default due to the sheer uselessness of certain degrees, they would loan much less money.
One way this happened is that schools are including all sorts of useless, but expensive, frivolities.
Why do school have ultra fancy sports areas? Why do they need 15 different restaurants?
Go visit a college - they are basically little resort towns, or cruise ships on land.
Instead they should focus on education, and let other companies do the rest of that, if students want them.
Why do school have ultra fancy sports areas? Why do they need 15 different restaurants?
Go visit a college - they are basically little resort towns, or cruise ships on land.
Instead they should focus on education, and let other companies do the rest of that, if students want them.
I attended a college with a spartan mindset. No research. The entire sports budget was less than one FTE. They were laser focused on instruction and recruiting elite students whom them could offer actually generous “financial aid” terms.
When I was in grad school we got, on the same day, one email saying that tuition was going up by 15% for the next semester, and another email proudly announcing the gym now had a lazy river.
Germany has a good model that we can follow with a very economical university system (sans some elite schools). They do it with low overhead courses with homework that isn’t graded by a TA that they can’t afford, no midterm just your entire grade based on a final (at least, that’s what I heard from my colleague who went through it just after unification). No fancy dorms or student recreation centers, just classes that you show up to take.
Why don’t we have this in the states? Even community colleges are expected to be luxurious with lots of graded homework, exams, and a less high-stakes final. But really, we really just need the classes to go to and maybe someplace to study (but local libraries can help there). We don’t actually need N-layers of administrators and counselors. That’s all overhead.
Why don’t we have this in the states? Even community colleges are expected to be luxurious with lots of graded homework, exams, and a less high-stakes final. But really, we really just need the classes to go to and maybe someplace to study (but local libraries can help there). We don’t actually need N-layers of administrators and counselors. That’s all overhead.
Loans. Loans are how this happened.
The schools are not free of blame. These are non-profit institutions, supposedly they have 0 incentive to be raising prices like this.
If there is effectively unlimited ability to pay, and the additional revenue can be used for higher-quality services (and since its free money for the institution, the marginal quality per dollar hardly matters) there is little reason, even as a not-profit-seeking institution, not to raise tuition.
The way to stop it is to turn off the unlimited ability to pay, which is tricky to do while maintaining both independent private education institutions and a desire to promote access the way federal aid was intended to, but it probably can be done by cost caps for institutions to be eligible for aid (which can apply only for students with federal aid, so long as there is no negative discrimination rule for such students).
The way to stop it is to turn off the unlimited ability to pay, which is tricky to do while maintaining both independent private education institutions and a desire to promote access the way federal aid was intended to, but it probably can be done by cost caps for institutions to be eligible for aid (which can apply only for students with federal aid, so long as there is no negative discrimination rule for such students).
> there is little reason, even as a not-profit-seeking institution, not to raise tuition
Except the well-being of the students? Not for profit institutions are supposed to be immune to this kind of behavior.
Also I agree with you that the way to stop this is to end student loans.
Except the well-being of the students? Not for profit institutions are supposed to be immune to this kind of behavior.
Also I agree with you that the way to stop this is to end student loans.
> Except the well-being of the students?
The long-term well-being of the students is not what most educational institutions frame as their charitable mission, and even if they did they don’t have a good way to assess marginal impacts on it the way they do other things, so its unlikely to get factored in consistently even if there is an intention to respect it.
> Not for profit institutions are supposed to be immune to this kind of behavior.
No, charitable non-profit institutions are supposed to be immune to seeking returns to investors, not from seeking money to serve what they have defined as their charitable mission. Quite the opposite.
> Also I agree with you that the way to stop this is to end student loans.
I very specifically did not say the solution was to end student loans, I said it was to condition aid (including whatever combination of grants and loans) on cost caps.
(I think aid should be mostly or all grants and not loans, but that’s unrelated to the cost of tuition problem.)
The long-term well-being of the students is not what most educational institutions frame as their charitable mission, and even if they did they don’t have a good way to assess marginal impacts on it the way they do other things, so its unlikely to get factored in consistently even if there is an intention to respect it.
> Not for profit institutions are supposed to be immune to this kind of behavior.
No, charitable non-profit institutions are supposed to be immune to seeking returns to investors, not from seeking money to serve what they have defined as their charitable mission. Quite the opposite.
> Also I agree with you that the way to stop this is to end student loans.
I very specifically did not say the solution was to end student loans, I said it was to condition aid (including whatever combination of grants and loans) on cost caps.
(I think aid should be mostly or all grants and not loans, but that’s unrelated to the cost of tuition problem.)
Schools should be on the hook if students default on their loans.
Yeah that would reign in tens of thousands of dollars for an arts degree immediately.
This is why schools should get equity rather than debt. If you graduate from University of Wherever, UW gets 3% of your income for the next 40 years (or whatever; the quants can come up with the actual number).
This means you can still have arts education because you only need to back one Andy Warhol to pay for everybody else, but you don't know in advance who that's going to be (this should sound familiar to people on this site).
This means you can still have arts education because you only need to back one Andy Warhol to pay for everybody else, but you don't know in advance who that's going to be (this should sound familiar to people on this site).
I've always deeply resented this "personal expenses" cost being lumped into tuition prices. Yeah, living and existing as a human being for a year costs about that much, whether you are going to college or not. It makes no sense whatsoever how that got conflated. And that's exactly how a huge portion of our entire generation got to enjoy a four year free for all party sabbatical in the prime of their lives, as the rest of us struggled at entry level jobs through global recessions, for which they now want forgiven on the backs of taxpayers.
It's not that uncommon for a university to require you live on-campus the first couple of years unless you live locally. On top of this, it's not uncommon for universities to mandate on-campus students pay for meal-plans and a lot of other potentially unnecessary garbage.
"How did this happen?" — because the market will bear it. High sticker price + financial aid for 65% of students just makes it easier for a college to price discriminate, which is overall a good thing. And as the article points out, most students don't pay anywhere near as much as a Vanderbilt full tuition, so in a sense it really doesn't matter. The article does a good job of explaining this.
You can't say the market is bearing it when the college market is being sustained by government-backed funding via student loans. If the market were really bearing it, government's involvement would be minimal to non-existent.
The people paying $100k are not doing so via government-backed student loans.
I don't understand this. When Harvard or CalTech says that anyone admitted will not be turned away due to financial hardship, it's because the loans are issued with a qualification based on their admission. 100k or any other price, the current financing structure remains the same.
At Caltech, students from families making $90K or below, will receive a no loan financial aid package (package will consist of grants and work-study).[0]
[0] https://www.admissions.caltech.edu/afford
[0] https://www.admissions.caltech.edu/afford
I believe Harvard also guarantees some students (from families below a certain income level) don't need to take out loans.
There an easy way to fix this:
Have a set price per semester hour that the college/university is allowed to charge.
Colleges/universities are free not to abide by this, but in that case they get zero federal funds, including research grants or student loans, and they get treated like a for profit which means no more tax deductible donations.
Once you set a limit on how much they can charge, the colleges will iron out the inefficiencies themselves.
Have a set price per semester hour that the college/university is allowed to charge.
Colleges/universities are free not to abide by this, but in that case they get zero federal funds, including research grants or student loans, and they get treated like a for profit which means no more tax deductible donations.
Once you set a limit on how much they can charge, the colleges will iron out the inefficiencies themselves.
Social signalling because tertiary degrees have become commoditized. Someone you want to hire someone because of who they're potentially connected to. It doesn't have to be targetted, but hire a large enough cohort of very expensive private school kids and all of sudden you're one bacon factor away from some well resourced families.
College is a social signaling tool. It's social acceptable to be prejudiced to someone based on if/where they attended college.
It is also a great social network for upper-class and upper class adjacent individuals to utilize.
Learning is generally kept to a minimum - the first 2 points are more than enough to guarantee a supply of customers.
It is also a great social network for upper-class and upper class adjacent individuals to utilize.
Learning is generally kept to a minimum - the first 2 points are more than enough to guarantee a supply of customers.
Half the money goes to administrators. This is also anecdotal, but it's hard not to notice that my university constructed a huge building exclusively for DEI. Not sure what it did that wasn't done before.
Mostly because we allow easy loans for students who don't read the paperwork.
We need to stop giving out easy loans to anyone who asks. The schools will lower prices if people can't afford it via a loan.
We need to stop giving out easy loans to anyone who asks. The schools will lower prices if people can't afford it via a loan.
> We need to stop giving out easy loans to anyone who asks.
Right, by not having student loans backed by the federal government. As it stands now, if you put glasses on a dog he could get a student loan because lenders have no incentive to scrutinize the debt. The federal government collects for them.
We're pushing people with absolutely no financial experience and no financial training to sign up for debt they can never get rid of without what's effectively economic indentured servitude.
Right, by not having student loans backed by the federal government. As it stands now, if you put glasses on a dog he could get a student loan because lenders have no incentive to scrutinize the debt. The federal government collects for them.
We're pushing people with absolutely no financial experience and no financial training to sign up for debt they can never get rid of without what's effectively economic indentured servitude.
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I don’t have any issue with easy loans just make them dischargable so banks have skin in the game
Why would ANYONE agree to service that? It's an insane proposal.
Natural check on lending. If you are too loose with requirements then you take heavy losses and the taxpayer bails you out.
Posing this question almost feels insulting. How did this happen? As with so many (not all) things that government gets involved with, Uncle Sam did it.
Why on God's green earth would colleges lower their prices when they have guaranteed funding via guaranteed student loans? If anyone could get a loan for a house, the same thing would happen to the housing market. Cough Cough...2008. Government placed quotas on the industry to make the "American Dream" a reality for everyone.
I get it. Government-backed student loans does indeed give opportunities for many less fortunate people. But does giving opportunities to the less fortunate, which is a much, much smaller percentage than those who are not in that category, justify making college unaffordable for the entire country? Keep in mind that most people fall into a middle category where they are not poor but still don't have enough for college and have to find a way.
And sure, call me a conspiracy theorist, but at the end of the day, the Government doesn't back student loans because they want to help. They do it because it serves their special interest groups.
Why on God's green earth would colleges lower their prices when they have guaranteed funding via guaranteed student loans? If anyone could get a loan for a house, the same thing would happen to the housing market. Cough Cough...2008. Government placed quotas on the industry to make the "American Dream" a reality for everyone.
I get it. Government-backed student loans does indeed give opportunities for many less fortunate people. But does giving opportunities to the less fortunate, which is a much, much smaller percentage than those who are not in that category, justify making college unaffordable for the entire country? Keep in mind that most people fall into a middle category where they are not poor but still don't have enough for college and have to find a way.
And sure, call me a conspiracy theorist, but at the end of the day, the Government doesn't back student loans because they want to help. They do it because it serves their special interest groups.
Student loans that removed any incentive to keep it affordable?
The price can increase because there are people willing
to pay that much.
This is in large part driven by companies who seek out students who have attended the most prestigious schools.
If the labor market was about the same for people with bachelor or graduate degrees from an accredited university then the benefit of paying $$$$ would rapidly decrease.
That is not likely to happen.
"Inclusive" hiring should target having a lot of employees from less known universities
This is in large part driven by companies who seek out students who have attended the most prestigious schools.
If the labor market was about the same for people with bachelor or graduate degrees from an accredited university then the benefit of paying $$$$ would rapidly decrease.
That is not likely to happen.
"Inclusive" hiring should target having a lot of employees from less known universities
The admin bloat is real.
It is a bureaucracy which like all bureaucracies is mainly interested in growing and being indispensable. Mainly being indispensable by a web of dependencies internal to the bureaucracy.
Look at trends on staff at universities over the last 20 years. Most universities now have more students (not all) but the academic staff has not kept up with growth, while the bureaucracy has seen solid growth
It is a bureaucracy which like all bureaucracies is mainly interested in growing and being indispensable. Mainly being indispensable by a web of dependencies internal to the bureaucracy.
Look at trends on staff at universities over the last 20 years. Most universities now have more students (not all) but the academic staff has not kept up with growth, while the bureaucracy has seen solid growth
Something that would cost virtually nothing compared with the cost of tuition is for the IRS to connect with the department of education and help students as consumers to make an informed decision about schools and financial outcomes.
An opaque system will never lead to price reductions. I want to know average salary 1, 10, and 20 years after graduating for each school and each major at the school.
Some might think it’s a bit too on the nose to think in purely financial terms about education. Fine. They can ignore the price tags. But let’s not pretend there’s no relationship between software engineering salaries, companies’ almost uniform requirement of a CS degree, and the thousands of students lining up for said degrees willing to pay whatever it takes.
Here’s another idea. How about the billionaires who say America doesn’t know how to build anymore, how about they create a new computer science university? Undercut the competition, give students an education at scale. Hire leading researchers to teach classes. Students who want to pay full sticker price at a legacy school can continue to do so.
An opaque system will never lead to price reductions. I want to know average salary 1, 10, and 20 years after graduating for each school and each major at the school.
Some might think it’s a bit too on the nose to think in purely financial terms about education. Fine. They can ignore the price tags. But let’s not pretend there’s no relationship between software engineering salaries, companies’ almost uniform requirement of a CS degree, and the thousands of students lining up for said degrees willing to pay whatever it takes.
Here’s another idea. How about the billionaires who say America doesn’t know how to build anymore, how about they create a new computer science university? Undercut the competition, give students an education at scale. Hire leading researchers to teach classes. Students who want to pay full sticker price at a legacy school can continue to do so.
One major reason is the college rankings which are based on how much the college price gouges and how many prospective students it rejects after stealing an application fee from them.
Another one is the federal student loan program which makes it possible for students to borrow whatever the college wants to charge even if it is obvious they'll never be able to afford to repay it.
Another one is the federal student loan program which makes it possible for students to borrow whatever the college wants to charge even if it is obvious they'll never be able to afford to repay it.
Does a $400k degree make any sense? That seems like a massive amount of debt to take on for knowledge you can get from watching youtube and personal learning. I'm not sure the elite status of schools is worth this much. Especially for non technical studies.
Are we moving back to when elite schools are only for the very rich?
Are we moving back to when elite schools are only for the very rich?
Americans could pay much less by attending community college for at least two years, or by going to Canada, or Europe, or many other countries.
But as long as high-income parents are willing to pay for little Johnny/Jane to have their four-year partying rite, universities will charge. Why shouldn't they?
But as long as high-income parents are willing to pay for little Johnny/Jane to have their four-year partying rite, universities will charge. Why shouldn't they?
I was talking to a college professor I know a couple weeks ago about this exact thing. And what they said comprised a substantial amount of the expenses of their 4 year private college made perfect sense, because it's happening to every business.
Health insurance costs.
Now, add to this: salaries and other benefits to both staff and educators. liability insurance. increased food costs. I'm certain facilities have increased costs also, from new construction to utilities. *Plus anything else I've left out.
Let's face it, everything has become more expensive. The Five Guys meal of a little cheeseburger, little fries, and regular drink which cost me $12 4 years ago in March, 2020 (I keep records), would cost me $17-18 today (I checked the prices today at noon and walked away). That's a 40-50% increase.
Why would we expect higher education to not be effected?
Health insurance costs.
Now, add to this: salaries and other benefits to both staff and educators. liability insurance. increased food costs. I'm certain facilities have increased costs also, from new construction to utilities. *Plus anything else I've left out.
Let's face it, everything has become more expensive. The Five Guys meal of a little cheeseburger, little fries, and regular drink which cost me $12 4 years ago in March, 2020 (I keep records), would cost me $17-18 today (I checked the prices today at noon and walked away). That's a 40-50% increase.
Why would we expect higher education to not be effected?
I don’t think anybody is surprised that college tuition has increased. They’re surprised it’s increased faster than the prices for almost every other service. So have health care costs. And in both cases, the system is designed to make it difficult and pointless to shop based on price.
I have a hard time believing health insurance costs have driven the drastic increase in college costs. They’ve certainly played a role, but I don’t see any reason they would increase the cost of education more than they’ve increased the price of everything else.
I have a hard time believing health insurance costs have driven the drastic increase in college costs. They’ve certainly played a role, but I don’t see any reason they would increase the cost of education more than they’ve increased the price of everything else.
Salaries are the primary cost not health insurance. There are more administrators than students. Also there is no excuse, the educational institutions are incompetent at managing their finances.
> Let's face it, everything has become more expensive. The Five Guys meal of a little cheeseburger, little fries, and regular drink which cost me $12 4 years ago in March, 2020 (I keep records), would cost me $17-18 today (I checked the prices today at noon and walked away). That's a 40-50% increase.
Couldn't this just be combated using shrinkflation? I'm sure that rice, beans, ramen, and other grad student fare is still cheap yet provides enough nutrients to study.
After all, these are supposed to be institutions of the mind, not institutions of the stomach.
Couldn't this just be combated using shrinkflation? I'm sure that rice, beans, ramen, and other grad student fare is still cheap yet provides enough nutrients to study.
After all, these are supposed to be institutions of the mind, not institutions of the stomach.
Increasing tuition increases applications and matriculations.
Usually higher prices decrease demand. But when they increase demand, and credit is available below market … that’s how you get insanely high prices.
Usually higher prices decrease demand. But when they increase demand, and credit is available below market … that’s how you get insanely high prices.
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That's on top of every other expense like books, scantrons (not sure if those are even used anymore), and whatever else. Everything adds up for students.
Have we seen people start to game this system? Basically, attend a cheaper school for 2-3 years then jump to an elite one to get the paper?
I love living in the land of opportunity to accrue debt. Student debt, medical debt, it's all Freedom Debt™ to me!
No "paywall":
https://www.cnbc.com/2024/04/03/costs-at-some-colleges-near-...
https://www.insidehighered.com/news/business/revenue-strateg...
https://podcasts.apple.com/us/podcast/how-much-should-you-pa...
https://boglecenter.net/bogleheads-speaker-series-with-ron-l...
https://www.theatlantic.com/education/archive/2019/11/some-c... (2019)
https://www.cnbc.com/2024/04/03/costs-at-some-colleges-near-...
https://www.insidehighered.com/news/business/revenue-strateg...
https://podcasts.apple.com/us/podcast/how-much-should-you-pa...
https://boglecenter.net/bogleheads-speaker-series-with-ron-l...
https://www.theatlantic.com/education/archive/2019/11/some-c... (2019)
Vanderbilt University tuition and fees 2023-2024
https://www.vanderbilt.edu/stuaccts/fees/tuition_fees_2023-2...
https://www.vanderbilt.edu/stuaccts/fees/tuition_fees_2023-2...
Make the federal government guaranteeing loans, the market would sort itself out.
In this specific instance, this is money slurped up by administration fees. If they stopped the loans, the prices would drop to meet reduced supply of loans.
I am against Biden forgiving loans when they keep on guaranteeing more loans. I'd be okay if they said the government is out of student loan business. Let the banks handle it.
Demand and supply - it's like the speed limit of light.
In this specific instance, this is money slurped up by administration fees. If they stopped the loans, the prices would drop to meet reduced supply of loans.
I am against Biden forgiving loans when they keep on guaranteeing more loans. I'd be okay if they said the government is out of student loan business. Let the banks handle it.
Demand and supply - it's like the speed limit of light.
This is why I'm so against the government forgiving education loans. All that will happen is the money will go to colleges, and they'll raise tuition.
Instead put the schools on the hook for the loans - if someone doesn't pay, well, it's the school that has to eat the cost.
Instead put the schools on the hook for the loans - if someone doesn't pay, well, it's the school that has to eat the cost.
The US already has a 'loan forgiveness program' that works for every single loan _other_ than student loans, called "bankruptcy". It's worked for hundreds of years, and we used to allow it for college loans.
There is one difference: student loans that are being "forgiven" are being put to taxpayers, whereas in bankruptcy the loans are absorbed by banks that lent money (and to a lesser extent, to parties with outstanding debts, such as vendors).
You're against a particular kind of loan forgiveness, where it's assumed the schools are made whole. As you note, there's another kind of loan forgiveness where the obligations simply evaporate.
The schools are already whole; the schools aren’t the loan issuers for the loans at issue, the federal government is. The schools already got paid.
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Usury.
People in debt are more easily manipulated.
Government
It seems america is slowly transitioning to phase where you have to be either millionaire or live without home and food
"Its not about what you can afford, its about what you can borrow"
How? Is that sarcastic?
Allowing colleges to profit is the problem. Clearly they care more about roi than education.
If a college gets any federal taxpayer funds in any way, they should not be allowed to profit. At all.
Allowing colleges to profit is the problem. Clearly they care more about roi than education.
If a college gets any federal taxpayer funds in any way, they should not be allowed to profit. At all.
Sometimes I feel like college tuitions and need based aid programs are specifically calibrated to fuck over the "upper middle class." It's completely ridiculous that households making 300K or whatever (which is barely enough to support a family in many cities in the nation) are put into the same financial aid category as billionaires (that is to say, no financial aid at all). It's a hoop that you have to jump through so that the man can keep you tied to your desk working throughout your entire life.
> It's completely ridiculous that households making 300K or whatever (which is barely enough to support a family in many cities in the nation)
...Is this /s? $300k is sufficiently enough to support a family of 4 in literally any city in the U.S., including NYC & LA.
Outside of those 2 major cities, $300k/y for a family is more than enough.
...Is this /s? $300k is sufficiently enough to support a family of 4 in literally any city in the U.S., including NYC & LA.
Outside of those 2 major cities, $300k/y for a family is more than enough.
I lived comfortably in SoCal making around $160k/year with a family of 5. These were in family friendly neighborhoods with low crime and good schools, so definitely not the cheapest areas either.
Staggering levels of wealth inequality
It's amazing how the highest rates of inflation are in the industries that are most affected by government intervention (housing, education, healthcare)
I know you only implied it but be careful with causation here. We know that there are situations where the free-market does not lead to ideal outcomes. Does it not seem likely for government to involve itself more in areas where the free market is most likely to fail?
The free market is a neoliberal fairy tale. A mystical idea. A hypothetical concept. There are no markets anywhere which are unsullied by the "dirty" touch of government in this reality.
Government intervention also covers such a broad range of things that you can't lump them under one umbrella.
Governments routinely create competition in some markets and suppress it in others and prices behave accordingly.
This idea doesnt fit in a soundbite unfortunately but "government bad, regulations bad, markets good" is catchy. Thats why this soundbite message was carefully marketed to an American audience by Koch think tanks in response to their epic fights with the environmental protection agency.
Government intervention also covers such a broad range of things that you can't lump them under one umbrella.
Governments routinely create competition in some markets and suppress it in others and prices behave accordingly.
This idea doesnt fit in a soundbite unfortunately but "government bad, regulations bad, markets good" is catchy. Thats why this soundbite message was carefully marketed to an American audience by Koch think tanks in response to their epic fights with the environmental protection agency.
You mean like involve itself in housing by requiring the industry to grant a certain amount of home loans to make the "American Dream" a reality, thereby creating a housing market bubble, then when the bubble popped and tanked the economy, blamed it on the banks?
They're also the industries whose providers know you can't really go without.
US healthcare and education is abberantly expensive compared to the rest of the OECD, most of which regulate them more.
US healthcare and education is abberantly expensive compared to the rest of the OECD, most of which regulate them more.
This happens in the USA. The regulation is pushed by private companies to increase cost of market entry ( I.e. decrease competition) Japan has none of the crazy inflation in these categories. The other key variable is these are core essential needs hence people will continue to pay.
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Staggering levels of debt funding backed by the inability to bankrupt one's way out of it.
subsidized student loans don't make education cheaper, it increase the ability to pay (adjusting for demand elasticity).
The same goes for the housing market. Govt interventions has only made home prices more expensive vis a vis other items we may consume.
The same goes for the housing market. Govt interventions has only made home prices more expensive vis a vis other items we may consume.
Please explain the details of how wealth inequality causes extreme inflation in higher ed prices. I've yet to see wealth inequality fingered as the culprit.
Some people have several orders of magnitude more to spend giving their offspring an advantage. It’s worth it too, due to massive inequality in job market.
It's the US Department of Education that did this.
Trigger warning: A rant follows that will upset some people.
The US Department of Education destroyed the innovators in inexpensive online learning by claiming that an online course you can take online at your own pace is not a distance learning course but is instead a correspondence course. The US Department of Education says the difference is RSI. No, not Carpal Tunnel Syndrome, but something more painful called "Regular and Substantive Interaction" between the teacher and student, in a way that is scheduled by the teacher.
The two biggest advantages of online courses were that you could work on them where you wanted to, and when you wanted to. The US Department of Education killed that. I mean they pulled the baby of online learning baby halfway out of the birth canal, forced a pair of scissors into the back of the squirming newborn's head to make a hole, rammed a curettage and suction device into the agonized baby's skull, and sucked out the baby's brain, murdering the newborn online learning industry before it could draw its first breath.
As an instructor who built online courses that were perfect to the point that 80% of my students could finish the course and do better on a departmental final exam than in-class students did, I am horrified. My online classes in Canvas are regularly gutted by school administrators who delete large portions of the courses. They are meticulous in deleting all my backups as well. I am forced to schedule absurd mandatory office hours that are really online pseudo-lectures without decent visual aides where students fight for hours to glean the bits of knowledge that could have fit on a PowerPoint slide or two. The more disfunctional these sessions are, the more pleased the college administrators are. If I dare to use competent visual aides, then students do not sit through the multi-hour torture session and instead screen-capture what they need in a minute or two and leave. Such competence threatens the existence of our college because it means we can not get paid for online education courses if there is not regular and substantive interaction between the teacher and the students in a way that is scheduled by the teacher. My competent online courses cost one college their SACS accreditation.
The fact that I respond to all student emails within 12 hours, 24/7/365 is not enough.
The fact that I detail grade all assignments with detailed comments on a clear grading rubric within 12 hours of the assignment being submitted is not enough.
The fact that I give my personal cell phone number to my students (when ethics rules allow it) is not enough because they do not all call me every week and because I do not schedule that time.
If I do not force my students to schedule a time every week to sit down and listen to me, then we lack RSI.
The US Department of Education took over $700 million dollars from one college that did a great job innovating online courses. https://www.insidehighered.com/news/2022/11/17/regular-and-s... I've never taught for that college, but I have seen other colleges completely gutted by the government scum.
Trigger warning: A rant follows that will upset some people.
The US Department of Education destroyed the innovators in inexpensive online learning by claiming that an online course you can take online at your own pace is not a distance learning course but is instead a correspondence course. The US Department of Education says the difference is RSI. No, not Carpal Tunnel Syndrome, but something more painful called "Regular and Substantive Interaction" between the teacher and student, in a way that is scheduled by the teacher.
The two biggest advantages of online courses were that you could work on them where you wanted to, and when you wanted to. The US Department of Education killed that. I mean they pulled the baby of online learning baby halfway out of the birth canal, forced a pair of scissors into the back of the squirming newborn's head to make a hole, rammed a curettage and suction device into the agonized baby's skull, and sucked out the baby's brain, murdering the newborn online learning industry before it could draw its first breath.
As an instructor who built online courses that were perfect to the point that 80% of my students could finish the course and do better on a departmental final exam than in-class students did, I am horrified. My online classes in Canvas are regularly gutted by school administrators who delete large portions of the courses. They are meticulous in deleting all my backups as well. I am forced to schedule absurd mandatory office hours that are really online pseudo-lectures without decent visual aides where students fight for hours to glean the bits of knowledge that could have fit on a PowerPoint slide or two. The more disfunctional these sessions are, the more pleased the college administrators are. If I dare to use competent visual aides, then students do not sit through the multi-hour torture session and instead screen-capture what they need in a minute or two and leave. Such competence threatens the existence of our college because it means we can not get paid for online education courses if there is not regular and substantive interaction between the teacher and the students in a way that is scheduled by the teacher. My competent online courses cost one college their SACS accreditation.
The fact that I respond to all student emails within 12 hours, 24/7/365 is not enough.
The fact that I detail grade all assignments with detailed comments on a clear grading rubric within 12 hours of the assignment being submitted is not enough.
The fact that I give my personal cell phone number to my students (when ethics rules allow it) is not enough because they do not all call me every week and because I do not schedule that time.
If I do not force my students to schedule a time every week to sit down and listen to me, then we lack RSI.
The US Department of Education took over $700 million dollars from one college that did a great job innovating online courses. https://www.insidehighered.com/news/2022/11/17/regular-and-s... I've never taught for that college, but I have seen other colleges completely gutted by the government scum.
Why is this presumed to be a bad thing?
College attendance and graduation rates are higher than at any point in the past, so the cost isn't actually keeping people from going to college (or at least, isn't keeping people from going to college more than they were kept from going to it 50 years ago).
In general, the income premium from a college education is much greater than the debt accrued to get that education, which is why people still take the deal. (There's people on the margins for whom that isn't true and I think most of the reform/bailout effort should involve them.)
Is this actually something that needs to be "fixed"?
College attendance and graduation rates are higher than at any point in the past, so the cost isn't actually keeping people from going to college (or at least, isn't keeping people from going to college more than they were kept from going to it 50 years ago).
In general, the income premium from a college education is much greater than the debt accrued to get that education, which is why people still take the deal. (There's people on the margins for whom that isn't true and I think most of the reform/bailout effort should involve them.)
Is this actually something that needs to be "fixed"?
You don't seem to be concerned at all by the ballooning student loan debt.
Also, it's not clear that the wage premium from attending college has to do with what is learned in college. Some scholars believe that it is largely a signaling device. Others believe that it is used as a proxy for general intelligence tests, which companies try to avoid using when hiring employees (due to a SCOTUS case from several decades ago, dealing with disparate racial impact).
It may be true that the wage premium has outweighed the cost of attendance in the recent past, but this could easily change as tuition continues rising, and critically as interest rates are much higher than in recent years. The discount rate to which future earnings are subject is much larger than in the past 30 years, which means that the required wage premium has to be much larger than if the interest/discount rate were closer to zero. Basically, ZIRP was a boon for colleges, not just startups.
Also, it's not clear that the wage premium from attending college has to do with what is learned in college. Some scholars believe that it is largely a signaling device. Others believe that it is used as a proxy for general intelligence tests, which companies try to avoid using when hiring employees (due to a SCOTUS case from several decades ago, dealing with disparate racial impact).
It may be true that the wage premium has outweighed the cost of attendance in the recent past, but this could easily change as tuition continues rising, and critically as interest rates are much higher than in recent years. The discount rate to which future earnings are subject is much larger than in the past 30 years, which means that the required wage premium has to be much larger than if the interest/discount rate were closer to zero. Basically, ZIRP was a boon for colleges, not just startups.
> You don't seem to be concerned at all by the ballooning student loan debt.
I'm not, no. As long as the income premium exceeds the debt it doesn't really matter what the numbers involved are.
> but this could easily change as tuition continues rising
I mean, yes, if things were different they might be worse than they are. That's true of anything.
I'm not, no. As long as the income premium exceeds the debt it doesn't really matter what the numbers involved are.
> but this could easily change as tuition continues rising
I mean, yes, if things were different they might be worse than they are. That's true of anything.
> if things were different they might be worse than they are. That's true of anything.
Sorry for being too subtle. What I was pointing out is that the higher interest rates we are currently seeing, in combination with the ever-rising cost, could mean we're at (or even past) the tipping point now. This won't be apparent to many people until 10-15 years after the tipping point is reached, when people realize that the premium they thought they were getting is outweighed by their loan payments.
But this is just the tail of the dog. The main point is that college is largely about signaling, which means that much of the value is in the acceptance letter, not the diploma. Why pay $400,000 to get the diploma if this is the case?
Sorry for being too subtle. What I was pointing out is that the higher interest rates we are currently seeing, in combination with the ever-rising cost, could mean we're at (or even past) the tipping point now. This won't be apparent to many people until 10-15 years after the tipping point is reached, when people realize that the premium they thought they were getting is outweighed by their loan payments.
But this is just the tail of the dog. The main point is that college is largely about signaling, which means that much of the value is in the acceptance letter, not the diploma. Why pay $400,000 to get the diploma if this is the case?
For the sake of argument let's say college triples your income potential. To make the math easy, let's say instead of earning $1M over your life you'll now earn $3M.
We shouldn't look at a school charging $400k and say "well you'll make more than that so it's a good deal." We should look at what you're actually getting. A cinder block dorm, mass-produced assembly line food, a professor making $80k a year telling you to write a paper on a book that's in the public domain. None of that is worth $400k.
We shouldn't look at a school charging $400k and say "well you'll make more than that so it's a good deal." We should look at what you're actually getting. A cinder block dorm, mass-produced assembly line food, a professor making $80k a year telling you to write a paper on a book that's in the public domain. None of that is worth $400k.
> We shouldn't look at a school charging $400k and say "well you'll make more than that so it's a good deal." We should look at what you're actually getting. A cinder block dorm, mass-produced assembly line food, a professor making $80k a year telling you to write a paper on a book that's in the public domain. None of that is worth $400k.
If passing this exercise in docility gives you the mentioned 2 million USD over life: why not?
If passing this exercise in docility gives you the mentioned 2 million USD over life: why not?
Neither my brother nor most of his friends at Vanderbilt were burdened by student loans. Most came from reasonable wealthy families that were able to pay the cost up front. Reasonably well-off families send their kids to Vanderbilt and other top schools because of the connections that can form and the reputation of the school. Everything else you mentioned comes second.
I'm not sure what point you're trying to make here tbh. Nobody is arguing that wealthy and connected individuals in part maintain those wealth and connections by going to elite schools. Legacy admissions all but guarantee that once you're a couple generations deep you'll be able to at least maintain your family's status.
The question is whether a college charging $400K for what is probably closer to $70-80K of services is right.
The question is whether a college charging $400K for what is probably closer to $70-80K of services is right.
The point is that the parents who are paying for their kids to go to these schools have already put aside the money in a 529 or other account, and if their kids get admitted, there is no question of cost to put their kids a step ahead. Given this, exclusive universities know that they can charge prices that are relatively extreme, as they don't have any financial, moral or legal obligation to not do so. The question of cost compared to earnings that you raised is immaterial for these students, as the students will bear none of the cost.
> None of that is worth $400k
Huh? You just said it gives you $2M over your life. That's obviously worth $400K.
Huh? You just said it gives you $2M over your life. That's obviously worth $400K.
Why just $400K why not $800K? Why not $1.6M? $1.99M? Why not just a contract that you pay the college 95% of whatever you make above the median HS graduate salary every year? I mean they're letting you keep 5% of the earnings you're only getting because of them, you should be happy with that, right?
Just because $2M > $400K doesn't mean it's objectively worth that amount of money.
Just because $2M > $400K doesn't mean it's objectively worth that amount of money.
Imagine any other service where they demanded your bank statements before they told you what they would charge you, and the impact that would have on sticker price.