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Why Is College in America So Expensive?

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Re: Why Is College in America So Expensive?

#131

Post by secabeen »

bhupy wrote: post #119
fzeroracer wrote: post #107

Earlier quoted context omitted.

I don't see a statistic or actual citation there other than an issue with potentially out of date laws. How are you quantifying American Healthcare as being one of the least free markets? And how does it compare to other countries? I don't see anyone ever actually quantify how 'free' a market is; people only ever argue that if a market is not working therefore it's not free enough, which means we must make it free. A…

Sure - in America, healthcare is far from a free market because: 1) We don’t pay our own healthcare bills, we pay for our healthcare through insurance. As a result, there isn’t a pricing system in place, much like there is for other critical goods and services with price-inelastic demand like food and housing. This is caused by regulations that require employers to provide health insurance for their employees, and mo…

The other big cost is supply control by the AMA and other physicians associations. In other countries, being a Dr is a prestigious job, but not one that often pays mid-six figures. It's going to be challenging to get into a new, cheaper system without fighting the existing population of well-compensated physicians.

Re: Why Is College in America So Expensive?

#132

Post by topkai22 »

In summary, the reason (from a spending perspective) presumably non-profit colleges are so expensive in the US is that US colleges spends 2x/student as much on staff and faculty as many OECD counterparts.

College faculty, staff, and administrators form a large constituency that will be campaigning to keep spending (private, public, or otherwise) up, which campaigners for lower higher-educational spending will need to keep in mind.

Re: Why Is College in America So Expensive?

#133

Post by denzil_correa »

StreamBright wrote: post #123
bhupy wrote: post #119

Earlier quoted context omitted.

Sure - in America, healthcare is far from a free market because: 1) We don’t pay our own healthcare bills, we pay for our healthcare through insurance. As a result, there isn’t a pricing system in place, much like there is for other critical goods and services with price-inelastic demand like food and housing. This is caused by regulations that require employers to provide health insurance for their employees, and mo…

Exactly this. In Germany the private insurance is actually cheaper than the public one, you can purchase private on the top of public and so on. As a result of a much freer market the prices are much lower.

> In Germany the private insurance is actually cheaper than the public one

Well, the public insurance is a percentage of your income. The private one is based on many opaque factors. Private cheaper than public would be a more than a stretch without appropriate qualifiers.

Re: Why Is College in America So Expensive?

#134

Post by denzil_correa »

noetic_techy wrote: post #116
fzeroracer wrote: post #102

Earlier quoted context omitted.

The free market does not work in all situations. There's a reason why our healthcare is an absolute disaster compared to any other first world country, why our college is far more expensive, why our drugs cost more etc And it ain't because of cost control. Every time we loosen the reins a bit and let the 'free market' take the wheels, we see things get a lot worse for Americans as a whole. Especially when you have gi…

Except for Singapore: https://www.nytimes.com/2017/10/02/upshot/what-makes-singapo...

Doesn't seem like it.

> Initially, Singapore let hospitals compete more, believing that the free market would bring down costs. But when hospitals competed, they did so by buying new technology, offering expensive services, paying more for doctors, decreasing services to lower-class wards, and focusing more on A-class wards. This led to increased spending.

Re: Why Is College in America So Expensive?

#135

Post by frebord »

throwawayjava wrote: post #103
frebord wrote: post #91

Earlier quoted context omitted.

> Ultimately, college is expensive in the U.S. for the same reason MRIs are expensive: There is no central mechanism to control price increases. “Universities extract money from students because they can,” says Schleicher at the OECD. “It’s the inevitable outcome of an unregulated fee structure.” Why do people always reach for central control, when we have the ultimate mechanism of price control as a core part of our…

> Why do people always reach for central control, when we have the ultimate mechanism of price control as a core part of our society (competition). The USA has 4,000+ colleges, most of which do compete aggressively for students. Huge marketing departments with regional and national reach. Radio ads. Television ads. Print ads. Marketing networks with college counselors. Salespeople who spend many months attending coll…

Competition ALONE is exactly what drives prices down.

The endless supply of students with a government guaranteed loan is why they are not going down, why would they? It completely violates the most basic element of our economy.

Fully socializing those things is a solution better than what we have now, but that is the point where those things stagnate (US K12) which is why I prefer the free market solution and still think it is perfectly capable of producing exponentially more opportunity than the car without an engine (socialism).

Re: Why Is College in America So Expensive?

#136

Post by StreamBright »

denzil_correa wrote: post #133
StreamBright wrote: post #123

Earlier quoted context omitted.

Exactly this. In Germany the private insurance is actually cheaper than the public one, you can purchase private on the top of public and so on. As a result of a much freer market the prices are much lower.

> In Germany the private insurance is actually cheaper than the public one Well, the public insurance is a percentage of your income. The private one is based on many opaque factors. Private cheaper than public would be a more than a stretch without appropriate qualifiers.

Sure, in my situation this is the case. I am not sure about others or how much percentage of the population has the same situation.

Re: Why Is College in America So Expensive?

#137

Post by javagram »

clay_the_ripper wrote: post #125
leekyle333 wrote: post #121

Earlier quoted context omitted.

It is interesting to me that the three areas main areas in America that have become exponentially more expensive are healthcare, construction, and education. It's curious that they have the most government control.

Could you explain to me how the government control of those things had lead to price increases? Specifically? I hear this a lot but have never heard an explaination and I am genuinely curious of the reasoning

College administration costs have been expanding rapidly over the previous decades. Part of that could be attributed to federal mandates, e.g. everything to do with investigating/achieving Title IX compliance is the result of government regulation and probably wouldn’t exist in an unrestricted free market.

Accreditation is also related to government and can require colleges spend money on things they might not have 50 years ago.

I suspect the biggest cost driver is federally-backed student loans though. When you’re paying with what seems like free money it’s a lot harder to control costs. If students run out of money and drop out of your school, that’s a bigger driver to keep costs down.

Re: Why Is College in America So Expensive?

#138

Post by gwright »

clay_the_ripper wrote: post #125
leekyle333 wrote: post #121

Earlier quoted context omitted.

It is interesting to me that the three areas main areas in America that have become exponentially more expensive are healthcare, construction, and education. It's curious that they have the most government control.

Could you explain to me how the government control of those things had lead to price increases? Specifically? I hear this a lot but have never heard an explaination and I am genuinely curious of the reasoning

One data point on public works construction, the Davis-Bacon act and "prevailing wages".

https://www.forbes.com/sites/timworstall/2016/08/31/union-wa...

Re: Why Is College in America So Expensive?

#139

Post by codeddesign »

clay_the_ripper wrote: post #125
leekyle333 wrote: post #121

Earlier quoted context omitted.

It is interesting to me that the three areas main areas in America that have become exponentially more expensive are healthcare, construction, and education. It's curious that they have the most government control.

Could you explain to me how the government control of those things had lead to price increases? Specifically? I hear this a lot but have never heard an explaination and I am genuinely curious of the reasoning

It’s pretty simple. Both regulation and guarantees reduce competition in certain elements. Example: colleges no longer have to compete on pricing because students no longer have to save to go to college. The loans are easy to get and colleges are guaranteed on payment. Due to this, pricing competition because much less of a concern for colleges.

Re: Why Is College in America So Expensive?

#140

Post by ergothus »

froindt wrote: post #96
xienze wrote: post #37

Earlier quoted context omitted.

I think a lot of university staff cry wolf over funding and always have, even in the good times. Yeah, they're really feeling the effects of it, what with admin staff sizes increasingly exponentially, constantly building new buildings and renovating existing ones, etc. My humble state school is like a luxury resort these days. There's puh-lenty of fat for colleges to trim if they're really feeling the pinch, but they…

I agree with the luxury portion. My university hasn't added a "cheap" dorm in decades. Now they're all suites, where 2 or 4 people share a bathroom, and are much more expensive. I think a big part is students growing up in a middle class lifestyle and wanting to change as little as possible. I lived in the cheapest dorm available (no AC in the heat and humidity of Iowa). At current rates, 4694/year versus 6415 in the…

At the same time, "cheap" can hurt the effort at education. My freshman dorm room had me and one other roommate in a single room that I recall as being 8 ft by 15 ft. It was probably larger, but the issue wasn't the size but that he liked to come in at 3am and go to bed, falling asleep to the TV, while I had an 8am class and really had problems sleeping with noise on.

Did I need to learn to deal with it? Sure. Did I learn that you can fail a class in college? Yes I did. Was that a loss of time and money? Oh yes it was.

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