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Why Is College in America So Expensive?

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Re: Why Is College in America So Expensive?

#211

Post by chimeracoder »

dnomad wrote: post #194
chimeracoder wrote: post #184

Earlier quoted context omitted.

> No they don't. Where do you even come up with such obvious nonsense? The numbers are right there on Wikipedia. Maybe look them up before you call it "obvious nonsense".

It's obvious nonsense to anybody who's taken even a moment to understand what those numbers mean. Here's a very, very simple chart that shows population with tertiary education [1]. The US is not significantly above other countries where education is paid for by the government. What's more is that those numbers are very generous to the US because, as everybody knows, most private colleges in the US are shit. So calle…

> Here's a very, very simple chart that shows population with tertiary education [1]. The US is not significantly above other countries where education is paid for by the government.

As you can plainly see in the data, the US has significantly more graduates than each of the counties I listed: https://en.wikipedia.org/wiki/List_of_countries_by_tertiary_...

> What's more is that those numbers are very generous to the US because, as everybody knows, most colleges in the US are shit.

It's appalling that people can drop this kind of drivel on an HN thread and let it stand. Most colleges in the US are not "shit", by any measure. And while non-selective schools and for-profit schools make for good headlines, they form a minuscule proportion of the college-educated population.

> But, yes, somehow we need to get the government out of education. That will surely fix everything.

You're responding to claims I never made, which reveals that you're less interested in having an actual conversation than you are in pushing an ideological stance. That's not going to be productive, so I have no interest in continuing this further.

Re: Why Is College in America So Expensive?

#212

Post by mcguire »

kansface wrote: post #179
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…

> The free market does not work in all situations. Sure, but you did not enumerate a single free market. I'd wager the US healthcare industry is far and away the most regulated market in the entire world. We know that regulation protects the big players at the expense of their would be competition and drives up profits. Colleges are hardly any better, and ISPs are nearly all monopolies granted by municipalities in ex…

An unregulated healthcare market, complete with all the benefits of the free market, was the rule in the US until the Pure Good and Drug Act of 1906. It's history is... entertaining.

Re: Why Is College in America So Expensive?

#213

Post by kryogen1c »

fzeroracer wrote: post #202
kansface wrote: post #179

Earlier quoted context omitted.

> The free market does not work in all situations. Sure, but you did not enumerate a single free market. I'd wager the US healthcare industry is far and away the most regulated market in the entire world. We know that regulation protects the big players at the expense of their would be competition and drives up profits. Colleges are hardly any better, and ISPs are nearly all monopolies granted by municipalities in ex…

Can you prove that the US healthcare industry is more regulated than countries like say, Germany or Canada? Because it would be incredibly hard to believe that somehow America is more regulated than countries that have more direct control over their healthcare.

I think that's exactly the point: direct control and heavy regulation are two different things.

This in-between fairyland with artificial barriers to entry on the frontend but no control on the back end is what's creating these captive markets where old companies to do almost anything because new companies can't join the market.

Re: Why Is College in America So Expensive?

#214

Post by flukus »

nostrademons wrote: post #159
clay_the_ripper wrote: post #125

Earlier quoted context omitted.

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

Some examples other than what people have already mentioned: Prescription drugs. The FDA has a "no existing alternative first" policy - they work on approving drugs for conditions where no current treatment works before they even start considering competitors to existing drugs. This sounds quite logical, but the effect of it is that every new drug is granted a monopoly for a long period of time before any competitor…

> Prescription drugs. The FDA has a "no existing alternative first" policy - they work on approving drugs for conditions where no current treatment works before they even start considering competitors to existing drugs. This sounds quite logical, but the effect of it is that every new drug is granted a monopoly for a long period of time before any competitor can even legally sell their alternative, so the drug company can literally charge whatever they want.

You think that's government control? Most countries have the government negotiating prices on behalf of it's citizens in a very "take it or leave it" manner. Pharmacists also have to offer a generic if it's available, regardless of what the doctor prescribes.

Those much stronger government controls produce better (cheaper and universal) outcomes.

Re: Why Is College in America So Expensive?

#215

Post by justicezyx »

frebord wrote: post #91
Domenic_S wrote: post #3

I didn't see this discussed in the article, but IMO the main driver is the availability of student loans. When the government guarantees loans, you can lend whatever you want! The price of a TRIPLE occupancy dorm + 7 day meal access is $14,813.29/YEAR at UC Davis. The "meals", if they haven't changed in the last decade, are Sodexo garbage. And don't forget a "year" doesn't count the summer, or winter break.

> 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).

Because it will be plausibly working.

Re: Why Is College in America So Expensive?

#216

Post by Spooky23 »

frebord wrote: post #91
Domenic_S wrote: post #3

I didn't see this discussed in the article, but IMO the main driver is the availability of student loans. When the government guarantees loans, you can lend whatever you want! The price of a TRIPLE occupancy dorm + 7 day meal access is $14,813.29/YEAR at UC Davis. The "meals", if they haven't changed in the last decade, are Sodexo garbage. And don't forget a "year" doesn't count the summer, or winter break.

> 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…

The worst part is nobody knows the real price. The posted prices are ceilings.

So the government pays, but each student pays a different rate.

Re: Why Is College in America So Expensive?

#217

Post by noonespecial »

Domenic_S wrote: post #3

I didn't see this discussed in the article, but IMO the main driver is the availability of student loans. When the government guarantees loans, you can lend whatever you want! The price of a TRIPLE occupancy dorm + 7 day meal access is $14,813.29/YEAR at UC Davis. The "meals", if they haven't changed in the last decade, are Sodexo garbage. And don't forget a "year" doesn't count the summer, or winter break.

There is still technically an upper limit to "whatever you want" and that is the lifetime expected value of the education to the student. We recently seem to have started bumping into it as more people ask (publicly) "is it worth it at all?".

The direct consequence of the government guaranteeing the loan and making it undischargeable for life is to transfer the expected monetary value of the education away from the students and to the operators of colleges with a nice cut diverted to bankers along the way.

The students are reduced to being sharecroppers of their own minds, spending a lifetime working the education that someone else owns.

Re: Why Is College in America So Expensive?

#218

Post by coryrc »

jayd16 wrote: post #165
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.

How is this not explained by correlation? It makes sense that important things are both expensive and regulated. Besides, isn't this terribly cherry picked? Sewage is a government issue and you don't talk about runaway costs there.

Seattle's power, sewer, and water bills are all growing much higher than inflation; have been for at least a decade; and are going to continue at this pace for the foreseeable future.

Re: Why Is College in America So Expensive?

#219

Post by jjoonathan »

roenxi wrote: post #162
clay_the_ripper wrote: post #125

Earlier quoted context omitted.

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

"The Economy" is a (surprisingly effective!) system for allocating resources. It short-circuits a human instinct that social status and fairness should be the guide, and replaces that with "a persons economic contribution" instead. Now, it turns out that the difference in productivity between people is so great (think the old 10x-100x programmer) that allocating resources according to contribution creates so much sur…

The market's notion of "value" is whacked. Feeding a starving poor person is not "valuable." Finding an excuse to decline insurance coverage to someone with cancer is extremely "valuable."

When the market says that one person is 1000x more productive than another, I'd take that with a 1000 kilo grain of salt unless I know the particular market sector to be sane by some other measure.

Re: Why Is College in America So Expensive?

#220

Post by mcguire »

nostrademons wrote: post #159
clay_the_ripper wrote: post #125

Earlier quoted context omitted.

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

Some examples other than what people have already mentioned: Prescription drugs. The FDA has a "no existing alternative first" policy - they work on approving drugs for conditions where no current treatment works before they even start considering competitors to existing drugs. This sounds quite logical, but the effect of it is that every new drug is granted a monopoly for a long period of time before any competitor…

"In my grandparents' day, it was still possible to construct your own house: you bought a plot of land, hired a concrete mixer to come pour the foundation, bought a lot of 2x4s, and spent a bunch of time hammering & sawing."

It still is. And here in rural Alabama, I have the electrical wiring to show for it.

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