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Why has college gotten so expensive in the last 30 years? A blank check in 1993

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Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#221

Post by AdrianB1 »

Hokusai wrote: post #111
ChuckNorris89 wrote: post #45

Earlier quoted context omitted.

>Universities in Europe are generally high quality and low cost. The cost is low for the student but it's pretty high for the taxpayers. Not US high but still, it's not free, there's lots of bloat in the system that thrives on volume of students not on quality so they try to push forward legislation and programs to increase the number of students, especially from abroad and build more faculties/universities with more…

> The cost is low for the student but it's pretty high for the taxpayers. That is a supposition that proves to be false. The same happens for health care. To have a centralized state sponsored education or health care system allows it to be more efficient that smaller for profit institutions that have incentives to increase cost to the students as their profit depends on that. Also, I would like to notice, that for E…

> To have a centralized state sponsored education or health care system allows it to be more efficient that smaller for profit institutions that have incentives to increase cost to the students as their profit depends on that.

There is a major flaw in this argument: mixing incentive with potential. Yes, governments have the potential to be more efficient due to scale, but there is no incentive to do it. Smaller for profit institutions don't have the economy of scale, but have the incentive to be very efficient. In the end, private institutions need to be extremely efficient to compete with the free state colleges in Europe, while free state colleges have zero motivation to improve and compete, their money is a given.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#222

Post by chris_va »

jsemrau wrote: post #198
seibelj wrote: post #196

Earlier quoted context omitted.

I don’t understand your logic. People take out loans all the time to get community college degrees. Those loans are federally backed. So the increase in credit would indeed inflate community college costs.

Judging from a European perspective, I think society as a whole is better off if more people have access to affordable education and don't need to take out a loan to take classes.

I think most Americans (at least on HN) would agree with you.

Of course, there are complications.

In Europe, the effective tax rate is generally much higher, and the fraction of population that is university aged is generally lower. My understanding is that a non-trivial fraction of the population also goes into a trade school (?), which the US does not have in the same way.

In the US, lower taxes+loan is sometimes seen as more equitable (i.e. only those that use something pay for it) than a population wide tax. It is quite the risk you force onto someone young, though.

If you could drop your tax rate by 50%, but had to pay back $80-100k for college, would you take it? Obviously that tax goes to pay for many other things besides education, but the US-average mentality generally leans towards individual choice over broad social programs (with various political parties widely disagreeing).

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#223

Post by vikramkr »

andreilys wrote: post #174
alexpotato wrote: post #139

Earlier quoted context omitted.

Speaking as a dual US/Italian citizen there are some things I would add to your picture (which surprised me when I first learned them). I should also add, my picture is a bit dated since I last looked at this in the early 2000's but a lot of this is still true: US vs Italian "high school" - Finishing Italian secondary education is most equivalent to US high school + at least the first year of most US universities - I…

“ Another comparison: at the time (early 2000s) multiple people in senior level positions in European companies mentioned to me that in their opinion, having an MBA from a top US school was equivalent to a degree from a top Italian economics school like Bocconi University” HBS and GSB have much more brand value than Bocconi university. Whether the economics education you get is on par is debatable but it’s clear one…

Bocconi might have more signaling value to European or Italian companies perhaps, but American companies have European companies thoroughly beat in terms of number, size, power, global influence, etc. One of the "benefits" of valuing capitalism as much as we have is that the opinion of American company management carries quite a bit more weight around the world, and they would pick harvard over bocconi any day.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#224

Post by mjn »

ummonk wrote: post #220
mjn wrote: post #182

Earlier quoted context omitted.

In some state university systems the inflation-adjusted total funding has actually decreased. For example, the University of California system was budgeted about $2.1 billion in state money in 1990, which is $4.3 billion in 2020 dollars. At the time, there were 9 campuses, serving 125,000 undergraduates, in a state with population 30 million. Fast-forward to 2020, and the system is budgeted $3.9 billion in state fund…

You're cherrypicking by focusing on UC in isolation. Higher education funding in California has gone up from ~5.5 billion to ~16 billion nominal from 1990 to now. Overall funding has gone up - it was just focused on community colleges at the expense of UC, as it should be to avoid exacerbating economic inequality.

That's true! This thread I thought was about whether tuition at places like UCs has gone up because of cost increases or state funding decreases though. As far as I can tell from the budgets, it's primarily due to per-student state funding decreases, which match almost dollar-for-dollar with tuition hikes. I.e. the UC is hiking tuition to make up for declining per-student state support, not because the UC is spending more per-student to deliver the education (in real terms).

The community college system has been funded more generously, and not coincidentally, hasn't seen the same tuition hikes. You can still get an associate's degree that's almost 100% taxpayer-funded in CA, just no longer a bachelor's. (Cal State is kind of halfway in between, still much more state-funded than the UCs, but not anywhere near the per-student levels of 1990, which is why in-state tuition there is creeping towards $10k.)

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#225

Post by laGrenouille »

t0mbstone wrote: post #173
non-entity wrote: post #90

Earlier quoted context omitted.

> Or how about breaking the degree monopoly with something like equivalent certification programs and let private companies fill the gap. Similar to what Google is doing with its certificate program they are rolling out. This stuff has existed for years and there are probably thousands of "certification programs". Most of the time, they're deemed worthless.

The real question is why schools like Khan Academy aren't accredited? Why can't we have free online courses for everyone, where the only costs are the actual free market costs that go towards staff required for administration, courseware development, instructors, and test proctoring? Why should a college degree from an online university cost a fortune, if the course material remains mostly unchanged from year to year…

> staff required for administration, courseware development, instructors, and test proctoring

These costs are not exactly negligible, though they are much less than the prices charged by private 4-year colleges. The average community college tuition and fees is only $3400 [0]. That's fairly close to the "free market" cost of providing tutoring, creating new tests, test grading, and other administrative fees. So, I think the real reason is that there is not much of a market to be had since---if you don't need the signaling, research, or social aspects of a 4-year college---community colleges already offer an arguably superior product for what would be a similar price.

[0] https://bigfuture.collegeboard.org/pay-for-college/college-c...

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#226

Post by plorkyeran »

ryandrake wrote: post #217
pb7 wrote: post #207

Earlier quoted context omitted.

Your argument doesn’t sound very convincing. People declare bankruptcy now all the time; it’s quite easy actually if you really have no assets and don’t mind your credit ruined for 7 years or less. You haven’t actually stated under what conditions you would be allowed to discharge your debt, you’re just trying to convince me that it wouldn’t be abused and also that we really need this to happen. Again, not very convi…

Isn't the risk of default/bankruptcy part of what justifies charging interest? If there is no risk for lenders, how do they justify charging interest?

Not being able to discharge a debt in bankruptcy doesn't make the loan zero risk. Even if you can garnish someone's income there's no guarantee that they'll ever make enough money for that to repay the loan.

The risk also isn't the only thing that justifies interest. Why would they let you borrow some of their money if they weren't getting some benefit from doing so?

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#227

Post by AdrianB1 »

Ericson2314 wrote: post #191
SilasX wrote: post #106

Earlier quoted context omitted.

IMHO, because what colleges are selling is effectively a positional good[1], one valued specifically for how it ranks against other similar goods. They're selling the certification that "this person is in the n% percentile of employability". And you generally can't just make more of a positional good. That's like, "why can't Louis Vuitton ramp up production so that everyone can have a LV handbag?" [1] https://en.wiki…

The answer is we have UBI, and embrace the positional value going to 0. Just about everyone is already overqualified for the jobs that they do. It's a bullshit job economy. Let's drive up the cost of labor, educate for non-job-related reasons, and see if the the two paths meet again in some vastly different economy.

Please tell anyone that is overqualified at their current job to contact me, about everyone in my company in IT is underqualified, many times incompetent because we don't compete on salaries with the FAANG companies paying 3-5x more.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#228

Post by xmprt »

bawana wrote: post #89
jimhefferon wrote: post #70

Earlier quoted context omitted.

> Colleges are now awash in money It is not possible for me to overstate how very much this is not true at the college where I work, and at all colleges with which I have a personal connection.

Of course not. They ARE AWASH in income. They just figure out how to spend it fast. Fancy buildings, fancy retirement plans, outrageous administrative salaries.... For example the Chairman of UMASS Medical Center makes 2.3 million. The CEO of Harvard makes 9.25 million. How are these jobs an order of magnitude harder than the governor of Massachusetts. (salary 150K) Or harder than the US President (salary 400K). I ca…

I have never heard this argument ("captains of industry take huge risks and therefore deserve handsome reimbursement"). What I have heard is that these people are paid market rate for their management skills because they could easily get a similar salary in other endeavors.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#229

Post by justinmeiners »

twic wrote: post #128
Hokusai wrote: post #111

Earlier quoted context omitted.

> The cost is low for the student but it's pretty high for the taxpayers. That is a supposition that proves to be false. The same happens for health care. To have a centralized state sponsored education or health care system allows it to be more efficient that smaller for profit institutions that have incentives to increase cost to the students as their profit depends on that. Also, I would like to notice, that for E…

Americans are absolutely, utterly, unable to imagine that the way they do things is not the best. It's incredible to watch from outside.

Europeans are absolutely, utterly, unable to imagine that things they pay a percentage of all income earned, over their entire life, are not free. It's incredible to watch from outside.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#230

Post by thatcat »

ntsplnkv2 wrote: post #170
thatcat wrote: post #156

Earlier quoted context omitted.

What's the variance in the set? how do you know it's not bimodal with many students having scholarships or parent paid tuition, food, and board; then other students mostly graduating with 50k plus debt?

In my less than complete research it seems the ranges are based from 27k-37k. Either way, that doesn't seem to to bad. So based on that number being relatively true, is that too high? Why is that too high?

It's too high if the degree doesn't lead to employment or is not useful in employment. Consider the cost over a lifetime: it is much more than 27-37k after it is paid off and there is no way to discharge the debt. It's a risk that is put on students who are 17-18 and the effect is essentially to increase worker desperation of 21-22 year olds - suppressing labor costs to employers while increasing the monthly bills of the employee. Why should students pay for this while living for 4 years in poverty conditions when there is arguably little tangible benefit beyond checking a box required by employers?
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