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High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

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Re: High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

#281

Post by AbrahamParangi »

bumby wrote: post #272
GlenTheMachine wrote: post #219

Wait, the claim doesn't match the little data presented and the primary claim is not examined or supported. 1) The Omnibus bill passed in 1993, but from the graph tuition was already increasing at 200% greater than inflation, and appears to have started in the mid 1980's; and 2) Why would the fact that the loans are now from the government mean that universities no longer had to compete on costs? The bill ultimately…

> Why would the fact that the loans are now from the government mean that universities no longer had to compete on costs? I think an economist would say that the loans increase the number of "customers" who could now afford to go to college. Accordingly, when the demand increases faster than the supply, an economist would say increases prices are the result. There's an old op-ed by former Education Secretary William…

Cheap capital raises prices everywhere- for homes, for equities, for land, and certainly for education.

Student loans are cheaper than cheap, they are government subsidized and not even close to their appropriate cost.

Re: High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

#282

Post by GlenTheMachine »

AbrahamParangi wrote: post #281
bumby wrote: post #272

Earlier quoted context omitted.

> Why would the fact that the loans are now from the government mean that universities no longer had to compete on costs? I think an economist would say that the loans increase the number of "customers" who could now afford to go to college. Accordingly, when the demand increases faster than the supply, an economist would say increases prices are the result. There's an old op-ed by former Education Secretary William…

Cheap capital raises prices everywhere- for homes, for equities, for land, and certainly for education. Student loans are cheaper than cheap, they are government subsidized and not even close to their appropriate cost.

...and always have been. So what changed?

Re: High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

#283

Post by bumby »

GlenTheMachine wrote: post #282
AbrahamParangi wrote: post #281

Earlier quoted context omitted.

Cheap capital raises prices everywhere- for homes, for equities, for land, and certainly for education. Student loans are cheaper than cheap, they are government subsidized and not even close to their appropriate cost.

...and always have been. So what changed?

One theory is that competing priorities have shifted public funds towards entitlements, especially healthcare, and away from public university. Tuition is then raised to compensate for the budget reduction. It's interesting to hear some cite that healthcare costs are the only sector that is outpacing college costs, which would explain why budgets are shifted towards it. As with any complex system, I doubt we can point to a single, simple cause.

Re: High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

#284

Post by lapcat »

suture wrote: post #155
BitwiseFool wrote: post #141

Earlier quoted context omitted.

Yes, I do consider the child tax credit buying votes and I likewise consider farm subsidies vote buying as well. This situation, in particular, seems egregious because of the amount being proposed - $10,000 - and because the executive branch is planning to do it unilaterally. I would still disagree with the measure, but I wouldn't feel as strongly if this happened a result of a vote from Congress.

Politically speaking the best course of action for Biden is to say that the repayment pause will continue until Congress passes comprehensive legislation addressing higher education funding and reforms.

This would actually be better than $10K forgiveness, which is kind of a drop in the bucket for people who are really struggling with student loan debt, despite the previous commenter thinking the amount is "egregious".

Re: High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

#285

Post by mgamache »

throw93232 wrote: post #11

College today has way more responsibilities. It has to fix rape culture, dismantle patriarchy, fix diversity, organize protests... All that costs money. In 1990ties 20% of students got raped, nobody wants to go back to that dark times!

The 20% rape is a fiction. Patriarchy in university is a fiction based on the number of females graduating (even in science). Organizing protests is not a part university's mission.

Re: High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

#286

Post by jedberg »

ChainOfFools wrote: post #273
jedberg wrote: post #261

Earlier quoted context omitted.

The UC system accepts out of state admits but they have always paid full tuition. In state residents get a discount (which used to be 100%). But they also guarantee that they will admit 9% of state grads.

The 9% merit bar is increasingly being circumvented by students electing to take one or two semesters of community college and take advantage of the 30% transfer rate into the UC system enjoyed by full-time students of those schools.

I don't think there is anything wrong with that. If you can get good enough grades at JC to prove you should have been admitted in the first place, then good on you, eh?

Re: High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

#287

Post by TimPC »

onlyrealcuzzo wrote: post #254
TimPC wrote: post #224

Earlier quoted context omitted.

Some people have far more than $100k in debt, so the tradeoff might be far more attractive. If you're finishing undergrad at 22, your bankruptcy won't harm you for buying a house at 29-30 which is kind of when you want to buy a house anyways since saving up 25% takes a good amount of time. It seems like a very worthwhile trade to declare bankruptcy. As for being allowed to declare, the time to do it is before you hav…

> Some people have far more than $100k in debt, so the tradeoff might be far more attractive. That would be the lender's problem for lending far more than anyone reasonably needs to be lent to obtain a degree. They'd have to price the loan accordingly. > It seems like a very worthwhile trade to declare bankruptcy. You don't get to just declare bankruptcy on a whim because the outcome is favorable to you.

> You don’t get to just declare bankruptcy on a whim because the outcome is favourable to you.

I’ve addressed this in the above by mentioning when you do it. You have assets < debt and no job therefore no income. No court is going to reject this bankruptcy because you are actually underwater and will in theory take infinite time to repay the amount you owe.

Re: High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

#288

Post by dap »

taurath wrote: post #280
dap wrote: post #158

Earlier quoted context omitted.

> Isn’t this in some ways just growing up and directly having experience with the intricacies of a big system? From what I've read, I don't think so. The underlying considerations may not have changed. But societal awareness of various problems has increased, causing both parents and students to ask things like "how many mental health counselors do you have for your student body?" or "what's the waiting time for an a…

That example sounds to me a lot like a university taking on things they shouldn’t need to do, but have to because there’s nothing else to take them on. I wonder how many counselors they have and how short wait times for appointments are in European countries where higher education costs either nothing or a small amount compared to median incomes

(edit: sorry, I misread your comment earlier)

> That example sounds to me a lot like a university taking on things they shouldn’t need to do, but have to because there’s nothing else to take them on.

"should" is pretty load-bearing there, but yeah, that could be. People know that mental health is a particular issue for college students[1]. In the absence of anything else providing these services, it's not surprising that informed consumers would look to colleges to do what they can, and competitive pressure would result in most colleges growing their offerings in this area.

[1] https://www.bu.edu/articles/2022/mental-health-of-college-st...

> I wonder how many counselors they have and how short wait times for appointments are in European countries where higher education costs either nothing or a small amount compared to median incomes

It's a good question. In interpreting the answer, one would presumably want to know how the general level of access to mental health services compares between the United States and those countries.

Re: High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

#289

Post by chongli »

dap wrote: post #263
chongli wrote: post #203

Earlier quoted context omitted.

It's a zero sum game. Bob the student can either attend Charles State or Derek University, not both. If Charles State spends a million dollars trying to attract Bob, Derek U spends a million and a half, and Bob decides to go to Derek U, Charles State has wasted a million dollars. Furthermore, the fancy new aquatics complex at Derek U may have been the deciding factor for Bob but it does nothing to make him better at…

> If Charles State spends a million dollars trying to attract Bob, Derek U spends a million and a half, and Bob decides to go to Derek U, Charles State has wasted a million dollars. Furthermore, the fancy new aquatics complex at Derek U may have been the deciding factor for Bob but it does nothing to make him better at electrical engineering, his chosen major. Why do you think it's zero sum? Everything I've read sugg…

You could argue they shouldn't, that we'd rather they be affordable and not have aquatic centers, but that's a different debate.

That is my argument. Society is a whole is spending more and more on education but not getting more education in the deal. We’re getting more aquatic complexes and climbing walls and sports stadiums. None of these things help society achieve higher levels of education. They merely allow one school to lure students away from another: zero sum.

Re: High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

#290

Post by wahern »

AbrahamParangi wrote: post #281
bumby wrote: post #272

Earlier quoted context omitted.

> Why would the fact that the loans are now from the government mean that universities no longer had to compete on costs? I think an economist would say that the loans increase the number of "customers" who could now afford to go to college. Accordingly, when the demand increases faster than the supply, an economist would say increases prices are the result. There's an old op-ed by former Education Secretary William…

Cheap capital raises prices everywhere- for homes, for equities, for land, and certainly for education. Student loans are cheaper than cheap, they are government subsidized and not even close to their appropriate cost.

> Student loans are cheaper than cheap, they are government subsidized and not even close to their appropriate cost.

Interest rates on government-subsidized college loans aren't that cheap. Undergraduate loans are the cheapest. They were particularly cheap in the early 2010s and during the COVID pandemic. But over the past 20 years the rate has been ~4-5%, and generally greater than mortgage rates.[1][2][3] Subsidized graduate loans are in 6-7% territory (even 8+%), and always have been. Unsurprisingly, AFAIU the latter constitute a substantially disproportionate share of student debt--including, especially, debt that people are unable to climb out of due to compounding--relative to the number of students.

[1] https://studentaid.gov/understand-aid/types/loans/interest-r... [2] https://educationdata.org/average-student-loan-interest-rate [3] https://fred.stlouisfed.org/series/MORTGAGE30US

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