41–50 of 181 posts
It's not the interest, it's the principal. And I don't understand how the principal got so high. Is calculus ten times more expensive to teach than it was thirty years ago? Is Shakespeare? Supply is totally inelastic, because it's almost impossible to get a new college accredited (for profit schools all started with an already accredited school and expand them). Same with demand - not having a college degree puts you…
It's not the interest, it's the principal. And I don't understand how the principal got so high. Is calculus ten times more expensive to teach than it was thirty years ago? Is Shakespeare? Supply is totally inelastic, because it's almost impossible to get a new college accredited (for profit schools all started with an already accredited school and expand them). Same with demand - not having a college degree puts you…
Another unmentioned factor is simply how nice many university campuses have become. Lots of state of the art buildings are being built in often quite expensive metro areas as parts of college campuses. New dorms are often really surprisingly nice, even upscale. Consider that the dormitory that I lived in even had maids who would take out your trash daily and clean your bathroom and shower weekly!
I know tuition and books have skyrocketed but at the same time I know people who spent student loan money on flat screen televisions, computers, spring break trips, and used cars.
Meh. This is (mostly) the students' and the families' who abet their stupid decisions fault. If you go to an in-state community college and then matriculate to an in-state university in my state the total cost of college is (~$4500 for 2 years of CC living at home + ~$25000 for 2 years of closest to home in-state school) ~$30000 + the cost of living at home. Meanwhile people continue to whine about sending their kids…
You are absolutely right about the relative value of community college, but you pointed out the major problem: community colleges are not thought of highly at all, even though 2 years of CC credited to a bachelor's degree at a more prestigious university counts just the same. I'm not sure how CC's get over the stigma attached to them, but it really needs to happen. They are good value.
This is basic stuff, people. If everyone is going to college, everyone should know this.
Rates are also fixed with no possibility to refinance. you have to make other decisions, like buying a house and borrowing extra to pay off your student loan. this could have other repercussions and is not very "free market."
but in the end, the degree itself is supposed to be worth about a million in lifetime earnings. for professional degrees it is multiple millions. maybe it is all worth it anyway and the price of education is still too low.
p.s. The main fear of "why would students want to take our 40-60K$ on-campus program if we offer the same degree online for a fraction of the price" is being put to a test here. So far I didn't see evidence that the number of on campus GA Tech graduate students decline, but I don't know for sure, time will tell.
Future will tell if this model works (I realy hope it does), but if one university can do it, others can as well.
So stop letting the government guarantee the loans. Watch how the prices fall once only a small fraction can afford to take a $200,000 loan to pay for their college, afterwards. US colleges have been spoiled. That's why prices are so high.
More likely, you will just see the proportion of foreign students increase dramatically. College these days is already mostly made up of semi-rich kids from America and actually-rich kids from China. With loans at least some middle class American kids get a shot.
The issue is even worse than this article suggests. The article focuses on graduates. But students who fail to graduate, for whatever reason, are even worse off. They usually can't payoff their debt, so they go into default and have their credit destroyed for the rest of their lives. They can't try to go back to school later because they can't get new loans, and, with the latest laws, can't even transfer the credits…
The college premium skyrocketed over the last three decades. B.A.s now out-earn high school grads by 70-80%. College graduation, in contrast, barely rose. In econospeak, the supply of college graduates looks bizarrely price-inelastic.
Over the last two months, I've read virtually everything ever written on this puzzle. All of the compelling stories converge on a single factor I've emphasized for years: The return to trying to get a degree is far lower than the return to successfully getting a degree. Why? Because marginal students routinely fail to graduate. The single best paper on this theme: "The Education Risk Premium" by Janice Eberly and Kartik Athreya.
http://econlog.econlib.org/archives/2014/02/why_the_college....
For various reasons, I've been saying for a year or so now that "we're not going to educate our way out of this mess". Education helps, yes, but it's also pretty distinctly limited, and I'm seeing increasing evidence that there's only so much potential among most students. Though there are notable exceptions: see "Stand and Deliver".
More of my own take:
http://www.reddit.com/r/dredmorbius/comments/1y5aq0/the_coll...
So stop letting the government guarantee the loans. Watch how the prices fall once only a small fraction can afford to take a $200,000 loan to pay for their college, afterwards. US colleges have been spoiled. That's why prices are so high.
How do you balance that with giving access to college to individuals who wouldn't have it otherwise? It isn't black and white.
How much of a typical student loan is tuition and books, and how much of it is room, board, computers, Starbucks and partying? I know tuition and books have skyrocketed but at the same time I know people who spent student loan money on flat screen televisions, computers, spring break trips, and used cars.