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U of Chicago projected to be the first U.S. university to cost $100k per year

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Re: U of Chicago projected to be the first U.S. university to cost $100k per year

#131

Post by wholepointofcc »

chimi wrote: post #68

Throughout history, every time loans are invented to pay for something, the price skyrockets. House, Cars, Education... except credit cards. What credit cards did is flatten the salary curve, filling the gap between where salaries should be if they increased as much or more than inflation and the cost of living, with debt. Debt is a powerful tool when used correctly, but most people are unskilled in tool use, financi…

> Debt is a powerful tool when used correctly,

Could you expand on that? It's a very interesting perspective

Re: U of Chicago projected to be the first U.S. university to cost $100k per year

#132

Post by jmpman »

jmpman wrote: post #95
chrischattin wrote: post #17

How to fix student loans... The .gov backs student loans. And, they are non-dischargeable. So, it is zero risk for the lender to give loan to the 2.7 GPA moron getting a worthless basket weaving degree from the local private lib arts school for $100k. So, they give as many loans as possible, since they can't lose (taxpayer on the hook). Colleges are incentivized to drive up costs of tuition b/c tons of free money. It…

Or, track the loan payback percentage for each degree, let’s say 5 years after graduation. Publish those results, and stop making loans for programs where the repayment is less than X%. Then, basket weaving degrees won’t get loans, the cost for basket weaving programs will go down, as only those with parent’s stupid money will pay for basket weaving degrees. Students will be directed by market forces to degrees that…

This will of course cause universities to encourage student loans for students with wealthy parents who could have paid up front, as they’re more likely to pay, even if employed as a barista. For every rule, it will be gamed in some way.

Re: U of Chicago projected to be the first U.S. university to cost $100k per year

#133

Post by rayiner »

nixass wrote: post #21

On the other hand, TUM (technical university in Munich) costs only 220 euro per semester, and you're still enrolled into top25 university in the world. The land of free..

TUM has a $1.1 billion budget and 41,000 students. Chicago has a $2.6 billion budget and 16,000 students.

Re: U of Chicago projected to be the first U.S. university to cost $100k per year

#134

Post by FrozenTuna »

wholepointofcc wrote: post #131
chimi wrote: post #68

Throughout history, every time loans are invented to pay for something, the price skyrockets. House, Cars, Education... except credit cards. What credit cards did is flatten the salary curve, filling the gap between where salaries should be if they increased as much or more than inflation and the cost of living, with debt. Debt is a powerful tool when used correctly, but most people are unskilled in tool use, financi…

> Debt is a powerful tool when used correctly, Could you expand on that? It's a very interesting perspective

Companies (and people) take on debt to invest in themselves, knowing the growth can (hopefully) pay off the debt and generate more income in the long run. Here's a fun list of companies with debt: https://wolfstreet.com/2019/07/26/the-most-indebted-companie...

In the case of students, the idea is to take some debt now and pay it off with increased earnings. The problem is, those increased earnings aren't guaranteed and students are way worse at determining the return on their debt than companies with dedicated teams.

Re: U of Chicago projected to be the first U.S. university to cost $100k per year

#135

Post by wholepointofcc »

wholepointofcc wrote: post #131
chimi wrote: post #68

Throughout history, every time loans are invented to pay for something, the price skyrockets. House, Cars, Education... except credit cards. What credit cards did is flatten the salary curve, filling the gap between where salaries should be if they increased as much or more than inflation and the cost of living, with debt. Debt is a powerful tool when used correctly, but most people are unskilled in tool use, financi…

> Debt is a powerful tool when used correctly, Could you expand on that? It's a very interesting perspective

Thank you FrozenTuna for your input but I was specifically thinking of physical people, as opposed to companies.

I also meant a more specific application rather than a general iteration on the (perfectly valid) idea that if one can make more money with a value now, rather than later, and this opportunity cost is larger than the interest rate minus inflation, then the deal is good.

Student loans would be a good example of that in a well-functioning market. Are there many others?

Re: U of Chicago projected to be the first U.S. university to cost $100k per year

#136

Post by lancesells »

oconnor663 wrote: post #29
sorenn111 wrote: post #7

One thing I find crazy is the very same institutions that are generally very left leaning, decry income inequality, and espouse generally liberal views then turn around and having tuition costs that having been rising at rates so far above inflation. Student debt is a major issue in the US and the ever increasing costs of tuition are a MAJOR culprit in pushing this crisis. Where are these costs coming from? How can y…

Looking at the sticker price can be confusing, when the majority of students are receiving some financial aid. You'd need to look at the average tuition paid by students at different family income levels. But is that data even publicly available?

That is definitely the way to look at it although there is a middle class where family income is more than what qualifies for financial aid but far lower than tuition being "affordable".

Re: U of Chicago projected to be the first U.S. university to cost $100k per year

#137

Post by pastor_elm »

garmaine wrote: post #117
pastor_elm wrote: post #35

Earlier quoted context omitted.

It's pretty clear how these schools operate. They charge high tuition for people with a lot of money and cover the costs for people that can't afford it. >With over $159 million in financial aid distributed this year, UChicago is committed to ensuring that its students graduate debt-free and prepared for lifelong success, no matter their chosen major or background prior to enrolling in The College. UChicago is a need…

Financial aid is code for student loans. If they meant a scholarship they would have said so.

> Guaranteed Free Tuition Families earning less than $125,000 per year (with typical assets) will receive a financial aid award that covers the full cost of tuition. Families earning less than $60,000 per year will have tuition, fees, and room and board covered by financial aid. UChicago’s need-based financial aid involves no loans and is awarded as grants, which do not need to be repaid.

https://nobarriers.uchicago.edu/

Re: U of Chicago projected to be the first U.S. university to cost $100k per year

#138

Post by ohazi »

phkahler wrote: post #85

Let's assume a full time student taking 4 courses at a time. A professor might (should) be able to teach 4 classes. I'm not sure how much profs make, but let's assume between 1 and 3 students could pay them. Now where does the money from all the other students in the classes go? Sure, there's admin overhead, room costs, etc, but that stuff is hopefully less than the prof costs. So 6 students max to cover costs for a…

> Sure, there's admin overhead, room costs, etc, but that stuff is hopefully less than the prof costs.

Not by a long shot.

Re: U of Chicago projected to be the first U.S. university to cost $100k per year

#139

Post by o09rdk »

Finnucane wrote: post #11
sorenn111 wrote: post #7

One thing I find crazy is the very same institutions that are generally very left leaning, decry income inequality, and espouse generally liberal views then turn around and having tuition costs that having been rising at rates so far above inflation. Student debt is a major issue in the US and the ever increasing costs of tuition are a MAJOR culprit in pushing this crisis. Where are these costs coming from? How can y…

I work at one local university, and my wife works at another. One thing we've definitely noticed (and this is a widespread problem) is that the administration is becoming more top-heavy. There are cutbacks in faculty, support, and teaching staff, more reliance on adjuncts (academic temps, basically), and so on, while central administration grows. Expensive new buildings contribute, but less than people suppose. But t…

Former tenured professor.

I think your impression is generally spot-on although there's nuances and it's more complicated than that.

In general, universities are suffering from many of the same pressures as other fields. Nonprofits are being run as profit-generating centers, and the implicit promotion track goes from faculty to senior faculty to administration, if you're even on tenure track. The administration salaries are increasing, as are the number of administrative positions (deans, associate deans, vice associate deans, assistant deans, etc.), and the structures are becoming increasingly hierarchical. Things are very top-heavy and expensive to run because the salary budget is so disproportionately distributed.

I don't think that's all of it, though. The rest of it is harder to quantify, but is the flip side of the educational bubble coin. Students are rushing to go to college in record numbers, which then puts pressure on colleges to stand out to attract more students and more high-paying students who become high-donating alumni. Institutions that should be getting public funding are not, which then trickles down to students; other private institutions then benefit from the increased tuition norms etc.

It's a complicated problem that involves HR and administrative practices and norms, economic incentives within university funding structures, incentives coming from a broken employment system in the US, problematic incentives coming from federal grant structures, etc. etc. etc. etc.

Re: U of Chicago projected to be the first U.S. university to cost $100k per year

#140

Post by chimi »

wholepointofcc wrote: post #135
wholepointofcc wrote: post #131

Earlier quoted context omitted.

> Debt is a powerful tool when used correctly, Could you expand on that? It's a very interesting perspective

Thank you FrozenTuna for your input but I was specifically thinking of physical people, as opposed to companies. I also meant a more specific application rather than a general iteration on the (perfectly valid) idea that if one can make more money with a value now, rather than later, and this opportunity cost is larger than the interest rate minus inflation, then the deal is good. Student loans would be a good exampl…

Companies are people, legally speaking, but I see your point. See ours: Imagine yourself as a company and the same debt equation applies.

Companies, like you, need tools to produce goods and maintain their operations. You, if you're a programmer, need a computer. You don't have $1000 to buy one, but you have a credit card. You know, you can bill your hours out at say, $100/hr writing code. You need to write code for 10 hours to pay for the machine, but you don't have $1000 to buy the machine.

So you put $1000 on a credit card at 20% interest, buy the computer and then bill 100 hours on it @ $100 / hr = $10,000 in just one month.

You incurred a little bit of debt, bought something worth a lot, but worth a lot more to you because you can leverage that tool to make more money than it cost to buy the tool.

Think of debt as leverage. It's a little bit of money pressing down on a lever to lift more money into your pocket.

If you only use that leverage to buy assets that help you make money (fairly easy) or increase in value at a rate greater than the interest rate (difficult, risky, speculative), then your net worth will continue to grow.

That college degree in a practical field like engineering is an asset because you will leverage it to earn more money over your lifetime than you would without that degree. Compare this to a degree in the proverbial "basket weaving." You, in your lifetime, will never weave $400,000 worth of baskets you'd need to pay for that University of Chicago degree. That degree is a liability that will follow you, perhaps your entire life and might make your life worse than it would be had you never gotten it at all. You'll resent that degree so much you refuse to work because every penny goes to some bank that sold you a worthless piece of paper for $400,000.

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