> 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.” That assertion makes no sense. In a market economy, almost all prices are unregulated. Yet the prices of TVs, hamburgers,…
The government doesn't give every 18-year-old an unlimited line of credit to buy hamburgers, either :P
More or less. I actually think that the debt above 15k (or whatever) should be shifted back to the school, should the graduate be (provably) unable to pay it back in 10 years. ;)
> I actually think that the debt above 15k (or whatever) should be shifted back to the school Shifted back to the school, not the lender? Or are you assuming that the school is the lender?
I think he meant "the school must pay back the lender if the student can't pay back the loan after ten years"
I.e., our institutions of higher education should be forced to bail out our banks when the banks issue risky loans that don't pan out. This is definitely good idea because divorcing banks from the downsides of their risky loans has worked out so well this century /s
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.
Am I the only one who doesn't think this is that bad? Living on campus is a privilege, not a right. Students probably can live off-campus for less, but paying $1800/month (guessing that "a year" is ~8 months) for accommodation + food... Really doesn't seem that bad. It's certainly a premium, but it's an entirely optional one and doesn't seem like an extreme one. Add on administration overhead for dorms, etc. Proximit…
I also think it's a good trade-off. Students should be wary though, no one wants to be stuck in a minimum wage job after graduation with loans. I also would add that students ought to take advantage of the resources available - meaning, don't just go to class, get food, and back to your dorm room throughout the school year, but rather participate and get involved: join clubs, develop relationships, teacher assist, etc.
> College is essentially free for many european countries, that is what I think sufficient level of subsidy Most of the countries which people usually talk about here - France, Germany, Spain, etc. - have significantly lower matriculation and graduation rates than the US does.
No they don't. Where do you even come up with such obvious nonsense?
> 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".
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…
College is expensive because people still pay that price. People pay that price because they have easy access to student loans.
So if we get rid of student loans, colleges would be forced to change their pricing.
If governments still want to encourage students to go to college, then perhaps non-price based methods would help. Scholarships could move away from being a monetary amount, to being a fixed amount of semesters paid for.
> 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). The USA has 4,000+ colleges, most of which do compete aggressively for students. Huge marketing departments with regional and national reach. Radio ads. Television ads. Print ads. Marketing networks with college counselors. Salespeople who spend many months attending coll…
Competition ALONE is exactly what drives prices down. The endless supply of students with a government guaranteed loan is why they are not going down, why would they? It completely violates the most basic element of our economy. Fully socializing those things is a solution better than what we have now, but that is the point where those things stagnate (US K12) which is why I prefer the free market solution and still…
You do realize students have to pay back those loans right? I know many people including my girlfriend that only considered state schools or ones that offered significant scholarships because they didn't want to be 100s of thousands of dollars in debt.
Exactly. Access to cheap debt will always drive up prices. Lower the interest rates for anything (houses pre recession) and prices skyrocket.
It's not even necessarily cheap debt. A lot of my undergraduate loans were at rates of 6.8% which I consider somewhat high. The problem is it's easily accessible debt to people who have no concept of what tens of thousands of dollars is really worth. You see the amount you're borrowing on the form and it's really nothing more than a number.
Totally, I didn't have to pay for college and since you cannot write off school debt, I thought they would at least have decent interest rates since it is pretty much guaranteed unless the die. As I found out from my girlfriend who has them, they are ridiculously high. Some of her undergrad ones are at least ok at like 4-5% but almost all the ones she is getting for grad school are like 6-8%.
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.
> 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!
And the fact that student loans aren't dischargeable via bankruptcy.
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.
Talk to the folks in Jefferson Co. AL, facing $200 a month sewer bills after a botched upgrade.