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Tuition costs have risen 710% since 1983

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Re: Tuition costs have risen 710% since 1983

#191

Post by theptip »

extrapickles wrote: post #76
koube wrote: post #19

Earlier quoted context omitted.

I generally see charts like this in relation to Baumol's cost disease, I'm surprised the linked article never mentions Baumol, but goes on to talk about government regulation and foreign competition. https://en.wikipedia.org/wiki/Baumol_effect (See also section on education https://en.wikipedia.org/wiki/Baumol_effect#Education ) Basically as scalable goods and services get cheaper, non-scalable goods and services bec…

If Baumol was solely the reason for increased prices, I expect the increase to be more in line with the increase in prices for hiring tradespeople or other professional services.

FWIW Alex Tabarrok (economist) wrote a small book analyzing this and came away with the conclusion that it's mostly Baumol; if you're interested in a deeper dive:

https://www.lesswrong.com/posts/FCMfToFnRXhsfpfQB/book-revie...

Re: Tuition costs have risen 710% since 1983

#192

Post by stcroixx »

eschulz wrote: post #10

Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan since the bank knows that the government will protect their investment if she fails to pay them back. So now young people have this easy access to credit, and universities can greatly increase tuition and fees wit…

Also helps to drop standards like SAT/ACT. If you don't need grades or money to get into school, well, that includes just about everyone.

Re: Tuition costs have risen 710% since 1983

#193

Post by tylerhou »

GartzenDeHaes wrote: post #36
taeric wrote: post #24

Earlier quoted context omitted.

Worse than just "backed by the federal government," the loans are basically protected by the government. Being one of the small list of things you can't bankrupt out of, the risk in giving out the loans has been fully pulled from the lenders. It is frustrating to hear the discourse over the inappropriate students that are taking on too much debt, all the while ignoring the lenders that are taking on too much risk. At…

> lenders that are taking on too much risk The lenders are taking no risks since these loans cannot be discharged through bankruptcy. There are also very large late fees and penalties that can triple (or more) the amount owed.

Student loans can be discharged through bankruptcy, if you pass hardship requirements.

- https://studentaid.gov/manage-loans/forgiveness-cancellation...

- https://www.consumerfinance.gov/about-us/blog/busting-myths-...

Re: Tuition costs have risen 710% since 1983

#194

Post by adventured »

wdb wrote: post #108
taeric wrote: post #24

Earlier quoted context omitted.

Worse than just "backed by the federal government," the loans are basically protected by the government. Being one of the small list of things you can't bankrupt out of, the risk in giving out the loans has been fully pulled from the lenders. It is frustrating to hear the discourse over the inappropriate students that are taking on too much debt, all the while ignoring the lenders that are taking on too much risk. At…

Aren’t they government issued loans? That’s how it worked over here

Yes. It's not the bankers doing it, it's the US Government - the Feds are the market, they own 93% of student debt. What a coincidence they dictate whether you can discharge the debt too, not too difficult to spot the gigantic conflict of interest.

It's designed by the US Government to bring in massive, on-going funding to help fill in the red ink in the entitlement programs now that those are no longer funding sources to steal from (entitlements used to produce persistent surplus funding the politicians used to steal from for decades). That's why they'll never allow it to be dischargeable. Their margin on the loans is de facto 100%: it's all magic printed dollars or otherwise taxpayer dollars (makes no difference to them).

Re: Tuition costs have risen 710% since 1983

#195

Post by ilikehurdles »

somewhat_drunk wrote: post #58
Night_Thastus wrote: post #49

Earlier quoted context omitted.

It's unfortunate, but to me this feels like half of the root of the problem. One half is easy access to loans, the other half is student debt relief programs. Between the two, colleges know they can charge absurd prices and pocket the money. It's awful, and I wish someone was doing something to stop this. It cannot go like this forever.

>the other half is student debt relief programs ...which student debt relief programs? Afaik there are no widely used student debt relief programs.

Work for a public organization or certain non-profits while making 10 years of regularly scheduled payments and you may be qualified for student loan forgiveness. Lots of physicians I know took advantage of this since most of their training is at public academic institutions, and I believe many teachers do as well.

Re: Tuition costs have risen 710% since 1983

#196

Post by jibbit »

There was a #1 hn submission some time ago about a theory of how/why things have risen is price i.e. cost of educating a child now vs 100 years ago, but exam results are no better, cost of keeping someone in prison etc. but crime is no lower, etc. it gave a name to the phenomenon. I would like to find it, if that rings a bell with anyone..

Re: Tuition costs have risen 710% since 1983

#197

Post by mberning »

If lenders actually had to evaluate their chances of getting paid back what percentage of students do you think would not receive a loan? 50%? We need to make student loan debt dischargable in bankruptcy and the problem will be solved overnight. Lenders will suddenly take a keen interest in determining which students are serious and have a reasonable chance for success.

Re: Tuition costs have risen 710% since 1983

#198

Post by yardie »

mwerd wrote: post #125

You have to look at net price not sticker price. faulty analysis. better data here https://usafacts.org/articles/college-tuition-has-increased-...

You only get the net price after applying and submitting a FAFSA. The net price is only useful if you intend to go there. It's functionally useless for any other purpose. If the price says $100 then for most everyone it's $100.

Re: Tuition costs have risen 710% since 1983

#199

Post by thedangler »

eschulz wrote: post #10

Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan since the bank knows that the government will protect their investment if she fails to pay them back. So now young people have this easy access to credit, and universities can greatly increase tuition and fees wit…

I've been saying this for a while and no one has ever agreed. They are always like you think they are that greedy. YES I DO. It's not complicated. If one can get bailed out, one can do what ever they want.

Re: Tuition costs have risen 710% since 1983

#200

Post by ilamont »

We have two kids in the in-state university system which are considered "affordable" relative to private colleges ($35k all in for tuition/room/board/misc per student per academic year vs. $65k-$85k) but are laughably expensive compared to almost any other country in the world.

If we didn't set up 529 plans years ago loans would be our only option to pay for the quarter of a million dollars required for both of them. If they were in private colleges, the combined outlay would be well over half a million dollars.

FWIW we did look at Canadian schools which may be affordable to Canadians, but not to international students ... mid 40s pre-Covid when my oldest was applying.

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