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Why Is College in America So Expensive?

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Re: Why Is College in America So Expensive?

#221

Post by orangecat »

droithomme wrote: post #208
frebord wrote: post #91

Earlier quoted context omitted.

> 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…

> the same reason MRIs are expensive MRIs in the US are very cheap. However people are dumb and freely choose to pay much more than they should. This company cheapimaging.com was founded by a teacher as a part time project. They have contracts for MRI imaging throughout the entire US, at fixed, reasonable, cash-only price. Some states you can get an MRI for $265. Or you can go to the exact same facility naively and p…

Or you can go to the exact same facility naively and pay $10,000 or more for the same scan.

Most likely you don't care, because your insurance is covering it. And your insurance company doesn't care because they'll just raise their rates. And other customers won't care because most they don't actually choose their health insurance; they just get whatever their employer offers.

A free market depends on competition and consumer awareness to keep prices under control. Central planning depends on the government allocating resources efficiently. The US health care system has neither, and the results are exactly what you'd expect.

Re: Why Is College in America So Expensive?

#222

Post by coryrc »

mrep wrote: post #187
frebord wrote: post #135

Earlier quoted context omitted.

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.

They don't have to. There are limits to how much of a person's income can be spent and some people choose low-paying careers, so their loans never get paid off. Government agencies and schools will pay off loans if you work there; an additional bailout financially-responsible people are missing out on.

Re: Why Is College in America So Expensive?

#224

Post by mcguire »

roenxi wrote: post #162
clay_the_ripper wrote: post #125

Earlier quoted context omitted.

Could you explain to me how the government control of those things had lead to price increases? Specifically? I hear this a lot but have never heard an explaination and I am genuinely curious of the reasoning

"The Economy" is a (surprisingly effective!) system for allocating resources. It short-circuits a human instinct that social status and fairness should be the guide, and replaces that with "a persons economic contribution" instead. Now, it turns out that the difference in productivity between people is so great (think the old 10x-100x programmer) that allocating resources according to contribution creates so much sur…

What is the "economic contribution" of, say, the average software developer versus the average first grade teacher?

Re: Why Is College in America So Expensive?

#225

Post by zaptheimpaler »

frebord wrote: post #91
Domenic_S wrote: post #3

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…

The truly free market is great for many things, but demand for college is very inelastic, and a truly free market requires no barriers to entry - this is not the case at all in either education (certification/regulation) or healthcare (regulation/approval/patents).

If nothing but the free market can work, how do tax-funded government services for healthcare and education work just fine across much of the world? There are 10+ other countries with socialized healthcare and free or subsidized education. The "free market" argument is equivalent to closing your eyes and pretending these counterexamples don't exist at all.

Re: Why Is College in America So Expensive?

#226

Post by Spooky23 »

fzeroracer wrote: post #102
frebord wrote: post #91

Earlier quoted context omitted.

> 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…

The free market does not work in all situations. There's a reason why our healthcare is an absolute disaster compared to any other first world country, why our college is far more expensive, why our drugs cost more etc And it ain't because of cost control. Every time we loosen the reins a bit and let the 'free market' take the wheels, we see things get a lot worse for Americans as a whole. Especially when you have gi…

Healthcare is not a free market. It’s a collection of cartels with price controls.

Things like healthcare networks were illegal before the Supreme Court redefined monopoly, and are now swallowing up healthcare delivery.

CVS essentially controls drug distribution.

The AMA is a trade guild that restricts the supply of doctors. A radiologist makes $1M a year because there are only a limited number of new ones minted each year.

ISPs are dangerous but nothing close to as awful as healthcare.

Re: Why Is College in America So Expensive?

#227

Post by detaro »

chimeracoder wrote: post #211
dnomad wrote: post #194

Earlier quoted context omitted.

It's obvious nonsense to anybody who's taken even a moment to understand what those numbers mean. Here's a very, very simple chart that shows population with tertiary education [1]. The US is not significantly above other countries where education is paid for by the government. What's more is that those numbers are very generous to the US because, as everybody knows, most private colleges in the US are shit. So calle…

> Here's a very, very simple chart that shows population with tertiary education [1]. The US is not significantly above other countries where education is paid for by the government. As you can plainly see in the data, the US has significantly more graduates than each of the counties I listed: https://en.wikipedia.org/wiki/List_of_countries_by_tertiary_... > What's more is that those numbers are very generous to the…

Could it be that one of you is looking at the young age bracket (=people who likely finished university in the past few years) and the other at all ages?

Re: Why Is College in America So Expensive?

#228

Post by diogenescynic »

frebord wrote: post #91
Domenic_S wrote: post #3

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…

Then why is college/healthcare/RXs cheaper in Europe where there is more government involvement? Seems like we’ve tried the free market approach and it’s failed us miserably—healthcare costs us 2-3x as much for worse results compared to other developed countries. Why can’t we just do what’s working for every other developed country?

Re: Why Is College in America So Expensive?

#229

Post by chillacy »

kryogen1c wrote: post #213
fzeroracer wrote: post #202

Earlier quoted context omitted.

Can you prove that the US healthcare industry is more regulated than countries like say, Germany or Canada? Because it would be incredibly hard to believe that somehow America is more regulated than countries that have more direct control over their healthcare.

I think that's exactly the point: direct control and heavy regulation are two different things. This in-between fairyland with artificial barriers to entry on the frontend but no control on the back end is what's creating these captive markets where old companies to do almost anything because new companies can't join the market.

To add to that point, because the government guarantees things that it has no control over, it means the businesses in these industries have the best risk/reward ratio possible: no risk for unlimited upside, because the risk is taken care of by taxpayers.

Re: Why Is College in America So Expensive?

#230

Post by dnomad »

detaro wrote: post #227
chimeracoder wrote: post #211

Earlier quoted context omitted.

> Here's a very, very simple chart that shows population with tertiary education [1]. The US is not significantly above other countries where education is paid for by the government. As you can plainly see in the data, the US has significantly more graduates than each of the counties I listed: https://en.wikipedia.org/wiki/List_of_countries_by_tertiary_... > What's more is that those numbers are very generous to the…

Could it be that one of you is looking at the young age bracket (=people who likely finished university in the past few years) and the other at all ages?

The data on Wikipedia is out of date though it cites oecd.org. Go straight to oecd.org for the correct data.

(It's not good that Wikipedia copies data like that. If only we had decent transclusion capabilities on the web.)

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