I was just asking colleagues at work in response to the supreme court ruling on the student debt forgiveness stuff whether or not they experienced yearly tuition increases every single year they were enrolled--straight monotonic increase. I got many yes emoji's tagged onto that post so I knew I wasn't the only one. I can only imagine that treadmill never stopped for people.
Tuition costs have risen 710% since 1983
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Re: Tuition costs have risen 710% since 1983
#232Earlier quoted context omitted.
If only governments could make…laws to restrict the price of University. Or…could limit the maximum loan size thus encouraging Universities to not charge more than that.
Price controls are one of the few things that economists on both sides of the political aisle agree do not work, and/or have unintended consequences which are worse than the problem they attempt to resolve. https://www.econlib.org/the-consensus-on-price-controls/
> Price controls are one of the few things that economists on both sides of the political aisle agree do not work, and/or have unintended consequences which are worse than the problem they attempt to resolve.
Australia effectively has price controls on both health and tertiary education. It isn’t perfect but it is hardly terrible.
I know the US pharmaceutical industry hates it - the Australian government uses its monopsony power to limit drug prices and hence drug company profits - and is forever lobbying the US government to use trade negotiations to pressure to undermine it (but hasn’t yet succeeded)
Universities can charge as much as they want - but if they want students to have full eligibility for government student loans and government tuition subsidies, there is a maximum they can charge. Students want that full eligibility, so for the majority of places they stick to the maximum
Re: Tuition costs have risen 710% since 1983
#233Earlier quoted context omitted.
Now I read that Wall Street is creating CDO's based on these loans, like they (continue to) do on mortgages. Some people die "early" without paying back these loans, and sometimes, they will owe more than they took out. Given the mounting problems with the numbers here, it seems a whole generation of people in the middle of this bubble are going to go to the grave while still owing on these loans. What happens to the…
Well the CDOs are probably tranched, so there will be some portions that are safe. But in general, you'd think the student loans would only be in trouble if there's a large increase in the unemployment rate. You'd get a meltdown if the government were to announce a change in the laws.
> the CDOs are probably tranched, so there will be some portions that are safe
The mortgage CDO's where tranched in 2008 also.
Re: Tuition costs have risen 710% since 1983
#234Could it be because in capitalism, the seller tries to take as much money as possible from buyer and the price is not related to expenses? Let me give an example that can illustrate this: a typical mobile plan from Verizon in US costs $45/month and gives you 15 Gb of traffic. At the same time in Russia one can get 30 Gb for $9/month. Are expenses for maintaining a cell network 5 times higher in US? Unlikely. It is ju…
Isn’t Russia capitalist too? I’m confused but your comparison. Sounds like you’ve just compared two markets without myriad variables. The fact that student loans are backed by the government would in fact undermine this as a good example of a free market.
Almost every country is capitalist, including Russia. I didn't try to compare capitalist vs non-capitalist countries, I tried to show that in capitalist countries the price of services is not related to expenses. In both countries mobile providers use similar equipment which probably cost the same, but the price they charge from consumers is significantly different.
Re: Tuition costs have risen 710% since 1983
#235Makes 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…
This is a common theme on HN, but it's not obvious to me if it reflects this entire period we're talking about here. Were government loans growing from 1980 to 2000? I know they have been in the last 20 years, but tuition was clearly growing before that (as you can see for yourself in the graphs of the original article).
Re: Tuition costs have risen 710% since 1983
#236Supply demand pricing has to be part of this equation
Re: Tuition costs have risen 710% since 1983
#237I work IT for an institution that is currently kicking off a campaign to transform the business model of higher education. We're currently one of the more expensive private liberal arts schools in Michigan, and we want to pivot to fully funded tuition for all students. We have been talking a lot lately, just like OP, about how this cost trajectory in Higher Ed is unsustainable. We want to instead build a cycle of generosity.
2. https://www.pushkin.fm/podcasts/revisionist-history/a-good-c...
Re: Tuition costs have risen 710% since 1983
#238Makes 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 hope to see the day where interest bearing loans are recognized by the rest of the world as the evil they are. Muslims and Jews know this fact quite well.
This seems good in theory but hard in reality. The modern economy is built on debt being used for new investments. The problem is high interest rates, not interest rates in general.
Re: Tuition costs have risen 710% since 1983
#239And yet, college is still worth it. While many folks like to point out the Baumol effect aka cost disease, it's also important to remember that college is overwhelmingly worth it, and the government ought to subsidize college educations. There's no better investment the government can make than subsidize more people to go to college. (Well, perhaps except for funding the IRS, but that's more of a zero-sum game.)
See: https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/c...
Lifetime net earnings increase for progressively higher levels of education, resulting in overall GDP growth and a wealthier society better able to pay for public goods and the social welfare of all. The vast majority of college students who attend a 2 or 4 year in-state program will net a significant increase in lifetime earnings and the amount they pay for that degree, even assuming they maximized their federal loans, will be dwarfed by their lifetime earnings increase.
Even for those folks getting masters degrees to the tune of hundreds of thousands of dollars, the Department of Education finds that the lifetime net earnings increase by nearly $1.5 million over a high school education, and yes, actually, around $300k over a Bachelor's degree.
Re: Tuition costs have risen 710% since 1983
#240Makes 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…
Private high school costs have also gone up astronomically and there are no federal loans for them. [0] https://educationdata.org/average-cost-of-private-school
This says that the average private highschool tuition is $15,645.
In 2003, the average private highschool tuition was $8,412 (Snyder, Dillow, & Hoffman, 2008), or $14,079 (in today's dollars).
Please correct me if I've made some mistake, but plugging those numbers in shows that the annualized real increase in price is 0.5% per year over 20 years. Looks like doing the same thing for public 4 year college over the same timespan results in an annual real increase in 2.1%