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Tuition costs have risen 710% since 1983

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Re: Tuition costs have risen 710% since 1983

#241

Post by lotsofpulp »

FrustratedMonky wrote: post #123
scinerio wrote: post #21

Earlier quoted context omitted.

It's free for universities who can rest easy knowing that if students don't pay then it doesn't affect them.

Ah, free in the sense that the University got its money and can now ignore any consequences? It is NOT free to the student who is definitely affected. They are in debt and now crippled. But the university got it's money. If you want to blame the government. Why is it the governments fault that Universities are now behaving like scammers and charging more for less and leaving the 'customer' stuck. ---- Lets say I go t…

> Why is it the governments fault that Universities are now behaving like scammers and charging more for less and leaving the 'customer' stuck.

Because the government is not doing its due diligence as a lender, because current voters and government employees have no problem soaking future taxpayers. And crippling uninformed 18 year olds’ futures.

Re: Tuition costs have risen 710% since 1983

#242

Post by colordrops »

taeric wrote: post #24
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…

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…

It's maddeningly frustrating to see such short-sighted greed dragging down the class of people meant to lead the future.

Re: Tuition costs have risen 710% since 1983

#245

Post by lotsofpulp »

drew-y wrote: post #64
lotsofpulp wrote: post #12

Earlier quoted context omitted.

Common sense? Government (taxpayers) underwrite unlimited amounts to uninformed buyers paying informed sellers. I am a seller (college boss), and I can boost my own income, and I know I have no competitive pressure to keep prices down, so why not increase the college budget and spending, hence justifying tuition increases.

Common sense is often wrong. I haven't found any reliable source yet that even mentions the availability government loans as being a driving factor. Based on the limited research I've done over the last few minutes, the main drivers appear to be: 1. A large increase in demand for College. I could imagine this may be, in part, due to more accessible student loans. But it appears that many factors have come into play,…

> Based on the limited research I've done over the last few minutes, the main drivers appear to be:

All your drivers cannot cause a price increase if an 18 to 25 year old cannot get unlimited funding from a lender to make a stupid decision.

Re: Tuition costs have risen 710% since 1983

#246

Post by reaperman »

lordnacho wrote: post #210
TheRealDunkirk wrote: post #135

Earlier 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.

> But in general, you'd think the student loans would only be in trouble if there's a large increase in the unemployment rate.

I thought the government guarantees these loans, but maybe I mis-read that, mis-understood, or something changed. I think the borrower is still on the hook and accrues fees if they don't pay but I also thought the federal government literally paid to keep the bank whole.

Re: Tuition costs have risen 710% since 1983

#247

Post by relaxing »

abeppu wrote: post #203
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…

Thanks for pointing this out -- I've heard some people back this claim, but I still find it confusing. In a graph in that wikipedia article, we see that from 1998-2018, average hourly earnings increased by less than 100%, but tuition increased by more than 150%. If wages for university staff (who aren't becoming more productive) are rising to match wages for those who _are_ becoming more productive, why should tuitio…

Much of the money is going to construction or capital improvements, i.e. shiny new buildings.

Now look at the board of trustees of your local University, and play spot the construction firms...

Re: Tuition costs have risen 710% since 1983

#248

Post by pixelatedindex »

tempsy wrote: post #119
kortilla wrote: post #115

Earlier quoted context omitted.

This is wrong. You’re mixing up subsidized loans with the ability to get loans. People can get unsubsidized loans that still come with the same constraints around inability to discharge in bankruptcy for vastly more money. It’s essentially all unsecured student loans (i.e. effectively the entire student loan market) that have this risk free model for lenders. It would all be completely toxic trash otherwise that no l…

No its not Literally says "Subsidized and Unsubsidized Aggregate Loan Limit $31,000-No more than $23,000 of this amount may be in subsidized loan" Just confirms most people have no clue how small the limits actually are.

That’s the limit directly from the government. Depending on what you’re studying for, that might end up being lower than what you actually need.

For instance, when I was in college (undergrad) I took the maximum, but it wasn’t enough for me to pay tuition, rent, etc. Also those loans don’t pay during the summer, so you’ve to budget for that as well. My part time job tended to cut hours because there’s a high influx of kids who also want summer jobs, which meant less money overall for me. I ended up taking some more loans from Wells Fargo to make ends meet.

In hindsight, I should have got a better job instead of retail - some sort of office job. But I didn’t have a car, so I was limited in how far I could go.

Re: Tuition costs have risen 710% since 1983

#249

Post by mrguyorama »

patrickthebold wrote: post #165
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…

"Able to pay", but where is the "Want to pay?" I feel you also need to argue: "18 year olds don't realize they are being ripped off", or "college is actually worth that much". It's probably a different answer for different students.

Society is better off as a whole with a well educated populace. We shouldn't optimize for college only for kids who can learn to program or whatever.

Most other developed nations manage to send every smart kid to college for ten thousand dollars per kid or less. Once again, it is only the US that thinks it is a special butterfly that can't somehow manage to give kids college. Sure, most European colleges don't spend one billion tax dollars on a football stadium, but that is also a good thing.

And no, those sports complexes largely DON'T pay their own way. A significant amount of college sports don't make much money, and don't give it back to the campus as a whole, and that's WITH literal free labor of NCAA athletes.

Re: Tuition costs have risen 710% since 1983

#250

Post by timfsu »

SamBam wrote: post #179
za3faran wrote: post #149

Earlier quoted context omitted.

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.

Serious question: what would incentive anyone to lend to people who have any risk at all (i.e. everyone)?

The same incentive you'd have to do something for someone without receiving payment - a desire to help. I'd imagine the fact that people in that time had stronger familial ties to others in their village also helped increase payback rates.
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