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Why Is College in America So Expensive?

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Re: Why Is College in America So Expensive?

#341

Post by topkai22 »

jayd16 wrote: post #327
topkai22 wrote: post #285

Earlier quoted context omitted.

Also it’s almost impossible for private entities to compete with heavily subsidized public institutions on price, so they need to compete in other ways, like superior marketing, ease of financing, or “quality” If states let their subsidies flow to private institutions on a per student basis, you could get some interesting results, but frankly I think community colleges are already so efficient it’s a crowded market.

>Also it’s almost impossible for private entities to compete with heavily subsidized public institutions on price, so they need to compete in other ways, like superior marketing, ease of financing, or “quality” The entire argument is that they would be cheaper. You could argue they might be better but saying they can't compete on price just concedes the point.

Old thread now, but the reason I said they can’t compete on price is states subsidize state universities to the tune of $7100/student/year (https://www.cbpp.org/research/state-budget-and-tax/funding-d...) (some of that goes to grants transferable to private institutions but I don’t think it is much)

If you instantly dropped that subsidy and increased per student tuition at state schools by $7000 (I don’t recommend this) there would quickly be private options strongly competing on price I bet.

Re: Why Is College in America So Expensive?

#342

Post by oconnor663 »

batiudrami wrote: post #340
oconnor663 wrote: post #330

Earlier quoted context omitted.

I'm curious about this thought experiment when people are discussing the pros and cons of user pays: > Imagine that in 2019 someone invents a perfect artificial heart, which has zero risks or complications, reliably giving 5 or 10 extra years of life to typical elderly patients with heart issues. The downside is that it has to be made out of a giant diamond and so it costs $100 million. How do we decide who gets one?…

It's an okay thought experiment but I don't think it's especially valuable when the reality is closer to "we take an additional 1-2% of your taxable income in return for people being confident that they can go to the hospital if they need to". Which is where we're at, not $100M hearts. Of course there are issues with it. Government inefficiency, people taking up GP time when they don't need to, over-prescription push…

That is where we're at, but the word "exponential" makes me worry that it won't be where we're at for very long.

Re: Why Is College in America So Expensive?

#343

Post by afpx »

kansface wrote: post #179
fzeroracer wrote: post #102

Earlier quoted context omitted.

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…

> The free market does not work in all situations. Sure, but you did not enumerate a single free market. I'd wager the US healthcare industry is far and away the most regulated market in the entire world. We know that regulation protects the big players at the expense of their would be competition and drives up profits. Colleges are hardly any better, and ISPs are nearly all monopolies granted by municipalities in ex…

Three honest questions:

1. Is there a place that is deregulated enough that it can be used as an example?

2. If so, does that place significantly outperform all others?

3. If so, what holds back the people in more regulated areas from adopting that type of system?

Re: Why Is College in America So Expensive?

#344

Post by batiudrami »

oconnor663 wrote: post #342
batiudrami wrote: post #340

Earlier quoted context omitted.

It's an okay thought experiment but I don't think it's especially valuable when the reality is closer to "we take an additional 1-2% of your taxable income in return for people being confident that they can go to the hospital if they need to". Which is where we're at, not $100M hearts. Of course there are issues with it. Government inefficiency, people taking up GP time when they don't need to, over-prescription push…

That is where we're at, but the word "exponential" makes me worry that it won't be where we're at for very long.

I think we're likely to cap out on a quality of life front before it becomes genuinely affordable. Bodies still break down over time, even if we're able to prolong lives a little through modern medicine.

Re: Why Is College in America So Expensive?

#345

Post by ionised »

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…

> 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).

Because not everyone thinks the free market is a solution to all our problems.

Re: Why Is College in America So Expensive?

#346

Post by lucideer »

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…

> 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).

Because competition and central control optimise for different "ideal" outcomes: we often reach for central control when the market fails to optimise for the desired "ideal".

This ideal is different in each case, but is usually largely differentiated on the basis of income inequality. Even a perfect market can't bring about perfect wealth distribution, and central control of education aims for universal access. Market-based price control will produce lower education costs, but only to include an income bracket that provides optimum profits, rather than universal accessibility.

> By it's nature, anything the government subsidizes is going to be taken advantage of.

This isn't entirely true: only unregulated subsidy has this flaw. The problem with many purported small-government advocates is they lobby for removal of regulation without removal of subsidy. One requires the other.

> Schleicher at the OECD. “It’s the inevitable outcome of an unregulated fee structure.”

In this particular quote, Schleicher seems to advocate for central control via regulation, rather than removal of subsidy.

Re: Why Is College in America So Expensive?

#348

Post by brownbat »

rayiner wrote: post #284
brownbat wrote: post #280

Earlier quoted context omitted.

> The AMA is a trade guild that restricts the supply of doctors. Technically the supply of doctors is throttled by residency programs, the numbers of which are determined by an incredibly weird dance between Congress and hospitals. Your point stands, but just noting that simple monopolistic graft would be far more rational than how this actually works.

It’s not that “incredibly weird.” Medicare doesn’t reimburse for residents unless a teaching physician is also present. Because that dramatically limits hospitals’ incentives to train physicians, Medicare pays hospitals a certain amount to support training residents. To limit how much is paid under that program, the number of residents Medicare will pay for is capped. It’s not irrational, but an example of how a seri…

You're skipping past the congressional funding negotiations that set up those rules, and the motivations of hospitals to create the conditions supporting either funded or unfunded slots.

Sure, we can slice off portions of this process and explain the decisions of individuals, but there are so many players with motivations independent of the outcome it's not a clean line.

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