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Tuition costs have risen 710% since 1983

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Re: Tuition costs have risen 710% since 1983

#401

Post by Scarblac »

somewhat_drunk wrote: post #87
basisword wrote: post #26

Earlier 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/

Paraphrasing the Onion -- "This policy doesn't work", agree politicians on both sides of the aisle in only country that has this problem.

Re: Tuition costs have risen 710% since 1983

#402

Post by SideQuark »

lr4444lr wrote: post #71
SideQuark wrote: post #38

Earlier quoted context omitted.

A better method to analyze college cost is to look at expected lifetime income gain for a college degree vs not having one. If it's significantly net positive, then college is a good investment. Since 1980, that has gone up a lot. This method is

Why is that better? Non graduates also have loan expenses for other things, e.g. businesses or mortgages acquired sooner. You'd want to compare paychecks net of debt payments to look at workable income.

College is either a good investment, or it is not. To evaluate, you look at expected returns, just like any investment.

Last time I ran numbers, it was one of the best investments one could make; better return than historical stocks, real estate, or just about any similar volatility asset class.

You also might want to figure in lifetime expected unemoloyment- there's usually a decent gap between college degreed unemployment rates vs non-degreed rates.

And the gains given to skilled vs unskilled are only increasing.

Re: Tuition costs have risen 710% since 1983

#404

Post by yardie »

aidenn0 wrote: post #183
codegeek wrote: post #41

It is free money for lenders because backed by the Govt AND protected against bankruptcy. It is Free money for colleges because they know they will get paid regardless. Remove this "free money guarantee" and watch how market corrects itself. When students can file for bankruptcy and/or the debt is not guaranteed by Govt, lenders would now use the same criteria they use to issue credit cards to 18 year olds. Hint: It'…

> Hint: It's tough to get your 1st credit card if you have no credit history in the US and most lenders will not even entertain that idea. Some will do if you put in a collateral like $500 of actual cash deposit to guard against the default risk. Is that true these days? At my university 20 years ago, the credit card companies would bribe 18-year-old freshmen to sign up for their cards.

I had an unsecured student credit card, 20 years now. Its limit was $800, no deposit required; just enough to pay for books, lab supplies, and a few meals. I know because I kept it as my last resort emergency card all these years later. Or use it on sketchy kiosk/online shopping sites. Every few years BoA asks me to increase the limit, which I decline to do.

I'm still FB friends with the girl that gave me a free t-shirt for signing up. LOL.

Re: Tuition costs have risen 710% since 1983

#405

Post by gottorf »

pixelatedindex wrote: post #341
somewhat_drunk wrote: post #87

Earlier quoted context omitted.

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/

Sometimes it feels like economists come up with these ideas in an ivory tower, detached from reality. Any kind of price control seems to make economists very upset, rent control being another example. Reality is that there are so many other factors that it’s probably better to have some sort of price control as a form of regulation, instead of only focusing on supply/demand levers. I’m not an economist so I’m happy t…

> Any kind of price control seems to make economists very upset, rent control being another example.

They're probably upset the same way that climate scientists get upset when people dispute climate change; that is, it's a widely-studied phenomenon by economists of all political persuasions with lots of evidence to back it up.

A price ceiling causes a shortage, like cars lining up at gas stations during the 70s oil crisis or the 10+ years of wait time in Stockholm apartments. A price floor causes a surplus, like unemployed workers at the minimum wage.

Re: Tuition costs have risen 710% since 1983

#406

Post by HKH2 »

throwaway29812 wrote: post #354
JamesLeonis wrote: post #276

Earlier quoted context omitted.

> Now I read that Wall Street is creating CDO's based on these loans The official term is SLABS: Student Loan Asset Backed Securities. Here's a recent paper on the subject. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3631953

Have we learned...nothing?

Well, students can't default on their loans, so this time round it's more interesting.

Re: Tuition costs have risen 710% since 1983

#408

Post by gaoshan »

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…

If that's the case, that the federal government backing the loans is what permits the increases, then why not just have the federal government pay up front and cut out the loan portion? Might give them more power to negotiate lower prices. Though I suppose the loan industry wouldn't like getting cut out of their middleman position, eh, and politicians probably wouldn't stand for that egregious cutting of profits.

Re: Tuition costs have risen 710% since 1983

#409

Post by jbverschoor »

throwaway29812 wrote: post #354
JamesLeonis wrote: post #276

Earlier quoted context omitted.

> Now I read that Wall Street is creating CDO's based on these loans The official term is SLABS: Student Loan Asset Backed Securities. Here's a recent paper on the subject. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3631953

Have we learned...nothing?

We learned that people like to gamble and that it’s easy to push things forwards. Also, better jump on the loan band wagon, or you’ll be left out. Anyone without a mortgage + houw which appreciated has basically been robbed by people who do

Re: Tuition costs have risen 710% since 1983

#410

Post by rqtwteye »

Xeronate wrote: post #230
willcipriano wrote: post #180

Earlier quoted context omitted.

Most people desire not being poor over most other things.

There are a lot of ways to make money. Picking a job based on money is a good way to be absolutely miserable. My parents pushed me towards making money my entire life and there is nothing I regret more than following that advice. Every day I wake up dreading going to work and it seeps into every aspect of my life.

You may regret it even more if you hadn’t made money.
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