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Why has college gotten so expensive in the last 30 years? A blank check in 1993

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Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#471

Post by gravypod »

jlebar wrote: post #437

The central claim in TFA is that when the government gives out loans directly, instead of guaranteeing loans made by banks, it's easier for students to get student loans, and therefore college prices go up. a) Zero evidence is provided in TFA that it is in fact easier for students to get loans under the government program. I could make an equally compelling argument and say, when the private sector provides loans gua…

> If they had, you might have doubted their claim that this is the reason that college costs $50+k/yr.

I think of this more as a capacity problem. Let's say every student has the capacity to pay for ~15k in schooling. If you have ~15k in spending power you can almost always find someone who will lend to you at around 2x your spending power. Because of this you can probably find someone to give you 30k on top. After that the government gives you an extra 5K of deferred loans.

Suppose people couldn't get that last $5k from the government. No one in the country could come up with the money. Would colleges close down?

If they wouldn't close down, and they would instead make adjustments to their pricing, then you can reasonably say that the government involvement here is making SOME change to the market effects.

We might argue here about numbers and percents but it's pretty evident: if your consumer base has a higher purchasing power you can extract more money from them. There's a load of MacOS devs that make a living selling $10 utils that can attest to this.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#472

Post by hadrien01 »

dragonwriter wrote: post #467
jlebar wrote: post #437

The central claim in TFA is that when the government gives out loans directly, instead of guaranteeing loans made by banks, it's easier for students to get student loans, and therefore college prices go up. a) Zero evidence is provided in TFA that it is in fact easier for students to get loans under the government program. I could make an equally compelling argument and say, when the private sector provides loans gua…

> c) TFA neglects to mention that you can take out up to $5500-7500 in government loans per year as an undergrad. https://studentaid.gov/understand-aid/types/loans/subsidized... . Your own source says $5,500-$12,500, not $5,500-$7,500.

I get a 404 on that studentaid.gov link

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#473

Post by freetime2 »

jlebar wrote: post #437

The central claim in TFA is that when the government gives out loans directly, instead of guaranteeing loans made by banks, it's easier for students to get student loans, and therefore college prices go up. a) Zero evidence is provided in TFA that it is in fact easier for students to get loans under the government program. I could make an equally compelling argument and say, when the private sector provides loans gua…

Also - what about the agency of students (and their parents) when deciding which school to attend and whether or not they can afford the loan? This article makes it sound as if it's purely the amount the lender is will to loan that determines the market price, but I would imagine the amount the student is willing to borrow must also play a pretty significant part.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#474

Post by cmwelsh »

quietbritishjim wrote: post #463
bjt wrote: post #458

Earlier quoted context omitted.

> the government does not succeed if students are stuck in debt forever. Therefore when government gives the loans, incentives are aligned and lending goes down. That's a double edged sword. Yeah, the government doesn't have the profit motive that predatory lenders do, but they also lack the incentive to say no to students who are borrowing money to study things that won't do much to help them pay it back. Politician…

In a system of loans directly from the government, there is still some mild disincentive against lending to people that won't pay it back, even if it is tempered against some other incentives. What's more, a government body certainly can and surely would limit total loan amounts for affordability reasons. More to the point, the comparison here is against regular private lenders, but instead against private lenders wi…

> What's more, a government body certainly can and surely would limit total loan amounts for affordability reasons.

Interesting in this regard - the macro picture shows that the majority of the USA’s assets are these loans. Let’s hope they can all pay us back!

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#475

Post by philwelch »

jldugger wrote: post #332
philwelch wrote: post #93

Earlier quoted context omitted.

IQ tests aren’t blanket-banned; they just have additional hurdles. For instance, the Wonderlic test is routinely used in hiring contexts and is even part of the NFL scouting combine.

While the Wonderlic published, is it even used as a factor? Does a coach say "no linebackers who scored less than 18?"

There’s actually rumors of upper limits because smart guys are perceived as harder to coach. For playbook memorization and decision-making though, high Wonderlic scores are usually expected for offensive line and QB’s.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#476

Post by rscho »

noetic_techy wrote: post #34

"The question then becomes a matter of how we fix this without diminishing access to a college education." This is the crux of it that everyone needs to get over. Universality, High Quality, Low Cost. Pick two. By letting the government meddle you have guaranteed no one can afford college and will be long in debt to a loan they cannot discharge in bankruptcy. I'd rather have cheap college then universal access for ev…

> Universality, High Quality, Low Cost. Pick two.

Or, move to the Old Continent and pick 3...

Although fees are indirectly increasing in Europe as well. But it still is massively more affordable than in the US. Hopefully, we'll manage to keep it that way.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#477

Post by hansvm »

lotsofpulp wrote: post #330
jldugger wrote: post #325

Earlier quoted context omitted.

> Americans expect college campuses to be like resorts You say that but the typical dorm room offers no privacy or air conditioning, and the showers and bathrooms are shared. They're similar in nature to SROs which the US pretty much abolished anywhere else, but way more expensive. And then universities have the audacity to demand that students live in them freshman year, even though living off campus would be cheape…

And they force the students living in them to purchase meal plans which cost 3x what a restaurant meal would cost for defrosted food from Aramark/Sodexo. Obviously someone is getting paid.

Last time I ran the numbers at my alma mater, the mandatory meal plans were (in most circumstances) more expensive than paying cash for the same meals at the same dining halls.

There were a few low-end restaurants on campus too (sandwiches, wraps, pizza, burgers, etc) that were both better and far cheaper than the dining halls. Their defining characteristic was that you couldn't spend your dining dollars there.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#478

Post by WalterBright »

jlebar wrote: post #437

The central claim in TFA is that when the government gives out loans directly, instead of guaranteeing loans made by banks, it's easier for students to get student loans, and therefore college prices go up. a) Zero evidence is provided in TFA that it is in fact easier for students to get loans under the government program. I could make an equally compelling argument and say, when the private sector provides loans gua…

> Its incentives are aligned

Not with the students. Students generally don't vote and don't contribute to political campaigns.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#479

Post by unishark »

quietbritishjim wrote: post #463
bjt wrote: post #458

Earlier quoted context omitted.

> the government does not succeed if students are stuck in debt forever. Therefore when government gives the loans, incentives are aligned and lending goes down. That's a double edged sword. Yeah, the government doesn't have the profit motive that predatory lenders do, but they also lack the incentive to say no to students who are borrowing money to study things that won't do much to help them pay it back. Politician…

In a system of loans directly from the government, there is still some mild disincentive against lending to people that won't pay it back, even if it is tempered against some other incentives. What's more, a government body certainly can and surely would limit total loan amounts for affordability reasons. More to the point, the comparison here is against regular private lenders, but instead against private lenders wi…

I believe private lenders require cosigners or else proof of income. I don't see how they can win here. You'd have them discriminate in giving loans based on some kind of lifetime prediction of someone's earnings? I'm sure that would go over well.

Schools need to be the adults in the room, since they getting most of the money after all. And that will only be motivated by having them take the financial hit if students default.

Re: Why has college gotten so expensive in the last 30 years? A blank check in 1993

#480

Post by rscho »

georgeecollins wrote: post #127
Dannymetconan wrote: post #40

Earlier quoted context omitted.

Universities in Europe are generally high quality and low cost. It does have it's problems but it is not one or the other. You do not need a degree 30 years ago to do lots of jobs that now require one. Higher education for a lot of organizations is just an easy way to cut the application stack down

Are Universities in Europe really that high quality? Certainly some are, but as a parent researching schools I have been really surprised by how many European colleges are a bit mediocre by the criteria I was evaluating. For example, Spain and Italy have some of the oldest colleges in the world. But in many ways there are four or five colleges in California that are better, four or five colleges in Texas, and across…

Europe educates people. The US let you believe your child can bring in his little league bat and get to play with the Yankees.

I'd be most surprised if the progress you make as a student was correlated to having the rock stars of the field in your school. In the age of the internet, if you're good and motivated you can work with pretty much anyone in the world.

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