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Tuition costs have risen 710% since 1983

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Re: Tuition costs have risen 710% since 1983

#51

Post by dantheman »

basisword wrote: post #26
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 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.

They could easily limit the loan size...

Re: Tuition costs have risen 710% since 1983

#52

Post by chiefalchemist »

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…

The loans:

1) Increased demand.

2) Increased what the market could bear.

The result is Economic 101. There are no surprises here.

p.s. Note: Roughly the same applies to mortgages. The idea that more affordable mortgages (i.e., 30 yr) was going to make homes more affordable, is comical at best. With a relatively fixed supply, increasing demand is only going to have one effect on price. And the solution? The 40 yr or 50 yr mortgage.

Round and round we go.

Re: Tuition costs have risen 710% since 1983

#54

Post by londons_explore »

I'd like to see a new funding model for universities.

I'd like to see universities be able to register for a share of tax revenue from their students post-graduation.

For example "This course costs 5% extra income tax for 20 years".

Then, you pay nothing for the course, but after you graduate you pay a 5% higher tax rate, and that extra money goes to the university. The IRS would administer the scheme since they already have to do all the math anyway for every taxpayer.

This gives the university a strong incentive to make sure their students are productive. They'll help push students into studying finance rather than 'soccer studies'.

Obviously the university needs money now, not in 20 years, but private lenders can help cover that gap (and then the lender also has an incentive to make sure the university is doing a good job educating students).

Re: Tuition costs have risen 710% since 1983

#55

Post by solarmist »

drunner wrote: post #37
toomuchtodo wrote: post #2

The only service category that has outpaced higher education is hospital services. https://www.aei.org/carpe-diem/chart-of-the-day-or-century/

Related: https://www.aei.org/carpe-diem/chart-of-the-day-administrati... I always thought the issue was in admin body count. However, just picking the largest universities in Germany and US on wikipedia we see: Ludwig Maximilian University of Munich Academic staff: 5,565 Administrative staff: 8,208 Students: 51,606 Michigan State University Academic staff: 5,703 Administrative staff: 7,365 Students: 49,809 Those look…

Limited budget vs uncapped budget.

The way student loans are structured is the cause.

Re: Tuition costs have risen 710% since 1983

#56

Post by ourmandave »

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'…

If you don't repay your student loan, it dies with you.

They won't go after your estate for the balance.

Re: Tuition costs have risen 710% since 1983

#57

Post by macdaknife »

tempsy wrote: post #45
taeric wrote: post #24

Earlier quoted context omitted.

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…

Eh I think the impact of the federal government on undergraduate costs is largely overstated. The limits for dependent students, which is most undergrads, is really small over 4 years. https://studentaid.gov/understand-aid/types/loans/subsidized... You can only borrow $31k over 4 years. That isn't a lot at all.

I would disagree that 31K is not a lot of money, but then again, maybe it is not a lot of money and my opinion is warped. I think if the government took a few points off for performance as a preferred return on the massive endowments, all of this would go away.

Re: Tuition costs have risen 710% since 1983

#58

Post by somewhat_drunk »

Night_Thastus wrote: post #49
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…

It's unfortunate, but to me this feels like half of the root of the problem. One half is easy access to loans, the other half is student debt relief programs. Between the two, colleges know they can charge absurd prices and pocket the money. It's awful, and I wish someone was doing something to stop this. It cannot go like this forever.

>the other half is student debt relief programs

...which student debt relief programs?

Afaik there are no widely used student debt relief programs.

Re: Tuition costs have risen 710% since 1983

#59

Post by chiefalchemist »

GartzenDeHaes wrote: post #36
taeric wrote: post #24

Earlier quoted context omitted.

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…

> lenders that are taking on too much risk The lenders are taking no risks since these loans cannot be discharged through bankruptcy. There are also very large late fees and penalties that can triple (or more) the amount owed.

In other words, the government gave the leaders license to do "predatory".

Re: Tuition costs have risen 710% since 1983

#60

Post by hospitalJail »

bmau5 wrote: post #4
toomuchtodo wrote: post #2

The only service category that has outpaced higher education is hospital services. https://www.aei.org/carpe-diem/chart-of-the-day-or-century/

And interestingly both have predominantly grown in "administrative" costs

No no don't let the Physician cartel get out of this.

Year over year they get at least 5% pay increases with US tax dollars. Not to mention, they get private pay increases by weaponizing the ACGME to keep residency slots low.

Residency does not need to be paid. Outside of the Medical industry, people pay for their college. For some reason Physicians make tax payers pay for their education and a decent salary.

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