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The College-Cost Calamity

economist.com

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Re: The College-Cost Calamity

#61

Post by LockeWatts »

stevencorona wrote: post #9

The craziest part, IMO, is that I had to make a decision whether or not to take on $175,000 in debt (I went to RIT, it costs $44,000 per year) when I was 18 years old and had never handled more than $300. Sure! Sign me up! I couldn't even imagine what that much money would look like, let alone feel like to pay back- at that time, it was as equally mysterious as $10,000 or $1,000,000. Luckily, I left after my 2nd year…

I couldn't even imagine what that much money would look like, let alone feel like to pay back- at that time, it was as equally mysterious as $10,000 or $1,000,000.

Really? You were so disconnected from numbers that you couldn't tell the difference between 10^4 and 10^6?

I've never understood that argument. I'm 19, and last year I could comprehend this. It's not particularly difficult to run the math versus your expected salary, cost of living, etc.

Re: The College-Cost Calamity

#62

Post by stevencorona »

dfc wrote: post #13
stevencorona wrote: post #9

The craziest part, IMO, is that I had to make a decision whether or not to take on $175,000 in debt (I went to RIT, it costs $44,000 per year) when I was 18 years old and had never handled more than $300. Sure! Sign me up! I couldn't even imagine what that much money would look like, let alone feel like to pay back- at that time, it was as equally mysterious as $10,000 or $1,000,000. Luckily, I left after my 2nd year…

Why did two years cost $50k but four years costs $175k? (2/4 != 50/175) As far as the $300 goes I take it you never worked in high school?

No one really pays sticker price for college. I had some grants, financial aid, and (like someone else mentioned), the co-op program helped pay for some of my tuition.

I did work, at Target, making minimum wage. One full-time paycheck was about 300 bucks, give or take. Since I supported myself, that money was used on car/food/gas. So, 300 bucks was the most I'd ever seen.

Re: The College-Cost Calamity

#63

Post by hackinthebochs »

brazzy wrote: post #38
netcan wrote: post #33

Earlier quoted context omitted.

Sarcasm aside, yes. The Aussie HECS system is more like the European style systems than american ones where universities compete in a semi-free market. Unis get paid a set amount per student. Student contributions are a fixed contribution to the total. Including the subsidized loans but not including founding & research grants to Universities, they account for about 25% of total costs, an incentive to take it serious…

It seems to me that the bizarre excesses of the "education bubble" are the direct result of a free market in education and prove that it's a bad idea. Education is not something where there should ever be an attempt to capture the consumer surplus.

The education bubble is in fact caused by the opposite of the free market. On one end you have government subsidies and no corresponding price controls which inflate demand and drive up prices. On the other end you have no negative feedback mechanism in terms of shedding the debt in bankruptcy for degrees that turn out to be worthless.

There is no downside for institutions to continually inflate prices, so they do. Incentives run the world.

Re: The College-Cost Calamity

#64

Post by stevencorona »

tsotha wrote: post #29
stevencorona wrote: post #9

The craziest part, IMO, is that I had to make a decision whether or not to take on $175,000 in debt (I went to RIT, it costs $44,000 per year) when I was 18 years old and had never handled more than $300. Sure! Sign me up! I couldn't even imagine what that much money would look like, let alone feel like to pay back- at that time, it was as equally mysterious as $10,000 or $1,000,000. Luckily, I left after my 2nd year…

Why in the world would you go to a college that costs that much if you weren't rich?

Right? And if I had to make the decision now, I wouldn't do it. But when you're 18, your parents opinion carries alot of weight- and I had parents that were telling me- STEVE you absolutely cannot be successful without a degree. A degree is everything. It's everything!

And as an ignorant 18 year old, I had no idea what a $175,000 loan really meant. Everyone does it, right? So it must not be that bad.

Re: The College-Cost Calamity

#65

Post by stevencorona »

LockeWatts wrote: post #61
stevencorona wrote: post #9

The craziest part, IMO, is that I had to make a decision whether or not to take on $175,000 in debt (I went to RIT, it costs $44,000 per year) when I was 18 years old and had never handled more than $300. Sure! Sign me up! I couldn't even imagine what that much money would look like, let alone feel like to pay back- at that time, it was as equally mysterious as $10,000 or $1,000,000. Luckily, I left after my 2nd year…

I couldn't even imagine what that much money would look like, let alone feel like to pay back- at that time, it was as equally mysterious as $10,000 or $1,000,000. Really? You were so disconnected from numbers that you couldn't tell the difference between 10^4 and 10^6? I've never understood that argument. I'm 19, and last year I could comprehend this. It's not particularly difficult to run the math versus your expec…

Yes. Maybe you're a particularly savvy 19-year old, but when I was 18 those two numbers were as equally unfathomable to me. I'm not saying I couldn't tell the difference, I'm just saying that they were so large and incomprehensible, it didn't matter.

It's the equivalent of trying to wrap your head around the difference between 1 billion and 1 trillion dollars. Sure, I can SEE the difference, but really can't comprehend it, even though they are orders of magnitude apart.

Re: The College-Cost Calamity

#66

Post by dfc »

stevencorona wrote: post #62
dfc wrote: post #13

Earlier quoted context omitted.

Why did two years cost $50k but four years costs $175k? (2/4 != 50/175) As far as the $300 goes I take it you never worked in high school?

No one really pays sticker price for college. I had some grants, financial aid, and (like someone else mentioned), the co-op program helped pay for some of my tuition. I did work, at Target, making minimum wage. One full-time paycheck was about 300 bucks, give or take. Since I supported myself, that money was used on car/food/gas. So, 300 bucks was the most I'd ever seen.

If nobody pays sticker price for college why did you use the sticker price when discussing how much debt you chose not to accept?

Re: The College-Cost Calamity

#67

Post by SideburnsOfDoom »

tom_b wrote: post #59
SideburnsOfDoom wrote: post #44

Earlier quoted context omitted.

The article hardly even mentions a very real risk to Ivy league Universities - that they will be challenged from below by Khan, Coursera, and Udacity and the like. Ivy-covered buildings and in-person lectures cost a lot to keep going. As the article states, Universities are typically in debt and student fees are rising. "Disruption" is an overused buzzword but it may apply in this case. Universities trade of the fact…

The Ivies are actually selling exclusivity by attendance along with acting a filter for employers: only the absolute top students have any chance of being admitted and physically attending. The quality of education obtained at the Ivies is not part of that. An interesting question to consider is whether admissions to Ivies followed by independent, autodidact study can work around the actual attendance. "Here is my on…

Disruption happens from the low end up. MP3 players supplemented but didn't challenge CDs because they didn't have the same sound quality ... until they did challenge CDs, and now CD sales are in steep decline. It turns out that people valued having 10 000 tunes in their pocket more than the audio quality, and the audiophiles could use FLAC or high-bitrate MP3.

There's nothing stopping the online-U's from eventually working on reproducing or circumventing the Ivies' specific advantages.

Another outcome to look out for would be for cash-strapped Ivies to be hollowed out. i.e. become a cluster of buildings where students log on and do work online in exchange for an attendance certificate. That would preserve the quality of education and the social advantages of the university, while costing less. It would work, at least for a while until the next generation sees through the archaic model.

Re: The College-Cost Calamity

#68

Post by tzs »

16s wrote: post #45

My advice is to go to a college that you can afford. I spent my first two years at a local community college and transferred 60 credit hours (about half of what's needed to graduate) to a large state university where I graduated Phi Beta Kappa with honors and I only had about 15K in student loan debt. I could have avoided the loans entirely if I had worked a few more part time jobs. You don't have to go to a high-pri…

That $15k in student loan debt is higher than the average loan debt at graduation at many high-priced private universities. Harvard, Yale, Princeton, Caltech all average $10k or under, and MIT and Stanford average under $15k.

The averages are the averages of those who borrowed, which for most of those schools is about 50% of the students (about 25% at Princeton), so half the students at these high-priced private schools are graduating without any debt.

These are 2010 numbers. The numbers are probably lower now at some of them. Stanford, for instance, waives tuition completely for students whose families make under $100k.

By all means consider affordability when choosing a school--but don't assume that you can't easily afford a high-priced private university just because the sticker price is in the stratosphere.

Re: The College-Cost Calamity

#69

Post by brianto2010 »

tsotha wrote: post #29
stevencorona wrote: post #9

The craziest part, IMO, is that I had to make a decision whether or not to take on $175,000 in debt (I went to RIT, it costs $44,000 per year) when I was 18 years old and had never handled more than $300. Sure! Sign me up! I couldn't even imagine what that much money would look like, let alone feel like to pay back- at that time, it was as equally mysterious as $10,000 or $1,000,000. Luckily, I left after my 2nd year…

Why in the world would you go to a college that costs that much if you weren't rich?

Co-op program. And networking.

A lot of companies see RIT as a huge talent pool, and dedicate quite a bit of recruiting resources to look for potential interns and full-timers. Plus, you'll find peers that you can use to develop your professional network.

Re: The College-Cost Calamity

#70

Post by pbiggar »

Daniel_Newby wrote: post #56
pbiggar wrote: post #12

Earlier quoted context omitted.

Indentured servitude (defined by the UN to be slavery) is nothing like taking on debt to go to college. Two components of indentured servitude is that they do not permit you to leave your work until you have paid the debt, and secondly that they charge you so that you can never escape your debt. A final onerous part of real indentured servitude is that debt can be passed to your children, and many generations can be…

You are badly misinformed. Indentured servitude is a contract to serve for a fixed term in exchange for large up-front compensation. It is not a financial debt but a performance obligation, and cannot be inherited.

I have stated my source in another comment. Indentured servitude is of course used a various points in history to refer to different things. But I am not "badly misinformed" - I have read a decent amount about modern day slavery, if you believe me to be wrong, please state a source. Mine, as stated above, was a book on slavery by the head of the "Free the Slaves" organization.
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