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Tuition costs have risen 710% since 1983

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Re: Tuition costs have risen 710% since 1983

#681

Post by 1vuio0pswjnm7 »

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…

This was predicted by the then Secretary of Education in 1987.

https://www.nytimes.com/1987/02/18/opinion/our-greedy-colleg...

Here is something interesting:

https://www.ed.gov/category/keyword/borrower-defense

Re: Tuition costs have risen 710% since 1983

#682

Post by brnaftr361 »

recursivedoubts wrote: post #663
imtringued wrote: post #489

Earlier quoted context omitted.

Literally all they have to do is limit the maximum loan size. Max $50k per year. Anything beyond that is not subsidized or requires proof of academic performance or ability to repay.

The max should be 20k per year, maybe even 15k. I teach part time at a relatively affordable public university and the waste, inefficiency and bureaucracy takes my breath away. Limit loans to 15k/60k lifetime and make them forgivable. You would be amazed at how focused, productive and inexpensive higher education could get.

You'd probably need to do that. I pay $6k/sem for my university tuition, but it seems that what doesn't go towards tuition gets sucked up by slumlords or university room and board, so pressing down tuition prices alone doesn't seem like a feasible option. Limiting the overall liquidity, I think, would dramatically improve things.

It's either that or enrollment drops off a cliff because the college proposition is so off the rails. That appears to be the current trend, I believe.

Re: Tuition costs have risen 710% since 1983

#683

Post by loeg »

captaincrisp wrote: post #676
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…

Some of the interest rates I've seen on federal student loans - 7+% - seem exorbitant in general but particularly because the lender takes no risk. 7% interest on a loan in a year with 3% inflation (the real cost of having money that year) that is guaranteed to be repaid seems like evidence of corruption to me. But maybe I think too simplistically.

It's not true to say the Federal government does not take on risk loaning to students. Students are frequently unable to pay. 7% probably does not cover costs.

Re: Tuition costs have risen 710% since 1983

#684

Post by Red_Leaves_Flyy »

musicale wrote: post #651
erickhill wrote: post #566

Earlier quoted context omitted.

Reminds me of our healthcare system. And military contractors. And..

Extra layers of payment indirection seem to invite overcharging. Note that universities also basically act as a cartel.

Pharmacy benefits managers provide no value and collect absurd fees. Perhaps companies should be required to justify their continued existence if subject of consumer complaints.

Re: Tuition costs have risen 710% since 1983

#685

Post by malfist »

RyanAdamas wrote: post #258
malfist wrote: post #218

Earlier quoted context omitted.

> can't join the drunken sexfest that is modern military service Wait, what did I miss?

Apparently you missed being social. Having worked with a number of vets it's absolutely true. Here, in case you missed this too: https://www.npr.org/sections/alltechconsidered/2014/11/19/36...

Sexfest is different from sexist

Re: Tuition costs have risen 710% since 1983

#686

Post by AngryData »

tylerhou wrote: post #193
GartzenDeHaes wrote: post #36

Earlier quoted context omitted.

> 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.

Student loans can be discharged through bankruptcy, if you pass hardship requirements. - https://studentaid.gov/manage-loans/forgiveness-cancellation... - https://www.consumerfinance.gov/about-us/blog/busting-myths-...

Do we have any numbers for how many applicants get their debt forgiven? The requirements seem pretty wishy-washy and easy for courts to just deny out of hand if they want. And while that could go both ways for someone, Americans in general are pretty obsessed with people paying debts in full regardless of how fair or not or manipulative or scammy the deal originally was or the circumstances that brought it about.

Every other debt having your bankruptcy approved is proof enough that you were under undue hardship and couldn't crawl your way back out. But student loans are special and need further proof, which means they are definitely not that easy to get out from.

Re: Tuition costs have risen 710% since 1983

#687

Post by rayiner »

mistrial9 wrote: post #329
rayiner wrote: post #39

Earlier quoted context omitted.

What "lenders," and what "market" are you talking about? 92% of all student debt was issued by the federal government. As a matter of social policy, the government does not meaningfully consider credit risk when issuing student loans.

where does that exact figure come from?

https://www.bestcolleges.com/research/average-student-loan-d...

Look at footnotes 1 and 3, which rely on the Department of Education’s and the Fed’s own numbers. $1.64 trillion/1.77 trillion = 92.6%.

Re: Tuition costs have risen 710% since 1983

#688

Post by AngryData »

gottorf wrote: post #405
pixelatedindex wrote: post #341

Earlier quoted context omitted.

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 c…

That is not a good comparison. Scientists that disagree with climate change are like a couple percent at max. Meanwhile nearly every economic topic, including price controls, would have double digits of economists disagreeing with it. Economics is not a hard science where you can take anything in absolutes.

Re: Tuition costs have risen 710% since 1983

#689

Post by AngryData »

OkayPhysicist wrote: post #673
gameman144 wrote: post #339

Earlier quoted context omitted.

They study in a field which has a high likelihood of loan repayment, or study at a less expensive school. If a really smart poor person wants to become a really smart rich person by pursuing a degree in film studies, it's reasonable (in my opinion) for a bank to say "borrowers whose only education is a bachelors in film studies tend to have trouble paying back loans, so we won't lend you very much". If that very smar…

Why wouldn't it be the first resort? I have a degree in hand, increasing my earning potential by, say, $50k a year. I also have 100k in student debt, and approximately zero assets to my name. Why wouldn't I declare bankruptcy the day my diploma arrives in the mail? It's not like they can repossess my knowledge.

The same reason you don't go on a drunken gambling traveling adventure on the multitude of credit cards you can get at 25 and then just declare bankruptcy, because now you are going to have a bankruptcy status over your head for the next 7 years and you won't be able to buy a house or get decent rent or get a car loan or even be able to sign up for a cell phone without fronting them the entire cost in cash ahead of time.

Re: Tuition costs have risen 710% since 1983

#690

Post by WheelsAtLarge »

lr1970 wrote: post #388
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…

> Worse than just "backed by the federal government," the loans are basically protected by the government. It is really strange that government does not constrain tuitions of the colleges participating in the loan program. Currently, Universities have no incentives to control costs in any way.

Universities have Zero incentives to change things. They get the benefit of all the enrollment of the students that wouldn't otherwise enroll, also.

What I have never understood is why career counselors aren't advising students against the downside of getting into so much debt so early in life. Going to your dream school is nice but not if you have to pay for it the rest of your life. My counselor was all about applying to the best schools with little talk about costs.

Why aren't student's suing the counselors for malpractice?

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