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Tuition costs have risen 710% since 1983

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Re: Tuition costs have risen 710% since 1983

#71

Post by lr4444lr »

SideQuark wrote: post #38
spondylosaurus wrote: post #8

I would love to see comparative data on how the average college-educated worker's earnings have changed during the same time frame! My guess is that the adjusted wages haven't risen much over time, or at least nowhere near as steeply as the associated education costs have.

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.

Re: Tuition costs have risen 710% since 1983

#72

Post by somewhat_drunk »

chiefalchemist wrote: post #52
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 5…

Agreed. The real question is: do they produce a net positive effect for society?

Re: Tuition costs have risen 710% since 1983

#73

Post by treeman79 »

kzrdude wrote: post #28

What happens if you compare with real estate prices?

Imagine if banks didn’t have to worry about if you could afford to pay the loan or not. Every loan would be approved. House prices would sky rocket.

This sounds a lot like 2008 housing crash, among others.

Re: Tuition costs have risen 710% since 1983

#75

Post by tempsy »

macdaknife wrote: post #57
tempsy wrote: post #45

Earlier quoted context omitted.

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.

it's $8k a year. that wouldn't even cover rent for a school year at this point.

i think a lot of people seem to believe that the federal government is handing out $50k+ a school year when theres a very small limit. people who need to borrow likely have to tap private lenders.

Re: Tuition costs have risen 710% since 1983

#76

Post by extrapickles »

koube wrote: post #19
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/

I generally see charts like this in relation to Baumol's cost disease, I'm surprised the linked article never mentions Baumol, but goes on to talk about government regulation and foreign competition. https://en.wikipedia.org/wiki/Baumol_effect (See also section on education https://en.wikipedia.org/wiki/Baumol_effect#Education ) Basically as scalable goods and services get cheaper, non-scalable goods and services bec…

If Baumol was solely the reason for increased prices, I expect the increase to be more in line with the increase in prices for hiring tradespeople or other professional services.

Re: Tuition costs have risen 710% since 1983

#77

Post by rayiner »

treeman79 wrote: post #46
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.

Proper solution is government to stop guaranteeing the loans and to allow people to put them in bankruptcy. Prices will collapse to what people are willing to pay in real time, or save up for.

The government cannot and will not do that, because such a policy would have racially disparate impacts.

Re: Tuition costs have risen 710% since 1983

#78

Post by Sivart13 »

hospitalJail wrote: post #48
dpierce9 wrote: post #29

Earlier quoted context omitted.

Private high school costs have also gone up astronomically and there are no federal loans for them. [0] https://educationdata.org/average-cost-of-private-school

Where does it say that? Btw private school looks quite affordable. I used to think my neighbor was rich, they were, but for only $20k/yr you can send 2 kids to private school? That is cheaper than daycare.

Daycare is considered by many to be very expensive and a lot of parents would prefer not to (or can't!) pay daycare prices until their kids leave the house.

Re: Tuition costs have risen 710% since 1983

#79

Post by Workaccount2 »

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'…

This isn't going to happen because the whole point of the current government back student loan program is to give kids from not-ideal backgrounds access to credit, and hence access to the full range of schools available.

Re: Tuition costs have risen 710% since 1983

#80

Post by swagasaurus-rex »

ourmandave wrote: post #56
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.

At great sacrifice to your credit score
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