Tuition costs have risen 710% since 1983 • Hacker News Board

Re: Tuition costs have risen 710% since 1983

#91

Post by kalleboo » Mon, Jul 10, 2023, 5:37 PM UTC

hospitalJail wrote: post #40

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…

The first I had heard about this was from libertarians complaining about the government backing causing the tuition increase. This was among a debate where people were asking for more federal and state funding. Its crazy to see this point become so mainstream. I suppose it was inevitable if it was the truth.

From an outside point of view, it looks like just another problem of the duality of the American self-image.

"We want everyone to have a chance at school, but public schools are government indoctrination so we'll just make sure people are in un-releasable debt to private companies."

"We don't want to see people dying in the streets, but universal health care is "socialist", so we're create these convoluted insurance systems, but still require hospitals to provide free ER care (that has to be covered by everyone else in the end)."

"We're afraid of immigrants, but our agricultural industry is dependent on their cheap labor, so we'll make legal immigration difficult, and keep pretending that we're going to restrict illegal immigration, but never actually do anything effective to curb it."

(I also want to add that mentalities like this are not at all exclusive to the US - you can find similar inconsistencies in every countries self-image, the US just seems to have them in more fundamental issues that other countries made a decision on long ago)

Re: Tuition costs have risen 710% since 1983

#92

Post by johnny99k » Mon, Jul 10, 2023, 5:37 PM UTC

It's because universities have no incentive to lower costs. The majority of students get loans, which transfer to the university and they don't really care if it gets paid back or not.

The only way this will stop is if the universities are forced to take on the risk of the debt.

Re: Tuition costs have risen 710% since 1983

#93

Post by anonzzzies » Mon, Jul 10, 2023, 5:38 PM UTC

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…

That is obvious, but it used to be that admission needed some tests which most people simply cannot get past. Colleges lowered the bar of entry to make more money and that caused your point 2 and as well massively lowered the quality of the education making the diplomas not very worthwhile (known exceptions are there of course). Keep the bar to entry very high and you cannot have a reason for upping prices. Get a loan when you are actually really good and otherwise don’t get in, even if your parents have billions.

Re: Tuition costs have risen 710% since 1983

#94

Post by rhplus » Mon, Jul 10, 2023, 5:39 PM UTC

Workaccount2 wrote: post #79

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.

Crazy idea, but how about the gov just gives kids from not-ideal backgrounds access to grants and scholarships, rather than credit.

Re: Tuition costs have risen 710% since 1983

#95

Post by RoyGBivCap » Mon, Jul 10, 2023, 5:39 PM UTC

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

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Re: Tuition costs have risen 710% since 1983

#96

Post by stri8ed » Mon, Jul 10, 2023, 5:39 PM UTC

dpierce9 wrote: post #50

londons_explore wrote: post #3

Main cause: Government-backed student loans. While it is technically the student paying, in reality the money is going (indirectly) from the federal reserve to the universities. Everyone loves free government money... The fact the student may never pay off those loans (and hence the government foots the bill) is the cherry on top.

I will say it again: 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

What is the rate of increase, and how does it compare to CPI inflation?

Re: Tuition costs have risen 710% since 1983

#97

Post by preommr » Mon, Jul 10, 2023, 5:39 PM UTC

Others have mentioned the proble of government backed loans, but the whole higher education system is broken.

People are going in to get a degree with a job, meanwhile there's a whole bunch of administrators and people that think universities should be for rounding out your knowledge so you're required to pay thousands more for courses not needed for your degree. If we really wanted to, I am sure we could condense a bachelors down to 1-2 years with 2-3 years of practical learning in the field.

Re: Tuition costs have risen 710% since 1983

#98

Post by taeric » Mon, Jul 10, 2023, 5:39 PM UTC

kortilla wrote: post #89

taeric wrote: post #66

Earlier quoted context omitted.

Right, this is what I meant by them having captured the market.

But your comment seems to blame them for taking on risk, which they aren’t. Maybe reword it?

I can see that read. I meant that we should not have built a situation where lending money is risk free. It is a perverse incentive to do more lending, and ignores the actual risks that people will be unable to repay.

Re: Tuition costs have risen 710% since 1983

#99

Post by dpierce9 » Mon, Jul 10, 2023, 5:39 PM UTC

lr4444lr wrote: post #43

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

This is really interesting, but has it outpaced inflation ? Did not see that skimming the site.

There is a chart at the bottom. Costs doubled over twenty years since 1999, directly comparable to the college rate over the same period and well above inflation.

Re: Tuition costs have risen 710% since 1983

#100

Post by pixl97 » Mon, Jul 10, 2023, 5:39 PM UTC

dpierce9 wrote: post #50

londons_explore wrote: post #3

Main cause: Government-backed student loans. While it is technically the student paying, in reality the money is going (indirectly) from the federal reserve to the universities. Everyone loves free government money... The fact the student may never pay off those loans (and hence the government foots the bill) is the cherry on top.

I will say it again: 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

This said nothing about the number of seats in private schools versus public ones. If there are very few then we should expect private costs to increase dramatically as public costs increase. Not every student gets public loans, some students come from wealthy families that have other means of financing. If public is $100k, then these families would still likely choose the $120k private school for better outcomes. There is no reason for private to stay cheap.