U of Chicago projected to be the first U.S. university to cost $100k per year | Hacker News Reader

U of Chicago projected to be the first U.S. university to cost $100k per year

hechingerreport.org

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UChicago 2011 graduate here. When I attended, I paid about $20k/year in tuition, given that I had various merit scholarships, worked for the university, and that my siblings also attended school. My parents were in for a RUDE awakening in my fourth year, however, when my brother graduated his undergraduate program...UChicago found out via a survey, that I was now the sole college attendee, and without warning they jacked the tuition from $20k to $32k for my final year. My parents were absolutely livid and it left a terrible taste in our mouths.

I must say, it was not a pleasant undergraduate experience. On top of being expensive and working very long hours daily, it was immensely competitive and the social life was very poor for me. I have always had numerous friends in life, but I constantly felt lonely at that school, not to mention receiving MUCH worse marks due to grade deflation, which made medical school applications a nightmare.

In hindsight, I absolutely should have gone to my state school, and I'd be a Tesla and a Steinway piano richer for it if I had. I think these ridiculously expensive, 4 year educational vacations need to end...let's encourage our young, bright minds to stay local, to save money, and to use their brightness and talents to lead very productive and EFFICIENT lives.

UChicago 2011 here as well, except actually class of 2010 because I couldn't afford to keep paying the tuition as my parents were both unemployed due to the financial crisis. I remember the financial aid office saying they could use the last two or three years of prior income rather than consider unemployment as a current and urgent condition. They literally said something along the lines of, "Your parents are smart, they will find a job soon, statistically speaking." They also capped my work at 20 hours a week as an employee of the University, which made it really fun for various departments to pay me via bonuses instead.

I feel you, and had a very similar experience academically and socially. It's not easy to get by minimal GPA filters when math professors declared that a C would be a great grade worthy of a good recommendation to a PhD in math. There's no easy way to tell that to an HR screener! I also found to great sadness by the end of my first year that I had more online friends than classmate friends. Looking back, it seems this was the time when the university just started to realize that it needed to prepare students for practical work. And that sort of experience can be gained at a lot of different universities.

That is absolutely horrible.

I got in to University of Chicago, but the finances were rough. They expected my parents to pay around 30% of their (combined) income in tuition after scholarships and loans. Presumably this would have dropped when my brother entered college a year after me, but given that I got into other schools that cost less than half as much it wasn't really a question.

My parents didn't really know what to tell me because on one hand they felt like they were being punished for not making profligate decisions like going into debt for a fancy car or buying a bigger house, but on they other hand they didn't really want to outright tell me not to go somewhere like U of Chicago.

Made me feel like college admissions spiels saying not to worry about finances were a lip-service scam designed to make college look accessible while mostly benefiting the rich and very poor and screwing those in-between.

Went to a state university instead, but never really fit in there. Too much alcohol, greek life, and sports.

In any case, I don't mean to imply that my parents didn't have a decent income, just that the way things worked made them feel like they were being punished for trying to be financially responsible, and being asked to pay the equivalent of a 2nd mortgage for your kid's college only for them to be in debt on top of it anyway, and not knowing how things would work once they had a 2nd kid in college wasn't a strong sell. Even though they didn't say not to go there, I would have felt super super guilty about saying yes.

Fun fact: the scholarship U of Chicago offered would have covered the cost of attendance at each other college I got into and then some, but still didn't cover even half of the cost of attendance there.

just that the way things worked made them feel like they were being punished for trying to be financially responsible

100% feel you, as I my son just started UCSD. He was looking at a bunch of private colleges and I did the financial aid (for early decision) and it was really shitty. I felt that because I had so much equity in my house and no debt, I was screwed. And, when the numbers came back, it was true. Very little help.

I have a work friend who has a very close friend. They're both Dr's pulling down > $500k/yr, but with huge debt. Their kid got into Princeton and they paid $15k/yr. I was more than double that for some equivalent schools, but I make far, far less than $500k/yr.

Very glad he decided on UCSD.

So is the life advice to go massively in debt (and jack up your income) before your kids apply to colleges? How far in advance do you have to go massively in debt?

EDIT: Looking at Princeton's financial needs calculator, assuming a constant income, to maximize your financial aid you should: - Reduce your assets: Buy a really expensive house, have nothing in savings/investments/other equity - Reduce your income: Pay a ton for private school tuition, medical expenses, or child support.

EDIT 2: Looking around some more, apparently FAFSA doesn't consider: Your primary residence Your car A boat you may own or furniture in your home Untaxed Social Security as income

Here comes my big house / Bugatti / yacht!

>mostly benefiting the rich and very poor

Not quite just the very poor: U Chicago gives free full tuition to students from families making under $125k.

But as for the very poor at nearly every other private college, the picture is more bleak: The average private is in the ballpark of $35k. Maximum grants from the feds and state of Illinois total about $16k. That's not enough. However, it is generally plenty for attending any public state school.

The most squeezed bracket financially are families making around $65k a year. They earn too much and so lose a large portion of need based grant eligibility, and have and "estimated family contribution" (EFC) 3 or 4 times higher than families making not too much less. Even state schools are difficult here. My recommendation to such families is to begin by getting an associate's degree for 1/3 the cost for those 2 years, then only pay the higher rate to finish the bachelor's degree in the last 2 years.

It's true families making > $100k a year are expected to contribute the lion's share, absent merit scholarships, but they also tend to be families with assets, including houses with equity they can leverage, to help pay. Yes, it sucks to have to do that, but many thousands of families in the $65k bracket are much worse off without even that option.

To be clear, I'm not really disputing what you said on that topic: I just wanted to add more detail and nuance.

Source: I work in Higher Ed analytics.

When I was accepted that ($125k) policy didn't exist or we'd have been included, though in the upper half. I'd likely have chosen to go there if it had existed then.

That said it sounds like the general situation I described is somewhat true overall.

No, you guys need to quit the platitudes.

You need to do something about your “fixed” meritocratic society where your future is largely determined by your parents’ wealth.

You need tax reform, healthcare, cheaper education. I had a discussion with an American friend recently, he offered that the American society has produced marvels such as Google and Facebook and Tesla and countless others, fair point.

Can you imagine a new social media today competing with Facebook? A new search engine? Wanna open a retail online store? AWS will eat you alive.

I grew up thinking America was the greatest country on earth, truly. You know who also had some absolutely amazing achievements? The Egyptian pharaohs.

Non American here. They seem to be the greatest country on earth. They have a big problem with the gap between the rich and the poor but have huge upward mobility.

The education system is too expensive and a bit of a scam but does that cause the problems people think it does. Can you make it in the US without a degree?

Social mobility in the USA is actually much lower than in other developed countries.

> Can you make it in the US without a degree?

Absolutely.

* This being HN, I should point you can make it in IT/software without a degree though you must start at the low-end and climb from there.

* Skilled blue collar work has its limits but provides an accessible career more than capable of supporting a family.

* Military service has its drawbacks but has quite cushy benefits.

* For the ambitious, service-based small businesses are easier than ever.

While it's possible to make it in the US without a degree, I'd recommend more of a middle ground of a 2 or 4-year degree from a local college or state school.

Americais and always has been fantastic place if you're part of the upper 20% and dog shit for everyone else. We just have great propaganda.

The Thirteen Colonies were the richest group of states under the British and as the US grew it continued to be land rich and labour poor. Americans were noticeably taller than Europeans until week after WWII. The rest of the world has caught up some but the US is without a doubt in the top ten by GDP per capita though competing with city states and what would be individual states there. Measured by average individual consumption it’s probably number 1. The US may not be a good place to be in the bottom 10%, possibly even the bottom 20% but by standards of living for normal people nowhere else compares.

I mean, imagine telling that to people living in poor countries.

Please travel or read about the world to get some perspective.

Seriously, if you were born in a country like the U.S. in modern times, you won the birth lottery.

I totally disagree. I was raised in a family of 8 kids, we didn't have any money. All my siblings and friends have had a good shot at the American dream, most of us have done quite well.

I've also lived in several different states. Haven't seen anything even close to 80% dog crap. Not even close.

> No, you guys need to quit the platitudes.

Uh-huh

> You need to do something about your “fixed” meritocratic society where your future is largely determined by your parents’ wealth.

> You need tax reform, healthcare, cheaper education.

Please continue your nuanced argument with a straw-man.

I'm a graduate of Uchicago (from shortly after you), and to offer a different perspective, I'm still paying off my loans (and will be for another 6 years), but I'm incredibly glad I went. I thought the undergraduate experience was perfect, and about half of my friends from around the world are people I met while I was there. I did get much worse marks that I had ever gotten before, but the University being very difficult is part of the package.

One question: I think a large part of the social experience for me was based around the house system. Even though I moved out of my house when I was a second-year, the house and dorm I was in provided a big chunk of my social network. Did you not have a good experience with your house? And if so, were you placed in the house you wanted to be in?

So how does having more realistic grades (i.e. not everyone gets B or above) feel when it comes to graduate admissions?

I went to the university with the hardest admissions score for EE, some of the brightest people I've met, graded on a curve, and yet for graduate admissions I'm competing with people who took much easier classes and ALL have much better marks. The GPA system is just insane really.

It helps a lot if the university you're coming from had a reputation for difficulty and grade deflation. Academia is incestuous enough that people will usually be clued into that.

Barring that, having excellent rec letters and GRE scores, having been published or done research in a lab, having written an undergraduate thesis etc can all help provide signal that you'll make a good candidate for the department you're applying to. I don't know much about EE departments, but generally grad school admissions will be more holistic and thoughtful than undergrad admissions.

I don't know what's happened in the last 25 years since I last went. But my college started testing the snot out of incoming freshmen. Basically they didn't trust the students GPA or the classes they took in high school to tell whether they were ready for college level classes.

Ace the GRE and get letters of recommendation and it doesn't matter.

Different schools do the sibling calculation differently. I had the same experience you describe in my third year at Swarthmore, which jacked up the "parental contribution" after my brother graduated from Carleton College. But Carleton does things differently, with the same parental contribution each year. They know going in how many siblings you have and just come up with a flat rate that you pay each year.

Each method has its pros and cons: the flat-rate method gives certainty, and the adjustable method is more appropriate if you don't know whether siblings will actually go to college. It seems the most important thing is for each institution to communicate which method they are using, so nobody gets a rude awakening.

caveat: my data points are 15 yrs old

I'm curious what you think could have convinced you to attend a state school as opposed to where you went? Did you know the state school was a viable option at the time? Did your parents push you toward a state school, were they upfront with you about the cost difference?

I agree with your last line, but am unsure how we would best implement that as a practicality. Young people tend not to always think in the most efficient ways, and parents aren't always knowledgeable nor around to help.

One thing I remember from my college admission process years ago was how overhyped it all was, especially the soap opera aspect. Everything was about numbers, and where you would get in, and where you would 'fit,' which was far more ambiguous, sinister, and completely unrooted in any logic or reasoning because you just aren't going to ever understand what your personal experience will be like until you get there.

Fretting about 'fit' keeps schools like u chicago alive. A radically unwise decision in pursuit of some romantic youthful ideal. Otherwise, everyone would just go to a state school, have largely the same college experience, end up with largely the same career outcomes, but with far less debt.

Sorry to hear that. I graduated the same year as you but had an incredibly positive experience, and one I look on more and more fondly over time. Having said that, I immediately recognize that IT IS NOT for everybody. There are a few peculiarities about the school that can really make it or break it for you, even beyond simply the matter of fit. To me the house system was the epicenter of my social life, and I know full well that had I simply been assigned to a different random group of people my experience could have been significantly different and possible way worse.

What’s the reasoning behind the discount for siblings? Seems strange to me that this would affect the cost of tuition.

They squeeze everybody for as much as they’ve got.

More kids in school translates to greater financial need per kid.

Ah, any school. I thought this was about siblings attending the same school.

What do you mean by grade deflation? I've heard of grade inflation (mostly in the context of college admissions), but not deflation.

Grades are determined by curves. There's no absolute scoring in most university classes, especially in engineering and science programs.

Professors usually draw something similar to a bell curve along the grade distribution and set the average to be a particular grade. Grade inflation would be setting the average to something high (as practiced at Harvard this is usually an A-).

Grade deflation which both U Chicago and my alma mater Johns Hopkins are notorious for has professors set the average grade to a B-/C+. In classrooms full of students who have excelled their entire life, where the average represents a pretty high standard of work and achievement, setting the average to a B- is grade deflation.

Did your parents not know that your sibling would graduate college before you did. Strange thing to be livid about.

One thing I find crazy is the very same institutions that are generally very left leaning, decry income inequality, and espouse generally liberal views then turn around and having tuition costs that having been rising at rates so far above inflation.

Student debt is a major issue in the US and the ever increasing costs of tuition are a MAJOR culprit in pushing this crisis. Where are these costs coming from? How can you politically espouse free college while ratcheting up tuition costs?

I work at one local university, and my wife works at another. One thing we've definitely noticed (and this is a widespread problem) is that the administration is becoming more top-heavy. There are cutbacks in faculty, support, and teaching staff, more reliance on adjuncts (academic temps, basically), and so on, while central administration grows. Expensive new buildings contribute, but less than people suppose. But that is a tangential problem, in that wealthy donors want to give big gifts for vanity projects rather than to, say, scholarship funds.

Former tenured professor.

I think your impression is generally spot-on although there's nuances and it's more complicated than that.

In general, universities are suffering from many of the same pressures as other fields. Nonprofits are being run as profit-generating centers, and the implicit promotion track goes from faculty to senior faculty to administration, if you're even on tenure track. The administration salaries are increasing, as are the number of administrative positions (deans, associate deans, vice associate deans, assistant deans, etc.), and the structures are becoming increasingly hierarchical. Things are very top-heavy and expensive to run because the salary budget is so disproportionately distributed.

I don't think that's all of it, though. The rest of it is harder to quantify, but is the flip side of the educational bubble coin. Students are rushing to go to college in record numbers, which then puts pressure on colleges to stand out to attract more students and more high-paying students who become high-donating alumni. Institutions that should be getting public funding are not, which then trickles down to students; other private institutions then benefit from the increased tuition norms etc.

It's a complicated problem that involves HR and administrative practices and norms, economic incentives within university funding structures, incentives coming from a broken employment system in the US, problematic incentives coming from federal grant structures, etc. etc. etc. etc.

I worked for five years at a private university a few years ago, and my experience is similar, although to add a little:

It never felt like a plan or conspiracy to make administration costs bigger. It's just very easy to do when you have more money coming in, year after year. In another economic environment, you'd get a "hard no" because the money isn't there. But when there is, expenditures become just another bargaining chip. Maybe you get your seventh librarian this year, and I get my fifth network guy next year.

New buildings (as you stated) aren't as big of a contributor as expected due to the convoluted role of donations, grants, etc. But another big factor for those buildings is that we were getting loans for them, too, and those were based on (big surprise) long term forecasts presuming this gravy train is going to keep on chugging for the next 30+ years. And even then we were getting projections of our "debt capacity" and always riding that line, so it's debt on top of debt all the way down.

I don't know about big schools, but for a smaller one like ours, there was no visible bad faith. These kind of things just happen when you can keep bringing in more and more money and so can your competitors.

Yes, admin is a problem, but its not just admin. If you are a professor making 150k+, you have to ask yourself how much of your salary is being funded by rampant, unsustainable borrowing.

Colleges need dramatic, across the board cost cutting including professors, admins etc.

Colleges are in for a world of pain in the next 50 years.

Do colleges make their budgets public? When a program is taking too long to run the first step is to profile. What does the data say on college costs?

> But that is a tangential problem, in that wealthy donors want to give big gifts for vanity projects rather than to, say, scholarship funds.

In the past I've felt quite motivated to give to scholarship funds. It resonates a lot if you yourself relied on scholarships to go to college. But I feel somewhat more cynical about this since I've seen costs spiraling out of control. The actual price of college can have anything bundled in there. I want to support students, but I feel less good about supporting ballooning costs that are twice inflation when I haven't heard a good reason for this.

Ahh, the iron law of bureaucracy at work. https://www.jerrypournelle.com/reports/jerryp/iron.html

An AEI report on 'administrative bloat' in higher education: https://www.aei.org/carpe-diem/diversity-and-other-administr...

Alex Tabarrok disagrees: https://marginalrevolution.com/marginalrevolution/2019/05/bl...

This comment is sadly familiar to me - it sounds exactly how my friends in healthcare describe the state of their industry (more admin, fancy buildings, less focus or spending on patient care).

The tuition price being talked about is the top sticker price. If you care about inequality, that isn't the metric to care about. You should instead focus on something like median tuition paid since financial aid can mean that any individual student is paying anything from zero up to the full tuition costs. The concept of the richest students paying a six figure sticker price in order to help compensate for the students on the other end of the socioeconomic spectrum who can't afford it is the exact type of thing you would expect from a "left leaning" institution.

But as the article says, low income students are scared away by high tuition. My fiancee was raised poor and I kind of understand the mentality -- when the tuition is a multiple of what both your parents make in a year, you say "this place isn't for me" and move on. You've been told in various ways throughout your life which places aren't for you (there are a lot of them), and a $100k sticker price is a pretty damn good signal.

And besides, no one wants to rely on the generosity of paternalistic college administrators. That's not safe. You don't want to wake up and suddenly find due to some technicality you again owe more money than both of your parents make in a year. And you don't want to feel like a charity case.

(If you think that's a remote possibility, think of the people who went into teaching with the promise of debt forgiveness, and found it revoked. They don't have any choice in the matter -- they're totally screwed.)

Better to go to the local city college. Your cousin went there and a few other people from your school go there, too. It's a safe choice, and there are people like you there.

> One thing I find crazy is the very same institutions that are generally very left leaning, decry income inequality, and espouse generally liberal views then turn around and having tuition costs that having been rising at rates so far above inflation.

It's weird you chose to make this comment on an article about the University of Chicago, the home of Milton Friedman, Supply-side economics, "no safe spaces"[1] and so on.

[1] https://www.washingtonpost.com/news/answer-sheet/wp/2016/08/...

Tuition rates seem to be rising across the board however. University of Chicago is just the tip of the spear.

Has the University of Chicago ever advocated for free college? Their economics department, home of the late Milton Friedman and the Chicago Boys, is among the most right-leaning in the country.

This really isn't true anymore, but people keep regurgitating it. Chicago has a lot of behavioral economists like Thaler/List/Levitt, a lot of people who work on econometrics or mathematical economics like Harberger/Uhlig/Stokey/Tesler. There are still some Chicago school of economics folks at the university, but increasingly "the Chicago school" is an independent beast. There are a few emeritus professors in the old guard, but claiming that the department is one of the most "right-leaning" in the country is wrong.

That was then.

Given that most (yes, most) students at the University of Chicago receive financial aid, what you're seeing is a sticker price. The school is using the high sticker price + financial aid to perform very efficient price discrimination[0], so they can get a lot of money from people who can pay.

It is effectively a sliding scale fee [1].

[0] https://en.wikipedia.org/wiki/Price_discrimination

[1] https://en.wikipedia.org/wiki/Sliding_scale_fees

That is part of it, but the term "financial aid" is usually trotted around to make people think that the less wealthy are getting "aid" but in reality, the majority of that "aid" is in the form of non-dischargeable student loans.

I don't consider a loan "aid". Especially since that loan has interest.

Yes, this. The nameplate tuition is paid by a vanishingly small percentage of students. What I think each school should do is publish data showing what the median tuition paid is, and the quartiles. That would help a lot to fight this perception that "tuition is going up every year!"

In theory. Do you have evidence that is what is actually happening?

Interestingly enough, many elite schools have need-blind admissions and excellent aid if you are poor. If you are rich, it's affordable. As usual, it's the middle class that gets screwed.

Depends a lot on how you define "middle class" and "screwed". For example:

https://financialaid.stanford.edu/undergrad/how/index.html

https://college.harvard.edu/guides/financial-aid-fact-sheet

>UChicago guarantees free tuition for families with incomes under $125,000 per year (with typical assets).

Seems generous for middle class. (the median US household income is only 61k)

Right, I also assume a lot of these MSRP prices are what they want wealthy foreign nationals to pay, not necessarily a US citizen. We really need the data on the average cost and what the distribution curve looks like.

It's pretty clear how these schools operate. They charge high tuition for people with a lot of money and cover the costs for people that can't afford it.

>With over $159 million in financial aid distributed this year, UChicago is committed to ensuring that its students graduate debt-free and prepared for lifelong success, no matter their chosen major or background prior to enrolling in The College. UChicago is a need-blind institution, which means we make admissions decisions independent of a family’s financial circumstances[0]

That seems like a hallmark move of progressivism, no?

[0]https://collegeadmissions.uchicago.edu/cost-aid

That's basically how healthcare works as well, and I don't think anyone would argue that healthcare is in a good place in the US.

Financial aid is code for student loans. If they meant a scholarship they would have said so.

Looking at the sticker price can be confusing, when the majority of students are receiving some financial aid. You'd need to look at the average tuition paid by students at different family income levels. But is that data even publicly available?

That is definitely the way to look at it although there is a middle class where family income is more than what qualifies for financial aid but far lower than tuition being "affordable".

> the very same institutions that are generally very left leaning, decry income inequality, ...

These schools are price discriminating, which means only the richest families are paying the full price. This kind of heavily graduated pricing where the wealthy pay for most of the cost of the school is very much in line with their principles.

Yeah they’re not left leaning at all, they’re completely corporate and plutocratic. The highest paid state employees are university presidents and college sports coaches.

When there is a difference between what people say and what they do, always believe what they do.

Has it occurred to you that maybe the state can handle the cost? Compare to how much we spend buying fancy equipment to kill people. (Military spending if that is too indirect a description.)

Consider also that a large amount of student loans are already from the government, so in a default...

You might see people rallying for forgiving debt, but not for increasing enrollment, which is what caused high debts in the first place. It s impossible not to call this hypocritical

While this is true of its peers, no one has ever accused the University of Chicago of being left leaning. The unrestrained neoliberalism (deregulation of consumer protections, unwinding of antitrust policy) that characterizes our time is literally called the "Chicago School" of economics.

The same goes for housing, in same states.

U. Chicago is left leaning? It produced the Chicago boys, the authors of neoliberalism in Chile.

I think most people would say you're correct about the Econ department, but that isn't the whole university. Plus, it's not like U Chicago is that far off from other universities when it comes to tuition and fees. They cost $58k, but Columbia University is already above $59k, Dartmouth is $55k, Penn is $56k, Duke is $56k, Brown is $55k, Tufts is $56k,

There are plenty of liberal schools whose sticker price is going sky high.

It depends on what area of the University of Chicago you're talking about.

You may want to look into the difference between liberalism and leftism.

Eh...the UChicago economics department and the people of Chile would like a word with you on that.

- Rampant cronyism in the administrative bureaucracy. Too many inflated titles with ~$200k yearly compensations.

- Building architecturally impressive (but questionably prudent) faculty buildings/dorms/libraries/etc. in hopes of luring prospective students, many funded by alumni looking to stroke their ego via their name on the structure (reminds me of that scene from House of Cards when Kevin Spacey's character does this very thing)

- Federal government showing no signs of abating the giving out free money to attend college, which enables the entire cycle to continue

More people need to talk about what Purdue is doing. They’ve held tuition constant for 8 years since Mitch Daniels took over.

https://www.purdue.edu/newsroom/releases/2019/Q1/purdue-anno...

As a US citizen, I see the US debt bomb ending it two different ways

1. Sanders/Warren get elected and somehow forgive 1.5 trillion in student loans and make education free going forward.

2. 2008 level crisis

with (2) is the more probable

I think universities tuition is way too expensive in our country, but I'm against (1) currently because I don't think retroactively forgiving debt is a good policy. The students took those loans out, signed the docs, and knew (or should have known) what they were getting themselves into. I think forgiving all of the debt would be obviously ridiculously expensive (1.5 trillion is a lot of money) but also possibly creates moral hazard.

I would be more supportive of (1) if the government took more of a "Canadian pharma industry" approach and just said "this is how much we will pay for this citizen to go to Harvard, take it or leave it". I have no faith that any of the current presidential candidates will be able to negotiate and pass that type of law, so I currently cant support (1).

Is my line of thinking wrong here? I think education should be more affordable but have no faith we have leaders that can get us there.

I'm completely against forgiving student loans. I want to solve the problem, which means no more Government backed student loans. (I'm all for the Government building more low-cost public Universities, though.)

But if they are going to forgive them, certainly the students who prided themselves on being the best and the brightest should have known better! Therefore, anyone in the top 10% of SAT scores or at the top 100 schools should not be eligible for discharge. If you're smart enough to get into Chicago or Harvard, you're smart enough to know how loans work.

Student debt isn't likely to cause a 2008 crisis since the vast majority of it is held by (or backed by) the government.

Hi, quant here (in Uni). I have some obligation to respond to (2), because I know something about it and you've mischaracterized it alot.

We have around $1.5T in student debt currently, at its peak in 2008, there was around $12.7T in housing debt (there's more now, interestingly). Like 2008 era mortgages, student debt is securitized and sold in the form of SLABS (Student Loan Backed AssetS; [1]). However, to my knowledge, there are no derivative securities trades on these SLABS, whereas in 2008, nth derivative securities were trades on mortgage-backed securities (MBSs; when I say nth, I mean derivatives were traded on derivative were traded on derivatives, increasing leverage). In Q2 '08, around 4.5% of mortgages were "seriously deliquent" (i.e. were over 90 days past due). This figure jumped to over 21.0% in July '08 [3]. In contrast, serious delinquency for SLABS is around 0.254% [4]. This is different by a full two orders of magnitude (a little less) from the crisis levels.

While I get why you might be led to believe that (2) is possible, the data doesn't back it up at all. Remember that almost everyone takes out a mortgage, but only around 50% of relatively young people take out student loans.

[1]: https://www.salliemae.com/investors/asset-backed-securities/ [2]: https://www.federalreserve.gov/pubs/feds/2008/200859/200859p... (pages 2 and 3, use ctrl+F and "delinquent") [3]: https://www.federalreserve.gov/pubs/feds/2008/200859/200859p... (page 5) [4]: https://www.salliemae.com/assets/investors/asset-backed-secu... (page 4; I'm taking this security to be representative, sue me)

There's a few other options, such as it levels off. But something must change, whether social or governmental or economic. At the current rate of growth, by the time my kids are of age, four years at many colleges is going to cost a good deal more than my house- each. Which is not to say that can't happen- but if it did, it would go hand-in-hand with a cultural return to the days of college as a finishing school for the aristocrats, and not something normal people do anymore.

Do you believe the same thing about medical debt? Why or why not?

> somehow forgive 1.5 trillion in student loans

A more plausible outcome is that the law changes to allows student to end after bankruptcy.

Maybe lenders are made whole by the government; maybe not.

That provides relief to extreme cases, while not shifting an entire $1T+ of debt.

if (2) is possible, what's the difference if (1) happens? Someone will have to pay that debt eventually (the taxpayer).

Harvard is a weird example to use.

I think we should stop offering government backed loans to all institutions that aren’t in-state public. Then, tie them to a graduation period. The moral hazard of taking out hundreds of thousands of debt that may never be paid back is (Ideally) gone.

Is there an issue to doing this?

The data is this article are pretty misleadingly framed. The only time they quote the current cost, they use the base tuition number of $57,642. In the next sentence they say that in six years the cost is projected to be over $100,000. But the latter number includes all additional costs: tuition, room and board, books, fees, supplies, transportation, and living expenses. The former number is just tuition. UChicago is crazy expensive, but it's not doubling in cost in the next six years.

How to fix student loans...

The .gov backs student loans. And, they are non-dischargeable. So, it is zero risk for the lender to give loan to the 2.7 GPA moron getting a worthless basket weaving degree from the local private lib arts school for $100k. So, they give as many loans as possible, since they can't lose (taxpayer on the hook). Colleges are incentivized to drive up costs of tuition b/c tons of free money.

It's a classic moral hazard created by .gov guaranteeing the loans. Same thing we saw in the housing crisis.

Make student loans dischargeable in bankruptcy or take away the .gov guarantee and watch the market for student loans for worthless degrees dry up and tuition costs plummet.

This is my thought as well. These universities have had very little incentive to cut costs for a long time and have padded out administrators and built opulent and unnecessary facilities driving costs ever upward. Universities used to be little more than professors and classrooms with very few administrators.

>Universities used to be little more than professors and classrooms with very few administrators.

Correct. There was also no IT, counseling, healthcare, Title IX, and secondary public education was functional. Things are different now.

Option 3: Make the schools co-obligors on the debt. In a default, the school pays. I suggested that to a congressman once; he nearly spit out his drink.

I was thinking the same thing except maybe place it at 50% or something. So they still want to give out loans but are more judicious about it.

Also there might be scale correlated to market demand. So if doctors are in high demand the gov backs it more, if it’s something with little market demand, back it less.

Everyone passes all of their classes?

It is incredible to me how straightforward and undoubtedly true the point you are making is, yet I've had 0% success in bringing it up in conversation without immediately being called all sorts of names or accused of hating poor people.

> It is incredible to me how straightforward and undoubtedly true the point you are making is

Even the part when it relies on private lending behavior being driven by security provided to lenders by federal loan guarantees that haven't been available to private lenders since July 1, 2010?

Or, track the loan payback percentage for each degree, let’s say 5 years after graduation. Publish those results, and stop making loans for programs where the repayment is less than X%. Then, basket weaving degrees won’t get loans, the cost for basket weaving programs will go down, as only those with parent’s stupid money will pay for basket weaving degrees. Students will be directed by market forces to degrees that actually pay, and repayment percentages will go up.

This will of course cause universities to encourage student loans for students with wealthy parents who could have paid up front, as they’re more likely to pay, even if employed as a barista. For every rule, it will be gamed in some way.

More likely, the basket weaving program would entirely go away. Wealthy parents generally aren't idiots and don't encourage their children to waste away in pointless degrees. Well, the ultra-wealthy might not care, but there aren't too many of those.

In any event, congrats, you just made a whole set of degrees inaccessible to anyone except the wealthy. The progressives are really going to love you for that.

That will automatically happen because lending banks will do it, just like car, home and health insurance.

That already happens. Lenders just don't care because they can't lose money on those loans b/c reasons stated above.

The government doesn’t just back student loans, it makes the student loans. The government is the lender. More than 90% of all student debt is carried on the government’s books.

Not only that, I remember reading that something like 1/3 of the US federal government's receivables are student loans. A mass default or forgiveness program would dramatically lower the governments ability to pay other obligations.

The other 10% is still $156Bn... That's more than the GDP of Hungary. It's still worth considering.

Good luck with that. You just made college out of reach for everyone that isn't already wealthy, exacerbating inequality and further entrenching class boundaries.

To be clear, I agree with you, rip out the loan guarantees and let the private market deal. But progressives would never allow this.

> You just made college out of reach for everyone that isn't already wealthy

Immediately yes, fortunately, there is a supply and demand curve, so if you cut the demand for a bunch of colleges that already exist; then the price should find a new equilibrium. Of course, as is the science of economics, time and outside influences matter.

You can get a very good education at a pubic university, for example in California's State University system, for about $6,000 a year. It wouldn't put college out of reach, it would put going to an expensive liberal arts school out of reach. I think that's OK.

> Good luck with that. You just made college out of reach for everyone that isn't already wealthy, exacerbating inequality and further entrenching class boundaries.

You could apply that argument to anything. "Good luck with that, now people can't afford mansions, Good luck with that now people can't afford private jets".

Should everybody be able to afford mansions or private jets? No.

College should either be free, thus directly paid for by the government, or not everybody should go to college, you can't have it both ways, or that's how you'll get your big next financial crisis. The government should not back private loans, period.

Cost of education has skyrocketed BECAUSE banks started to loan crazy amounts of money to every students. This is free money for the banks.

Wouldn't they be in roughly the same position, just without a ton of debt?

People have a different emotional response to predatory lending like payday loans, but not those same practices in student loans.

You say that like it's a bad thing and not the real intent.

Make the college take a 10% stake in each loan. Suddenly they’ll start being more discerning about who they accept and what their majors are.

Suddenly costs go up 10%.

If someone told me they'd give me $1 if I throw away a dime, why wouldn't I just keep taking their dollars all day long?

What a great idea!

The 100k basket weaving liberal arts student barely exists and is a meme to generate rage clicks.

The modern versions are usually gender studies, communications, or English.. As an engineer, it's difficult to accept any non-engineering degree as legitimate :-)

So my nephew is getting his degree in "expeditionary studies":

https://www.plattsburgh.edu/programs/expeditionary-studies-m...

I'm jealous..

The 100k in debt grad student becoming an adjunct and needing food stamps not to die of starvation in poverty is a pretty stark reality. One would have to be tone-deaf to pretend it does not exist.

That's probably some of it, but the underwater basket weaving meme predates the internet and has embedded wisdom.

Essentially a cautionary tale about taking on debt for something unlikely to be able to pay off that debt.

Agreed, attacking degree programs is a red herring. Also, what kind of society would we be if the only subjects available to pursue were a select list of STEM programs?

"Basket weaving" may be a meme.

But English, psychology, history, music, etc. are in fact very real.

I'd go one step further. Make the universities guarantee the loans. If a student earns a degree and isn't able to earn a living sufficient to pay back the loans then the University has failed.

What you are effectively saying is that university education exists solely for providing job training. That's not something most universities will agree with.

This is fundamentally incompatible with the idea that everyone should be able to afford to go to college and private institutions need to foot the bill for the costs. We as a society prioritized availability of college education over costs. In order to get both you would likely have to change to some income percentage based repayment system instead of traditional loan repayments and that probably wouldn't be possible unless the government is heavily involved.

Half of all college students don't finish their 4-year degree in 5 years, and it's not due to cost. Even countries like France, Netherlands, etc which have lower costs for college, place you in a track when you're in your freshman year of high school. This track determines if you're going to college, a trade, or somewhere in between, and it's hard to switch from lower to higher tracks. College should not be a goal for 100% of the population like we have now, there should be a greater push for trades like chefs, electricians, HVAC technicians, plumbers, woodworking, metal working, glass blowing. You're an apprentice, you get paid a livable wage, and you have 0 student loans.

College was dirt cheap before student loans became non-dischargeable and the government started backing them.

The government is already heavily involved and we already have that system: https://studentaid.ed.gov/sa/repay-loans/understand/plans/in...

Debt as an investment is fine. If you are investing in your future with your education, okay, but that requires the education be practical. It must have a value greater than its cost. That is not true for most education and thus we are not investing in our future as a society with this debt.

I'd rather the debt we incur as a society be spent on infrastructure and engineers than wicker baskets. Wicker baskets don't last very long. Roads and bridges do. Engineers do.

Regarding income-based repayment, I think Purdue was experimenting with this, and may still be. I haven't heard of any significant government involvement in that program.

https://www.washingtonpost.com/news/grade-point/wp/2016/04/1...

U of Chicago is ranked #6 in US 2.7 GPA morons are nor likely to be accepted.

The ad hominem hyperbole turned me against your much simpler - add moral hazard - argument. Do tell, which universities provide this degree in basket weaving that you denigrate? Sure, you may have drawn on this often invoked mythical degree as a standin for courses of study that you see as useless and valueless but implicitly know would quickly and easily get called out for revealing your bias about obviously subjective determinations of worth. Maybe basket weaving is really art or history or the study of native cultures. And there are plenty of smart people who have been 2.6 GPA students at some point, as GPA is not a measure of intelligence but an abstraction that simply measures one's ability to adhere to and excel at a fairly arbitrary framework.

Moral hazard may or may not be a simple, good solution but your argument for it, as presented, disincentivizes me from even considering it, since so much seemed to be missed in the argument, the same was probably true for consideration of the solution.

Those colleges exist, but they exist in the form of for-profits like Strayer and University of Phoenix. They prey on veterans and marginalized folks, many of whom don’t get jobs that can a pay off the debt afterward. It’s not “basket weaving”

>So, it is zero risk for the lender to give loan to the 2.7 GPA moron getting a worthless basket weaving degree from the local private lib arts school for $100k.

I don't see how any degree LAC, Computer Science, Math etc is worth risking a dischargeable loan for from a bank's perspective. There's no reason to single out LAC degrees, which by the way can be pretty useful.

The smartest thing for any student to do is declare bankruptcy right away after college when they have nothing and risk losing nothing. That makes no loan worth giving, which is the problem.

> The .gov backs student loans. And, they are non-dischargeable. So, it is zero risk for the lender to give loan to the 2.7 GPA moron getting a worthless basket weaving degree from the local private lib arts school for $100k. So, they give as many loans as possible, since they can't lose (taxpayer on the hook).

The only lender who is allowed to issue government-backed student loans for many years is the federal government, and their policy on what loans they’ll issue and on what terms are set in law, not a response to market incentives.

This. To the lender, it's a virtually risk-free loan and a very high yielding one at that (10%+ interest). I don't think there is even a way of discharging it, even death.

>Make student loans dischargeable in bankruptcy

And watch default rates rise, and interest rates on these unsecured loans skyrocket, so that very few can go to college, and even more people get screwed by them due to higher rates.

Or people will simply not get loans, since they'd become too risky, and less people will get college skills, likely hurting the entire economy over time.

Educating people is a good national goal. Balancing the various pieces is much harder than simplistic changes to the current system.

Or keep them private but set a max cost per year. You can't give student loans and have no control over the price.

I mean, you're not wrong. I'd say 9/10. Its pretty easy to see the parallels to gov involvement in many other areas, where they create a special type of problem, by only being partially involved. Then everyone can stake out their positions, and just work on fighting over the middle of the issue, never letting gov be involved enough to be effective, nor entirely removed enough to let the market fix it.

Its the worst kind of half assed capitalism, that only benefits the political class. Kinda like our healthcare system, among others.

The government isn't guaranteeing the loans, it's making the loans. It is the lender.

Loans for education are different from loans for a house or car since your lender cant repossess your degree/the connections you made while in school, which is the original reason these loans were made to be non dischargeable.

The Government should stop backing student loans. Tuitions will drop like a rock.

The government giving anyone and everyone money and guaranteeing it is the problem. I don't think the bankruptcy plan works. A lot of people would just not pay.

That's exactly the point. Lenders would stop lending to people who couldn't/wouldn't pay.

In all countries? Here, we don't have that, the cost is fixed and so are the loans.

I totally agree but unfortunately a lot of people can take the same situation and twist it up to fit their own views.

Where I live we just passed a minimum wage increase. A fairly substantial one that keeps up with the rest of the country by increasing every year until we hit 15 an hour in a few years. It's been a couple of years into it and someone asked why local restaurants are ending services, closing some locations, increasing prices, shrinking their menus, and basically cutting costs. I saw a lot of answers that boiled down to "greed" and my favorite was "labor costs are increasing" because of "late stage capitalism".

I wouldn't be surprised if a lot of answers you see in the wild involves doing exactly what we've been doing but on a larger scale.

Kind of off topic, but I'm very much a fan of the "shrinking their menus" effect. Restaurants have way too many things on their menus. This usually means that they aren't very good at those things leading to lower quality food. Smaller menus generally mean a restaurant is going to be more focused, and able to produce quality food. I'm all for quality food.

Loans should not be guaranteed by the government. Banks should be able to tell shitheads no.

One big problem here is that they'll be rewarded in the rankings. A bit part of the various rankings models (US News, etc) is how much money is spent on each student. So squandering $10k more on students next year is, in certain respects, a good investment for a university with decent cash flow.

And the question of how much money is spent on a student can be disconnected from the question of tuition, at least at top-tier schools:

At my alma mater, Bowdoin, the college spends just shy of $100k per student each year. The comprehensive fee (incl. room & board) is around $72k per year, and for students qualifying for financial aid (abour half), the college provides grants that bring it down to about $24k per year, which almost resembles something sensible.

But if you're a donor, and you give an unrestricted gift to a top-tier college or university, there should be absolutely no expectation that your donation will be spent frugally. In fact, for rankings purposes (which help all the cash flow stuff above), it just matters that it gets raised and spent.

I think this is one of the biggest problems in American higher ed, and I'm hoping there are a few institutions with the fortitude of character to stand against it and work toward, rather than against, a cost-effective education model in the US.

For those interested in background on this, Paul Tough's 'The Years that Matter Most'[1] has a lot of really interesting, surprising facts about college admissions.

Many of the ideas touched on in the comments here so far are covered in much more detail in that book. One interesting fact is that although there is a lot of publicity from colleges about reaching out to lower income students, there are massive incentives (often necessities) for admissions offices to take less qualified kids who can pay full price.

Overall, I found the book a nuanced and surprising view of the realities of trying to manage college admissions, and of trying to deal with inequality in access to higher education.

[1] https://www.amazon.com/Years-That-Matter-Most-College/dp/054...

People who pay "full price" are paying extra for the poor students. Schools need both.

Honest question from an outsider: how realistic would it be for the government to stop guaranteeing student loans over a "public university" (community college?) level threshold? What are the unintended secondary effects? Would it help curb wild-growth of tuition fees?

It probably depends, more than anything else, on how much lobbying money is available to help convince our friends at Capitol Hill to keep the gravy train rolling.

The very first step should be to make student loans dischargeable in bankruptcy again.

This would be a mistake I think. The nature of a loan is that the lender can reclaim the asset when a default occurs. This works well for assets like cars and houses but obviously fails for knowledge. Combine that with the age and overall assets of graduates (22 and near-zero) and a bankruptcy becomes a less risky proposition to the student. As more and more default on the loans, interest rates will start to skyrocket, to the point that no one will be able to afford one at all.

You can't do that because it would be far more beneficial at this point to just declare bankruptcy out of college and get the loans dismissed than it would be to pay them back. Also there's nothing of value to repossess if you were to declare bankruptcy, banks can't repossess and then re-sell a college degree.

Ah, I always assumed that was the same thing. Thanks. What I mean is: treating student loans (at least above community college tuition levels) like any other loan.

I think the easy solution is to make loans over 20k dischargable. That would allow for some borrowing, but pretty soon that would be the max cost.

One secondary effect might be to reduce the percentage of minority students at 4-year universities, if those students are more likely than average to rely on loans to attend. Opponents of the policy change would ask some very loaded questions about that in any public debate, and they wouldn't be wrong to ask.

Throughout history, every time loans are invented to pay for something, the price skyrockets. House, Cars, Education... except credit cards. What credit cards did is flatten the salary curve, filling the gap between where salaries should be if they increased as much or more than inflation and the cost of living, with debt.

Debt is a powerful tool when used correctly, but most people are unskilled in tool use, financial equations and themselves thus, debt is a Market for Lemons.

Consumers do not know what they are buying. They are buying cash and paying for it with future income.

People are generally more optimistic about their futures and irrationally excited about what they consume.

The banks have been allowed to sell cash with impunity. We have to stop that. We're just cooking the books as an entire society.

"People are generally more optimistic about their futures and irrationally excited about what they consume."

I don't think that's quite it. People get comfort from following a plan. Go to college, take a bunch of loans, and it will all work out.

They think if it doesn't, someone will bail them out because they followed the plan. Everyone else is in the same boat anyway, and maybe one of them will find a solution, or they can band together and demand something from someone else.

That doesn't line up with reality though. A lot of people do get left behind. The people with the "plan" are nowhere to be found, and were just repeating what worked for them without looking at the new numbers.

> Debt is a powerful tool when used correctly,

Could you expand on that? It's a very interesting perspective

Companies (and people) take on debt to invest in themselves, knowing the growth can (hopefully) pay off the debt and generate more income in the long run. Here's a fun list of companies with debt: https://wolfstreet.com/2019/07/26/the-most-indebted-companie...

In the case of students, the idea is to take some debt now and pay it off with increased earnings. The problem is, those increased earnings aren't guaranteed and students are way worse at determining the return on their debt than companies with dedicated teams.

Thank you FrozenTuna for your input but I was specifically thinking of physical people, as opposed to companies.

I also meant a more specific application rather than a general iteration on the (perfectly valid) idea that if one can make more money with a value now, rather than later, and this opportunity cost is larger than the interest rate minus inflation, then the deal is good.

Student loans would be a good example of that in a well-functioning market. Are there many others?

The boom and bust cycle is a feature not a bug. Here's money, go make stuff. You think it's yours, but we'll eventually take it all back in the bust. The money we lost we created out of thin air.

>They are buying cash and paying for it with future income.

Yes, that's what interest is, and it often makes sense.

There's a lot of value of having something (that you buy with money) available to you now rather than in a couple of years - especially if the means to make money depends that item (be it a car, education, a tractor, a musical instrument, set of tools, or what not).

Also, there was a lot of value for me to travel when I was a grad student and had a much more flexible schedule - and, frankly, was younger. I wish I took out loans for that, paying them off now that I'm working full time would not be a burden.

But while you rob your future self by taking a loan, you can't donate anything to your former self no matter how much you have.

TL;DR: there's value for people in having the right things at the right time.

> Throughout history, every time loans are invented to pay for something, the price skyrockets.

Which is why interest-bearing loans are prohibited in the three major religions. Puts things into perspective.

Having just read ‘Debt: The First 5000 years’ I don’t think the author contends that price skyrocketing was the reason interest-bearing debt was banned, but I could be wrong.

Do you have a source?

Which major religion other than Islam forbids it?

The prices in USA look exorbitant. If a worker works full year for minimum wage, they earn $7.25 * 8 * 253 = $14674. Such worker will have to work for 6 years and 9 months to pay tuition costs for 1 year, if we assume that they don't have to pay taxes, buy food, visit a doctor and pay the rent.

A house may cost several hundred thousands dollars or higher. If that worker has paid for a university, no way they will be able to buy a house in their remaining lifespan.

Who is going to study in this university? Billionaires' kids?

Private school tuition is the same as healthcare in the US.

Everything has an enormous sticker price for anyone who asks, but no one is expected to actually pay that amount. And if you do pay that amount, it's just because you're a sucker who didn't get in on the fact that it's just a made up number.

Rich kids may pay that amount, but it probably gets flipped around into some tax-advantaged "donation" that also helps people feel good about themselves.

Poor people get "scholarships", which are really just the university cutting the sticker price down to what they actually need from the person, with some creative shuffling of funds to make it look like they are paying "sticker price".

Healthcare works exactly the same. The key is to have enough layers of bureaucracy that no one can quite figure it all out.

Case in point, my original tuition value of ~16k/year was reduced so much by scholarships that I was actually making money going to school. This is an unusual case, but it wasn't unusual for other people at this school to be getting thousands in scholarships per year.

It's not exactly the same. Tuition had a standard process for showing the school your financials so they can set a price. It sounds like open-ended pickpocketing but it's a competitive market with a clear coordinated timeline for the offer process, so you can choose the school with the best price for offering.

I don’t believe it’s true that rich people are getting to write off college costs as a donation. They might be paying them out of a tax advantaged 529 account. The magnitude of this advantage is such that middle-class people probably care the most about it.

> The prices in USA look exorbitant. If a worker works full year for minimum wage, they earn $7.25 * 8 * 253 = $14674. Such worker will have to work for 6 years and 9 months to pay tuition costs for 1 year,

Someone earning minimum wage does not pay the full cost of tuition. In fact, few people ever pay full tuition due to scholarships, grants, aid, and various discounts. Only very affluent families pay the full tuition costs.

Families with low incomes pay well under $10K per year, all included, for even the top colleges.

Reference: https://www.nytimes.com/interactive/2018/06/05/opinion/colum...

Of course, it's all still more expensive than it should be. I don't pretend this system is good, but it's absolutely not true that minimum wage earners are paying $60K+ per year to get college degrees in the USA.

Minimum wage in Chicago is $12, not that it makes a huge difference in the math.

I think you can make the argument that if someone is going to be making minimum wage after getting their degree, they should go to a cheaper school like a community college or a trade school. Or just start working right out of high school.

Or those with scholarships.

It's not stated, so I assume that the current "all in" cost is about $75-80k. Some private universities in the Boston area are not far behind, including Brandeis, BU, BC, Tufts, and I believe MIT.

I have a high school senior and have been visiting many schools across the U.S. and Canada since last summer. The schools with sky-high all-in costs are not even consideration. If they lop off $10k-$15k per year, we will still be paying a quarter of a million dollars for a four-year education. There are no guarantees of this, either, considering grades and our middle class AGI.

The schools we have looked at are mostly public. Our in-state dream option, UMass Amherst, is "only" ~$30k/year all in, but is now super-competitive, likely because of outrageous private college costs driving families to the affordable options. The only comparable values are the schools we have seen in Canada - University of Ottawa, Carleton University, and Concordia.

Out-of-state public universities for out of state students in New England (URI, UConn, UVM) plus Pitt and Temple are generally high 40s/low 50s. CU Boulder was mid-upper 50s. I can't remember UCSD but it in that range, plus travel considerations.

> I have a high school senior and have been visiting many schools across the U.S. and Canada since last summer. The schools with sky-high all-in costs are not even consideration. If they lop off $10k-$15k per year, we will still be paying a quarter of a million dollars for a four-year education. There are no guarantees of this, either, considering grades and our middle class AGI.

You might want to reconsider those "schools with sky-high all-in costs". Many of them have very generous non-loan aid packages, which for many people can actually bring the effective cost below those of state schools.

For example, take Harvard, which totals about $74k/year.

A family of 3 (2 parents, 1 child) with $160k/year gross income only ends up having to cover $25k/year. A similar family with $120k/year pays $13k/year. They have a net price calculator here [1] if you want to see what it would cost you.

[1] https://college.harvard.edu/financial-aid/net-price-calculat...

I've seen private schools promoting such aid, but for most there is no clarity on A) whether your student will qualify and B) what the amount will be over the 4-year period.

I've heard from friends with students already in college that there are often ad hoc negotiations between parents and financial aid offices about the size of the discount, which is frustrating, unfair, and open to abuse.

What I find funny in these discussions on HN is how most people seem to be completely oblivious to the obvious solution, proven to work in many developed countries around the world: have the state directly fund universities and don't charge tuition to students (or charge them a small amount). Why is the assumption "universities are private endeavours that should make a profit" something that goes unchallenged on HN?

Most colleges/universities are nonprofits and they still charge tens of thousands per semester. I will also point out that the European model is not free, universal college degrees for all - access is restricted behind rigorous entrance exams. Such a system would be politically untenable in the US wherein a growing movement wants to do away with all entry tests. What would actually happen in practice is that we would get a different flavor of the worst of both worlds.

> I will also point out that the European model is not free, universal college degrees for all - access is restricted behind rigorous entrance exams

WHAT ?? Not. at. all.

I'm french and university is almost FREE (never more than 1000 euros a year and mostly around 300) for anyone with the A-level, at any age. Yeah of course there are exams like for any diploma in the entire world but there are not "super rigorous" especially at uni. There's only a "hard" exam in medecine, and normal "exams" every year (like in every program in the world) that are basically a joke for anyone qualified in these disciplines. If you want you can enroll in elite tracks, which are very hard, but they are almost free too (i paid 0 for the education, 200 a year for housing + around 60 euro per month of food).

Granted you have amphitheater with hundreds of people, but if you are motivated you'll get the education.

The most expensive school in frances are the high end economic school and some engineering school (not the best ones actually) and it's under 10k a year.

You have no idea of how much you get screwed in the US

>not free, universal college degrees for all - access is restricted behind rigorous entrance exams.

As another user pointed out, US universities are also restricted in the same manner. Perhaps you're attempting to describe a difference in how they would be perceived and thus perhaps politically digestable, but college admissions is extremely competitive in the United States as well.

The bar for entry has certainly lowered/widened, likely related to financial incentives being discussed in this post.

Your point about entrance exams is, in general, not true. University applications in Europe are very similar to those in the USA.

I think Americans need to be a little more discriminating about tossing around “non-profit” without qualification. Many public and private universities are essentially hedge funds with schools attached to them. This money is used to do everything from real estate speculation to handing out patronage jobs to well-connected elites (and often not to running the schools well or humanely, e.g. all the labor issues around perpetual adjuncting).

That a given university is a non-profit tells you almost nothing about whether it functions like a state-funded school in a social democracy. Many are actually quite predatory in terms of saddling students with tuition, fees, unnecessary courses, etc.

It depends, most university courses in Italy don't have a strict access exam for example, or they only do in some some universities.

I don't think there is a European standardisation on hard entrance exams and limited numbers.

>restricted behind rigorous entrance exams

I don't know which nations you're talking about, but I'm not certain that I'd call entrance exams in France "rigorous". But the entire system is different than in the US, so I guess maybe it's not comparable?

In any case, trying to get a perfect score on an SAT is way harder. Probably the whole reason an industry has popped up around increasing your score on the SAT/ACT/GRE/GMAT/MCAT etc etc etc.

In Belgium, there are only entrance exams for the highest level engineering program, and some medical degrees. No entrance exams at all for anything else.

Don’t confuse “nonprofit” with “no profits”. There are plenty of people making a lot of money in nonprofits.

> universal college degrees for all - access is restricted behind rigorous entrance exams.

that's just not quite true in all major European countries I have a direct experience with.

> access is restricted behind rigorous entrance exams

In some countries there is no exam at all.

Very true. And what works in Europe will not work for the US because 1. No kids should be left behind, so let's dumb down the test. 2. Kids should have stress-free life and academia is for boring people, so let's dumb dow the curriculum. 3. Math is racism. STEM for sure is racism. As Seattle educator put it, why don't we teach kids aboriginal math, and tests are surely racism. So, let's get rid of entrance exam and possibly reduce course work on model civilization.

With all the progress in civil rights, charging hefty intuition is the only way to go

It's worth remembering that the US does not lack for excellent, public, shockingly expensive universities - California, Illinois, Michigan, Virginia, Minnesota, and North Carolina all readily spring to mind.

We're not accepting uncritically that universities are private endeavors. We're accepting that some are and they should be allowed to continue to exist.

Did you mean shockingly inexpensive?

UNC Chapel Hill (what I assume you mean by North Carolina) costs students from the state $8,834 USD. Out-of-state tuition is $33,916. I would not call either number "shockingly expensive."

Michigan is $14,402 and $45,410. UVA is similar. Quite a bit more but still not anything shocking. Minnesota is similar but out-of-state tuition is just $23k.

> Why is the assumption "universities are private endeavours that should make a profit" something that goes unchallenged on HN?

Because that assumption doesn't exist, nor does this describe how universities work in the US.

Americans aren't "completely oblivious to the obvious solution." 80% of first-year college students are enrolled in an in-state, public college.

Good point, although stefano also said "don't charge tuition to students (or charge them a small amount)". In-state tuition is probably still considerably higher than what stefano had in mind (see comments in this thread about costs of attending McGill University in Canada).

> have the state directly fund universities and don't charge tuition to students

That's how you end up with "Education" being the first cost element of the French budget (about 72 billions EUR per year) despite pretty poor academic results (that can be easily observed in the ever-decreasing level of the national exams). When government manages everything in one field, that field becomes mismanaged (trains: SNCF always in the red, the post office: ever increasing costs for users year after year, etc...)

Education has been a big public endeavour in France for over a century and until 1980ish they had excellent results.

According to E. D Hirsch in Why Knowledge Matters, the decline in French academic results is attributable to them adopting the individualistic USA model.

Where are you getting the information that the supposedly poor results are because schooling is publicly funded?

I see your point and it can be true, in particular when the state is officially controlled by a single party, and/or in societies with systematic corruption.

And while your examples are also true, I would argue that it's actually normal for rail and post to be in the red. This is because their primary purpose is not to generate revenue for the state, but to provide a service to taxpayers. For example, unprofitable train routes have to be kept because they link remote areas to cities.

In fact, when private industry handles these type of public services, users tend to have poorer service and higher costs, because there is a natural monopoly.

For train service, take a look at the UK, where different companies "compete": service is worse than France at a higher cost.

La Poste has been a publicly traded company for about 10 years if memory serves. Service has been getting worse ever since.

The US has state funded universities that charge an order of magnitude less than 100k. In fact there are 3 of them in Chicago. Generally, anyone with acceptable high school grades can find a spot in a state university if they want. Students attending U of Chicago would have specifically decided not to attend a state university, typically because their local state university is less prestigious.

U of Chicago doesn't have the prestigious rep that other schools who are charging less do. Is this a way of increasing their prestige?

I’m not sure Chicago State is going to be around much longer...

They used to do this in the UK probably until the 90s but then they'd start charging "tuition fees" although to be fair I think they were standardised, so the same fees for any university, and fairly small, with support for poorer families. I think having so many people go to university is a big burden to pay for. Part of the solution is not so many people going to university.

But that's a very short term solution. Because with low cost labor globalizing and moving out of the EU and US, you will either need more highly educated knowledge workers to be competitive or accept a bigger group in society get very low wages or unemployment.

California did this as part of their master plan back in the 60s. Tuition has been around for decades but up until recently tuition was not legally allowed to be named as such. Instead there were "fees".

Must point out that we have no tuition fees in Scotland, which is unfortunately part of the UK.

I think the entire solution is increasing the tax burden on the upper class in the US but that's just me.

>Why is the assumption "universities are private endeavours that should make a profit" something that goes unchallenged...

Hmmm:

>Robert J. ZimmerUniversity of Chicago

>Total Compensation: $1,625,136Base Pay: $1,090,844Bonus Pay: $100,000Other Pay: $286,484

https://i.imgur.com/b7omZa4.png

https://www.chronicle.com/interactives/executive-compensatio...

https://i.imgur.com/RZRqtQu.png

https://i.imgur.com/k2TIG8d.png

> proven to work in many developed countries around the world: have the state directly fund universities and don't charge tuition to students (or charge them a small amount).

That would probably work if the system was designed that way decades ago. But we’re already in a situation where “free money” is driving tuition costs sky-high. Taking the next step and just having the government cut a blank check for “operating expenses” to every university will just kick the whole thing into overdrive.

If universities in the US were responsible and could a) keep expenses under control and b) not cry like little children when whenever the state demands some belt-tightening, it could work. But that’s not the world we live in. Universities just keep spending more and more and keep hiring more and more administrators.

My favorite experience with this was when I was in school many years ago at a state university. The state government said that their share of the funding was decreasing by 2% the next year (FYI, state universities are funded by state governments to some degree, it’s not all tuition). Two freaking percent! Basically asking the school to cut back to where they were two or three years ago. Sounds like a relatively reasonable ask, don’t you think?

Oh, you should have seen the wailing and gnashing of teeth that generated. The school was claiming that there wasn’t any fat in their budget (ha), and immediately proposed cutting like 10% of all class sections in math, science, art, etc. Then they riled up the students enough to have them march to the capitol and demand the cuts be rolled back (to be fair though, doesn’t take much to get students to get interested in joining a protest).

Anyway, my point is that US universities only know grow, grow, grow and to top it off they all have a fetish for turning campuses into lavish, over-the-top affairs. Getting them to cut back on anything is next to impossible, and giving them a blank check to be paid for by taxpayers in perpetuity would be a disaster.

"Why is the assumption "universities are private endeavours that should make a profit" something that goes unchallenged on HN?"

Because:

1) that's a true statement - private institutions are free to be for or not for profit and charge whatever they like.

2) public universities are already funded (in part) by the government and the problem exists there as well, just not to the same extent

I agree entirely with the OP that the source of the problem is in what I will refer to as the "financialization" of college. As OP mentioned, we saw the same thing with the housing bubble. We see it anywhere this type of "easy" money is offered because most people are not long term thinkers or don't fully grasp the details of the terms of the contract or the impact. Put simply, if you offer people money (even with interest attached) as a loan - especially when they are young and broke and want to pay for something expensive - they are going to take it.

The same thing happened with housing. People's incomes didn't magically do up. Rates went down and so the banks said "hey, we'll loan you more money now" and people did exactly what people do - most of them took out the most that the banks would offer them to buy the biggest houses they could afford. This drove up prices across the board.

The same thing has happened here. The actual cost of educating a person hasn't gone up dramatically. Faculty to student ratios are largely the same as well. Yes, the colleges added a bunch of non-teaching staff that increased cost, but they didn't actually need that money to function (in the beginning). They were just suddenly able to charge a lot more because the government guaranteed a bunch of loans to people who otherwise couldn't get them or at least could get them at reasonable rates. So now there was more money chasing after the same amount of services. Unsurprisingly prices went up (a lot). The colleges then spent money on building new dorms and offering all types of new programs and things. And they hired a lot of administrative staff. Now they need that money to function because they got bloated with all that easy money.

It's just the same process we see over and over. With the federal, state, and local budgets - it's not a tax problem, it's a spending problem. Similar story here. There is far too much bloat and debt within these universities. But it all started with the same shitty easy money crap that we've seen before. Same scam, different industry.

Schools in the US didn't always cost so much. Tuition costs keep going up year after year at higher than inflation rates though. That is at schools that are subsidized by State or local governments.

I'm all for that. My only concern is that it starts covering up one of the fundamental problems: a lot people are graduating high school, becoming eligible to vote, to be drafted, and in all other ways be adults, and they can't seem to do the cost/benefit analysis on college, or research a career that they're about to spend 4 years educating themselves for. They're surprised by how much debt costs, when they should have learnt the match behind compound interest years earlier.

We gotta fix that too...

We also need to move away from the idea that nearly every non-trade position requires a degree and as a society need to stop looking down on trades works. College is expensive because everyone wants to go.

My understanding is that the US system is dual: On the one hand there are private universities that charge freely, but on the other hand there are also public universities that charge reasonable fees (at least for state residents).

It's not unreasonable to charge tuition fees that are significant enough to make sure student will choose seriously and study diligently. I say that because it is certainly not always the case in countries where university is free...

It also makes sense to provide scholarship for deserving student who could not otherwise afford it.

"Reasonable" is relative. Tuition at U.S. "public" universities is still around $10k per year, even if you're in-state:

https://www.cnbc.com/2019/04/24/tuition-at-public-universiti...

There are a variety of systems that 'work' around the world. The United States' model clearly works to some extent as its universities are still able to attract talented professors from around the world and produce a lot of great research.

There are a few reasons why people would resist the idea of making all universities publicly funded. One of them is that Academic pursuit is now beholden to the state and its interests. In the current system, you can find funding for research in universities from both private and public investment. Also, when all funding is from the government, its bureaucratic nature tends to increase costs. Anyone that has worked with a government contract in the US probably understands how lucrative it can be because the government is not incentivized to reduce costs in a way a private entity would. Anyone that has worked in a department of the government when they have to spend the rest of their budget so it doesn't get reduced also understands this. Interaction with private entities that are incentivized to increase profits with what is basically an infinite money pit is dangerous (who then use said money to push for regulatory capture in congress), and you can see the effects of this in almost every aspect of the U.S. government.

It also further cements the idea that you must go to University in order to be eligible for any sort of job in the U.S. Jobs that traditionally only required a high school education or less now require a 4 year degree. This already is happening to an extent because it's an easy way to eliminate candidates, despite the fact that their profession may or may not require any sort of post-secondary education.

It also is a program that benefits and subsidizes people that either don't need it (wealthy upper class) or are already relatively advantaged in life (middle class). It would unlikely benefit the poor as much as you'd think, as there are still a lot of barriers to getting into higher education that the poor face that the middle and upper class simply don't. From the bottom up they have worse schooling and less opportunities. They may be under pressure to find a job immediately out of school (or drop out of high school) to support their family. The exceptions that can benefit from some program like this likely already can benefit from the current system of scholarships and grants to underprivileged students.

I would like to see a shift to something more similar to Canada where the distinction between college and university is clear. Academic and Vocational (but still professional) schooling being separate can be valuable and serve students with different learning styles better than the largely liberal arts education that universities in the U.S. provide. I'd also like to see some of this theoretical money that is funding tuition-free university towards improving educational opportunities from the bottom up in places that desperately need it. It doesn't matter if your postsecondary education is tuition-free if you can't make it to college.

America needs elite colleges to reproduce its ruling class. At least the ruling class thinks so.

That system is completely compatible with the parent commenter's proposal.

Shusshh, don't wake HN.

Our system produces the best universities and most sought after students on the planet. Why would we adopt a model that gets worse results?

If states want to find community college or something I wouldn't gripe too much, but universities are for advancing human knowledge. Don't hold them back.

> have the state directly fund universities and don't charge tuition to students (or charge them a small amount)

See how well this works out in France. Overcrowding, declining facilities, students that have no business in college continuing to go since they have nothing at stake. The top tier schools are still pretty good, but normal schools are a crowded mess.

And to think that the benefit of the education has not changed since when I attended a similar school for a total cost of $25,000 per year just 10 years ago.

Surely UofChicago did not cost so little 10 years ago? A factor of 4 in ten years does not seem realistic.

From here: https://news.uchicago.edu/story/university-announces-increas...

"The total cost of undergraduate education for the 2010-11 school year will be $53,244; of that amount, tuition is $40,188, and the remaining $13,056 is for room, board and fees. For about 60 percent of students, that cost is significantly reduced through need- or merit-based aid. And for the 49 percent of undergraduate students receiving need-based aid, the average amount of grant assistance from all sources, though not yet final, will be more than $35,000 per student in the coming year."

So you are correct.

I attended the University of North Carolina at Chapel Hill, which had a "total cost of attendance" for out of state students at $40,000 in 2010.

For in state students it was only $15,000 per year.

I came from a "middle class" family and received "grants" from the school, such that my cost of attendance per year averaged to $25,000.

Ever since I graduated, not a single person has ever asked me anything regarding my education, and I currently make $93,000 per year as a front end dev.

Strange times!!

It looks like the parent went to a different school than UofC.

It was $39,381 in 2009, $58,230 in 2019 [1]. These are tuition-only, exclusive of room & board, books, etc.

The $100k figure is a projection for 2025.

[1] https://www.collegetuitioncompare.com/trends/university-of-c...

On the other hand, TUM (technical university in Munich) costs only 220 euro per semester, and you're still enrolled into top25 university in the world. The land of free..

TUM has a $1.1 billion budget and 41,000 students. Chicago has a $2.6 billion budget and 16,000 students.

How am I supposed to buy my way in there if I have to compete with the entirety of society for admissions??!!

That's impressive. As someone who works in Robotics, I rate them very highly. Does it cost the same for international students?

I'm a student attending UT Dallas. Not only am I in the honors programs there, but I also have an AES scholarship which grants me a stipend of $3,000 per semester.

I know several people who've gotten into prestigious institutions such as John Hopkins who are going to UTD instead.

It's not like options don't exist. Yeah UTD isn't some brand name, but it's a good starting point.

I blame universities to some degree for this problem, but I also blame consumers. I was once a starry-eyed high school student who applied to the likes of CMU and got rejected from all save UTD and A&M, with A&M basically giving me nothing. People realize that these schools open doors through elite social connections, more so than say UTD, but you can still network outside these elite institutions, it'll just be a little harder.

I see a lot of people telling everyone to just go to another university if the one you want is too expensive or isn't up your standard in the degree you're chasing. Remember that out-of-state tuition effectively bars students from attending any university outside of their state and, if you're in a smallish state like Oregon, your options can be pretty limited, particularly if you'd like to stay in one geographical region.

Go to community college for a year in the state that you want to go to college to, become a resident, and also complete some pre-reqs for cheap in the meanwhile.

Which state schools have out-of-state tuition rates north of 100k a year? Not all of them, that's for sure. U of Chicago is notable for how expensive it is, meaning that virtually any other option is a cheaper option, almost certainly including out of state tuition in another state.

> "particularly if you'd like to stay in one geographical region."

A luxury I can scarcely comprehend...

Not really, out of state tuition per term at Montana state university Bozeman (go cats!) is only 6k/term.

The liberal arts college my wife teaches at recently introduced a more "transparent" tuition pricing scheme. Advertised price $18,600 down from $38,600! https://news.central.edu/2019/09/central-announces-new-tuiti...

The key is in the subtitle:

> But fewer students are paying the full tuition

Any seller who can legally charge different prices based on means is under impossibly strong pressure to exercise that power. Universities do this by having "full" tuition rates that almost no one pays.

Is University of Chicago even that good? Genuinely curious, as I know nothing about it. I live here in Chicago, and feel like I never hear about it, compared to say Northwestern or like UIC (University of Illinois at Chicago). Why would anyone ever pay that much for college yearly, if it wasn't like the #1 school, by a landslide, in the US?

EDIT: I guess it is good? haha The more you know. Just surprising that I've been here in Chicago for almost 10 years now, and feel like I never hear about it compared to other colleges in the city. Maybe it's cause they aren't downtown or something? ¯\_(ツ)_/¯

From US News, its #6 in national rankings so its pretty good. But the way the economy is structured around knowledge work and with the effect of credential signalling, our society is convinced of the need to get into the best school possible. This belief could be utter bullshit, have some truth (top rated schools teach better), or be somewhere in between.

What is probably very true is that getting into a top school is a signal that you did very well in the competition of getting into a good school. And employers absolutely pay attention to where you went.

so getting into a good school becomes a societal self fulfilling prophecy in terms of importance.

I grew up on the North side of Chicago and also didn't feel like UChicago had a very large presence. Now that I work in the research world (both in CS and biomedicine), it's very obviously the dominant institution in Chicago. Northwestern comes in at a distant second and UIC isn't really in the race. I'm not sure about their undergrad education but if a student wants to have access to teachers who are also leading voices in their fields, UChicago would be a better bet than other local options. Nationally you would have to look to places like Harvard or Stanford to do better.

Yes, it is a top school in the country, equivalent to an Ivy League school.

In terms of the price, a few things come into play. First, most other schools have similar pricing. Northwestern is $54.6k and U Chicago is $58.2k. Yep, it's $3,600 per year, but is a 6% difference that meaningful? Maybe not given that university education has lots of other expenses. Room and board might end up eating a grand or two at another school out of that $3,600.

Plus, as a student, often you don't get full choice. It's not like going to the store and being allowed to buy whatever phone you can afford. The university has to pick you first.

Beyond that, the sticker price isn't what most people pay. For students coming from families earning over $110k/year, the net price is $40.8k. Northwestern's sticker is $3,600 cheaper, but the net for rich kids is $40.3k or only $500 cheaper.

Not only that, for lower-income students, U Chicago is cheaper. In the $0-30k bracket, $3.2k vs $13.4k; $30k-48k, $6.3k vs $7.4k; $48k-75k, $7.9k vs $10.7k.

So, is U Chicago more expensive? If your family is making half a million a year, maybe you're paying sticker everywhere and your family has to pay more for U Chicago. However, the sticker price isn't that meaningful given the parental income based sliding scale that universities use.

They don't have the same kind of PR as other major universities (Stanford, Harvard), even though they compete on that level.

UIUC has a similar problem that its a top school but isn't well-know outside the immediate region

As a Northwestern grad--this is hilarious.

Yes. It’s a top tier university.

You live in Chicago and you don't know UChicago is more prestigious than even NW? Damn son, you haven't been here very long have you?

ARENT DOWNTOWN??? UChicago is in the heart of Chicago! You know Chicago doesn't end at Roosevelt, right?? Let me guess, you grew up in the suburbs and moved to Lincoln Park 10 years ago?

It was also the home of the first nuclear reactor:

https://en.wikipedia.org/wiki/Chicago_Pile-1

It's ranked #6 in the nation by US News & World Report

University of Chicago has amazing economics, and is know for its unique approach. The Chicago school is descended more from the right-leaning Austrian than the left-leaning Keynesian that essentially every other school has. One of the best places you could hope to study for economics.

https://en.wikipedia.org/wiki/Chicago_school_of_economics

How can these universities be so expensive, if you can instead go to a just-as-good university in the UK for a fraction of the cost, even as a foreign student? Why does anyone agree to pay such fees?

You can attend a public university in the US for a fraction of the cost. UCLA is $12,000 a year for tuition. You can also do two years at a community college which costs almost nothing like $50 a credit and transfer to a 4 year university for the the remaining two years.

Oxford (UK) tuition for overseas students is $35-45k/year (and people generally pay sticker price), so not radically cheaper, though you get the B.A. in 3 years not 4. Other EU countries are much cheaper, but with a language barrier (except maybe NL).

The title is kind a click bait. The content is actually about very few actually pay for the sticker price. In essence the sticker price is becoming kind a meaningless.

I can’t imagine paying $100k even for a 4- or 5 year degree. My student loans (zero tuition, only food/rent/books) was $35k for 5 years I think. I have paid over $200/month for 15 years and I’ll be done paying it back this year. I just can’t even imagine my calculation if the loan had been 10x. My US paycheck would certainly be bigger, but I still fail to see how it could be a good investment.

Chicago is one of the private schools where the sticker price is essentially fictional. There may be a small number of students each year from wealthy families who pay that, but I'm reasonably sure it's nowhere near what the average student actually pays.

Are we ready to admit that government-backed, non-defaultable student loans are a bad idea?

I still fail to understand why in US the university is so expensive, compared to 99% of universities in Europe. Not even private universities in Europe are so expensive like there, plus there are countries where university is free (e.g. Germany).

Is the American Dream just the one who wants their kids don't go to university because it's so much expensive?

The boomer generation has really broken it. Imagine now that millennials could not send their kids to colleges because of the high tuition fee, connected to low salaries. It's a system that has its destiny doomed and that a day will collapse badly

At what point doesn't it just become feasible to hire a full-time tutor?

The point of college is a name and certificate. If it was about actual education and learning, we'd see online classes with in-person exams in the forefront.

So, never? A tutor cannot give you a magic piece of "job qualification" paper.

Not Harvard, not Yale, not MIT, not Cornell...but U of Chicago? Why would they be able to charge so much more than the other big name schools? It may very well be they have a specialty they are the best in that I'm not aware of.

Also, if you are in Maryland take advantage of the MD program that lets you pay your kids college while they're in high school and lock in the college price as of when you enroll in the program. At the average 8% rate of college price increases you could save around %57 of the money you'd pay otherwise.

Let's assume a full time student taking 4 courses at a time. A professor might (should) be able to teach 4 classes. I'm not sure how much profs make, but let's assume between 1 and 3 students could pay them. Now where does the money from all the other students in the classes go? Sure, there's admin overhead, room costs, etc, but that stuff is hopefully less than the prof costs. So 6 students max to cover costs for a class. Where does the money go from all the others?

> Sure, there's admin overhead, room costs, etc, but that stuff is hopefully less than the prof costs.

Not by a long shot.

The vast majority of jobs/careers/professions do not require sitting in a classroom for 4 years to learn enough to do them. Even less require sitting in an extremely expensive classroom for 4 years.

At the same time learning has never been more accessible. I can study Python, mechanical engineering, calculus, aviation ground school, etc all without leaving the house if I wanted. So how does a commodity like education, which is basically free for the people who want to learn, increase in price?

You're assuming the entire point of college is to make you a worker. But a lberal arts education has always been about making you a complete human. If nothing else, it's important for citizens to be well-rounded enough to be informed voters.

This comment stood out:

"It also manages a staff that receives more than $1 billion in salary, $230 million of which is for its roughly 1,350 instructional staff and faculty, according to federal data for 2017-18. Producing and employing Nobel laureates does not come cheap."

In other words, only 25% of expense is for instructional staff and faculty, while 75% is not. I'd love to know how much of the $750M salary goes to administrative execs who don't actual do anything.

They don't even have big time athletics and facilites, do they?

And probably a huge endowment that if properly applied would remove any need of tuition.

>But fewer students are paying the full tuition.

Is anyone paying the sticker price and if so what is their financial state / considerations?

If you work for FAANG your kids have to pay full tuition because scholarships vanish when you have $250K or more in annual income.

A few years ago an American friend told me the cost of his masters at Colombia was about USD$180K for 1 year, taking all expenses in to consideration. Journalism.... insane... no way that money is coming back without a pivot to public policy!

No degree, no matter how gold-plated, is worth $400K. Go to a community college, get a degree in accounting or whatever and spend the rest of your life laughing at the idiots still paying off their tuition debt...

Is there any data on what % of student loans are spent on things other than tuition? You have things that could be school-related like laptops but then you have kids paying credit cards with student loan money.

How does a 400k degree compare to a state ran online degree for 24k? http://www.wgu.edu as an example.

Education should not be this expensive. If at all, it can be competitive. But it should be available and affordable to all. U of Chicago is not a best place to be in.

High tuition costs and loan burdens were and are an integral part of the de-radicalization of American college students.

It's one thing for private universities to cost so much, but there needs to be a tuition free public option.

That exists to some extent in 26 states, though generally at the community college (associates degree, 2 year) level:

https://www.usnews.com/education/best-colleges/paying-for-co...

But why? Why does it cost as much as a full time teacher to get extremely part time access to university faculty?

This stinks.

How come it can be this expensive? Can't see how a degree would worth 400k seriously

Ouch! The ole Alma mater ain't what she used to be.

A year?! Sheesh. Things are getting out of control.

Why not just do it like any other developed country on earth, make the universities public and drop tuition altogether. Works very well here in Germany.

Compared to USA Germany is a relatively poor, so it doesn't work, you see.

Conservatives in America literally liken such proposals to the socialist takeover of America, with the actual belief that authoritarianism and basic social programs are inescapably intertwined.

So half the country is resisting those sorts of programs with all of their might.

Why not!? If our next president will just wipe out student debt--without ending government backed loans--why not charge $1MM/year?

I guess you're being downvoted for your sarcasm but I do think a giant uneven payoff is a bad idea and cheap populism. Part of the reason the price keeps going up is the ready availability of money via student loans.

higher stocker price and more discounts + aid. It’s the clothing store pricing model.

Graduating in Europe with Master's that cost me nothing, I always feel so bad thinking about the debt my coworkers who studied in the US have to repay.

It's just so wrong and stupid. On top of that I can always go back "home" to get free healthcare too.

US is (at times) so much better when you are an immigrant.

And then so many (who actually have student loans to repay and expensive healthcare to pay for) feel sorry for me because of discrimination (perceived only by them!)

Same here, got free education in my home country, upto a Masters. Came to the US for a PhD, also free (+ a small stipend and internships). I just don't see undergrad education here being a good deal.

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