Why has college gotten so expensive in the last 30 years? A blank check in 1993

I know a lot of people will disagree because there are so many ways to compare colleges. But what I look for is the strength of the top faculty (not necessarily the teachers but who you might work with as you get more advanced), the facilities, the quality of the research that comes out of that University. The US really has an impressive number of schools that attract top faculty from around the world and produce world class research in many fields.

A lot of European colleges seem to give you a good education. But if you really wanted to be an expert in something, or just get the experience of working with top people, it is amazing how relatively strong US colleges are.

I know I am making a lot of generalizations, perhaps unfairly. So if you disagree or see it a different way please correct me. This is something I am really trying to learn about.

This is an easy way to ensure you do not have a diverse workforce, or even the best people for the job

As you say, you can have high quality, and low cost. But European university isn’t as universal as north american universities are.

This is part of the problem.

Stop demanding a formal degree for jobs, allow anyone who can do the job to do it, and much/some of these problems will go away.

And not universal. You do not go to a German university from a Realschule or a Hauptschule -- you go to Gymnasium, and if you succeed there, you can go to University.

Otherwise, there are professional and vocational tracks available.

University slots are limited as well -- you may have to hunt around for a university that has open space for you in your program of choice, or choose a different course of study.

Changing study programs is much more difficult than in the US.

I would be abundantly happy if we did this in the US, but the "everybody must go to college" crowd would have none of it.

But they’re not universal and there’s nowhere near the level of handholding and support that’s common in US universities with high tuition, i.e. private ones. If you have a problem in a German university it’s on you to run around and solve it and if you can’t the administrators are quite likely to say “tough” if you tell them. Missed a deadline? Your problem, should have read the syllabus. Come back next year.

"spread out" implies taxation, but something similar can be done via endowment.

For example, a college with an existing $100MM endowment can educate at least a few hundred students for free in perpetuity.

With a billion dollar endowment, a college can educate a couple thousand for free.

In fact, Berea College does exactly this: 1600 students, 1.2 billion endowment, and provides effectively free college to nearly every student. Ranks alongside places like Denison University. So, Low Cost (to consumer), High Quality, but definitely not Universal (there are only so many billion dollar endowments to go around).

High Quality, Available to everyone: Will cost a lot because we'd need a lot of high quality teachers, and attracting them will be expensive.

Low Cost, High Quality: Only the best will get accepted, and the colleges will make their money in other ways using the work the students provide (like how medical school research departments are big money-makers)

You see almost the same phenomena with Uber vs traditional taxi's. The government forced taxi's to buy medallions to operate a certain number of drivers because they didnt want the streets overrun with taxi's, with each medallion costing hundreds of thousands and even up to a million dollars in places like NYC. A taxi driver essentially had to have a second mortgage to operate. Along comes Uber and that whole government backed system gets crushed and starts to look ridiculous and artificially inflated in price. Yes, the taxi drivers got screwed, but it was the "good intentions" of the medallion system to keep the number of taxi's low that screwed over the consumer with higher cost rides compared to a market driven approach with companies like Lyft and Uber competing to the bottom. Let the market do the same for colleges. They have fancy campuses now.

There have been other ideas where student loan ROI is factored in and the college themselves must cover the cost of the loan if your degree turns into a lower paying job and the percentage of your loan payment exceeds some percentage of your income. Either way they have skin in the game that's EXACTLY whats needed.

University will stop offering low quality degrees that do not offer utility and focus on current needs of economy.

https://fanbuzz.com/national/highest-paid-state-employees/

And now with distance learning, tuitions have not decreased by an order of magnitude though the overhead should have.

To last point, many state colleges in the US let you transfer credits from a community/regional college easily, so you can save ~50%

IMO if you want to remove non-STEM courses, what you actually want is a trade school. University is all about learning outside of the normal narrow viewpoint, so removing everything outside the narrow viewpoint defeats the point.

"But so what", you might say. Well, here's the problem: trade schools already exist, and nobody wants to hire from a trade school because it's seen as less classy.

I think this is the fundamental problem: People want a degree to primarily satisfy employers, and what employers want is to exclude people. You can't have an all-inclusive exclusive degree, it's an oxymoron.

Either you change employers' minds to match your vision of all-inclusive degrees, or you change the degrees to match employer's vision of exclusivity.

And you generally can't just make more of a positional good. That's like, "why can't Louis Vuitton ramp up production so that everyone can have a LV handbag?"

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

Essentially, the primary driver is states reducing funding to public institutions. (A reply to the linked comment shows how this transfers into private colleges costing more, but essentially consider that if UMass Boston ended up being more expensive than Harvard due to Massachusetts reducing tuition support, then Harvard would obviously be remiss if it didn't double its prices. This is not a knock on UMass Boston, an excellent institution that nonetheless does not carry the prestige factor of Harvard.).

So the problem is: 1) states are the only entities that can quickly (< a generation) create universities whose degrees broadly confer the benefits expected when purchasing a college degree, 2) states are cutting funding for higher ed. QED we are more likely to end up with fewer colleges in 10 years than even as many as we have now.

That's all blowhards (not you) really mean by "high quality" anyway.

Nonetheless it is quite the puzzle, why there aren't more colleges.

Like Leon Black could afford, just by himself, to found not one, but five world class universities, instead of donating to Harvard, one for each of his children to be admitted to. And yet.

This was the way medical school quotas / exclusions for Jews were dealt with: new medical schools that didn't discriminate!

Maybe it's a little about money. Getting your kids a guaranteed Yale admit probably costs around $20m - then the legacy system can deal with the rest of your family. It's a lot more affordable than founding a school.

Still I don't think it's about money. There isn't some monopoly on schools or lack of spending. Historically, and in my personal belief, someone has to feel they stopped getting a fair deal from the system. Then there will be more schools.

You need some way to get your foot in the door and prove your chops. Some bootcamps like Lambda school are doing a pretty good job about that

Why can't we have free online courses for everyone, where the only costs are the actual free market costs that go towards staff required for administration, courseware development, instructors, and test proctoring?

Why should a college degree from an online university cost a fortune, if the course material remains mostly unchanged from year to year? At the end of the day, all you need is the educational materials, someone who help guide you through them, and then a test to prove that you learned the material. Why isn't that good enough??

I'm not saying you get what you pay for, I'm saying you get what you vote for. The government needs to get the heck out of the loan market.

>>It's easy to find example in the US past and in other countries where high general and specialized quality education is provided in a fairly low-cost fashion.

If you are talking about Europe, the catch is that they weed out those who shouldn't be there early. For example in Italy, everyone can go for the first year, but then you have to pass a continuation exam, that upwards of 50 to 70 % fail. Germany has a similar system with exams early in high school that separate what tier school you can go to (trade schools or universities). So sure, its "free/low cost" but and technically "universal", except for those who fail at the gate. Otherwise try your luck in the US where you can rack up massive debt to attend any for profit college with 90% acceptance rates and the peice of paper is accredited the same as any other college. Plus, most Europeans want to finish in an American school because late game quality is light year beyond what you can get in Europe save for a few schools like Cambridge or Oxford, and maybe the Max Planck institute.

You say that but the typical dorm room offers no privacy or air conditioning, and the showers and bathrooms are shared. They're similar in nature to SROs which the US pretty much abolished anywhere else, but way more expensive.

And then universities have the audacity to demand that students live in them freshman year, even though living off campus would be cheaper.

In a single year the tuition increased 5k, and yet the department of my major was downsized and classes that I needed to complete my degree were full. At the same time though they built a new $42 million "cultural exchange" building and began adding an enormous sports facility. It turned out that actually there was no intended purpose for the new building either, and it was mostly sat empty as far as I know.

I went to a large school in one of the big NCAA athletic conferences. Their stadium cost around $100M in 2020 dollars, and they bring in roughly $100M in revenue from all sports annually. They call football and basketball "revenue sports" because they fund all the others. I'm not sure how much tuition goes to sports, but the big ones are very self-sufficient. That, and they serve as marketing for the school, and that can add value to the degree.

Read 'Paying for Party' if you'd like a sobering view at how fucked everything is (graduated in 2009 and it was so true even at that point)

https://studentaid.gov/manage-loans/forgiveness-cancellation...

https://www.npr.org/2020/01/22/797330613/myth-busted-turns-o...

It's considered difficult but not totally impossible. It is indeed treated differently from other debt.

Better to say governments should do, not fund, on the institutional level (run the school, run the hospital, like you say), and fund, not do, in the individual level (UBI not SNAP).

Both of these are about what you have done, and not what you can do. I'm proposing limiting interviews, at least entry-level ones, to relevant skills, abilities, and knowledge. "Read this judicial decision and tell me whether you think it was correctly decided and why." etc.

> destroy all specialized scientific research, education degrees, agricultural science, all high-level maths, biology, ecology, zoology, environmental research

The government should fund students in these directly, as we do with grants in graduate level education.

Why? All of these fields existed prior to student loans becoming non-dischargable. As it stands, in many fields there is a massive grad school bubble where there are many more grad students and Ph.D’s than tenured positions.

As for education degrees, those have the same basic instrumental role as engineering or business degrees—they’re a form of professional training and accreditation. A lot of minor public universities started off as teachers’ colleges in the first place.

Work sample tests are legal; otherwise we wouldn't see tech companies giving whiteboard interviews.

More general tests are not legal (https://en.wikipedia.org/wiki/Griggs_v._Duke_Power_Co.) unless you can demonstrate that they "bear a demonstrable relationship to successful performance of the jobs for which it was used". On the other hand, they held that "neither the high school completion requirement nor the general intelligence test is shown to bear a demonstrable relationship to successful performance of the jobs for which it was used" so I think there's a decent chance that the widespread use of college degrees as a filter is also already illegal. (Not a lawyer)

Our society uses debt for an enormous number of things: business loans, car loans, mortgages. Simply prohibiting these seems like a cure worse than the disease?

More to the point, the comparison here is against regular private lenders, but instead against private lenders with government guarantees. Those have no disincentive whatsoever to avoid people who can't pay money back or to limit the loan amount. In fact they have a very strong positive incentive: there's a guaranteed profit on every loan and it's proportional to loan amount. What's more, if you cap the loan amount then the "customer" might use a competitor with a higher cap, so you lose the whole of the loan.

It pays better than anything else, so what's the problem?

Never mind that some stupid math problem that only fifty people in the world ever cared about led to the creation of both crypto and computing.

So presumably it would have been "discipline" to have Turing flipping burgers instead of going to college, because most administrators, voters, and politicians had no clue what he was doing, and fewer people cared.

This is why we shouldn't make student loans justify themselves economically.

In fact we shouldn't have student loans at all. Because it's really hard to make multi-decade predictions about which areas of interest will be financially viable - as anyone doing a CS degree today will discover in the next ten years or so.

1. List a set of "peer institutions", usually with the primary input coming from admissions. Here, "peer" means "competes for the same set of students we're after". Almost always the region's public colleges and universities will be on this list.

2. Set prices relative to these "peer institutions".

If Local State College charges $X, then most (read: non-elite) regional private colleges can get away with charging after-discount-factor $(X+Y) for some relatively modest Y < X.

Increasing $X also increases $(X+Y).

Cutting state subsidies will lead to higher prices and private institutions. 100% probability. I've seen the exact process by which it happens.

I was surprised to learn that the federal government were the ones now directly making the loans, and I'm sure many others are too.

I had to do quite a bit of research to come to the conclusion that this was causing tuition increases. It's rarely ever talked about for some reason.

And why politicians want to see them in the voting booths so badly.

In addition to this, student enrollment has increased, so per-student taxpayer funding has not kept pace even as taxpayer funding for public universities has gone up relative to the overall population.

Ah, the peak of an era.

Check out "Fear City: New York's Fiscal Crisis and the Rise of Austerity Politics" if you haven't, and cry some.

When I graphed the data over time, there was no place that stood out as being a place after which tuition increases were consistently worse than what they had been before. There would be a couple years or so here or there where it rose more rapidly during those years, and a couple years here or there where it did not rise as rapidly as in prior years, but mostly its been pretty steady.

Most articles I've seen where someone says the high cost of college is because of change X appear only look at the growth since X and just assume that X was the cause. So if tuition goes up 4% a year for 10 years, then some change is made, and it goes up 4% a year for the next 10 years, you'll see articles blaming the previous 10 years of 4% annual rise on X.

The entire economy is subsidize. We have a credit-based system, hence universal access to cheap credit is the end-game, that is why car loans are starting to creep into the 10-year territory with 0 down and no credit score.

College graduate parents are going to try very hard to send their kids to college, and today, the vast majority of students at 4 year colleges come from families with college graduate parents. When tuitions were low, this did not require much sacrifice for those parents. When prices went up, those parents continued to send their kids to college, making greater sacrifices, but often without taking out a loan (at least for public universities). Today, 42% of undergraduates at public universities have no debt.[0]

No doubt loans also had an effect -- among other things, they made it easier for state politicians to reduce support for public universities. But since 40% of students at public universities have no debt, and costs increased more than 5 fold, it is hard to argue that loans were the major factor driving up the cost. To support the loan driving argument, it would be useful to see relationship between the fraction of students with loans and college costs. Simply saying that costs went up when loans became more available ignores many other changes in education finance.

[0] https://www.aplu.org/projects-and-initiatives/college-costs-...

If you want to accuse the universities of spending more, do you have data to back up that assertion that they are spending significantly more on a real, per-student basis?

I did some low-fee legal for awhile part-time because I was still programming after I got my JD. I think I charged $250/hr or flat fees but I did a lot of free/contingency cases too. As a solo you rarely bill 8-hours a day. Between running around to meet clients or driving to different courts in the area some days you are lucky to bill a few hours.

One guy got angry at me because I wanted $250 (or something like that) "just to read" his DIY complaint before he filed it. "Just to make sure everything looked okay..." He didn't realize that he would be establishing an attorney client relationship with me that would obligate me to give competent legal advice that put my license on the line. That is way beyond just reading his complaint. The same goes for reviewing contracts, non-competes, etc. I eventually read the complaint he had prepared since he sent it to me earlier, boy I dodged a bullet on that one. It would have taken a ton of work to get it even close to ready for filing.

I did some low-fee family law stuff too -- one client thought I was taking the side of her ex, because I didn't raise her legally irrelevant complaints in court. I still got her more money than any other family lawyer would have done for the small fee she paid. I think I charged her a flat $1100.

In a low stakes employment discrimination case, my client had been rejected by multiple attorneys before she ran into dumb me. I took the case and got the client a six figure settlement. Client promptly took me to arbitration because she thought my share to was too high even though it was well below industry standard.

Eventually I got tired of this crap and sold out and went corporate.

Based on my baised observation of the local UC system I just don't see the types of personalities working there thinking about how to extract the last dime from students. What I do see though is very lax fiscal discipline and the inability to make even easy cost management choices. In this environment everyone just expects budgets to increase by x% each year. Then each year they realize - omg we have to increase tuition why does this keep happening?

I can not rely prove my idea - can you prove yours?

Getting paid upfront, instead of years later after tons of paperwork, can only accelerate the process.

Unpopular to admit: we need doctors / engineers / farmers more than we need another art major.

As a US taxpayer, I wouldn't want to subsidize just anyone's education. I'd rather incentivize and subsidize engineering / STEM / agricultural science.

You don't get to just get a free education regardless of what you want to study - different work/study has different value to society.

No, but she's probably going to pay way more taxes for everything, including income tax, VAT, taxes on petrol, electricity and will earn less.

People who complain about it are concentrated in threads like this, but all real life Americans I've talked with (whom I know for different reasons) said the debt may be annoying psychologically but at the end of the day, white collar professionals can easily pay it.

However, it may be the case that more people go to college in America due to marketing and other influences than actually should. Also, students tend to get pushed through the system and are pampered and have an entitled customer attitude and the colleges have a service provider attitude. The end result may be that even people with bad job prospects move through the system and then get surprised at the end. In Europe, universities quickly fail these students and push them out of the system so the students face reality earlier.

Also, Americans seem to value the "service provider", "resort" type college, with all kinds of non-academic services, personal mentoring, sports stadiums and teams etc. compared to the bare bones approach of European universities.

EDIT: just saw it's an art degree in question. Spending years on studying art has always been the luxury of wealthy people at all times, in all places. You'll have difficulties finding a job (assuming no connections) anywhere with an art degree. The meme of having to work at McDonald's is also alive and well in European countries.

PhD students are incredibly cheap and do a lot of the revenue-generating work; namely, classroom teaching and research. PhD students earn between $20K/yr and $30K/yr in stipend. For the university, that is damn close to the ALL-IN cost! The university pays no FICA taxes and does not contribute to retirement for these employees.

For this reason, in high-demand fields like Computer Science, 60+% of PhD students are foreign nationals. And the domestic students are often over-represented at top-tier universities. So there are lots of CS departments where the majority of the revenue-generating employees are foreign nationals making $20K/yr all-in.

A PhD student instructing or leading recitations for university courses makes less than 1/2 of what a first year high school teacher makes.

A PhD student doing research is bringing in typically $100K - $200K in grant money but only receiving about $30K of that. Also, again, the "2x multiplier" used to calculate the total cost of a normal employee doesn't apply here because the university does not pay FICA taxes, doesn't contribute to retirement, and often gets great tax breaks and gifts to cover things like real estate (=office space). For universities the "total cost of a PhD student" multiple is more like 1.2x salary.

Professors are managers. Deans and so on are executives. PhD students are the "bread-and-butter" employees of the university. They are the ones who do the bench work/coding and the vast majority of face-to-face teaching. Without international PhD students, universities' total cost of operation would skyrocket.

Credentialism is exactly that. If in the pre-covid era you went to Washington, DC, you will see huge illuminated ads in the metro stations for companies, for example "graduate school" (literally the name of one company I saw) which offer super sketchy master's degrees. This is because if you have a master's degree, you get a mandated pay bump in your salary as a civil servant.

And while it's definitely true that lifetime income expectations are higher for salaried people, I wonder if they're high enough to offset the negative compound interest most people are saddled with during their 20's.

I think we may be playing fast and loose with our comparisons elsewhere too. There's sort of an image that going to college for 4 or 6 years is a huge investment of energy in your future, and the alternative is to just take 1 year of trade school and then skip to the post-graduation part of on-the-job learning. Like we paused the clock for the college people to catch up?

If someone put half the time and energy into trade school + life skills + finances that we expect of college students, I think they'd turn out pretty okay. Stressing about money is expensive. Starting your nest egg eight years late is also expensive. If you make your early lead count for something, I don't expect too many regrets later on.

How much is one’s health and ability to move around in older age worth? How much is it worth to not have to drive around all day and come home on a regular schedule?