High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993
shrewdcuriosity.medium.com
shrewdcuriosity.medium.com
Having worked for one such office for ~15 years, the most appalling part was that they are largely antagonistic toward the faculty and mission of the schools. The waste is dizzying."
I made the above comment on another thread with a similar topic: "Boston University Undergraduate Cost Reach $80K" https://news.ycombinator.com/item?id=31309700
I hate that now, when I’m more mature, more experienced, and know exactly what I want from it is the time it’s the most difficult for me to go back.
For things like swimming pools and gyms, sure.
But some of the new services are things like 'mental health support' - it would be problematic if you'd opted out of mental health support to save $50/month, then you committed suicide.
BTW, you could get a lot of fees removed or reduced by dropping to part-time commuter student. But they probably got rid of that exclusion since a lot of colleges are chasing money.
I was also an online student that only attended on campus class for 1 weekend per semester. It made no sense to make everyone pay the fee that included significant amounts of benefits that weren't needed by online students (the online MBA program was structured toward those currently working). This was on top of the $41 fee that I paid for the "Rec Center"...which again would never be used by me since I was an online student.
Like many first in their family college students I soon discovered a lot of scholarships only covered tuition (and books) and I was left to make up the difference in housing, meals, and fees. I felt the fees were a sly way for the college to scam money out of students. I was required to pay an athletic fee but they weren't required to give me tickets to every football game.
For schools, MBA programs are such a money pump if they were entitled to charge more they would. A lot cases the employer pays for the MBA program and they don't have the wherewithal to scrutinize excess fees. So, you end up with online students paying student health, rec, bus, and athletic fees.
I think all online degrees are over the top also because many companies will pay for them. I'm doing a CS degree right now that is online and it's more expensive (per credit hour vs. on campus). Not sure what the on campus fees are, but it seems crazy that not requiring anything more than some server hosting space to charge ~$2,000 for a 4 credit class. Luckily my employer is picking up 90%+ of the tab (maxing out at $5,250/yr).
This sort of desire to tell people what's good for them is why we can't have nice things. You think you're being reasonable here but there's another well-meaning moron insisting they're being reasonable by preventing students from opting out of the the $50 gym fee, and another well-meaning moron that thinks they're being reasonable by requiring the dining hall have X Y and Z, etc, etc, etc.
In reality what you people are doing is the institutional policy equivalent of littering. One or two people do it and it's fine, we can tolerate that. But everyone does it and the park turns into a dump and the college turns into a flaming pile of money that society cannot afford to keep feeding.
The least crappy outcome is achieved when none of you get your way.
Schools try so very hard to be the entirety of their students' lives. They want students socialisation to be within their bounds, they want students to go to their hospital, exercise at their gym, be policed by their police force, work at their on-campus jobs, eat at their cafeteria, live in their dorms, cheer for their sports teams, and so on and so on. And society mostly caters to this desire, which the students and parents are also more-or-less on board with. But even as these integrations individually benefit the students, the net effect is to bubble students away from the rest of the world while also creating a bloated administrative entity that is both too powerful for its own good and completely unable to get things done.
Are you only speaking of public universities? I worked at an expensive, private, liberal arts, non-profit college, where I witnessed revolting inefficiency. Do such schools receive _significant_ state funding? Any?
One example of the waste I witnessed: at the end of the financial year, the student services departments where I worked would blow whatever money remained in their budget on frivolous, needless things, because if they didn't spend it, it went back into the college's budget. This mostly changed after the 2008 financial crisis, (I think?) but that's how it was for a long, long time. All staff were complicit, and knew what they were doing. These departments were given executive privileges with very little oversight of expenditure or outcomes. The corruption was surreal.
Another dynamic that I never see mentioned: in a small college town, the hiring pool is challenging, and the college jobs are the high-status local jobs. I witnessed, on several occasions, needless positions being opened for people who were basically friends of staff, so they could have one of the "college jobs".
When I hear students discussing college debt, and I remember these and other examples, it makes me a bit sick.
If only they hired an inspector general or auditor to keep tabs on these sort of shenanigans! /s
The problem is that in an effort to avoid being wasteful, the bureaucracy aggressively tracks money spent, and forces a return of unused funds. This in turn disincentivizes saving because there is literally no benefit to spending efficiently or saving money for rough times, because those short term savings are immediately vacuumed back up by the higher level bureacracy.
Blaming student services departments for overspending is missing the root of the problem. I've seen the exact same issues in STEM research institutions.
I worked in a Student Services office for 15 years, but I suspect this happens all over the place.
I also suspect that much of this changed after the 2008 financial crisis, as universities suddenly had to match their programs with career outcomes. Then the worst thing happened: administrations expanded even more, while the essential liberal arts are being suffocated and squeezed out.
We lost the best part of the college concept, and kept all the worst parts.
Decreased (per capita, inflation-adjusted) state (and federal) funding for schools (mostly state) and student grants (state and federal) effects both public and private schools.
The biggest declines in enrollments are at community colleges and state schools. Also counter intuitively when a college lowers their listed tuition to offer more transparent pricing they almost see an enrollment decline.
The difference between 50k, 60k, 70k, 80k per year is almost irrelevant to the students if they are able to secure a gurnanteed government loan.
Schools and loan folks have skin in the game so I can understand why they are pushing for more high priced loans.
Why aren't school guidance counselors and school programs better preparing people? We should be taking a hard look at that.
It's no wonder many young people have no idea what a burden debt can be.
No, I didn't went to military college, sadly, and now that I am properly independent and could do that in theory, I am over the age limit.
I am now debt free, but paying debts took a huge chunk of my life and set me back a lot, I married way later than I planned, got back to my sport way later than planned too and so on. (it took me 16 years to be able to rejoin my old team! now I am horribly out of shape and struggling to get back in shape).
in any market, there are broadly only two competitive strategies, cost or differentiation, and cost no longer matters when money is "free".
This often means we pull money out of our own pockets for super basic tooling and materials. Students simply cannot learn in such a restricted environment and often burn out because they have to spend days working around a problem that a $10 component is meant to solve. Those students are also required to work to even afford tuition. They have to take on a second external job to have any "extra" money to buy their own hardware with.
Yet the uni absolutely preaches equality and opportunity. Again, democrat talking points. They do nothing to actually make that happen.
We need to defund unis, and we should have done it 20 years ago. Across the board no more public funding, if it's worthwhile then private industry will fund it like they do for any other trade.
In other words, the "burn it to the ground and start over" approach.
Refactor. Don't rebuild. The bigger the system, the more true that is.
Code is logical, people are not. Cultures can only be removed, you will never convince a 40 year old woman working in education their whole life that their entire philosophy is wrong. They will continue to push their beliefs under the table. That's the poison that is naturally bred in public institutions. It's all politically motivated.
Not that I vote for them but you can see how little of a dent Trump made because the institutions around them were actively undoing their work. Perhaps for good reason, however they were voted in by half the population. What we see for support in education is largely confirmation bias. If you put it to a public vote higher education would be defunded.
It's a bandwagon culture that believes they have a responsibility to be activists and force that upon students. There is no fixing that by just replacing leadership. The whole boat must go.
Projects that just "align with political talking points" tend to be much more challenging to fund because there's significantly less money available in those domains.
Economically, an educated populace produces positive externalities on society. As such it makes sense for the government to fund and subsidize it to some extent because it produces a good ROI for both the society and the individuals.
Sure, but we tried that, and tuitions are sky high and everyone is in tons of debt, right? Cutting all public funding may be extreme, but something obviously needs to change.
Fun fact with many of the external programs is you are actually paying them to do it. Though it's a "grant" the institution wants you to fundraise to pay them. Yeah, no.
Because of this most students never touch a project outside of classes.
If you think university is solely vocational training, then this makes sense. However, that leaves a lot, including fundamental research unfunded. Research seems to suggest that reductions in public funding is the single most important variable in increases in tuition. I'd be worried that your proposal either exacerbates the problem or creates a whole new set of problems.
You can't fix the ship. The political culture is far too ingrained. This makes perfect sense when you realize that public means government controlled and funded. Of course it's going to be largely politically motivated.
As an example there are now new required classes that preach about equality and white privilege with dubious accreditation. Not as a concept, but as a requirement of students. That's a real thing, I wish I were making it up.
Be a fly on the wall in your admins offices and you'll want to scorch earth that system too.
Uh huh. Totally believe you. Convenient of you to leave out the name of your school while trying to make a ideological point so that nobody can refute your claims.
Apparently your school's tech program must be quite bad, if it's alumni are unwilling to donate to fund student's basic tooling requirements. However, it means your school can't be located in the Pac12 or California.
Across the board no more public funding, if it's worthwhile then private industry will fund it like they do for any other trade.
If you think that publicly funded schools are bad, you should look into how much worse privately funded schools are. (Here's a tip: you won't just be paying for your own tooling. The school will charge you for it at a huge markup.)
Alumni don't make enough to be contributing any significant amount of money. Programmers outside of Cali bubble economy are not making that kind of bank.
I'm telling you the facts of what I've personally worked with and how students are being scammed by this system for political gain.
For-profit schools are significantly worse than non-profit schools in every way. And it seems that your real beef is that the taxpayers have decided not to provide adequate funding to the school for basic supplies. You should take that up with your fellow taxpayers, not the school.
This doesn't even approach the problem that industry and academics are seperated worlds. Unis lie and tell you everything is "in demand" yet students graduate and no one will even look at them.
The most funding for effective programs comes from private industry. Companies will spend far more than state or federal on real programs as long as they're not attached to universities. That tells you something right off the bat. High schools get far more money than us.
Private industry should be the one footing the bill and are the most knowleable about what industry wants. We do not yet have a system of this so you don't have any examples to base your claim from. For this to happen we need to first remove all higher public education funding to force companies to build their own.
Before you make bogus claims about "general education" there is nothing learned about humanities or general knowledge at a uni that isn't better done with a YouTube video. The instructors don't know how to teach and can't engage students with effective knowledge.
And there we have it. The "taxation is theft" heuristic that snaps your perspective into focus.
>Private industry should be the one footing the bill and are the most knowleable about what industry wants.
Are there any instances where you think this breaks down? There are some industries that very likely would not exist without initial government support because the initial risk was too great or the payoff too vague. I'm not sure aerospace would exist, for example, without the public shouldering the bulk of the initial risk. (That shouldn't be conflated with the stance those industries can't mature to a point where privatization is better).
There is little done in modern academics that legitimately drives innovation. Only select institutions, with significant ties to private industry, generate papers and innovation. Largely these are still already done in R&D at a company somewhere.
Public funding for education that works is effectively subsidizing costs for private industry. Public funding that doesnt work is incompetence that benefits no one other then government employees, and that makes it equal to theft.
Therefore, we remove the subsidy, and students that are worth investing in will be paid for by the billions that companies have sitting around collecting dust.
In my experience, in both academia and industry, industry often gets the better deal. They can effectively socialize the risks to the public sphere and then when there's a clear path to make profits, take the reins. I think that hybrid system tends to work the best to mitigate the evils of both sides.
A good example is SpaceX. There would be no SpaceX without NASA and most of the earliest flights were self-insured by the govt. Their SpaceAct agreement allows them to have access to all the support and expertise of NASA as long as they share their data. In exchange, the dinosaur of NASA has some new innovation led by the private sector. Once they proved themselves competent, their customer base expanded to private companies because the risk was now lower. I don't think any of that was likely to happen in a non-hybrid approach.
Something doesn't add up. I'm going to assume you are trolling and leave this conversation now.
The Ron Swanson Effect
I can infact get a government paycheck and also criticize it, knowing where it comes from and how it's obtained. Infact that makes me one of the most knowledgeable people on it.
Either you are personally benefitting from an institution you are actively undermining or you are perpetuating an organization that you think deserves to go away. Neither of those actions are ethically admirable. (See: your post about how illogical humans are)
Now I'll grant that your personal ethics are distinct from the issue, but I'm sure you can see why that might raise some eyebrows.
There are many small colleges that are not research-focused. They teach. They make their money from tuition and gifts, and possibly other federal grants but not for research.
What incentive is there for a private entity to openly publish valuable research in the first place? Except in certain unusual situations (monopoly justification a la Bell Labs, PR, patent applications), I would expect that private entity research results would be kept private by default so the business can maximally exploit it without assisting its competition.
Most universities are nonprofits; universities tend to be research maximizing entities, with teaching as a distant second function.
There are institutions with teaching- (as opposed to research-) centric models, but they tend to do at most undergraduate, vocation, and/or professional education, not academic graduate education, and (somewhat ironically, in context of the comment above) tend to be far more likely to be profit-centric businesses.
This really hit home for me reading "Excellent Sheep" by William Deresiewicz. At one point, a professor won an award for excellence in teaching and I believe the dean took the professor aside to reassure them that the award wouldn't negatively impact their career. Apparently, the common wisdom was you could either prioritize research or teaching and that an award in the latter implied you may not be completely committed to the former.
Said he tries to keep people from getting pulled into the academia meat grinder. The politics, the intense competition for research grants, constantly fighting for tenure, the lack of support in their research - he didn't see it as a worthwhile pursuit compared to going after outside, private research money or working instead in the corporate world.
I could tell he was pretty jaded, but out of the five professors in the department, only one encouraged me to stay at the university and pursue a career in academia. Considering where academia has gone since then, I'm pretty happy I took their advice.
https://www.educationnext.org/state-funding-public-colleges-...
The article is not in disagreement with the thought that Free Federal Money displaces other sources.
Also, the article does not show why tuition has risen 1200% instead of 30%.
Enrollment at UC wouldn't change if it were free -- it will always be ~9% of graduating seniors.
But they also guarantee that they will admit 9% of state grads.
It’s not clear why a minor change in mechanics would lead to such a significant change in incentives.
Also, note that the relationship is non-linear: Suppose it really is constant dollars and constant costs and it really costs $10k/quarter/student and look at the numbers: $511/quarter in 1987, $2,848 in 2015--a 30% drop in funding leads to a 557% increase in tuition.
https://www.bls.gov/cpi/factsheets/college-tuition.htm
I can't fully tell here how much of this is the non-linear relationship you identified vs BLS not compensating for all financial aid and other reductions to create an actual net student cost.
I agree that cuts to public universities are also a big part of it, but that doesn't explain similar trends with private institutions, unless you explain it in terms of "inflation afforded through competitors" that private institutions could accrue. That is, public university funding is cut -> tuition increases at public universities -> private universities can increase tuition by comparison. It seems this would then lead to comparative budget surpluses at private universities though?
There's also a lot of trends that seem to have happened around the same time too that don't have anything directly related to state funding. For example, federal grant funds started ballooning around that same time, and the feeding frenzy on indirect funds and pyramid scheme of grad student funding started coming into play.
I'd love to have a single coherent explanation for why all of this started accelerating together in the late 90s. So far I've just chalked it up to political-administrative culture in the US (healthcare started seeing similar problems around the same time), but I'm open to the idea there's some sort of unidentified sociopoliticoeconomic explanation. I don't think it's just the Omnibus Budget Reconciliation Act of 1993 though.
Grow bigger, spend more, push the lie that everyone needs to go to college...admissions go up, quality goes down...but they get more money than ever.
1) The Omnibus bill passed in 1993, but from the graph tuition was already increasing at 200% greater than inflation, and appears to have started in the mid 1980's; and
2) Why would the fact that the loans are now from the government mean that universities no longer had to compete on costs? The bill ultimately goes to the student in either case.
What, you don't like pre hoc ergo propter hoc argument?
Because 17 years old student taking out the loan is not financially experienced, so the issue of cost is often not properly considered.
Maybe what you're trying to say is that the private lenders vetted their loans better than the government does. And that might be true, but nothing in the article backs it up. In addition, note that even before the Omnibus bill, the government still insured the loans. So private lenders had basically no risk, and hence no incentive to deny a loan.
I'd assume universities didn't just take a decade to realize the implications of a 1993 law change.
I think an economist would say that the loans increase the number of "customers" who could now afford to go to college. Accordingly, when the demand increases faster than the supply, an economist would say increases prices are the result. There's an old op-ed by former Education Secretary William Bennett that gave rise to the "Bennett Hypothesis", where he said,
"If anything, increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase … Federal student aid policies do not cause college price inflation, but there is little doubt that they help make it possible."
However, I've casually seen a bit of research that refutes this claim and instead states the primary driver of tuition increases is reduced public funding.
Student loans are cheaper than cheap, they are government subsidized and not even close to their appropriate cost.
Interest rates on government-subsidized college loans aren't that cheap. Undergraduate loans are the cheapest. They were particularly cheap in the early 2010s and during the COVID pandemic. But over the past 20 years the rate has been ~4-5%, and generally greater than mortgage rates.[1][2][3] Subsidized graduate loans are in 6-7% territory (even 8+%), and always have been. Unsurprisingly, AFAIU the latter constitute a substantially disproportionate share of student debt--including, especially, debt that people are unable to climb out of due to compounding--relative to the number of students.
[1] https://studentaid.gov/understand-aid/types/loans/interest-r... [2] https://educationdata.org/average-student-loan-interest-rate [3] https://fred.stlouisfed.org/series/MORTGAGE30US
Mortgages are secured by a real asset. You stop paying the mortgage, the bank gets the house.
Student loans are unsecured.
Cheap capital lowers the prices of all non-monopoly goods. Monthly payments on your mortgage are lower which reduces the cost of housing, it becomes cheaper to produce food or anything that can be produced in arbitrary quantities. It is only the monopolies that go up in price because they offer rent seeking revenue which is a direct result of their monopoly nature and actually distorts the market. Higher stock prices mean it becomes advantageous to start your own company.
Just trying to understand your perspective, but this is based on an existing mortgage, correct? What does it do for the price of a new mortgage? I was under the impression that cheap capital tends to inflate home prices.
The theory is that anytime you subsidize anything, you tend to increase consumption of it. Increased consumption tends to increase price. It's unclear to me that is always the case in practice, but that's my layman's understanding.
There's a whole lot of bloat in our college experience. I personally loved all the stuff that was included with my tuition. But you know what I don't love? That college is our society's key to upward mobility, but instead it creates crushing debt for many, because it includes lots of unnecessary stuff.
I wonder how much of that debt burden is due to the non-teaching part of college in the US: do students expect frats, dorms, gym, fancy cantine, exotic location, isolated modern campus ? Hell we barely had one 90s computer per student in some classes in France, and well it did the job just fine. It was in 2009.
In his recent book, Ron Lieber argues that the actual price paid hasn’t gone up nearly so much as the sticker price because of the increasing ubiquity of merit aid (which is terribly named). How does that factor in?
He also points out that people’s expectations about what colleges provide have gone up. People expect small class sizes, mental health services, etc. If you argue colleges are just capturing extra money and not doing anything useful with it, I want to know where you think it’s going and why you think that?
The solution here sounds awful. I really like the diversity of college experiences available and I’d hate to see that homogenized. Which is not to say it should be a “blank check”, but it’s already not that — the max is calculated based on need, and families have to make up the difference. Plus loans aren’t cheap. So there’s already incentive for students to choose cheaper schools even if they qualify for more aid.
Guess: Do nothing administrators paid to be on vacation.
Why: Several years ago I called 4 of them to follow up on different job applications and did not once get a live human, only out of office messages. Over the course of about six weeks I called each every week and left each a single message. I never received a single call back or email. This was my almamater after moving back to the state following my graduate study.
Certainly, people bring up too many overpaid administrators a lot. It's a compelling story too because it's got a well-defined bad guy. I've not seen much depth to the analysis though. Another story might be that "administrator" is what some people call people whose jobs they don't know or don't associate with "running a college"? Elsewhere in this thread folks have pointed out that colleges _do_ a lot more things now, from mental health services to just being bigger (and so having more overhead and associated middle management). _More_ administrators isn't bad if they're doing useful things.
If anything, there's a sudden increase in the rate of growth in the 2000s that would be interesting to understand, but since the article likely started with the conclusion and worked backwards, it's no surprise that's not explored.
My daughter had four simultaneous academic advisors (general, college, and two honors) during her undergrad, so I think it's going to pay too many administrators for duplicate services or services way beyond the mission of education. Why do I think this, because of this and other duplication\excesses we saw.
You can think anything you want. What can you prove? Because a single anecdote about a single institution in a single circumstance is hardly the basis for making systemic policy decisions.
>He also points out that people’s expectations about what colleges provide have gone up. People expect small class sizes, mental health services, etc. If you argue colleges are just capturing extra money and not doing anything useful with it, I want to know where you think it’s going and why you think that?
Exactly. Also ignoring the wage premium, which is wider than ever. Adjusted for inflation and student loan debt, grads are still earning more money than ever.
So why did tuition get high? The state stopped subsidizing it directly.
Example: not everyone becomes a doctor. But society needs doctors. Having affordable pre-med college programs benefits everyone, even though only doctors directly make income from the program.
There needs to be a lot more competition in healthcare service provision period. There are a lot of things that could be made over the counter (e.g., drug deregulation), and a lot of services that could be provided by other types of providers (e.g, pharmacists, other professions that don't even exist now).
If you want to do that, why don't you start by capping pay of CEOs, there seems to be no country on earth with shortage of CEOs
It's $600 to take it this summer. No financial aid since she's just taking on CC class.
If you're worried about administrative and sporting expenses, you could choose to subsidize only instructional expenses; primarily being instructor salaries, classroom buildings and equipment.
Really the degree holders benefit from having me around. I've been a taxpayer since 13, worked full time since 15, consumed essentially only the government services that I was forced to at gunpoint and even then I left school before I was legally allowed to. Why don't you all chip in for my mortgage?
There are a ton of other ways you benefit from an educated and informed society.
Is that you chipping in or you just taking less of what I have produced? I'm still far and away a net taxpayer.
> There are a ton of other ways you benefit from an educated and informed society.
Have any examples I don't already pay for?
Things you don't pay for, just a small list: 1. better dating pool, for you and your kids (assuming you like brains) - this is not to say each person went to college, but they are influenced by people around them who did.
2. Better job candidates 3. Less narrow minded people, but it sounds like that might be a negative.
Things you get without paying for it, or paying a small fraction - clean environment - Neighbors who can have an intellectual conversation - food that won't make you sick - Parks, roads, airports - First responders
--- last comment alert --- not wasting anymore time on this
Pretty much. At least the sort of degrees that leave you 100k+ in debt with no way to repay it. Poor kids don't have the luxury of making mistakes like that.
> for example subsidies for solar panels mostly go to the wealthy+upper middle class, but it still benefits everyone.
Only if you ignore opportunity costs. Those same dollars could've resolved food insecurity for a family for a few years instead they are sitting on a rich guys roof so he can brag about it in a condescending manner at dinner parties.
How do you figure? Poor kids qualify for federally subsidized student loans.
I suspect the whole debate is a bit skewed because it tends to ignore admissions. You can't go to an expensive college if you can't get admitted to an expensive college. Your family background and wealth tends to be a big factor in whether kids can get admitted to college, for many reasons.
It seems to be assumed that poor kids are just more "prudent" and other kids are recklessly throwing money away. More likely is just that poor kids get admitted to more expensive schools at a lower rate. The whole point of student loans is that they're taken by people who can't afford to pay for college upfront.
If poor kids are passing up the opportunity to go to great schools for purely financial reasons, why would we even celebrate that, instead of mourning their lost opportunities? I suspect the reality, however, is that poor kids aren't getting well prepped for college admissions, for well-known social reasons. That's not fair either, but I think it's cynical to try to play poor people and middle class people against each other just because middle class kids understandably want upward mobility — which poor kids want too, but simply have less access to such opportunities.
It's always weird when people mention the average lifetime earnings of college graduates, because you have to ask yourself why the so-called "prudent" poor kids who don't go to college are passing that up. It just feels to me like people want to shut down all upward mobility, and punish the ambitious middle class kids for even trying. What's the alternative to taking on big student loan debt, besides "staying in your place" and letting rich kids who can pay for expensive things upfront have all the best opportunities?
The other thing is that ambitious middle class parents and teachers are pushing their kids to go to college, indeed the best college possible, even if the kids aren't really ready for it or know what they want to do with their life yet. Everyone is telling the kids they have to go to college, that they can't get a job without a degree, etc. The pressure on kids from adults is massive. It's practically propaganda or brainwashing. There's nothing these adults love more than to brag about their kids, who end up as pawns in the social one-upmanship game of the adults.
Honestly, your post is one of the most vile and disgusting comments I have ever seen on HN. You think people can't have upward mobility unless they spend $100k per year on tuition? Even if we assume the loan can be discharged, it is incredibly elitist to assume that you need an elite education just to get anywhere in life. No, you don't need an educational institution, that is just a crutch. You need discipline, motivation, a work ethic which can't be bought with money. After that you just need any good college, because learning doesn't happen in a confined geographic location defined by a critical mass of elites, it happens in your head.
I don't know where these authoritarian people like you are coming from, telling others that they are worthless if they don't sign up for a life of financial suffering. It sounds to me like you want to be a gatekeeper for upward mobility while sneakily creating artificial guilt in the form of student debt that must be repaid because it is moral to pay debts, even if the conditions of those debts would be considered immoral by any sane person.
> I don't know where these authoritarian people like you are coming from, telling others that they are worthless if they don't sign up for a life of financial suffering.
Wow, this is completely nuts! You've wildly, recklessly misinterpreted me. I strongly urge you to reread the HN guidelines. https://news.ycombinator.com/newsguidelines.html
What I believe is basically the exact opposite of what you seem to think I believe. I was actually arguing in defense of immediate student loan debt forgiveness (evidenced by my other comments on this article such as https://news.ycombinator.com/item?id=31570258). By the way, I also support government-subsidized higher education for everyone, like we have for high school. Of course I don't want people in debt slavery! Seriously, your comment was unhinged. Maybe you need to take some time off the internet.
You could make this argument about anything:
Given that people who are well read make more money, why do we subsidise public libraries?
Given that people with access to transport make wages higher than those without, is it really fair that we pay for highways out of taxes?
It's also worth noting that reducing subsidies to education led to much of the administrative expansion. Recruitment, development, alumni, grant, and IP offices were created or expanded tremendously in an attempt to find additional funding from sources like more students, donations, indirect costs, and royalties.
What is that? Instilling values some people think is important and not others?
The chart shows that tuition inflation was already massively outpacing overall inflation in the '80s. The trend seems to accelerate a little bit in '93, but there's a much more pronounced acceleration in the early 2000's.
So whatever the underlying reason is for tuition growing much faster than inflation, that reason must have been present in the '80s already, and the greatest acceleration of that process happened about ten years after the event that the article claims is the cause of all of it.
- https://news.ycombinator.com/item?id=24343572 (562 comments, 440 points)
- https://news.ycombinator.com/item?id=31569654 (34 comments, 43 points)
My experience of expectations of college in the 90's - can I drink? Do the faculty let me miss if I need to?
My experience of expectations of college now - is my child safe? Can s/he access appropriate supports to ensure his/her success? What can s/he do on campus that ensures his/her safety and security and is free? Who can s/he talk to 24 hours a day for any reason? What connections to industry do you have for him/her? Do you have co-curricular and curricular experiences ensuring that s/he learns about life skills that s/he doesn't have? Is there a gym? Are there activities available 24/7 based on his/her schedule? Is the technology in the classroom accessible for my student? Are the buildings new?
Edit: My source is my decades of working in higher education. Like it or not, the expectations placed on colleges/universities are much, much higher today. All of that costs money. Every single part of it.
I feel strongly that these expectations could well lead to the undoing of Western Civilization.
"...is my child safe..." Perhaps the issue is that the people who go to college these days are still... children?
I have a half an hour soapbox rant about over-protective, bulldozer parenting and what I have seen it do to our kids if you have time.
I work in administration now for retention services, but I've done a little of everything over the years from maintenance and janitorial to executive leadership to professor.
My favorite story - I taught an educational law course; this was a 600 level graduate course for future principals and superintendents. It was a weekend course that met 4 weekends, for 8 hours both days each weekend. On the second weekend, one of the students came to class Sunday morning hammered. Not hung-over, I get that. But hammered drunk. Slurring, falling down drunk.
So, I sent this full-grown adult home and gave him a zero on what we were doing.
Monday morning, this man's mother called me to complain that I treated her son wrong. He was 15 years older than I was. He was a leader in his k-12 school. He was training to become a literal district superintendent. And his f**ing mom called me. Like, the 18 year olds I at least understand. The parents are used to stepping in at that point (even thought that's a whole other issue). But this man was a full-grown ass professional adult. And his elderly mom called to try to tell me I was wrong for sending him home when he came drunk to my class.
This is the world we live in.
Methinks Heraclitus is grinning in our general direction.
All those new things sound like considerations that were there before, yes even in the vaunted 90s to me.
Maybe the average role of parent has changed - I sorta remember college being perceived culturally as roughly a time to go be an adult, make your own choices haven taken a rough idea of the path, and get out of your parents wing.
I can’t see many the students being so interested in the things you listed. But then again, I never got to go because of the cost, and I don’t see first hand what expectations students have on them - but even if they do do care deeply about these expensive systems, where does that failure fall? Certainly not on the students who must work in the system that is set up for them.
From what I've read, I don't think so. The underlying considerations may not have changed. But societal awareness of various problems has increased, causing both parents and students to ask things like "how many mental health counselors do you have for your student body?" or "what's the waiting time for an appointment?" I think consumers have become a lot more educated, too.
I wonder how many counselors they have and how short wait times for appointments are in European countries where higher education costs either nothing or a small amount compared to median incomes
> That example sounds to me a lot like a university taking on things they shouldn’t need to do, but have to because there’s nothing else to take them on.
"should" is pretty load-bearing there, but yeah, that could be. People know that mental health is a particular issue for college students[1]. In the absence of anything else providing these services, it's not surprising that informed consumers would look to colleges to do what they can, and competitive pressure would result in most colleges growing their offerings in this area.
[1] https://www.bu.edu/articles/2022/mental-health-of-college-st...
> I wonder how many counselors they have and how short wait times for appointments are in European countries where higher education costs either nothing or a small amount compared to median incomes
It's a good question. In interpreting the answer, one would presumably want to know how the general level of access to mental health services compares between the United States and those countries.
1) Parent expectations higher -> college becomes more expensive
2) People would love colleges to do everything but they'd always say "we're a nonprofit spending all our $ on teaching/research so can't" and parents accept that -> colleges can get much larger amounts of money -> colleges compete on these non-circular programs -> students/parents raise their expectations.
I'm sure both are true, but I think something had to change. I would have loved all those services in the 90s but it wasn't considered practical.
I actually got a notification last year an artist was playing in a city near me so I went and what I didn’t realize was that it was actually a university event that happened to also be open to the public.
Looking at going back sometime within the next few years. I don’t need any of this shit. I want to learn, do research and make new connections, but I’ll certainly half to help fund it for it, at least for a couple years.
For example:
> Do you have co-curricular and curricular experiences ensuring that s/he learns about life skills that s/he doesn't have?
I’m a grown adult with experience working in many different types of environments, while school would be a new challenge, I’m confident in my ability to adapt to it without paying 1000s on end for courses designed for people who are barely 18.
You're running into the fact that universities aren't set up for adults, and what you're buying isn't really what they're selling. The activities that actually fund the learning is the undergrad college experience and grant money. If you want to join a PhD program and do research you'll find lots of resources, connections, and access to people in the field, and if you want to party, go to football games, and learn some stuff along the way there's plenty of resources for that too.
Yes, unfortunately before I even think much about that, I have to completely and undergrad degree.
Have they? Or are these just new things the college has come up with to sell?
https://freakonomics.com/podcast/what-is-the-future-of-colle...
I personally think that one policy that could have an outsized effect in solving this problem is establishing a max percentage of income that student loan repayment can be required to be for a maximum number of years (I'm pulling these numbers out of nowhere but just as an example) like 7.5% of gross income for 20 years. If the student hasn't repayed by that time using that percentage of income, the college is on the hook. Alternatively, a combination of the college and the lender (potentially switching away from government lenders).
The problem I'm hoping to solve is the insane growth rates of tuition for a wide variety of degrees that do not justify their cost. Young kids being told that college is the required pathway into a good life often are not given the commensurate instruction that the college degree should be useful in terms of earning more/securing a job. An instruction of "study whatever you find interesting!" sounds good but is IMO very poor advice. It should be modified "Study things you find interesting but remember that college is to build and refine your skills for your career after"
Creditors are going to make risk-free high-interest loans. As long as the loans are available - students will take them to get their underwater basket weaving degrees.
If students could default on debt - then there wouldn't be an endless supply of creditors willing to lend them money to get degrees they know won't pay enough money to pay them back.
Additionally, IIUC, you can't just declare bankruptcy because you feel like it.
But maybe my understanding is incorrect.
If you're finishing undergrad at 22, your bankruptcy won't harm you for buying a house at 29-30 which is kind of when you want to buy a house anyways since saving up 25% takes a good amount of time. It seems like a very worthwhile trade to declare bankruptcy.
As for being allowed to declare, the time to do it is before you have a job. At this point you have debt higher than assets and no income so the case for bankruptcy is extremely clear.
That would be the lender's problem for lending far more than anyone reasonably needs to be lent to obtain a degree. They'd have to price the loan accordingly.
> It seems like a very worthwhile trade to declare bankruptcy.
You don't get to just declare bankruptcy on a whim because the outcome is favorable to you.
I’ve addressed this in the above by mentioning when you do it. You have assets < debt and no job therefore no income. No court is going to reject this bankruptcy because you are actually underwater and will in theory take infinite time to repay the amount you owe.
The program is frankly a mess, with a ton of byzantine rules around eligibility and how the monthly payment is calculated. I work for a company that deals with this and have partial ownership of the code that has to implement these rules, and it's frankly a nightmare.
Furthermore I have serious doubts about the value of the program. It's really only good as a stop-gap measure to avoid defaulting on your loans in the immediate future. Going for the 20-year forgiveness seems unwise to me, since you are experiencing negative amortization for that time and your loan balance will be increasing. So most of the amount forgiven will be accrued interest, which will then be taxed. In most situations it would probably be better to focus on increasing your income and just paying the loans off.
X% of income *above the poverty line*, no time limit, disappears upon death. Administered through the IRS, it's a line on your tax return and thus automatically adjusted for income.
(And I'd do the same thing with child support--x% up to $y.)
Forgiving debt incentivizes debt though. It's impossible to address the root cause and forgive the debt.
For example, make student load debt dischargeable in bankruptcy like any other debt, and at the same time impose tuition caps at state universities to make them affordable again.
If we do nothing to change the system, what are new college applicants going to think? Either they'll have to pay back their loans and, compared to those who wend before, get totally screwed. Or borrow with the belief that the debt will eventually be forgiven. Neither are good.
And, FWIW, I have a boat load of student-loan debt that I would absolutely love to have forgiven. But it's a bad idea unless the White House and congress are able to address the root of the problem.
EDIT: I misread your comment. Please disregard.
They got screwed when they took the loan out, not when they pay it back. The terms never changed, people just realize they made a bad decision. Sometimes people argue they cant actually consent to the loan in which case we should just cease the loans immediately.
Part of the puzzle is rebuking this sort of logic: "Education is important. Having a bachelors degree is practically required. Therefor a loan is worth it." Without any qualifiers. This suggests the degree job prospects and loan amount don't matter. They do. If education is expensive enough, it's just not worth it.
The first test of a potential policy is whether it's better than doing exactly the opposite. If you can't even prove that, it's probably not a good policy.
Also, income can change a lot from year to year. My income certain has. If the economy goes to pot, suddenly a lot of people with higher income will become unemployed. And the years you spend in school are typically very low or no income, so you're not building any wealth during those years. And if you go to graduate school, it's even more years of low to no income.
> You can make a higher income than another person but still be poorer than them because of debt.
Maybe we should focus our money on making college costs more affordable rather than forgiving loans and signaling to universities and students that it's safe to take on more debt?
A male college graduate, on average. https://www.ssa.gov/policy/docs/research-summaries/education...
"Men with bachelor's degrees earn approximately $900,000 more in median lifetime earnings than high school graduates. Women with bachelor's degrees earn $630,000 more. Men with graduate degrees earn $1.5 million more in median lifetime earnings than high school graduates. Women with graduate degrees earn $1.1 million more."
Of course these are just averages. There's no guarantee that any given person will earn even a penny more. Not to mention that not everyone who goes to college even finishes their degree, but they accumulate the debt regardless.
> Maybe we should focus our money on making college costs more affordable rather than forgiving loans
Why not both?
The thing is, the people who make a lot of money after college are able to pay off their debt. The real problem is the people who get stuck with debt for decades, unable to pay it off. It's a lifetime burden. Senior citizens are a very fast growing group of student loan debtors.
I don't necessarily believe that you should forgive student loan debt the minute someone walks out of graduation. But what about decades later?
Anyway, it's important to remember that these lifetime earnings numbers don't include college costs. You have to subtract those. Unless your parents pay for your college, in which case you have no student loan debt.
Because forgiving loans is a moral hazard. It signals to new college students that they can take out more debt and it signals to universities that they can raise tuition.
Would a one-time forgiveness cause an increase in college costs? I don't know, maybe? And if it did, by how much? I don't know, do you? Maybe the problem needs to get worse in order to put pressure on Congress to finally address it comprehensively. And if Congress still refuses to address the problem despite its getting worse, then you can no longer argue that we need to wait for a comprehensive solution, because that's not coming. Perhaps the occasional forgiveness event is the best and only thing we can do in the face of persistent gridlock. I hope not, but...
I certainly don't feel student loan forgiveness is "fair" in that circumstance!
The state school prices have gone way up too. It's possible that the state school you could afford back then would no longer be affordable now.
(By the way, I had to go to a state school too instead of a nicer school that accepted me, because of money. And yet, I still accumulated student loan debt! Because college is pretty expensive no matter what.)
At this point I've paid my debts and still welcome relief for students who didn't have the same opportunities as me.
There is no 'cheap' 4 year school anymore. Costs can be mitigated by going to a Community College for an associates/first 2 years then bridge that into a 4 year program but if you want to go for research, engineering, or many other more dedicated programs then being at the 4 year school all 4 years leads to many more connections and opportunities that some feel are worth the cost.
Borrowing beyond ones means isn't always fully understood by a group of 17-18 year olds, especially those who may be first generation college students or from school districts that have spent 2+ decades now losing resources for educating students on college options in order to focus on the kids failing out. For example, many college apps I completed in 2011 needed a letter of rec from my counselor who I had talked to once as a sophomore but spent most of his time working with students on the edge of failing or dropping out. It's archaic just like how the US college system operates as a capitalists dream and not a public service.
In terms of fair, well policy hasn't been fair in a long time either. The 2017 tax bill raised my taxes and pushed a trillion plus surplus back to the wealthy - a much worse outcome for all then cancelling student debt without a deeper plan. It may not seem "fair" to you but that doesn't make it bad policy.
Colleges will still be just as expensive. The next round of student signing up now still has all the same burdens and obligations, the same disadvantages understanding the borrowing they're doing.
Nothing is getting fixed. You're just handing a one-time stimulus to recent college grads. And don't take me wrong - I would also have preferred a stimulus for recent college grads instead of the insanity that was Trump's tax cuts for the wealthy. But that's like picking between two wormy apples.
I really don't want a payout for EITHER of those groups! - I want the systemic issues around pricing for education to be addressed.
So if "debt forgiveness" also includes plans for something like universal access to college, or a standardized loan process through the federal government, or (perhaps most useful of all) the simple ability to discharge education debt through bankruptcy.... then sign me up.
If it just means handing money to the children of already mostly well-off folks, as a one-time political courtship to win the next presidential election... Then count me out. I think it's a bad idea.
It's mostly held by the federal government.
It's mostly owed by the richer half, but that's misleading when it comes to impact.
Sure, households in the bottom half of the top quintile have twice the average student loan debt of those in the bottom quintile, they also have more than 10 times the income. The average student debt in the bottom quintile ($25,030) is about the upper income limit ($27Kish as of 2020) of the bottom quintile, while the average in the bottom half of the top quintile (80-89th percentile, $51,380) is a little.more than 1/3 the lower limit ($143K in 2020) of the top quintile. (And the upper half of the top income quintile actually has a lower average student debt that the bottom half, or the whole of the next highest income quintile, not just a lower average student debt to income ratio.)
The share of households with any student debt and the average household student debt-to-income ratio decreases consistently with household income.
See, https://www.businessinsider.com/personal-finance/average-stu... and https://www.taxpolicycenter.org/statistics/household-income-...
EDIT:
To directly answer your question:
> Serious question: would it do more good if instead of giving money to people with student debt, you gave money to people without it?
Would it do more good to relieve 75% of bottom-income-quintile households (student debt relief) or 25% (anti student debt relief)? Clearly the former.
This is a false dichotomy. The root core of the issue should be addressed. However, that would require an act of Congress, whereas federal student loan forgiveness can be accomplished immediately via executive action. This is why people are calling for it now, because it can be done right now. Also, the President promised to do so multiple times during his campaign.
> Universities can charge more, and students can continue to take out larger loans
Universities are already charging more, and students are continuing to take out larger loans despite the lack of forgiveness.
I can't be the only one who feels like this is simply 'buying votes' in an attempt to try and salvage some seats for the upcoming midterms. And, of course the people with debt want the debt forgiven unilaterally and post-haste, so it makes sense they're clamoring for it. In a democracy, who turns down free money?
Votes are already bought by wealthy campaign contributors.
Anyway, aren't politicians supposed to help the public financially? If a politician campaigns on tax cuts, tax credits, and tax incentives, isn't that also "buying votes"? Which politician is not buying votes with their stated economic policies?
I’m not an economist but I suspect that in a society with a strong welfare system, universal healthcare, and free higher education then wages wouldn’t have to be as high as they are in the U.S. for certain industries. I don’t claim that student debt forgiveness is the efficacious or even that it should be done. I do claim that it’s best to ‘buy’ votes by creating a society with strong social programs.
The fact of the matter is that these loans are unsustainable. They saddle people with life-long debt that they can never get rid of, dooming them to a life of poverty because of a choice they made when they were young, which everybody at the time told them was the right choice.
That particular debt forgiveness is simply the right thing to do. It will free a lot of people from poverty.
But clearly there are also measures necessary to prevent this from happening again, like a reasonable maximum to how much can be lend.
I would prefer that the change be that loans can be discharged in bankruptcy instead of this one off forgiveness.
That said, I agree with you on bankruptcy being a better idea. From what I understand, these loans are harder if not impossible to get rid of through bankruptcy than other loans, despite being far more crippling.
In general, I'd like a rule that all interest-carrying loans must be able to be eliminated through bankruptcy. Only interest-free loans should be exempt. Also: a cap on student loans to discourage excessive tuition. Tuition is just insane (and where is that money going? I hear plenty of younger professors are struggling too).
My first pass on fixing education is that we should remove the non-discharge of student loan debt. Gen-Z could boycott this system by declaring bankruptcy immediately after graduation which would have relatively minimal affects on their lives relative to the debt and schools would be forced to lower costs
It's actually quite popular: https://www.forbes.com/sites/zackfriedman/2022/04/18/student...
I might support 0% interest rates so I guess that might be considered canceling some student loans for all?
So most people support.
It's not a false dichotomy because he's saying the root cause would get worse if student loans were forgiven.
You can argue whether or not that's true, but the claim he's making is not a false dichotomy.
We can apply similar tactics to these school financial injuries. We don't need to choose one or the other.
And the core problem with people taking on debt to pay for college in the US is individual people having to pay for college, unlike many other countries. How much it costs is a secondary issue. If it can cost anything, market forces will boost the price until it passes a fairness threshold.
Well... no. Obviously stopping the shooter is the top priority.
Beyond that, it depends on how many people are there to solve the problem and how many victims there are. Everything beyond whats required to stop the shooter would attend to the wounded.
I mean, it should be an unpopular opinion that a claim that both misrepresents the basic processes and incentives involved and requires effect to precede cause by more than a decade is perceived as “exactly why we should“ do or not do anything, but unfortunately it's actually a very popular opinion in this case.
(To the extent there is a real argument—and this one is not it—for federal student lending being a cost driver for education, that would be a good reason why debt forgiveness, if done, should be accompanied by lending reform to correct the problem going forward; of course, even without it being a cost driver, any argument for debt forgiveness is itself an argument for lending reform preventing the problem addressed by forgiveness from recurring.)
If the price of something is increasing faster than inflation then I expect something in return for the extra money I am paying like a bigger house, faster computer, whatever.
I went to college in the 1990's. Are college students getting a better education or experience for all the extra money they are paying? I've seen my university's new classrooms, student center, library, dorms, etc. and they are way nicer than when I was there. I don't know if the huge upgrade in facilities is also happening at other schools.
The short answer is: administrative bloat. That's where all the money is going. Universities employ far more non-teaching staff than ever before. A large bulk of this staff is essentially dedicated to marketing the university to prospective students, a zero-sum competition with other universities.
One of the big problems is that wealthy donors love to earmark their donations for big projects that carry their name. It's way less sexy to donate a bunch of no-strings-attached money that the school can use to pay salaries and keep tuition down. For donors who actually want to help future students, the usual route is named scholarships. But then, of course, scholarships also require admin staff to oversee them. And schools can have thousands of these scholarships.
> The short answer is: administrative bloat.
I don't get it -- you're saying it's "bloat" and bad that the competitive market for students is causing universities to invest in themselves?
You've actually convinced me that a large chunk of costs for nameless "administrators" might be going to useful purposes because investing in buildings and programs requires non-educational staff to keep things going.
The building itself may have been donated by some magnanimous billionaire, but the water to fill the pools and run the showers, the chlorine and other chemicals, the electricity to run the pumps and keep the lights on, the lifeguards, the cleaning crew, the maintenance crew, the swim team coaches, management, HR staff, and so on are all part of the school's operating costs. It is these costs that are paid for by tuition money.
Why do you think it's zero sum? Everything I've read suggests the total number of college students is increasing while school count isn't. Schools are increasing capacity, but not necessarily fast enough. Bob may not matriculate, but many others might because of the aquatic center.
I can't imagine schools are building an aquatic center for one individual who might not even matriculate. I can imagine schools building an aquatic center to increase the overall matriculation rate. If it works, and this example is representative, then what you're describing sounds like a competitive market causing all the producers to make investments to improve their product. (You could argue they shouldn't, that we'd rather they be affordable and not have aquatic centers, but that's a different debate.) If it doesn't work, then it sounds like it was just a bad decision, and possibly one with long-term costs for upkeep. But as far as I can tell, on average these things _are_ working, because colleges are only getting more selective.
That is my argument. Society is a whole is spending more and more on education but not getting more education in the deal. We’re getting more aquatic complexes and climbing walls and sports stadiums. None of these things help society achieve higher levels of education. They merely allow one school to lure students away from another: zero sum.
Do you have a citation for this claim? The Ed department publishes higher-ed expenditure data, and it doesn't show "far more" administrative expense on a real per-student basis compared to 10 or 20 years ago:
https://nces.ed.gov/programs/digest/d20/tables/dt20_334.10.a...
it's arguably worse
No it's not. Not without qualifiers. What if it costs $5M/year and the median income for graduates is 40k upon graduation? Clearly not worth it. That would utterly ruin your finances for the rest of your life. So there is some point where it becomes worth it. The question is where, which is going to be a little different for everyone.
Is 240k for a liberal arts degree worth it to you? It's certainly not for me.
Then it wouldn't be the best investment you can make in yourself. For now it still is. Yes, paying 240k to make more than a million more inflation adjusted dollars over the course of your career is worth it. Now it's probably not a great idea considering you can graduate at a much lower cost, but on the margin, yea, that's a good investment.
It wouldn't surprise me if it was something more subtle, like globalisation and massive Chinese and Indian populations seeking tuition from abroad. On the other hand, that seems like a bad explanation since typically these students are gouged even worse than domestic students (at least they are in Canada).
yet the chart he supplies clearly show the trend starting in 1985, so he torpedoes his own argument with his own 'evidence'. self-own
Under the William D Ford Federal Direct Loan program, the student borrows from the government. The university is paid right away.
So this post’s argument, which is that the Direct Loan program made universities get paid right away, makes no sense.
What’s the difference in incentives colleges in lowering tuitions whether the government pays them directly or indirectly through the students?
They are getting paid either way. Unless there was a cap that was removed that I missed.
And the students are picking up the same loan amounts whether it was originally backed by the government, or originated from the government.
The chart in the figure also doesn’t line up with the claims, with college inflation deviating from before the law was passed, and then a further increase in growth starting over a decade after it passed.
Anecdotally, having been heavily involved in the student govt affairs of a major state university at the time a lot of these tuition increases happened, what we saw was:
1) A huge pullback in state govt tuition support. 2) Coinciding with a massive increase in spending on athletics and buildings 3) leading to my otherwise extremely price competitive state college becoming as expensive as the equivalent private college a few streets down the road. 4) Followed a few years later by an increase in tuition at the private college.
This was once again further entrenched after the 2007-2009 financial crisis.
The article asserts:
> Close to 70% of college students attend using federal student loans, so schools would have no choice but to adjust their tuitions to match [the maximum federal loan], or risk losing a large chunk of revenue.
But as the article points out, the vast majority of schools are non-profits. Unlike corporations, they should not be attempting to maximize revenue.
I could be wrong, but I do not think most college administrators are looking to extract as much money for their students as possible. They want to put their students on a path to success, which implies not leaving them with crippling levels of debt.
Unfortunately, colleges sometimes don't have a choice, because they have bills to pay and are not swimming in piles of cash. Which leaves my primary question—if tuition has risen so much, where is that money going?
I have not yet seen a really good examination of this question.
One place is that it is used to replace reductions in government support.
"the single most important factor associated with tuition increases was decreasing revenue from government appropriations, with state appropriations making up the majority of such revenue.[1] (this is an old study, but I believe the pattern still exists, and is even more exacerbated)
Another seems to be that administrative costs are growing disproportionately at the same time that public money has been getting smaller. This seems to be aligned politically, so it may need to be taken with a grain of salt but I can give one anecdote.
When I went to college, I was sent to see the veterans representative. At that time it was just a single person who had those duties tasked on top of her "real" role. Now, it's common for colleges to have entire admin teams to recruit and help veteran students. On one hand, this can be great for the colleges and students; if managed well, those students bring in "free" government money. On the other, it's probably hard to calculate the true ROI of such a team; for example, it may be hard to know how many of those student-veterans would have attended regardless if there was a full team to support them or not. But all those admin teams, across all the different groups and bureaucracies add up.
1. Anyone can receive funds, regardless of cost/financial sense.
2. Anyone can receive funds, regardless of academic performance.
3. Burden on the state will be low.
There has to be a filter somewhere. Germany (and others) chose 1 & 3. It's cheap, but only available for good students (but tell me if I am wrong, I am not German).
For historical reasons, this is largely untenable in the USA: if they chose the same, it would be seen as enhancing privilege (both economic and ethnic) and a transfer from poor -> rich. Americans want to believe that education is a means to racial equality, a restoration of historical wrongs, and a land of opportunity.
America is forced to offer loans for all students at all institutions, even when they don't really believe it will be beneficial because of cultural ethos, and choose 1 & 2.
Fixing grade school education would go a long way to remedy this. Americans don't really believe in the fairness of their grade schools, and are unwilling to deny uni to students based on their grade school performance.
Devils advocate - how is the current situation any different? Education has skyrocketed in price which disproportionately disadvantages people with less.
I totally take your point and think you're right about picking 2 of the 3. It's just that the people who think that way aren't considering the larger picture (and probably never will).
No, the college gets paid on day one by the lender, whether it's (1) a non-federal loan, (2) a federally-guaranteed loan, or (3) a direct federal loan. The only case where the college would be out money is if they were the lender, but loans from schools were not the norm in the guaranteed loan program, school-issued loans tended to be (an old still are found as) private non-federal loans that are most commonly offered by for-profit institutions.
The difference between (1) and (2) is that the feds pay the lender (not the school) in case of default, so lenders have no real risk and behave accordingly.
From the schools perspective, there is no incentive difference between #2 and #3.
The more free money, the less the money is worth.
In particular, funding cuts are somewhat cyclical, occuring during economic downturns. Higher Ed funding always looks like the low-hanging fruit to cut. Health and social services, corrections (prisons) and K-12 education are much more problematic from a political optics viewpoint. Higher Ed is, in some sense, still seen as "optional" in the sense that people can live without it and because colleges do have an alternative revenue stream.
I've seen colleges have funding for basic things like updating crumbling infrastructure pulled mid-summer when states finalize budgets and a 5-year infrastructure program from the state is cut off in year three. This makes it very difficult for budget planning, and it's not uncommon for schools to then have to put out a bond to finish funding things itself.
A third factor is a sort of toxic arms race between colleges to recruit new students. In the wake of revenue uncertainty colleges of course try to increase their their enrollment to boost revenue. It has turned into a negative sum game, a college builds shiny new dining or housing facilities to attract new students, and the school down the road loses enrollment & revenue as a result which means they need to spend money building such things just to not lose students. Meanwhile the old facilities were perfectly adequate though by no means luxurious. Students going through the recruitment meat grinder are then making choices based on whether or not the school has various food franchises on campus. Schools doesn't have a Starbucks or even a Dunkin Donuts? Can't go there!
I don't know the solution to that one. The first schools that did it gained a brief competitive advantage but now it's more of an equilibrium where all schools have to do it just to tread water.
Anyway, it's all much more complicated than simply changing the loan structure (which of course was a big part of things as well.)
You can apply this rationale to the army, police, fire brigades, hospitals, schools, street lighting, public roads, public transport etc. and you end up in a jungle, not a civilized society.
Just like high medical costs, or school shootings (nineteen children were just killed by a gunman at a school in the US, for the Europeans unaware) and so forth, this seems to be a mostly US specific problem.
The difference between the EU and the US is mostly who pays for college - not how much it costs.
Edit: And I would be extremely surprised if cost per student was that much higher in the public system than what I know people in one of the "plan B" private universities got charged, economies of scale and all that.
You have to do some due diligence to figure out what credits you can transfer. You don't want to waste your time and money on a class that doesn't count. But I know of some people who did this.
It's a better way to do it anyway. Lower level courses at big schools tend to be giant lectures, but many of those are going to be higher level courses at community college. Would you rather take Calculus in a giant lecture hall or a small class room? Same with Physics and Chemistry (although those at least have lab sections that are usually size limited)
I went to a community college for two years (it was free), and then transferred the University of Florida to finish my degree (a fine public R1 university by any standard), paying exactly $0 for my degree. I know people who followed that same path and went on to top tier law schools, medical schools, bulge bracket investment banking, etc.
Now I can look back and be grateful that I got a great education for free, but I was, and still am slightly embarrassed by saying I went to a community college.
I now live in NYC where I'm pretty sure people can do almost the same thing with the SUNY school system, and come out with an undergrad degree for like $30k (still a lot, but most folks I know paid $100k+ for undergrad degrees that are not substantially differentiated from the path I did).
SUNY system worked out for me and I'm not embarrassed of it. They almost screwed up my graduation with a one credit discrepency in the requirements with the transfer. You have to be careful and do their job for them checking up on that, I've learned.
Of course if you get through only two years, you'll (optionally) have a piece of paper, which might be better than dropping out of a four year school two years in.