https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...
The benefits are actually much larger than I've just described. There's a snowball effect as the industries of the state move up the ladder. America is currently benefiting from past state investment in education. (There's intangible benefits too, but for these purposes let's just talk about the benefits the state accrues.)
That's if you accept the higher-education-as-training model. Under the higher-education-as-signaling model, the primary effect of education is to choose how to allocate a fixed set of high paying jobs. If there's 100 slots for new lawyers this year, then the difference between sending 150 and 151 students through law school is an additional unemployed lawyer.
Basically state governments off-loaded the burden of funding on the students while reaping the benefits of said investments.
Further, financial aid makes nameplate number less meaningful. If someone has rich parents or wins a full ride then schools want to milk that for as much as possible. Otherwise they can always add discounts down to whatever someone can pay.
http://slatestarcodex.com/2017/02/09/considerations-on-cost-...
My observations from attending and then later working at a large southern public university is that a bunch of things happened:
1) The financiers got in bed with the financial aid office, figuratively and possibly literally.
2) The campus went on an inexplicable building boom the likes of which no one had ever seen before. The state funded those projects, but they were clearly handouts to construction companies and pork spending. Sickening, really.
3) The quality of the average student plummeted. I blame the financiers for this, too--asses in seats is a thing.
So while it may be generally good that more people had access to higher education, at the same time the quality dropped, and I seriously doubt the outcomes for many of those people actually improved over attending community college or perhaps no college. Their debt loads had to be tremendous, after all.
It's also possible that states where education was valued have pulled back funding. There is actual hard data to indicate this is the case, but I'm also trying to avoid dismissing your claims out of hand.
The rise in college tuition is the most baffling, as this industry refuses the amortize costs. The buildings have been built, the books have been written, the intro courses have been handed down to graduate students, the handouts are sometimes the same handouts that were used a decade ago.
Yet the costs keep on rising.
Asking young humans with incomplete information to make a decision with long term financial impacts is a good gig, especially when "all their friends" are doing it.
"We find a pass-through effect on tuition of changes in subsidized loan maximums of about 60 cents on the dollar, and smaller but positive effects for unsubsidized federal loans."
Then you have to realize that tuition increases at private schools are misleading. You have to look at what people are actually paying not what the sticker prices.
At Harvard, for instance, 70% of students receive financial aid, so they are paying $12k a year on average (not the $60k sticker price). That's tuition, fees, and room and board. Harvard has generous financial aid, but it's not unusual among elite schools. Most private schools worth going to are going to have very good financial aid packages.
And even at lower tier private schools most people aren't paying sticker price unless you're talking about for profit institutions.
How long does it take to build and staff a private school? How long to get it into US News top 500?
Even something like increasing the number of students admitted to existing private schools is tricky because they are tracked on their admission percentage.
All that has to happen is for EXISTING colleges to realize that they can make a ton more money by expanding in size.
Obviously, this doesn't happen overnight. You have to hire new employees, buy more land, and build more buildings.
But I'd argue that this process would happen a lot, lot quicker than "create new college". Colleges are already expanding all the time.
If a single college doubles in size, the effect on total college supply is minimal.
You double the amount of quantity sold, for You, while only slightly decreasing price, because Total college supply has only barely increased.
It is simple supply and demand in a competitive market.
Harvard and Yale are ranked so highly that they could get away with it. But they won't do it for other reasons. Mainly that they don't need the money coming in from tuition. If you take a private school a bit further down the list though, their rankings would tank if they accepted twice the students.
Also there are other limiting factors. Many colleges don't have the physical space to just double in size. Their isn't land for sale within walking distance of their current campuses. Adding satellite campuses is one way around that, but that adds logistical problems that will reduce desirability. In addition to satellite campuses not always inheriting the reputation of the main campus.
Additionally you can't simply double the student to faculty ratio b/c that would tank rankings, and hiring double the faculty takes time.
You also don't know which departments you need to scale beforehand. If you decide to double your enrollment in the next 5 years, which majors will the new students choose? It's unlikely the ratios would stay the same. Good programs don't always scale well either. If a department worked hard over the last 20 years to build a good reputation, they can't just hire 20 new faculty members and teach twice the number of students without impacting quality.
Schools do expand all the time, but it is a very slow process that by its nature can't keep up with a constant growth in demand.
For decades the private sector has been feeding off the gravitas created by Stanford, Harvard, Yale and other superb private institutions. Maybe time has helped, maybe the Internet made comparisons easier, but it's pretty clear that private schools can be separated into three tiers, with tier one (Stanford, Yale) still being top notch, tier two being a questionable proposition for most people, and tier three (U of Phoenix, Trump U) being borderline fraud.
70% of Harvard students receive financial aid from the institution, and they pay an average of $12k a year total. Harvard clearly isn't charging a market rate for tuition.
Also government backed loans aren't nearly enough to cover tuition plus housing at these schools, so if your argument is that the prices are similar because they are both near the max loan amount, they aren't.
Does this mean that education budgets for the states has had cuts in the last 16 years? Where is that state money saved going?
This is not limited to education pension funds, public sector or prison guard pension funds typically negotiate the same deal, very frequently with people they themselves have helped get elected, so you know those negotiations are extremely tough.
https://satyagraha.files.wordpress.com/2011/11/uc-tuition-an...
As a California resident, I can tell you there are plenty of taxes and tax hikes, and the money doesn't make it to the Universities anyway.
Everyone got paid, except the sheep who got sheared.
So if you want to put yourself on the path to the C-Suite in a Fortune 500 company or to a partnership in a major law firm, you have to get into one of the very top colleges in the country. That, in turn, means top colleges can charge pretty much whatever they want and it's still worth the money. Not because of the instruction students receive, but because getting admitted is highly competitive and those students managed to do it. In other words, it's a positive feedback loop driving up prices for a scarce resource.
Even when you get out of the nosebleed tier, colleges are easy to rank by their accept/reject ratio. So if you're a big employer and you have a candidate from Brown (acceptance 9.5%) and one from Cornell (acceptance 15.1%), you'd probably prefer the one from Brown, everything else being equal.
The sad part is adding more money just makes the problem worse for the same reason adding money to real estate markets just makes everything more expensive.
The most prestigious colleges actually don't charge much money, except for families that can easily pay. Financial aid, including stipends for living expenses, is extremely generous at elite schools. The sticker price might be high, but few people actually pay it.
The problem is more with second tier schools that aspire to greater prestige but have more limited financial resources. While many of these schools offer perfectly good educations, they don't really open the same kind of doors that going to a more elite school can. A big tuition price can make parents think they're sending their kid to a really elite school - just like people often will assume a more expensive diamond ring is better than a less expensive one. But it's probably not really worth the money.
So instead I only applied to in-state colleges, thinking I was being sensible and pragmatic by doing so. But there's a chance I would have paid less at the top tier schools than I ended up paying for local schools.
It's an example of how inequality along financial or racial lines can be real despite there being no theoretical reason for it: if you don't know that you could attend a top tier university and leave with very little debt, you'll consider applying as a student. If you don't, then you've preemptively rejected a very good opportunity for upward mobility. Too many people just don't know because their families or communities don't play the college admissions "game."
If the minimum barrier to employment is having a college degree, then people will continue doing whatever they have to in order to get a college degree.
The only way you're going to change demand is if decent jobs start being created that don't require a bachelor's degree. And I don't see that happening...
Everything about our country is one big lie.
College is oversold but the American Dream is alive if you go to a cheap school and buy a house in a smaller city or burbs. There are plenty of great cities and emerging ones with jobs and reasonable cost of living.
However, if you choose to buy crap you don't need and succomb to debt, that's not America's fault. That's yours.
But yes it's dead in LA, NYC and SF. You have to be a top performer there. But that's just supply and demand. Nobody owes you the American Dream in those cities. You aren't entitled to it.
Which cities? How long will it be until they too turn into LA, NYC, and SF (While being surrounded by oceans of hopelessness and poverty)?
You're so hung up on the CEO thing which is irrelevant. We don't need more CEOs just like we don't need more lawyers and doctors. And you mention doctors - those are needed in any town of size anyway. My own grandfather was a doctor in a rather small town outside of Little Rock and he did very well for himself and sent 4 kids to college, one to med school. His son is doing the same thing now as a doctor in Memphis.
The American Dream is alive and well: it's just changed. It's no longer "graduate college, get a good job, buy a home and be set for retirement"
Too many people just aren't adapting and are frustrated because they are sinking themselves with poor decisions like crippling debt.
I know people w 200k school debt that graduated with degrees targeting jobs that tap out at around 80k that are way more competitive than any tech or marketing occupation. Makes no sense.
My uncle makes 100+k selling tools out of a town of 6k people. My father in law makes 150k+ in HVAC out of a suburb of about 50k people. They both own their homes outright. One didn't go to college.
People don't want to learn general crafts like sales and they don't want to learn crafts that get their hands dirty. Their parents keep pushing them into college which provides less and less value and tons of debt.
The American Dream doesn't go away just because less people are realizing it. It goes away because people are being stubborn and we have a nation of financially ignorant and wreckless citizens.
I've just driven out to Whidbey Island this past weekend - a 70 minute drive from Seattle. Beautiful place. Economically, it's also dying, and not because the people who live there are lazy bastards. If it didn't have a US Navy base, it would be dead. As a young person, you'd be insane to stay there.
In order to feed your uncle and father-in-law, small towns must have something to export.
It could be lumber. It could be coal. It could be applications for social security. It could be people, who work in the city, and live in their community, 40 miles away. But it has to be something.
Small towns that have an export - one big enough to feed all the doctors, cops, plumbers, politicians, realtors, teachers, babysitters, bricklayers, HVAC installers, and other people who bring no money into their economy can do reasonably well for themselves.
Those that don't are in a death spiral, and it won't matter if you replaced every person in them with a skilled contractor overnight.
1) the American Dream has included a college education as a general requirement for quite some time now. People that live in small towns, esp. mid-sized ones that rely on Naval bases or other similar economic drivers as the example you provided generally aren't part of this group
2) it ignores that the Dream is alive and well elsewhere
Nobody should expect to get a college education and go live in any given town and be set for life. That's not practical. Economies change, but the opportunities are still out there.
If you believe people should be entitled to make a living wherever they grow up (or choose) forever, then yes the American Dream doesn't exist because your expectations are out of line with capitalism.
That's not fair; it's alive if you aren't stubborn with occupational choices and where you live. It sucks to move but people need to get over that fear.
I do. At the lower end, if employers can't afford to pay people enough to make their loan payments, they'll start hiring people without debt.
The worry I have is that if the automation worries are born out, then you're going to have an inflexible debt loan (student loans) meeting a market that offers fewer jobs (due to automation).
I think you've misunderstood what you're hearing: low cost college by definition can't be the cause of high cost college.
The claim is that high availability of funds/liquidity for college is what pushes up prices,since there are more dollars available to chase a supply that hasn't kept pace[1].
> college is free in many countries where they are doing quite well. So I question the facile opinions I keep hearing.
This doesn't really make any sense. Colleges that are provided for free are a lot less dependent on markets to determine prices: they treat them like a more or less generic public good (where college choice is determined by quality of student more than ability to pay).
[1] strictly speaking, the supply hasn't been that constrained, but since college is largely perceived as a positional good, this affects all but the bottom rung for-profit colleges.
Exactly. It's no different to what causes a real estate bubble: Extremely low interest rates and lax lending policies make borrowed cash very cheap, which pushes up the amount that the average buyer can 'afford' to borrow.
It's gotten to the point that you might consider the alternative of starting a higher education co-op to hire associate professors and frustrated, underemployed phds while minimizing tuition by meeting in un-fancy locations or online.
That said, I would definitely join such a co-op as I feel the knowledge is more important than the paperwork anyways.
For those seeking ROI, boot camps are already providing a compelling vocational alternative.
At the same time, getting rid of tenured positions is a decent means of cutting costs to try to address the same shortfall.
Though I should note that PhD students in history aren't major drivers of demand for professors of history - undergraduates are.
In the sciences, there's a bit more of an incentive to have lots of graduate students.
So now we get to see other effects at work and some of those effects expose this rise in price as unrealistic.
Although I do want to mention that in my eyes these so-called top schools are overvalued. With both their professors and students gaming the system in order to 'stay the best'.
Well, yes; software is on average more reliable today than 15 years ago.
This has the same structure as your argument and is incorrect, so you have to add something specific to government to repair the argument structure.
I do think they should make student loans bankrupt-able. It's time.
Oh yea, and put a hiring freeze/salary cap on all administrative personnel for any school that accepts federal loans.
The best teachers I had were at community colleges, and usually had summer jobs.
I never figured out what most of the administration did besides irritate the better teachers.
The real answer is to cut what's funded by the government, make the rest of the financing come from the universities themselves, AND make it bankrupt-able. Then as demand declines and universities share the hit for each bankruptcy, universities will lower prices to something more reasonable to increase supply.
I thought the whole business of government helping with student loans is to enable poor people to get a degree when that was vital to getting rich. But that's not really needed anymore. You can often make more money with a trade certificate than a degree.
Banking industry does not have a concept of a college loan. A loan is either secured (mortgage, auto, HELOC) or unsecured (personal, credit card). Without government participation all college loans are treated as unsecured, which means that everybody will get roughly the same offer as they do today on personal loans. High interest rate, payments must start immediately, bad credit requires a co-signer (time to talk to Mom and Dad).
Banking sector interest in unsecured private loans to people with bad credit (which describes most 18-year-olds) is so close to zero that LendingClub pretty much owns the sector.
Want a new degree, your credits won't transfer so you start over as a freshman. (if you can get in - school is competitive and the bankruptcy is sitting there on your record)
https://nces.ed.gov/fastfacts/display.asp?id=40
"The 6-year graduation rate was 58 percent at public institutions, 65 percent at private nonprofit institutions, and 27 percent at private for-profit institutions."
Why not make the coding bootcamp start at kindergarten. And why not let parents pay for such schools so they can choose the best ROI for their kid.
If those "thinkers" were really contributing something valuable, that will show up in ROI. If you don't agree with that measure, how do you propose to eliminate completely useless classes and make space for better alternatives? Do you just assume that any classes that are part of the status quo must be valuable?
There are so many examples of this I don't know where to begin. Ok I'll start: Fracking.
Another good example of chasing the mighty fractionally reserved greenback:
Generally it is about playing to the strengths. Customized education.
Guaranteed downvotes
I think he/she is right-ish about the supply-demand calculus on this; looking at history, overextended credit/margins often lead to nasty bubbles because of the distortion effects.
As a teacher who has experienced that irritation, I hear you. But I also know that multitudes of administrators are a necessity in the modern world. There are a number of reasons for this; one of the biggest is regulatory burden.
Pick your favorite downtrodden group. Some politician makes a speech about how Group X has gotten the shaft for too long; he says he wants to pass a law that says no federal money is going to go to a university that hires people from Group X at a lower rate than other groups. Everyone says, "Yay, politician." And the law is passed.
Now, I am not (repeat: NOT) arguing against such policies. If thoughtfully enacted they can be beneficial. But they also come at a cost. And much of that cost is administrative.
Basically, this politician has just invented a new form to fill out. Before receiving federal $$$, we have to fill out this form that describes our good-faith efforts to hire qualified people from Group X.
Now, someone has to fill out that form. They have to keep the necessary records. They have to tell their coworkers what they need to do to be in compliance. They have to get periodic training, because government requirements change. That person needs office space and equipment. They need a parking space, and their trash needs to be emptied, and their restroom needs to be cleaned and stocked, and their paycheck needs to be deposited, and someone needs to supervise them. And none of this is free.
The modern world comes with a huge number of policies like this. "Let's prevent hard-working Americans' money from being misspent. I'm going to require that any scientist who receives a government grant has to account for his time, so we know where the money is going." Fine. And every university hires someone for a new administrative position.
"Every new construction project must conform to stricter safety requirements." Great idea. Another hire.
And again, none of this is free.
> Oh yea, and put a hiring freeze/salary cap on all administrative personnel for any school that accepts federal loans.
Ah, but the reason the administrative personnel are necessary in the first place is to ensure that the organization meets the qualifications to accept federal money. So the idea is, I'm afraid, completely impractical.
T.I.N.S.T.A.F.R
There is no such thing as free regulation. Some people tend to forget that when they say "We should make a law that says..."
Unless they are going out of their way to spend a lot of money, the cost of those graphics is actually pretty cheap in comparison to the entire device. It's probably things like marble floors where the cost between one material choice can be 3x-10x the cost of another that would increase costs.
Don't have all the answers, but less emphasis on loans, competition from better-supported state and other non-profit schools, and having multiple forms of post-high-school education and credentialing available could all potentially help to bring some competition and sanity back to all this.