When will the college tuition bubble burst?

[Anonymous]

Anonymous wrote:

Anonymous wrote:The high cost of tuition is driven by the availability of federal loans to fund it. The Department of Education could put a brake on the rising costs by imposing rules on schools for eligibility, including limiting the price tag, for tuition or for other expenses.

Oh my gosh - this is so true. I remember when I was in law school, the max yearly subsidized federal loan amount was about $30K, so the yearly tuition/costs were (surprise) about $30K for several years. Soon after I graduated, my bar association sent out an announcement that it was very proud to have successfully lobbied Congress to double the yearly subsidized loan amount to "maintain the ability of students to keep up with rising costs" and the yearly tuition/costs rose for my law school quickly went to (surprise again) $60K.

This is simply not understood by immature people

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm in academia. There are a lot of factors at play here of course. On the spending side, potential students show up and want to see how nice our non-academic facilities are, like the student center, cafeteria, dorms, and athletic facilities. That all costs money and drives our costs up.

Then on the consumer side, it's sort of a moral hazard. Student loan money is basically free, with no thought given to your ability to pay it back later. You can get just as much student loan money if you are studying social work or elementary education as if you are studying computer science. I'm leaving the societal benefit of each aside -- just it's a fact that some professions pay more than others. Colleges can raise tuition, then the student loans will rise to cover that increase. Not much incentive to keep tuition down.

Then you have foreign students. By law, they are not eligible for financial aid. The middle class in China (for example) is larger than the entire US population. It's very prestigious for your kid to study in the US, even at third-tier schools. Universities love them because they pay the full tuition. The number of these students has increased greatly over the last few years. That means you have a bunch of foreign students ready to pay full fare, along with well-off American residents ready to pay full fare, and lower income level students armed with student loans ready to pay slightly discounted tuition (the university will find some financial aid, often from hapless donors, to cover the difference).

I can see that for some fields, you’d want state of the art equipment for technical studies such as science, film, engineering, etc. But what’s wrong with just retooling/updating equipment rather than building completely new buildings?? Would be a fraction of the cost.

Where I think we will see _some_ focus on value is at 2nd and 3rd tier schools. There's less of a "name" to sell on, and they tend to draw only regionally not nationally.

The fix is to limit student loans, but that's politically untenable.

Those are easy targets to pick on, they don't actually make up a significant portion of spending by colleges and universities. And they're typically paid for with fees, rather than tuition itself. I'm sure they do play a role in the cost of college, but instruction itself is still what's driving the costs.

Somewhere between half and three-quarters of the instruction is done by adjuncts who are paid an average of $3000 per three-credit class. That's not what is driving the costs.

Perhaps I was loose with terminology. I meant the overall costs to provide instruction, including institutional support and academic facilities. Not just the cost of instructors/professors/etc.

+1 My spouse works at a private college, and salaries/spending were being slashed even before the pandemic to cover the costs for a new STEM building. When I toured schools with my high-school kid last year, every school was bragging about shiny new science buildings, so it is obviously an important marketing point.

[Anonymous]

Everyone here posting the roundly disproven Bennett hypothesis that federal loan availability drives the cost of college needs to take a good hard look at the proportion of the cost of their in-state option that has been paid by the state government over the last, say, 50 years. It's a line plummeting almost down to the Y axis in some states (and especially for the flagship publics, which play a key role in setting expectations in a state about what college "should cost.")

http://www.amacad.org/sites/default/files/academy/multimedia/pdfs/publications/researchpapersmonographs/PublicResearchUniv_ChangesInStateFunding.pdf

In 43 states, state revenue contributions to public higher education are still below where they were before the Great Recession--and in 7 of those they are 30% below where they were. https://shef.sheeo.org/report/

In general, public institutions' costs set the floor of what is "reasonable," and privates follow it accordingly.

So if you want lower tuition costs, vote for public investment in public higher education.

[Anonymous]

Anonymous wrote:Everyone here posting the roundly disproven Bennett hypothesis that federal loan availability drives the cost of college needs to take a good hard look at the proportion of the cost of their in-state option that has been paid by the state government over the last, say, 50 years. It's a line plummeting almost down to the Y axis in some states (and especially for the flagship publics, which play a key role in setting expectations in a state about what college "should cost.")

http://www.amacad.org/sites/default/files/academy/multimedia/pdfs/publications/researchpapersmonographs/PublicResearchUniv_ChangesInStateFunding.pdf

In 43 states, state revenue contributions to public higher education are still below where they were before the Great Recession--and in 7 of those they are 30% below where they were. https://shef.sheeo.org/report/

In general, public institutions' costs set the floor of what is "reasonable," and privates follow it accordingly.

So if you want lower tuition costs, vote for public investment in public higher education.

that doesn't explain why 70k seems to be the new going rate for costs at a good SLAC or private

[Anonymous]

Anonymous wrote:It is driven by the insecurity of the upper classes in the US, desperate to get their kids on the right path.

It will keep getting worse unless we change our economic system to one that avoids this winner takes all economy.

+1

OP, you don't see the parents who went to HYPES or similar freaking out over what college they have to make an enormous donation to, it is the parents who never went to college or went to a very non-HYPEs college who are taking that route.

[Anonymous]

When distance learning allows for increased capacity

[Anonymous]

Anonymous wrote:

Anonymous wrote:It is driven by the insecurity of the upper classes in the US, desperate to get their kids on the right path.

It will keep getting worse unless we change our economic system to one that avoids this winner takes all economy.

+1

OP, you don't see the parents who went to HYPES or similar freaking out over what college they have to make an enormous donation to, it is the parents who never went to college or went to a very non-HYPEs college who are taking that route.

Has Elon or Emory ascended to those nights?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Everyone here posting the roundly disproven Bennett hypothesis that federal loan availability drives the cost of college needs to take a good hard look at the proportion of the cost of their in-state option that has been paid by the state government over the last, say, 50 years. It's a line plummeting almost down to the Y axis in some states (and especially for the flagship publics, which play a key role in setting expectations in a state about what college "should cost.")

http://www.amacad.org/sites/default/files/academy/multimedia/pdfs/publications/researchpapersmonographs/PublicResearchUniv_ChangesInStateFunding.pdf

In 43 states, state revenue contributions to public higher education are still below where they were before the Great Recession--and in 7 of those they are 30% below where they were. https://shef.sheeo.org/report/

In general, public institutions' costs set the floor of what is "reasonable," and privates follow it accordingly.

So if you want lower tuition costs, vote for public investment in public higher education.

that doesn't explain why 70k seems to be the new going rate for costs at a good SLAC or private

It does, especially when you factor in the brinksmanship between state flagships competing for out-of-state (and international) students, who are typically full pay.

For example, when I went off to college in NJ in the early 1990s, Michigan would have cost me and my family about $25k per year, all-in. I can't find a number for the 1990s, but in 1968 state approps were 68% of the cost of UM's budget--it was less, but not dramatically less, by the 90s.

State appropriations to UM have since declined dramatically. They're now 14% of the budget. And for out of state first-years now, Michigan is $66,698.

With that price competition in the public sector, why shouldn't Bowdoin charge $75k or more, especially if they have a lazy river and a climbing wall on top of it?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:^^^ Thoughtful post. Don’t forget bloated administration.

Let me thank you for your thoughtful, nuanced post by adding my typical right wing catchphrase

The “right wing” post just confirmed by several academics on the thread.

So if I make up two posts refuting it, then what?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm in academia. There are a lot of factors at play here of course. On the spending side, potential students show up and want to see how nice our non-academic facilities are, like the student center, cafeteria, dorms, and athletic facilities. That all costs money and drives our costs up.

Then on the consumer side, it's sort of a moral hazard. Student loan money is basically free, with no thought given to your ability to pay it back later. You can get just as much student loan money if you are studying social work or elementary education as if you are studying computer science. I'm leaving the societal benefit of each aside -- just it's a fact that some professions pay more than others. Colleges can raise tuition, then the student loans will rise to cover that increase. Not much incentive to keep tuition down.

Then you have foreign students. By law, they are not eligible for financial aid. The middle class in China (for example) is larger than the entire US population. It's very prestigious for your kid to study in the US, even at third-tier schools. Universities love them because they pay the full tuition. The number of these students has increased greatly over the last few years. That means you have a bunch of foreign students ready to pay full fare, along with well-off American residents ready to pay full fare, and lower income level students armed with student loans ready to pay slightly discounted tuition (the university will find some financial aid, often from hapless donors, to cover the difference).

I can see that for some fields, you’d want state of the art equipment for technical studies such as science, film, engineering, etc. But what’s wrong with just retooling/updating equipment rather than building completely new buildings?? Would be a fraction of the cost.

Where I think we will see _some_ focus on value is at 2nd and 3rd tier schools. There's less of a "name" to sell on, and they tend to draw only regionally not nationally.

The fix is to limit student loans, but that's politically untenable.

Those are easy targets to pick on, they don't actually make up a significant portion of spending by colleges and universities. And they're typically paid for with fees, rather than tuition itself. I'm sure they do play a role in the cost of college, but instruction itself is still what's driving the costs.

Somewhere between half and three-quarters of the instruction is done by adjuncts who are paid an average of $3000 per three-credit class. That's not what is driving the costs.

Perhaps I was loose with terminology. I meant the overall costs to provide instruction, including institutional support and academic facilities. Not just the cost of instructors/professors/etc.

+1 My spouse works at a private college, and salaries/spending were being slashed even before the pandemic to cover the costs for a new STEM building. When I toured schools with my high-school kid last year, every school was bragging about shiny new science buildings, so it is obviously an important marketing point.

Look up the income of the some of the college presidents' salaries; look at what they are paying for new buildings; and some colleges try to get top names for professors. Colleges do not cut at the top, they make cuts at the bottom. It is absolutely backwards. Colleges also have boards, and I would be interested to know if they get paid - some of their input and proposals are worthless, because the boards are completely out of touch.

[Anonymous]

*Look at the income of some of the presidents - sorry, trying to multitask.

[Anonymous]

Anonymous wrote:Everyone here posting the roundly disproven Bennett hypothesis that federal loan availability drives the cost of college needs to take a good hard look at the proportion of the cost of their in-state option that has been paid by the state government over the last, say, 50 years. It's a line plummeting almost down to the Y axis in some states (and especially for the flagship publics, which play a key role in setting expectations in a state about what college "should cost.")

http://www.amacad.org/sites/default/files/academy/multimedia/pdfs/publications/researchpapersmonographs/PublicResearchUniv_ChangesInStateFunding.pdf

In 43 states, state revenue contributions to public higher education are still below where they were before the Great Recession--and in 7 of those they are 30% below where they were. https://shef.sheeo.org/report/

In general, public institutions' costs set the floor of what is "reasonable," and privates follow it accordingly.

So if you want lower tuition costs, vote for public investment in public higher education.

Exactly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:^^^ Thoughtful post. Don’t forget bloated administration.

Let me thank you for your thoughtful, nuanced post by adding my typical right wing catchphrase

The “right wing” post just confirmed by several academics on the thread.

So if I make up two posts refuting it, then what?

I’m sure making up stuff is you’re thing, so go for it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Everyone here posting the roundly disproven Bennett hypothesis that federal loan availability drives the cost of college needs to take a good hard look at the proportion of the cost of their in-state option that has been paid by the state government over the last, say, 50 years. It's a line plummeting almost down to the Y axis in some states (and especially for the flagship publics, which play a key role in setting expectations in a state about what college "should cost.")

http://www.amacad.org/sites/default/files/academy/multimedia/pdfs/publications/researchpapersmonographs/PublicResearchUniv_ChangesInStateFunding.pdf

In 43 states, state revenue contributions to public higher education are still below where they were before the Great Recession--and in 7 of those they are 30% below where they were. https://shef.sheeo.org/report/

In general, public institutions' costs set the floor of what is "reasonable," and privates follow it accordingly.

So if you want lower tuition costs, vote for public investment in public higher education.

Exactly.

If public schools all of the sudden receive a huge public injection of funds, they are not going to decrease tuition - each of the schools already has a group of customers (students and families) willing to pay certain costs. Instead, the public schools will spend the funds to improve and would even increase tuition due to the improvements relative to private schools.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Everyone here posting the roundly disproven Bennett hypothesis that federal loan availability drives the cost of college needs to take a good hard look at the proportion of the cost of their in-state option that has been paid by the state government over the last, say, 50 years. It's a line plummeting almost down to the Y axis in some states (and especially for the flagship publics, which play a key role in setting expectations in a state about what college "should cost.")

http://www.amacad.org/sites/default/files/academy/multimedia/pdfs/publications/researchpapersmonographs/PublicResearchUniv_ChangesInStateFunding.pdf

In 43 states, state revenue contributions to public higher education are still below where they were before the Great Recession--and in 7 of those they are 30% below where they were. https://shef.sheeo.org/report/

In general, public institutions' costs set the floor of what is "reasonable," and privates follow it accordingly.

So if you want lower tuition costs, vote for public investment in public higher education.

Exactly.

If public schools all of the sudden receive a huge public injection of funds, they are not going to decrease tuition - each of the schools already has a group of customers (students and families) willing to pay certain costs. Instead, the public schools will spend the funds to improve and would even increase tuition due to the improvements relative to private schools.

Correct! Same reason why it doesn't benefit the avg consumer if you give tax-breaks to corporations. They (the corporations) put the extra into reserve or buy back their stock, they don't embark on capital projects and go on hiring sprees. Mirror image of the inadequacy of "trickle down economics".