Reply to When will the cost of college flatten out?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Yep, simple supply and demand. Until the demand goes down, nothing will change. [b]Free market capitalism[/b] at work, folks.[/quote]

Not really. The government is both underwriting some of the costs and altering the rules on loans for the rest [/quote]
And how does that make the market any less free? No one's being forced to do anything.[/quote]

Government intervention distorts markets which is the opposite of a free market [/quote]

+1, and in the market for college degrees, there are ripple on effects that further increase demand.

When government subsidizes college degrees via loans, several things happen. One, colleges charge more because that money is "free" to them so they are going to charge at least up to the max loan amount since that's what dictates "affordability" on the market. But additionally, demand for college increases because more people who previously might not have thought they could afford college now can, so more people want to go. This drives up costs at colleges with excess applications because they have more applications than seats and therefore can ask for more money.

But there's also a market impact outside colleges that is a huge factor -- employers begin demanding applicants with college degrees because college has become so commonplace that it has become a marker of employability, even in jobs where a degree should not be required (and never used to be). This creates a feedback loop that helps spiral college costs up because it further increases demand (when a college degree is required for nearly all jobs, that increases demand for college) and also puts a higher *value* on a college degree because the more jobs that require a degree, the bigger the difference income between someone with a degree and someone without.

IMO, we should have a class of FREE colleges that are government funded and available to pretty much all college graduates, and then a class of non-profit colleges that charge tuition and offer/accept merit-based scholarships. But no college loans. The free college would be extremely vocationally focused on job training to ensure people are prepared for the jobs that are actually out there, and would work closely with employers to help segue high school graduates into professions that do require some specialized training and knowledge, but will never pay well enough to justify loans. And the brightest, most ambitious students who are pursuing careers that require classical college degrees would go to tuition-based colleges, but those who have demonstrated aptitude would qualify for generous merit aid. And rich kids with money can go to these schools full pay provided they can get in, which is always going to be part of the system.

The problem with the current system is that we are pushing many students to college using loans as a lure, even though college isn't really preparing them for the right jobs, and the jobs they get are never going to pay enough to justify the cost of college, especially with interest via loans. It enriches college administrators and other parts of the college industrial complex, but doesn't really accomplish the goals of higher education.[/quote]

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