

Why Does College Cost So Much?  - cwan
http://www.forbes.com/2010/08/01/rising-cost-education-opinions-best-colleges-10-feldman-archibald.html

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chedigitz
*official student document policy at a state university

"Make sure to print the documents, then place them in the bin, so they can be
scanned into the students file"

From my 5 years working in Higher ED that phrase pretty much sums it up.

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lionhearted
It misses the big and obvious one: Grants and loans cause price increases.
This is pretty much well accepted by economists, but a simple example:

Imagine Warren Buffet announces that he'll pay anyone who buys a used car
$5000. What will happen to the price of used cars? It will go up.

Imagine Warren Buffet announces that he'll lend anyone who wants to buy a used
car $5000. What will happen to the price of used cars? Again, it will go up.

There are lots of reasons for it, but a lot of 18 year olds just don't
understand what the loan application they signed for $40,000 for the upcoming
year's tuition really means, since they've never earned or spent $40k before.
Unfortunately, student loan debt is pretty much the only kind that can't be
discharged by bankruptcy, so students are stuck after getting it. And college
prices keep going up.

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shadowfox
I must admit I didnt follow this completely. Do you mean that because Buffer
pre-announced he will lend $5K to people, the prices of cars will increase to
accomodate this $5K?

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Experimentalist
The extra $5k people have to spend would increase the price people are
willing/able to pay for a car - and increase demand-- which would lead the car
sellers to raise their prices.

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patrickgzill
It costs so much because those running it are insulated from competition and
from being accountable - costs are just passed on to the students.

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vparikh
Because for most kids who are going to college it isn't about learning or
preparing for a future in something valuable. It is about "learning about
yourself", "gaining independence", finding a spouse, or simply getting to
party for four years. You see college has become a rite of passage for many
people. It is the equivalent to the high school prom.

Very few people actually go to college with a plan. And the universities take
advantage of this and sale a dream. It always cracks me up when I see a family
go to visit a campus and return commenting on how great the campus was, how
many extra curricular activities were available and the boy/girl ratio. Ask
them about the course and your typical answer is that their son/daughter
hasn't picked a major yet.

I mean you as a family are about to spend $200K+ over four years and you don't
know why you are spending it? Oh, sorry it is for the extra curricular
activities & the nice campus.

These people deserve to get ripped off.

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rick888
It's funny. Academia is much like most governments: Very inefficient, bloated,
and wasteful of money.

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Locke1689
That's actually the _exact opposite_ of what the article said:

 _Our story of rising cost is devoid of bad people making bad decisions. This
means that there are no simple fixes, like price controls, that would not also
reduce the quality of the education we offer._

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tokenadult
That is the opinion of the author of the article, but the opinion may be
mistaken.

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rb2k_
500 Euros / semester It was even free when I started :)

(Germany)

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hackermom
Because your educational system is scantily socialized.

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Locke1689
Maybe, but it's difficult to make that argument, partly because many of the
best universities in the world are private. Introducing price controls on
private universities sounds incredibly intrusive to me, but if the state were
to simply subsidize education, why should the student who gets into Harvard
receive 5 times as much taxpayer funds as one who goes into a state school? If
we only subsidize a limited amount, how does that help the problem? My
university costs ~$50k per year and people beg to pay it without gov't
subsidies.

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kevin_morrill
It's actually more fascist than socialized, which is why you see "private"
institutions affected just as much. By fascist I am not equivocating Nazi
Germany, but rather saying the means of production are heavily influenced by
government regulators. The commenter above who talks about loans hit the nail
on the head. And those loans are largely backed by the Federal Government.

It would be interesting if you had to go to a bank (who also didn't have the
FDIC backing) and demonstrating the probability your education will make you
able to pay the debt you're about to incur. I think you'd see far fewer loans,
and also better market signals for the types of majors that are worth high
dollar figures.

Right now there's no significant market signal. The primary signal is whatever
lobbyists can curry favor with the government to get money or more funding for
huge loan programs.

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pizza_
Demand.

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Locke1689
I think the downvote here was unwarranted: pizza_ makes a good point. Over the
past decade or so we've seen demand for higher education explode. The
motivation is simple -- those with higher education earn a higher living wage
than those without, on average. Honestly, though, what's the point? We may be
graduating many more people, but why? Despite the increase we have nowhere
near enough people doing professional work (e.g., plumbing, welding, etc.) and
a continuing lack of graduates in the significantly underpopular STEM fields.
In essence, why are so many people going to college and not getting a useful
education?

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njharman
"those with higher education earn a higher living wage"

Well they use to, now it seems your pretty lucky to get a decent job out of
college. People didn't think about whether there would be enough higher living
wage jobs for the hordes of graduates.

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parallax7d
It's still true for the top schools. The rest, meh.

