
Why has college gotten so expensive in the last 30 years? A blank check in 1993 - KoftaBob
https://medium.com/@andrewghobrial/why-has-college-gotten-so-expensive-in-the-last-30-years-3505af9aded8
======
noetic_techy
"The question then becomes a matter of how we fix this without diminishing
access to a college education."

This is the crux of it that everyone needs to get over. Universality, High
Quality, Low Cost. Pick two. By letting the government meddle you have
guaranteed no one can afford college and will be long in debt to a loan they
cannot discharge in bankruptcy. I'd rather have cheap college then universal
access for every single person who wants a English Literature or Anthropology
degree with low ROI. Colleges are now awash in money and they pump it into
newer and fancier campuses to attract more of that government backed debt from
all the masses, driving up cost significantly.

Or how about breaking the degree monopoly with something like equivalent
certification programs and let private companies fill the gap. Similar to what
Google is doing with its certificate program they are rolling out. 4 years for
a piece of paper that includes 2 years of general education classes for "well
roundness" is starting to look more and more ridiculous considering the cost
of that "well roundness" is years of non-dis chargeable debt weighing you down
during your best decades.

~~~
Dannymetconan
Universities in Europe are generally high quality and low cost. It does have
it's problems but it is not one or the other.

You do not need a degree 30 years ago to do lots of jobs that now require one.
Higher education for a lot of organizations is just an easy way to cut the
application stack down

~~~
georgeecollins
Are Universities in Europe really that high quality? Certainly some are, but
as a parent researching schools I have been really surprised by how many
European colleges are a bit mediocre by the criteria I was evaluating. For
example, Spain and Italy have some of the oldest colleges in the world. But in
many ways there are four or five colleges in California that are better, four
or five colleges in Texas, and across the US many many colleges than any
college in those countries.

I know a lot of people will disagree because there are so many ways to compare
colleges. But what I look for is the strength of the top faculty (not
necessarily the teachers but who you might work with as you get more
advanced), the facilities, the quality of the research that comes out of that
University. The US really has an impressive number of schools that attract top
faculty from around the world and produce world class research in many fields.

A lot of European colleges seem to give you a good education. But if you
really wanted to be an expert in something, or just get the experience of
working with top people, it is amazing how relatively strong US colleges are.

I know I am making a lot of generalizations, perhaps unfairly. So if you
disagree or see it a different way please correct me. This is something I am
really trying to learn about.

~~~
lordnacho
My issue with the rankings is how they emphasise research. Why would it matter
to an undergraduate how highly decorated his prof is? We used to joke that the
more titles a guy had, the worse he was at teaching. I think this is true
because the guys with the titles have moved on to managing research and
finding funding, rather than having daily tasks to do with the research.

I went to a very well known university that's known for giving tutorials with
just a couple of students, and this always seemed to be the case. Top prof =
doesn't have time or motivation to teach.

If you look at it, everything you do in undergrad is fairly well known anyway.
There's no reason why a course at one uni would be much different from
another, the fields have decided long ago what is and isn't important.

What might affect your kid is what peers they end up with. If you go to a top
uni, people are used to doing well and tend to come from backgrounds that
allow them to succeed.

~~~
throwawaygh
Well, a few things:

1\. Research is part of the pedagogy. Getting involved in a research lab as an
undergraduate is a great way to land in the top 5-10 percentile.

2\. I think what you're saying is roughly correct, but would warn that you
_can_ very easily go _way_ too far in the other direction. For example, check
out some of the smaller colleges and state branch campuses launching data
science departments staffed entirely by non-stats/non-CS faculty who have 0
days of work experience. Mostly because their math courses are under-
subscribed and they've gotta do something with those bodies. The quality of
these programs is about what you'd expect. So, you don't need top-tier
faculty. However, you do need faculty who have at least a relevant terminal
degree and/or significant work experience. Otherwise, it's the blind leading
the blind.

3\. Curriculum _does_ vary radically between universities! C.f., Stanford and
a random branch campus of a state school.

4\. As you noted, cohorts can also vary even more radically.

~~~
tnecniv
> Research is part of the pedagogy. Getting involved in a research lab as an
> undergraduate is a great way to land in the top 5-10 percentile.

I just want to point out for any newer undergrads that might be reading that
research is really one of the best things you can do during your time at
school. Even if you don't plan on going into academia, it looks great on a
resume and professors are often have industry connections that can get you an
internship easily.

~~~
jeffe
A few caveats to be aware of: more scrutinizing employers will recognize that
undergraduate research at the same university you attend is usually a gimme.
And at my large state school was often used for cheap labor that grad students
didn't want to do.

~~~
throwawaygh
It’s the project output, the faculty connection, and conference attendance.
The line on the resume doesn’t matter.

~~~
derangedHorse
For the large amount of students who don't go on to get PhDs, why would that
matter?

~~~
throwawaygh
A good rec from a strong researcher carries weight. Likely lots of execs,
managers, and senior engineers in the ranks of their academic siblings, old
grad school friends, collaborators, former students, etc.

It’ll add a band or at least max out comp in the existing one if the right
person gives the right rec.

And that’s assuming the undergrad research project was totally irrelevant to
the position. New grads who can contribute to cutting edge stuff are super
hard to find and super cheap relatively speaking. Usually your options are
super expensive engineers or the few phds who decide to go into engineering
instead of research.

I’ve seen undergrads sign in the 3s and 4s when their research aligns
perfectly with the advertised position, cause the alternative is often buying
the kid out of his startup a year later.

------
jefftk
_> the feds should handle student loans the same way they handle
medicaid/medicare reimbursement._

I'm not sure how anyone looks at our health care reimbursement system and the
decides that's the approach to apply to fix anything else?

Personally, I'd like to see:

* Employers are allowed to test students to see what they can do, but not evaluate them based on whether they went to school or where.

* Make student loan debt dischargeable in bankruptcy. Lenders will be much less willing to pay high tuitions in cases where students are unlikely to be able to pay it back, and if the lender guesses wrong and it does come to bankruptcy then the student is no longer encumbered.

(I wrote more along these lines: [https://www.jefftk.com/p/fixing-student-
loans](https://www.jefftk.com/p/fixing-student-loans))

~~~
btilly
_Employers are allowed to test students to see what they can do, but not
evaluate them based on whether they went to school or where._

For those who are unaware, these tests are considered a violation of the Civil
Rights Act because they result in hiring blacks at a much lower rate than
whites.

A big underlying cause of that is that schools with lots of blacks are
underfunded relative to schools with lots of whites.

 _Make student loan debt dischargeable in bankruptcy._

I support this. I thought that the 2005 change to the law that made it not
dischargeable was a bad idea then, and we are seeing the predictable
consequences now.

~~~
jefftk
_> For those who are unaware, these tests are considered a violation of the
Civil Rights Act because they result in hiring blacks at a much lower rate
than whites._

Work sample tests are legal; otherwise we wouldn't see tech companies giving
whiteboard interviews.

More general tests are not legal
([https://en.wikipedia.org/wiki/Griggs_v._Duke_Power_Co.](https://en.wikipedia.org/wiki/Griggs_v._Duke_Power_Co.))
unless you can demonstrate that they "bear a demonstrable relationship to
successful performance of the jobs for which it was used". On the other hand,
they held that "neither the high school completion requirement nor the general
intelligence test is shown to bear a demonstrable relationship to successful
performance of the jobs for which it was used" so I think there's a decent
chance that the widespread use of college degrees as a filter is also already
illegal. (Not a lawyer)

~~~
philwelch
IQ tests aren’t blanket-banned; they just have additional hurdles. For
instance, the Wonderlic test is routinely used in hiring contexts and is even
part of the NFL scouting combine.

~~~
jldugger
While the Wonderlic published, is it even used as a factor? Does a coach say
"no linebackers who scored less than 18?"

~~~
etempleton
Often it is used as a red flag when a prospect scores particularly low on the
test. NFL playbooks are complex and there is a lot to learn and then apply in
real time on the field compared to in college. Players who cannot process all
of this added complexity rapidly and then apply it are at risk of not being
able to keep up on the field, even if they are incredible athletes. This holds
the most weight with quarterbacks who have the most to juggle mentally
throughout a game, so you most often hear conversations about the wonderlic
when talking about the quarterback position.

------
jlebar
The central claim in TFA is that when the government gives out loans directly,
instead of guaranteeing loans made by banks, it's easier for students to get
student loans, and therefore college prices go up.

a) Zero evidence is provided in TFA that it is in fact easier for students to
get loans under the government program. I could make an equally compelling
argument and say, when the private sector provides loans guaranteed by the
government, private sector has a monetary incentive to seek out students and
pile them high with loans that they can't afford. The loans are guaranteed by
the government, so more loaning is direct upside.

In contrast, the government has no incentive to partake of predatory lending!
Its incentives are aligned -- and not just on the monetary angle, but also,
the government does not succeed if students are stuck in debt forever.
Therefore when government gives the loans, incentives are aligned and lending
goes down.

I've provided just as much evidence as Andrew. I'm not saying I'm right, but
how do we know he is, either?

b) Andrew who?

c) TFA neglects to mention that you can take out up to $5500-7500 in
government loans per year as an undergrad. [https://studentaid.gov/understand-
aid/types/loans/subsidized...](https://studentaid.gov/understand-
aid/types/loans/subsidized-unsubsidized) If they had, you might have doubted
their claim that this is the reason that college costs $50+k/yr.

We are already under this dude's system of "government offers a small, fixed
amount in loans and students have to figure it out". Prices are still high and
increasing.

It turns out that the high cost of college doesn't have a simple explanation
or solution. Who knew.

~~~
bjt
> the government does not succeed if students are stuck in debt forever.
> Therefore when government gives the loans, incentives are aligned and
> lending goes down.

That's a double edged sword. Yeah, the government doesn't have the profit
motive that predatory lenders do, but they also lack the incentive to say no
to students who are borrowing money to study things that won't do much to help
them pay it back. Politicians don't get re-elected on a platform of "let's
reduce student loan amounts" or "let's give less money to students who are
studying subjects that won't help them earn much". And the bureaucrats running
the program don't have the power or the incentive to impose discipline here
either.

~~~
quietbritishjim
In a system of loans directly from the government, there is still some mild
disincentive against lending to people that won't pay it back, even if it is
tempered against some other incentives. What's more, a government body
certainly can and surely would limit total loan amounts for affordability
reasons.

More to the point, the comparison here is against regular private lenders, but
instead against private lenders with government guarantees. Those have no
disincentive whatsoever to avoid people who can't pay money back or to limit
the loan amount. In fact they have a very strong positive incentive: there's a
guaranteed profit on every loan and it's proportional to loan amount. What's
more, if you cap the loan amount then the "customer" might use a competitor
with a higher cap, so you lose the whole of the loan.

~~~
unishark
I believe private lenders require cosigners or else proof of income. I don't
see how they can win here. You'd have them discriminate in giving loans based
on some kind of lifetime prediction of someone's earnings? I'm sure that would
go over well.

Schools need to be the adults in the room, since they getting most of the
money after all. And that will only be motivated by having them take the
financial hit if students default.

------
bachmeier
How did this hit the front page of HN? There's literally no analysis in a
piece on a topic that has been analyzed to death.

The hypothesis is that increased availability of loans in 1993 is responsible
for the rise in tuition between 2010 and 2020. Just stated as a fact, with
nothing to back it up. Okay.

The most obvious answer that is cited by _literally everyone_ that looks at
this topic is that it's partially caused by cuts in state funding. Nope, let's
just dismiss that, it was the one-time change in the availability of loans.

I don't see anything wrong with having a discussion, but there's not even
anything to discuss, because it's just a statement that a change 27 years ago
explains everything. HN can do better.

~~~
apsec112
Cuts in state funding don't explain the rapid tuition increases at private
universities.

~~~
throwawaygh
I know first-hand that this is not how pricing decisions work at regional
private colleges/universities. The process regional private colleges go
through is as follows:

1\. List a set of "peer institutions", usually with the primary input coming
from admissions. Here, "peer" means "competes for the same set of students
we're after". Almost always the region's public colleges and universities will
be on this list.

2\. Set prices relative to these "peer institutions".

If Local State College charges $X, then most (read: non-elite) regional
private colleges can get away with charging after-discount-factor $(X+Y) for
some relatively modest Y < X.

Increasing $X also increases $(X+Y).

Cutting state subsidies will lead to higher prices and private institutions.
100% probability. I've seen the exact process by which it happens.

~~~
secabeen
Yes, this is a great summary, and exactly what is going on.

Interestingly, it hasn't seemed to have much change on the spending side.
Colleges are charging more to the median student, but are using a lot of it to
subsidize less well-off students. It's not showing up in huge increases in
faculty salaries, or administrative costs.

~~~
throwawaygh
_> It's not showing up in huge increases in faculty salaries, or
administrative costs._

Not in faculty salaries, but often in faculty headcount. Lots of colleges and
universities have added a lot of faculty while keeping student headcount
constant. Mostly because they can't fire their tenured humanities faculty but
need to hire people who can prepare students for something other than the
Barista life.

IMO: tenure should be used very sparingly and should be viewed as part of a
competitive compensation package. E.g., if the CS PhDs you want to recruit all
have $300K offers in industry and the best you can do is $70K-$80K even with
salary inversion, then you absolutely do need to offer tenure. It's part of
the comp package and you simply will not recruit good people without
offsetting such significant pay gaps.

But tenure for humanities borders on fiduciary irresponsibility. The job
market for humanities PhDs is such that you can hire truly top-tier candidates
without committing to having another head in the Philosophy or English
department 40+ years. The $50K three-year contract is a competitive offer in
the humanities. No need for tenure.

 _> Colleges are charging more to the median student, but are using a lot of
it to subsidize less well-off students._

Certainly some of that too. I expect this will be the leading cause through
2030.

~~~
secabeen
> Not in faculty salaries, but often in faculty headcount. Lots of colleges
> and universities have added a lot of faculty while keeping student headcount
> constant.

Do you have a citation for that? The message in the industry is that colleges
have been reducing faculty headcounts, and relying on adjuncts to cover class
loads, not that there are too many faculty.

> tenure should be used very sparingly and should be viewed as part of a
> competitive compensation package.

I don't think you're going to get very far with this argument in most
universities, where faculty see themselves as part of the governance of the
university. There's quite a bit of collective action between faculty, and I
think even if you could get faculty in some departments without tenure, the
STEM faculty would not want to create a two tiered system.

~~~
throwawaygh
Reductions in faculty headcount are recent. As in, pretty much only this past
year. I’m talking about the last 10 or 20 years. Replacing tenured with ad
juncts or instructors is not a headcount reduction.

There already is a two-tiered system. Ad juncts and instructors are treated
and paid horribly. Stripping tenure but otherwise leaving positions unchanged
is downright humane by comparison.

Tbh, faculty governance is pretty dead at most places.

------
fatnoah
Is this surprising to anyone? Colleges battle each other to provide amenities,
loans are easy to come by, and the colleges have nothing to lose when the
students default.

I remember my first day of college (in 1993!) and remember part of registering
was signing all of these forms where my options were a) take out loans and go
to school or b) don't take out loans and don't go to school. I had no idea
what it meant to carry debt. As it turns out, I was fortunate to only have
$30k of debt and interest rates that eventually went down to 2%. Between then
and now, the "all-in" cost of attending my college has increased 200%.

~~~
vonmoltke
> Is this surprising to anyone?

Yes. Most people here who actually post in US college cost discussions seem to
think the federal government is still only in the business of guaranteeing
loans. As this article indicates, when the federal government is making these
loans and owning them from start to finish it changes the dynamics
considerably.

> I remember my first day of college (in 1993!) ... I was fortunate to only
> have $30k of debt

Where did you go? The on-campus sticker price on my state universities
(Florida International and Florida Atlantic) was only about $35k (all-in) for
the period of 1998-2002 (I didn't have to pay any of it).

~~~
fatnoah
Private Engineering-focused college in the Northeast. All-in annual cost was
listed at $24k for tuition, room, board, fees, etc.

~~~
vonmoltke
That's about what Rose-Hulman quoted me before aid. I would have had to borrow
or work for about $12k/year if I had gone there.

~~~
fatnoah
Ironically, my state's University ended up being my most expensive option
since it was the only school I was accepted to that offered zero scholarships.

------
fastaguy88
It is difficult to overstate how mistaken this article is. College has mostly
gotten more expensive because state support for public universities has
dramatically decreased, from over 80% in the 1970's to less than 20% now.
Since the taxpayer no longer pays for public higher education, the student
does.

The logic of this made some sense at the time; very high tuition subsidies
were a gift to the upper middle and upper class -- few poor students went to
college back when subsidies were high. Ideally, states would have continued to
fund higher education, and the increased tuition would be used to support
lower income students. But the states took the money away from their
universities in bad times, and did not replace it -- in my state (Virginia) it
went to prisons and medicaid.

There are lots of other problems with student loan statistics -- it is true
that the current student loan program has been a tremendous boon to for profit
colleges and trade schools, which is where most of the default occurs. And the
media likes to publicize the outliers; the average debt at public universities
is about $26K, at private non-profits $31K.

But the overall cost of higher education has only slightly beaten the cost of
living (and has certainly increased less than health costs); the price has
gone up because students are responsible for more of the cost.

~~~
baconandeggs
> the price has gone up because students are responsible for more of the cost.

That is not how prices work, the prices can't go up if the only buyers have no
money.

The price went up because they got access to credit. To government mandated
credit.

~~~
fastaguy88
I suppose this seems to make sense if you believe that higher education costs
are a true market that has found some kind of equilibrium. But it's not.

College graduate parents are going to try very hard to send their kids to
college, and today, the vast majority of students at 4 year colleges come from
families with college graduate parents. When tuitions were low, this did not
require much sacrifice for those parents. When prices went up, those parents
continued to send their kids to college, making greater sacrifices, but often
without taking out a loan (at least for public universities). Today, 42% of
undergraduates at public universities have no debt.[0]

No doubt loans also had an effect -- among other things, they made it easier
for state politicians to reduce support for public universities. But since 40%
of students at public universities have no debt, and costs increased more than
5 fold, it is hard to argue that loans were the major factor driving up the
cost. To support the loan driving argument, it would be useful to see
relationship between the fraction of students with loans and college costs.
Simply saying that costs went up when loans became more available ignores many
other changes in education finance.

[0] [https://www.aplu.org/projects-and-initiatives/college-
costs-...](https://www.aplu.org/projects-and-initiatives/college-costs-
tuition-and-financial-aid/publicuvalues/student-debt.html)

~~~
baconandeggs
We are not arguing about the cost of education because students can't pay the
tuition; they pay the tuition every year with no problem even though it keeps
rising. The argument is because after they graduate they have a mountain of
student debt. Students have a debt problem not a tuition problem. Colleges
will keep raising prices as long as the students keep paying them because that
is how markets work.

Loans have enabled all those "changes in education finance", all of them. You
don't need to have 100% reach to influence a market, you don't even need to be
technically in the same market to influence another one (see smartphones and
taxis).

------
disown
No, the real reason was that country wasn't producing enough jobs for the
expanding labor force so we artificially created a new requirement to keep
young people out of the job market for an additional 4+ years. Credentialism
is a tool governments/businesses use keep control of the labor situation.

The college tuition fiasco is a private/public creation. Now who wears the
pants in the private/public relationship, that's up to you to decide. Did
businesses decide to require college degrees for entry level positions and the
government react to that? Or did the government decide to get people into
colleges and the businesses react to that?

If businesses stop requiring college degrees, then college enrollment will
drop significantly. If government stops guaranteeing student loans, college
enrollment will drop significantly.

Who truly runs this country?

~~~
CincinnatiMan
I don’t know that there’s any groups deciding on something but rather
individuals acting in their best interest, getting a degree, that ruins it for
everybody else. An arms race among individuals.

~~~
dnautics
> I don’t know that there’s any groups deciding on something

Credentialism is exactly that. If in the pre-covid era you went to Washington,
DC, you will see huge illuminated ads in the metro stations for companies, for
example "graduate school" (literally the name of one company I saw) which
offer super sketchy master's degrees. This is because if you have a master's
degree, you get a mandated pay bump in your salary as a civil servant.

~~~
veilrap
That sounds like bad regulations and bureaucracy more than credential-ism, but
I agree that is horrifying.

A blanket pay bump for "Master's" degrees written into the code? Clearly
that's going to be gamed.

If any auditing actually went into the source and value of the credentials
then they could be appropriately valued or ignored, depending on the case.

~~~
jacobr1
> If any auditing actually went into the source and value of the credentials

Except that already is case. You need a degree by an accredited institution.
The Department of Education regulates the accreditors, which audit the
universities.

So we could have better or more aggressive regulation here, either at the DoE
or the accreditors. Or even have the department accredit directly, but I
suspect these institutions will still likely game the system.

Usually the bargin-basement universities do actually have worthwhile material,
the poor ones just don't provide you with the full support to succeed, and
often overstate the value of their program relative to alternatives (or cost).
I mean, you could just buy textbooks on Amazon and do self-study. And for some
folks, that might even be a good program! Good universities provide a lot more
than just the lectures and textbooks, but I suspect setting standards to
assess those properties is difficult. Even going to a well-respected state
school, I had a few classes that were very poorly run. In one case, my dorm-
mates and I created a study-group and basically taught ourselves the material.
But I shudder to think of a whole university consisting of classes like that,
though I suspect they would meet baseline audits of the curriculum. An
alternative approach would be to assess the outcomes of students, but looking
at the can worms that raises in primary eduction, I don't think that is a good
approach either.

------
pnw_hazor
For undergrad I used Army money and was poor enough for Pell grants after that
ran out. I got out with $12K in loans.

Much later in law school I was shocked how my first financial aid award letter
(I can't remember if it was for one semester or one year) offered $80,000 in
loans even though I had an $18000 tuition grant/waiver.

I met younger students who had close to $200,000 debt before starting law
school. It is too easy to take the loans, it is no wonder that so many kids or
their families get buried in debt.

I got out of LS with $27K or so in debt from interest deferred federal loans
that charged around 2% interest.

Now, 14 years later, that same Tier 2/3 school charges more than double what I
paid. I would not have gone at that price.

~~~
spaetzleesser
At least lawyers and doctors are smart enough to keep their rates high enough
so they can repay their loans. A while ago I was looking for a lawyer and it
was surprising that there were no freelance lawyers that changed maybe 80
dollars per hour. They all wanted 250 and more.

~~~
pnw_hazor
Maybe true for MDs. But many lawyers, especially solo firms struggle to get
by.

I did some low-fee legal for awhile part-time because I was still programming
after I got my JD. I think I charged $250/hr or flat fees but I did a lot of
free/contingency cases too. As a solo you rarely bill 8-hours a day. Between
running around to meet clients or driving to different courts in the area some
days you are lucky to bill a few hours.

One guy got angry at me because I wanted $250 (or something like that) "just
to read" his DIY complaint before he filed it. "Just to make sure everything
looked okay..." He didn't realize that he would be establishing an attorney
client relationship with me that would obligate me to give competent legal
advice that put my license on the line. That is way beyond just reading his
complaint. The same goes for reviewing contracts, non-competes, etc. I
eventually read the complaint he had prepared since he sent it to me earlier,
boy I dodged a bullet on that one. It would have taken a ton of work to get it
even close to ready for filing.

I did some low-fee family law stuff too -- one client thought I was taking the
side of her ex, because I didn't raise her legally irrelevant complaints in
court. I still got her more money than any other family lawyer would have done
for the small fee she paid. I think I charged her a flat $1100.

In a low stakes employment discrimination case, my client had been rejected by
multiple attorneys before she ran into dumb me. I took the case and got the
client a six figure settlement. Client promptly took me to arbitration because
she thought my share to was too high even though it was well below industry
standard.

Eventually I got tired of this crap and sold out and went corporate.

------
jimhefferon
I found [https://www.mercatus.org/system/files/helland-
tabarrok_why-a...](https://www.mercatus.org/system/files/helland-tabarrok_why-
are-the-prices-so-damn-high_v1.pdf) enlightening. (Not an economist, just a
person who wonders why college costs so much compared to cars.) I am a prof in
a SLAC and I can assure you that I am not floating in money, nor is the
college.

~~~
davidw
I was pleased to read about his paper. He's a somewhat libertarian leaning
economist, and came into his research with some notions about what was driving
costs. What he found did not match his earlier ideas. He wrote about what he
did find. That's how things ought to be.

------
btilly
The problem with the government regulation solution is that the universities
will be motivated to get their people into the position of being regulators,
so that they can have the government guarantee them as much money as possible.

A much simpler solution is to say that every year the most expensive 10% of
schools are denied federal loans, with a sliding cap on loans over the next
30% down to unlimited loans to 60% of schools. Students will have access to
loans based on the status of the school when the student started. And let
students know what that status will be before the school is chosen.

Create a market incentive to deliver school more cheaply than its competitors,
and see how long it takes them to figure out what a doable price point is.

~~~
ntsplnkv2
The reality is people will take out more private loans to attend these
institutions.

------
Beldin
There was a video on social media of a former student with 80 k$ in debt.
After 10 years of payments, amounting to ... (forgot exact number, but way
over 10 k$, vaguely recall it being over 50k), she still owed 76 k$. Probably
so "low" due to her downpaying 6k last year - that is, she seriously believed
it would have been higher otherwise.

I am absolutely convinced you could attend most universities in Northwestern
Europe & live there for less than what this student has already paid +
currently still owes. Including interest on a loan - as long as you don't get
it from the US loan sharks involved in college loans.

------
bhawks
Actual data showing that nothing significant happened to the tuition trendline
on/around 1993: [https://usafacts.org/articles/college-tuition-has-
increased-...](https://usafacts.org/articles/college-tuition-has-increased-
but-whats-the-actual-cost/)

Usafacts.org is a trove of data that is useful to have discussion around - op
(and folks in this thread ;) ) don't need to rely on their gut feelings.

In addition to 1993 being boring, the majority of expenses are far and away
instruction related versus student services (the luxury college memes folks
are taking about isn't strictly true).

I think the most interesting point is that over the past 40 years, all types
of expenses continue to grow at the same rate. (Inflation adjusted of course)
There doesn't seem to be any ceiling in sight or any meaningful changes in
what colleges will spend money on. Naturally tuition costs are on similar
upward trend to balance this - and folks still somehow find the finances to
pay for it.

This doesn't seem sustainable but it also doesn't seem to be stopping any time
soon. Too many students trying to do 'the right thing' are being sucked into
this meat grinder.

~~~
dragonwriter
> I think the most interesting point is that over the past 40 years, all types
> of expenses continue to grow at the same rate. (Inflation adjusted of
> course) There doesn't seem to be any ceiling in sight or any meaningful
> changes in what colleges will spend money on. Naturally tuition costs are on
> similar upward trend to balance this - and folks still somehow find the
> finances to pay for it.

I think you have it backwards: the increasing ability to extract tuition is
driving total spending up, because once you have the money, you are going to
spend it, not expenses going up an dragging tuition with it.

~~~
bhawks
How do you demonstrate that one is causing the other?

Based on my baised observation of the local UC system I just don't see the
types of personalities working there thinking about how to extract the last
dime from students. What I do see though is very lax fiscal discipline and the
inability to make even easy cost management choices. In this environment
everyone just expects budgets to increase by x% each year. Then each year they
realize - omg we have to increase tuition why does this keep happening?

I can not rely prove my idea - can you prove yours?

------
wwarner
I'll grant that some people overpay for some types of education because of
loans that shouldn't be available. But it could be simpler still. Contrary to
the typical contrarian viewpoint, a college education costs a lot because it
is very valuable. American schools are filled with excellent foreign students
that pay the premium rate, and receive no state support. Why? Because it's a
great value.

Technology has created a two tier economy, hollowed out in the middle. If you
don't get a good degree, you'll just free fall down to whatever happens to be
left in your region, and you'll still be biting your nails every day waiting
for technology to make your skills obsolete.

I think @pmarca's admonition to build, build and build some more is part of
the solution. We have to find technological applications besides building a
monopoly and taking over an industry. There's really a lack of imagination on
our part.

~~~
darkerside
How much of that value is entry into the world's most powerful country?

------
lifeisstillgood
My view is fairly simple - the median school leaving age has simply moved from
18 to 21.

My father left school at 14, and many of my friends left at 16, and around
only 1/4 of us went on to university.

Today 1/2 pupils will attend university - to all intents and purposes their
full time education continues from 5-21.

------
dpc_pw
Lending with interest (Usury) creates systemic instability, in a similar way
that Dollar Auction scheme does. There's no way to have stable financial
system in the presence of wide-spread usury. This fact has been known to
ancient cultures, which routinely banned usury or counter-acted by having an
universal debt-jubilees.

[https://en.wikipedia.org/wiki/Usury](https://en.wikipedia.org/wiki/Usury)
[https://en.wikipedia.org/wiki/Dollar_auction](https://en.wikipedia.org/wiki/Dollar_auction)
[https://en.wikipedia.org/wiki/Debt_jubilee](https://en.wikipedia.org/wiki/Debt_jubilee)

------
SomewhatLikely
The government gives away money for food, no repayment necessary. If
government intervention were an explanation by itself you'd have trouble
reconciling that. Food prices don't outgrow inflation because of a very
competitive market for commodities where one apple is about as good as another
apple. Car makers, furniture sellers, etc. often offer zero interest loans
with little effect on price growth. If one university or community college
diploma was as good as any other you'd see low prices caused by competition.
But everyone wants to go to the best university that will accept them, price
be damned. And the data likely shows it's the right move. More respected
universities lead to higher incomes that exceed the tuition costs.

------
eatmyshorts
I've got some news for the author of this article. University cost inflation
started well before 1993. The chart here ([https://www.edvisors.com/plan-for-
college/saving-for-college...](https://www.edvisors.com/plan-for-
college/saving-for-college/tuition-inflation/)) shows that the divergence in
university cost inflation and the greater economy's inflation started in the
early 1980s. I know that my university education went up 4x in the 5 years
(yes, 400% in 5 years, which equates to 32% CAGR) that I attended college, and
that predates this 1993 date in the article.

~~~
JJMcJ
A number of things have lead to this.

* Student loans detaching cost from time of service, similar to insurance and medicine

* Diminishing support for public colleges. In California UC and CSU schools were essentially free to Cal redidents until mid 60s.

* Metastatic administrations, partly for compliance and partly because the money is there. It sure isn't going to faculty.

~~~
eatmyshorts
Take a look at overhead costs as a percentage of the total budget for
universities. You'll see that administrative costs have ballooned, while the
size of faculty and student bodies have remained relatively constant. That
certainly was the case at my university. Here's another article about the
issue:
[https://www.forbes.com/sites/carolinesimon/2017/09/05/bureau...](https://www.forbes.com/sites/carolinesimon/2017/09/05/bureaucrats-
and-buildings-the-case-for-why-college-is-so-expensive/#5b2adc04456a)

------
biophysboy
I've heard several hypotheses at this point:

1\. gov loans

2\. administration

3\. Baumol effect (skilled labor $ goes up fast)

4\. reduced public funding

5\. demand inelasticity (cultural expectations to follow your passion and find
your crowd, etc)

6\. labor oversupply & elite overproduction (see Turchin)

How would you all rank these? Any others you would add?

------
eggy
The Student Loan Reform Act of 1993 was under Clinton and sponsored by
Democrat Robert E. Andrews of NJ. The gist was to smooth the delivery of funds
to the colleges, but per the article it failed since colleges then raised
their tuition to get more from the government, and students then started owing
larger amounts directly to the government as a lender. This is another example
of good intentions that allow for playing the market instead of leaving it
alone. That's my read on it, but I would like to hear others opinions on this
statement.

------
ineedasername
This is not the only reason. There are at least 4 other major reasons:

1) Future debt is irrelevant: The US has a culture of "having the college
experience". Easy loans facilitates this, but they would never be made without
families ignoring their future debt in favor what has become less about
education and more about a right of passage. For many, economics is not part
of the fundamental decision making process.

2) Demand. High demand means there's little need to compete on price.
Enrollment spiked up during the Great Recession as people went to retool for
job changes, and while it's come down since then, it's still at historic highs
compared to pre-recession enrollment. This might change over the next decade
as the %of HS grads entering college has been relatively flat the past few
years, and # of total graduating seniors is on a slight downward trend,
projected to continue for the next decade.

3) Reduced State Funding: Many states have been systematically reducing their
funding to public colleges & universities for a few decades. Right after the
Great Recession, higher ed was low hanging fruit for cash-strapped state
budget cuts, and dropped another 17%

4) Institutional Debt: With high demand eliminating much need to compete on
price, institutions have to compete on amenities & facilities. Beautiful new
dining halls, recreation facilities, dorms, academic buildings. Universities
borrow, build, and bill the students.

------
thordenmark
I was in college when this was enacted. I noticed immediately that college
tuition increased and matched exactly the maximum standard amount you'd get in
student loans.

------
nitwit005
I'm puzzled by the basic premise here. Having a bank as an intermediary or not
doesn't seem relevant to the incentives. It was still the student picking
which university they wanted to attend.

The reason for eliminating the banks as middle men was just to save money.
They weren't taking on any of the risk, or doing anything particularly useful
for the government.

I'd agree with the more general premise that easily obtainable loans should
push prices upward.

------
CobrastanJorji
I feel like when you make an argument about how a thing that happened on a
specific date in 1993 is the dominant reason for why a value that was low in
the past is now high, you are more or less obliged to include a graph of
average college cost over time and include a big marker for when your proposed
change occurred. Not including that graph is suspicious because if it would
have helped your case, you would have included it.

------
wbillingsley
What the article proposes (the government setting the maximum level of loan it
will provide for a course) is essentially the Australian system.

The other aspects in the Australian system, though, are a "Commonwealth
contribution" (part that the student does not have to pay back), an
institutional maximum on how much the government will fund / underwrite that's
dependent on institutional performance metrics (e.g. student employment rate
on graduation), and that they alter how much students can be charged and how
much the government will contribute depending on the subject area.

It gets very political and there are perverse incentives hidden in the detail.

(There's a couple of controversies in Aus higher ed at the moment. One is a
lot of downsizing due to Covid affecting the international market. The other
is proposed changes to the fee structure for particular courses and
universities from the government.)

However, it does get universities to respond to government strategy, so I
expect the people in government who run it are probably very happy.

Within government, I think they see university funding as also being one of
the levers the government has to influence economic growth. For example,
directing student places to a particular institution brings university jobs,
students, and the students' living expenses into that university's town to
grow it. By giving incentives for particular courses, they can feed particular
industries with graduates, etc.

So you'll hear universities and government talk about "creating job ready
graduates" (they've always talked about this), but also "creating graduate
ready jobs" (universities as a mechanism for growing parts of the economy in
an area)

------
soapboxrocket
The blank check is ultimately the problem. I say remove the blank check and
then let colleges figure out the rest.

I look to the UK as an example. The government only guarantees $10,000 in
student loans so most programs coincidentally cost less than $10,000. Are
there exceptions? Yes, but for the most part this holds true.

Not a complete solution but does significantly help to address the blank check
issue.

------
elil17
Not to be another commenter claiming to know the _real_ reason college costs
so much but...

The _real_ reason college costs so much is that the price of all services
provided by people with doctorate Or professional degrees has risen. The cost
of higher education has risen at the same rate as the cost of dentist services
and legal services. See:
[https://image.slidesharecdn.com/disruptiveinnovationinhigher...](https://image.slidesharecdn.com/disruptiveinnovationinhighereducationudemyv5-160129191225/95/disruptive-
innovation-in-higher-education-full-course-slides-25-638.jpg?cb=1454095471)
Archibald and Feldman, 2010

The reason the cost of all services provided by people with doctorate or
professional degrees has risen is complicated and could arise from many
factors. For instance, it could be that there’s more industry demand for
highly educated labor.

The rise in college costs relates primarily to overall changes in labor costs,
not to anything wrong with the education system in particular.

~~~
xupybd
One other factor is the cost of educating the work force has increased. This
might not be due to an increase in the education requirements of the job
market. If degrees are common place they get used as a proxy metric for who is
capable and who is not (while this is often not the case).

This means it's hard to measure the effectiveness of the current student load
system. Is the investment increasing productivity? Or just creating another
hurdle for people to jump over to get a good job?

------
CincinnatiMan
Isn’t there some self-incentive for the federal government to increase loan
sizes as well? I forget what it was but remember seeing some flowchart about
it.

I’d say we let the private market handle school loans. Certainly wouldn’t be a
perfect system in regards to access, but I feel it’d be better than current
state because there’d be somebody involved deciding if a college loan is
worthwhile.

------
rlanday
I don’t understand this argument here:

> Up until 1993, the federal government merely guaranteed/backed student loans
> that private lenders gave. This meant that only in the case of someone
> defaulting on their loan would the government be on the hook, stepping in
> and paying the college what’s owed.

> This amendment completely overhauled that system, making it so that for the
> vast majority of student loans, the federal government directly made the
> loans to students. More specifically, the federal government pays the
> universities/colleges up front, and the student then owes the government
> that money.

What’s the difference between the federal government directly making a loan
and a private lender making a loan and immediately pawning off all the risk on
the federal government? Either way the lender does not care if the borrower
will be able to pay it back. It sounds like the problem predates the Student
Loan Reform Act of 1993.

~~~
chemag
I had the same thought. My hunch is that the difference is friction. In both
cases, there's money going from the Feds to the University (100% probability)
and money going from the student to the Feds (<100% prob).

<1993: there's a bank in the middle. If the student cannot pay, the bank has
to do the paperwork to get paid by the Feds. Note that the profit for the bank
is limited.

>1993: no bank in the middle. University gets paid right away. Zero risk for
them

~~~
mixmastamyk
Yes, presumably Uncle Sam cares less about making a sound loan in the first
place. It is also able to create money out of thin air—in other words,
(symbolically) infinite resources.

Getting paid upfront, instead of years later after tons of paperwork, can only
accelerate the process.

------
darth_avocado
Why not move from a pre-paid to a post-paid system? The government stops
writing blank cheques. The students enroll for free, signing a 30-year
mortgage like contract, that would say pledge 1% of your post tax earnings to
the school/university you went to. Universities will then have incentives to
remove the programs that don't have as much of a use in the modern day and
age, and add the ones that are needed. The government can then use all that
money saved to fund programs that don't bring as much revenue to the
university but are necessary for the country.

I mean imagine graduating debt free and instead, just paying a small extra
tax. People would be able to focus on creating more wealth instead of being
underemployed so that they can pay their bills.

~~~
choward
Wouldn't all colleges just become trade schools at that point?

~~~
darth_avocado
And what's wrong with that? I mean what values do colleges bring?

------
brownbat
The roi was also high during that period.

The price of services relative to goods has also trended strongly upwards
during that period due to increased trade.

Urbanization and increased cost of living in some areas could be pushing up
averages in costs.

Nobody pays the sticker price. A lot of colleges are subsidized by a small
slice of wealthy and/or foreign students, so to maximize differential pricing,
universities raise prices, and simultaneously offer larger tuition grants for
need or merit.

There are a dozen reasons. Student aid is probably one of them too,
absolutely.

I just worry about someone saying 'x' is the reason for some complex social or
economic changes decades in the making. The interesting question to me is how
to weight all these influences.

------
bonoboTP
It's expensive because people can pay for it and we know they can because they
do.

All this talk about debt is mostly a non issue in real life but generates a
lot of heat online. American jobs pay vastly more than any other country on
the planet and paying back the debt is quite easy. Otherwise people wouldn't
keep enrolling. From a European point of view, US taxes are low, salaries for
professionals are sky high, utilities (gas, electricity) are cheap, consumer
goods are cheap.

Of course, you'll have difficulties if you majored in art history or
archeology, but that's also true everywhere.

~~~
kovek
I have a friend in France who is getting an art education for free. Is she
going to be in debt for her whole life? I don’t think so. Yes, some jobs pay
very well in the US, but not all of them. Average job often pays enough for
rent and living expenses plus a little bit. Student debt has interest and
people end up paying that interest for many many years.

I’m writing in the declarative, affirmative tone, but it is only my
understanding.

~~~
s3r3nity
> I have a friend in France who is getting an art education for free.

Unpopular to admit: we need doctors / engineers / farmers more than we need
another art major.

As a US taxpayer, I wouldn't want to subsidize just anyone's education. I'd
rather incentivize and subsidize engineering / STEM / agricultural science.

You don't get to just get a free education regardless of what you want to
study - different work/study has different value to society.

~~~
bonoboTP
Even in free-tuition countries, there are caps on the number of students
admitted to various study programs under state subsidy. The government can
incentivize more productive degrees by allocating more spaces to them.

------
nickpinkston
I'd blame it more on giving colleges a blank check without tying payback to
income outcomes - using an ISA (income share agreement) type of structure
would better align costs with real returns.

------
scorecard
It is not the case that free universities are necessarily 2nd tier. QS World
Univerity rankings puts ETH Zurich, a free university, as #6 overall. Times
Higher Education world ranking lists ETH Zurich as #13 overall.

The other Swiss flagship university, EPFL, which is also free, is ranked #14
overall in the QS world ranking.

[https://www.topuniversities.com/university-rankings/world-
un...](https://www.topuniversities.com/university-rankings/world-university-
rankings/2021)

~~~
tropdrop
What is this ranking site (QS world)? Not to dismiss it outright, I'm just
_usually_ suspicious of any rankings aggregator of universities at this point.

------
pnutjam
Colleges already make the large majority of their money from international
students. I'm not sure closing the door on low income students is the way to
go. There are literally thousands of universities in the U.S. The Federal
system was (pre-trump) getting pretty aggressive about cutting loans to bottom
of the barrel universities. This needs to keep happening, and there needs to
be guarantees of credit transfer. That would make a much bigger difference and
allow competition to keep costs under control.

~~~
asciident
I believe you've been misled about "large majority of their money from
international students" and am curious where you got this information from.
From the data I've looked at, the net revenue a vast majority of colleges make
are under 2% from international students. For R1 universities (the national
ones you've heard of), it's still under 10% , and finally even if you look at
undergraduate tuition only (ignoring graduate students, ignoring other sources
of revenue), it's still not the majority.

~~~
throwawaygh
Look at the bottom line, not the top line.

PhD students are _incredibly_ cheap and do a lot of the revenue-generating
work; namely, classroom teaching and research. PhD students earn between
$20K/yr and $30K/yr in stipend. For the university, that is damn close to the
ALL-IN cost! The university pays no FICA taxes and does not contribute to
retirement for these employees.

For this reason, in high-demand fields like Computer Science, 60+% of PhD
students are foreign nationals. And the domestic students are often over-
represented at top-tier universities. So there are lots of CS departments
where the majority of the revenue-generating employees are foreign nationals
making $20K/yr _all-in_.

A PhD student instructing or leading recitations for university courses makes
less than 1/2 of what a first year high school teacher makes.

A PhD student doing research is bringing in typically $100K - $200K in grant
money but only receiving about $30K of that. Also, again, the "2x multiplier"
used to calculate the total cost of a normal employee doesn't apply here
because the university does not pay FICA taxes, doesn't contribute to
retirement, and often gets great tax breaks and gifts to cover things like
real estate (=office space). For universities the "total cost of a PhD
student" multiple is more like 1.2x salary.

Professors are managers. Deans and so on are executives. PhD students are the
"bread-and-butter" employees of the university. They are the ones who do the
bench work/coding and the vast majority of face-to-face teaching. Without
international PhD students, universities' total cost of operation would
skyrocket.

------
petre
The Clinton administration made a change in 1998 that cut back on student debt
relief, incentivizes high university bills and has driven student debt to over
$1T. That might explain the "why" part.

[https://thehill.com/blogs/congress-blog/economy-
budget/28362...](https://thehill.com/blogs/congress-blog/economy-
budget/283625-how-the-clinton-administration-made-it-harder-on-student)

------
monadic2
I'm hard-pressed to see why you would attend a private college these days
without ambitions of entering politics or some other power-hungry career.

~~~
kube-system
The sticker prices might be high, but there also a lot of scholarship and
grant money out there for those who can get it.

------
zadkey
I don't think this explains _everything_ about why college tuition in America
has increased.

And what It did explain could have done a little bit better job.

------
nvahalik
Maybe I'm missing something here: the bill he linked to in the article
([https://www.congress.gov/bill/103rd-congress/house-
bill/2055](https://www.congress.gov/bill/103rd-congress/house-bill/2055))
doesn't show as passed. How did a bill that didn't pass end up impacting
things?

------
deevolution
Rising college tuition is clear evidence of runaway fiat currency inflation.
As soon as the US severed the peg to gold, prices have done nothing but
inflate. I think colleges have figured out people are willing to take on
increasing amounts of debt. The cost of loaning / creating money to pay for
college is zero, so the tuition price ceiling is effectively infinite.

~~~
adventured
The inflation is also of course simultaneously blatant in healthcare, many
prominent commodities, housing, vehicles, and so on.

We could easily restrain the cost increases - which has far exceeded the rate
of fiat destruction - by changing wildly irresponsible Federal loan backing.
It wouldn't take much to begin tipping the cost inflation backwards, we could
roll it back gently and it'd make a big difference over time versus continuing
the upward climb. We could flatten it and let inflation chew it up over time
in real terms. We don't have any politicians that are intelligent (wise?)
enough or brave enough to do it.

Most politicians are cowards. Good luck finding one willing to step in front
of the higher education train (everyone must get a four year degree in their
Cracker Jack box). Suddenly all the headlines would be that Joe Politician
doesn't want little Johnny to go to college, Joe Politician is depriving our
children of access to college, Joe Politician is stealing our children's
futures! And so on. The triggered propaganda flood would instantly drown
anyone that dared to go near it.

The US only has two primary political types on this topic: those that ignore
the problem, not wanting to go near it for the political consequences; or
those that are only capable of arguing in favor of a lot more spending as a
solution (as though the US can afford that, especially when the problem is
that costs are already far out of line with peers around the world).

------
kolbe
"Unsurprisingly, this decision lead to exactly what the Bennett Hypothesis
predicted in 1987, that “colleges will raise tuition when financial aid is
increased” in order to capture as much of that government money as possible.
In essence, the feds handed colleges a blank check, and the result is just as
expected for a decision like that."

That's a feature, not a bug.

------
peter303
Various tax breaks introduced in the past 30 years contributed. Direct tax
breaks like cost and loan credits. Plus indirect breaks like tax-advantaged
savings plans like 529.

A similar thing has happened in housing. Various tax breaks introduced in the
past 30 years allow people buy a much higher list price of house (in terms of
annual salary multiples) than 30 years ago.

------
stjohnswarts
The claim in the article is unfounded. Prices have increased due to states
cutting way back on funding, because of easy of getting loans (just one prong
of the problem), need to have a college degree just to get your foot in the
door (demand), and mismanagement by school management to build facilities
students can't afford.

------
jesstaa
This is what we do in Australia. Government supported places in courses have a
price cap, loans are CPI indexed and paying back the loan is scaled to your
pre-tax income. If you earn more then you're required to pay back your loan
faster. If you earn less than $40K, you're not required to pay back any of the
loan.

------
jweir
Look at Perdue University - no change in tuition in 9 years. What are they
doing right?

[https://www.purdue.edu/newsroom/releases/2020/Q1/purdue-
anno...](https://www.purdue.edu/newsroom/releases/2020/Q1/purdue-
announces-9th-consecutive-tuition-freeze.html)

~~~
rbarnes01
You'll enjoy this
[https://www.theatlantic.com/magazine/archive/2020/04/mitch-d...](https://www.theatlantic.com/magazine/archive/2020/04/mitch-
daniels-purdue/606772/)

------
pedro1976
It is IMHO completely insane that we limit a virtual good of zero marginal
cost like knowledge in a physical way. People could be educated/manipulated in
a way to appreciate knowledge over materialistic thing, which would have an
ecological impact of almost zero. And that is just one advantage.

------
darkerside
This is an incredibly straightforward identification of the problem and a
beautifully elegant solution.

------
akeck
An analysis in Time Magazine in 2001:
[http://content.time.com/time/magazine/article/0,9171,137412,...](http://content.time.com/time/magazine/article/0,9171,137412,00.html)

------
thinkski
The same happened with home prices.

------
thewileyone
I remember basic tuition cost increase 3x from 500-1500 between 1990 and 1994,
while I went to University of California. Didn't understand why at that time,
but this would explain it.

------
fortran77
We need to immediately stop Government-back student loans that can't be
discharged in a bankruptcy. Then tuition will drop like a rock.

I would never support student loan forgiveness until the Government stopped
the loans!

------
aj7
In pricing solar installations, it was obvious that prices rose as vendors
attempted to capture virtually all of federal and state subsidies.

------
jrphenow
Am I misreading the govtrack link? It looks like this particular bill somewhat
promptly died in congress.

------
guyzero
Yeah, as many others have pointed out this analysis is facile verging on just
wrong.

Do universities not compete for students? Why have costs gone up so much
faster than inflation? It's not just a question of there being a huge pool of
money, you can buy a car with loans and car prices haven't skyrocketed.

The answer is that education is a weird "good" that's probably a Veblen good,
among a lot of other reasons.

~~~
j15t
>It's not just a question of there being a huge pool of money, you can buy a
car with loans and car prices haven't skyrocketed.

The obvious difference is that car loans are not Federally issued and defaults
are possible. Hence creditors have to issue loans in a prudent manner or else
they will incur a loss. Not everyone is able to acquire a car loan, and
interest rates can be very high.

These incentives do not exist in the student loan market and thereby
subsidizing demand. Students become price inelastic.

------
Markoff
cost about same here in Europe, it was zero 30 years ago, it is zero in 2020

you should better ask, why students have to pay for education in developed
country

------
dailygrind___
Because education is a lucrative business.

------
rllin
yep demand side subsidies do not have good outcomes

supply side are a bit better

wrt cost disease

see how milk has remained the same price for decades

------
typedef_struct
So, Universal Basic Income....

~~~
PeterStuer
Why? Keeping afloat a system that siphons all the fruits of progress to the
0,01% by throwing just enough trickles to the bottom so they don't revolt?

~~~
rayiner
The top 0.01% earns 5% of all income. The top 1% (which includes many Facebook
engineers, doctors, etc.) earns 20%. The vast majority of the "fruits" of the
system go to normal people.

~~~
zadkey
Citation needed. I recall the top 1% earning 50% of all income.

~~~
rayiner
[https://www.cbpp.org/distribution-of-income-before-and-
after...](https://www.cbpp.org/distribution-of-income-before-and-after-
federal-transfers-and-taxes-2016)

------
stakkur
It's a factor, but I disagree that it's the root cause. _That_ distinction
goes to the quiet destruction of aid by Ronald Reagan. The rapid shift towards
loan-based support is directly linked to Reagan's targeted policies--and that
shift led to a well-documented explosion in tuition costs.

And Reagan's legacy didn't just affect higher ed--it put public K-12 on the
path to the financial and 'common core' shitshow that it is today.

~~~
stakkur
I'm honestly baffled by the downvotes. Do readers not know that what I
described is what _led to what the article claims as the cause_? To simplify:
it wasn't _who_ guaranteed the loans that was the problem, it was the
expansion of loans and their general replacement of grants that led to cost
inflation and the resulting crippling debt.

Here's just one of hundreds of explanations of how Reagan fucked higher ed.
It's not a theory--it's a very basic and well-documented fact.

[https://www.theatlantic.com/education/archive/2019/09/colleg...](https://www.theatlantic.com/education/archive/2019/09/college-
cost-indebted-zaloom/597181/)

From that article: " _The shift began in the 1980s, in terms of a changing
political philosophy. President Ronald Reagan’s budget director, David
Stockman, said in 1981, “If people want to go to college bad enough, then
there is opportunity and responsibility on their part to finance their way
through the best way they can.” When those who argued that college is a
private benefit framed it like that, it became logical to say that education
should be paid for by the people that it benefits. And so in the 1990s, the
vast expansion of loans for higher education began._ "

And you can track--with plentiful data--the rise of college costs in direct
parallel to this shift, year over year.

