
The $10,000-a-year college education has arrived (1981) - Futurebot
http://www.nytimes.com/1981/02/19/nyregion/the-10000-a-year-college-education-has-arrived.html
======
cassieramen
This article hints at schools inability to justify their ever increasing
prices. Why is tuition continuing to rise so much faster than inflation? Is
this simple supply and demand? Government backed loans create infinite supply
to anyone who wants them? How can not for profit schools justify gauging their
students?

~~~
crabasa
1\. Infinite supply of loans. Dept of Ed isn't even _allowed_ to deny a loan
to a person.

2\. Culture since the Clinton era of "everyone should go to college". Massive
cultural stigma for those who don't.

3\. Colleges continue to justify costs based on lifetime earnings delta of
people with degrees. Sadly, this data is backwards-looking and not indicative
of what today's students should expect.

The most heinous thing though is that student loans are exempted from American
bankruptcy laws. The gov't will give you a loan, without doing any diligence
on your ability to repay, but make it impossible to discharge your debt if you
go bankrupt.

~~~
jenshoop
Spot on. There's also been an increasing competitive push between universities
to deliver "country club-esque" experiences to students, which further drives
up cost. (Separately, let's not forget about the chaos of the educational
publishing industry and the insane price points they command for modestly
updated editions each year.) But I think items 1 and 2 above -- and a lack of
education about what loans are and the value of a higher ed degree to the
potential student -- are the true culprits here. There's a cultural
expectation that all students will matriculate to college, and many high
schools measure their success in terms of college attainment. Meanwhile,
there's a lack of counseling/education for students, so few know that they're
expected to repay loans and fewer explore the options (college and non-
college) in front of them, and counselors would be working at cross-purposes
with the secondary institution's goals if they advised against attending
college. As demand for higher ed continues to grow, for-profit higher ed
institutions continue to spring up to suck up federal loans and lower
acceptance standards.

~~~
zo1
>" _There 's also been an increasing competitive push between universities to
deliver "country club-esque" experiences to students, which further drives up
cost._"

That was my impression of University/College. Having only experienced what was
shown in movies and the media, I was under the impression that college meant
getting your own "apartment with a roommate". Unfortunately, in the non-US
university I attended, it meant "4x6" meter room, two beds, two cupboards, two
desks, and two-roommates.

Then again, the entire year's tuition did only cost about _$3500_ , about 9
years ago.

~~~
brbsix
At least in my experience at a UC, the media portrayal was fairly accurate. It
seemed like there was a never-ending onslaught of concerts, "multicultural
events", sporting events, "community center" activities, safe spaces, Greek
events, etcetera (all of which receive school funding in some form or
another). I appreciated the occasional guest speaker, but looking around I
couldn't help but notice money pouring from everywhere, namely for things that
had nothing to do with academics. Far too many administrators with too much
time on their hands.

------
blisterpeanuts
It's quite likely that by the time my 11-year-old hits 18, private
universities will cost over $100,000 per year (tuition plus fees, housing, and
food plan), and public schools will be $25K [EDITED orig. $50K] (plus or
minus, depending on state subsidies and other funding such as corporate
donations).

While the university experience is undoubtedly a valuable one for the 18-22
age range, with tremendous intellectual and socialization opportunities during
this formative period, I wonder whether it's still going to be the best and
only pathway to intellectual and social growth.

With MOOCs and other online learning resources flooding the internet, many
free or for moderate fees, the focus now has to be on justifying the classroom
experience. Are you still best off in a 300-seat lecture hall,
scribbling/typing notes while a grad student or adjunct spews information from
the lectern, at an arbitrary time of day that if you somehow miss it, you're
out of luck? You can't exactly ask the lecturer to pause while you go to the
toilet, or "please rewind 10 seconds, I missed something". _Maybe_ they have
videoed the lecture and _maybe_ the videographer remembered to zoom in on the
powerpoint screen at the right times.

You hope that meeting all those fellow students will lead to a group learning
experience -- "Hey, let's meet at the coffeeshop and go over this stuff
together!" That's possibly the best way to learn material, to teach it to your
colleagues and have them quiz you as well. But is that not reproducible in the
online model, e.g. chatrooms, skype, etc.?

In my opinion, the U.S. government should get out of the business of providing
and guaranteeing educational loans. It has resulted in a vast, bloated system
of exploitation of the students and the loan system, and we are now facing
possibly a trillion dollar bubble that may burst in the next few years if all
those freshly minted degrees don't lead to good paying jobs to retire those
loans.

Universities in the U.S. must be put on notice that the free ride is over, and
they have to get costs under control, stop with the billion dollar student
centers and bloated administrative offices, and try to get back to basics of
providing lecture halls and white boards and reasonably secure jobs for
professors to do what universities ought to focus on: teach.

~~~
liquidise
I agree with getting the US Gov out of the loan business, but i think we the
market to react, and it has begun to.

For many professions, colleges can be substituted by trade schools. We are
already seeing this surge in software, and i think we can expect the trend to
move into other verticals. At some point, and for some majors this has already
happened, a BS/BA stands to lose you money over a lifetime.

At a point, college is no longer fiscally viable. In these cases, a cheaper,
more targeted approach is highly marketable.

~~~
logfromblammo
If you separate the testing and certification from the education, it isn't
quite so important where the knowledge/skill came from, so long as the person
has it.

For instance, if you take the rock guitarist certification test, and pass, you
should be able to play guitar passably well in a rock band. It doesn't matter
if you studied in a music conservatory for a few years, or worked small-time
gigs in bars and clubs, or played a guitar-learning video game.

It's not the education that's the bottleneck. It's proving to others that you
have the knowledge/skill in an efficient way.

The professional associations for actuaries (SoA, CAS) runs their own testing
regime. You can take a university course to prepare for the tests, but you
don't have to. That testing and certification process has led to the situation
where passing another exam usually triggers a pay increase. And actuaries
consistently rate as having very high job satisfaction.

ABMS runs certification tests for specialist physicians.

Lawyers have the bar examinations and board certification for specialists.

The same could happen for other careers. A group with a narrow focus could
poach the testing and certification function from the generalist universities.
For someone who has no need for external guidance with respect to a general
education, and who knows what sort of _career_ they want, they could skip
college, and climb the ladder of a testing authority. That would present some
risk that the authority itself fails in some way before all the tests are
passed, and the career position established.

------
wlucas
What makes all the difference in the world now compared to the jaw-dropping
prices in '81 is we have alternative education options. There were virtually
no other paths to career success 30 years ago... heck... 15 years ago! A
traditional path towards a degree was the only way to assure a positive career
outlook.

I don't think MOOCs are the panacea, but all types of learning resources
(books, classes, organizations, events, people) are all more accessible. The
entrepreneurial approach to learning.

~~~
dpark
I feel like this is backwards. 30 years ago you could potentially work your
way up the ladder without a degree. Now you need a degree to get a job working
in a coffee shop, because college degrees are so ubiquitous that they've
become a prerequisite for employment at many places.

Sure, you could do some learning on your own now, but you could also do that
30 years ago, and I'm not certain most employers are going to put much stock
in self-directed education regardless, not when there are so many
underemployed college grads available.

~~~
nommm-nommm
Totally backwards.

I know a lot of people in their 30s-50s who would never be able to get hired
for their jobs now since new hires in their position need a college degree
which, by the way, is hilariously stupid. Employers expect you to have a
college degree to clean the toilets now.

------
kevindeasis
I'm still waiting for a dramatic disruption of the college/post-secondary
industry. I hope it comes really soon, but I'm starting to doubt if it'll come
within the next 5 years. I think it's going to take lots of people to disrupt
education especially since the government will get involve.

I'm starting to feel that some courses in college/university isn't worth that
much money. Like a 50,000 degree that has lectures and materials freely
available online? Seriously? Furthermore, some professors are amazing at
research, but has no business in teaching.

This looks like a massive waste. It's a huge problem and there are big
opportunities in this area.

~~~
losteric
> I'm still waiting for a dramatic disruption of the college/post-secondary
> industry. [..] I'm starting to feel that some courses in college/university
> isn't worth that much money.

It's still coming. As college grads increase in supply their value decreases
(top-tier colleges/students aside). More and more students are realizing their
college education has a negative ROI... in fact, outside of software, most of
my friends are not using their degree at their job.

I think the "code-school" trend is the start of a "micro-degree" program.
Self-service fluff-free education with a standard certification exam is pretty
compelling. As we see that proliferate to other domains, we'll start to see
micro-certifications (just the test). The missing component seems to be the
in-person meetings and networking that comes with physical college. I predict
we'll see more online school(s) supporting a physical meeting space for
students to network and learn from each other... maybe even a new campus model
that strips out the cruft of traditional centralized education institutions.

------
ewindisch
Parents pay more than this per child today for daycare[1].

[1] [https://www.care.com/a/how-much-does-child-care-
cost-1406091...](https://www.care.com/a/how-much-does-child-care-
cost-1406091737)

~~~
gohrt
Day care is far more labor-intensive than college. The student:staff ratio in
daycare is at most 6:1, for 40 hr/wk attention to students.

At a college, the ration is 10:1 or 20:1, for <20 hrs/wk attention to students

------
trentbigelow
If you're looking for a legit degree for around or under $10,000 check out
International Programmes at University of London. There's even some
undergraduate degrees from the LSE you can take remotely.
[http://www.londoninternational.ac.uk/courses/search/?solrsor...](http://www.londoninternational.ac.uk/courses/search/?solrsort=sort_title%20asc)

~~~
trentbigelow
I should add that I'm sharing this because I wish I knew about this before I
took on a oil tanker full of student debt to go to a "prestigious" US school
only to leave before graduating to do a startup. Startupers, consider this
option on your own time for (relative) cheap from a prestigious uni.

------
swampthinker
Adjusted for inflation, that is roughly $26,100 in 2015 dollars.

~~~
muzz
and 1981 when the article was written was a period of hyper-inflation

" 'families will still allocate about the same percentage of income in real
dollars' because college charges have only paralleled the inflation in the
nation's disposable personal income"

------
igonvalue
Adjusted for inflation, that's over $26K in 2015 dollars [0]. But of course
the punch line is that price increases since then have significantly outpaced
inflation. This phenomenon is known as Baumol's cost disease.

[0] [http://inflationcalculator.us/](http://inflationcalculator.us/)

------
peter303
The 'total package' at some schools recently passed 70K. Assuming 5% education
inflation (twice CPI), these schools may hit 100K in 8 years.

~~~
Alupis
This "total package" typically includes room and board, as well as other
normal living expenses (food, transportation, clothing, etc...).

You would be spending that same amount even if you did not attend university
(anywhere between $20K-$40k per year in living expenses).

~~~
usea
Many schools require taking said "total package" for the first semester or
first year. I know at my university, all incoming freshmen were required to
live on campus and purchase a meal plan. For anyone who lives nearby or
planned on shopping around, this is an additional cost.

~~~
Alupis
That's a good point. My university did not have this requirement, however I
should point out, even if you lived at home, or moved out on your own - you
will be spending this money anyway.

As-in, it doesn't matter if the university requires you to take this package
the first year, since you're spending it no matter what (on living somewhere).
It's just a matter of who you give that money to.

If you don't want to spend student loans on normal living expenses, one should
work while attending university, this way your loans are only for your tuition
and related school expenses... not for rent and food.

~~~
moron4hire
Well, no, not exactly. If you're living at home, your parents are paying for
your housing. It's money that is already getting spent. If you have to live in
the dorms, your parents don't get a break on their mortgage or rent because
you moved out. If your parents are helping you out, they now have their own
rent to pay, plus a new rent for you, where before they essentially got "your"
rent "for free".

Similarly, adding one person to the home grocery bill was not anywhere near as
expensive as the meal plan. Most universities run their cafeterias as profit
centers. You're paying restaurant prices. Cheap restaurant prices, typically,
but still more than cooking at home.

~~~
Alupis
The main point I was making, is it's unreasonable to complain about high
student debt when majority of it is living expenses.

People often complain about the high cost of attending university, but don't
differentiate between tuition fees and living expenses, often lumping them
together to reach a seemingly egregious yearly tab. It's not so egregious when
you examine where the money is going...

You would have spent near the same, or the same amount on just existing
(living expenses)... had you not gone to university.

Sure, if you live with your parents, they'd be picking up the tab for you, but
once you've joined the "real world" and moved out, you're having to cover your
own living expenses.

~~~
ambicapter
So you're saying people who go to college shouldn't expect to have time to
study?

~~~
Alupis
It's certainly possible to work while attending university. I did it...

~~~
moron4hire
Good for you. I had to quit working in my second year to be able to have
enough time to study as much as I needed.

~~~
Alupis
I think I understand the point you're raising - students should focus on
school-work and not have to worry about working to pay bills.

I would disagree, however.

> I had to quit working in my second year to be able to have enough time to
> study as much as I needed.

Wrong, you chose to prioritize school over working (and I presume the
resulting outcome was more student debt to continue paying for your expenses).

You didn't have to quit working, you chose to. You could have easily reached
an equilibrium between work and school by reducing your classload, and
continuing to work. School would have taken longer, but you would have less
debt (and I'd argue you'd be a better workforce candidate after graduating).

Getting back to the main point, if you decide not to work and pay your living
expenses yourself, then you will need to either borrow that same money (in a
loan for example), or get a relative to pay your way for you. It's the same
dollars at the end, it just matters how you obtained them.

So when people complain about very high school fees, and it breaks down to
60-80%+ are normal living expenses, it's tough to find sympathy. The only real
way to get rid of those fees entirely is to have the Tax Payer foot them for
you (and now we're back to just moving numbers around to wind up with the same
exact dollars spent on living expenses). Somebody's got to pay for it.

Further, I would argue students who work while attending university gain
invaluable experiences that a normal "professional student" would not be
exposed to. Working with others in a true team environment, typical
interactions in an office, exposure to "real" work in industry, "real"
consequences for missing an assignment or due date, etc. It matures the
individual a great deal - where-as a typical "professional student" graduates
with none of these experiences, then spends 1-3 years in industry having to
learn them before becoming truly productive and valuable to their company.

------
mhb
Subsidies increase tuition:

[http://marginalrevolution.com/marginalrevolution/2015/12/sub...](http://marginalrevolution.com/marginalrevolution/2015/12/subsidies-
increase-tuition-part-xiv.html)

~~~
fredgrott
that is not real truthful..

As subsidies increased the upswing in HS students attending college happen..

1970s 25% HS students went to college

2000s 85% HS students went to college

Its not the subsidies that increased its the shear numbers of students per
college campus increased beyond what the US state budgets for college could
weather..

The correct term would be that US Federal subsidies had a side effect of de-
funding public colleges at the State levels.

------
crabasa
Another, lesser known side effect of the unlimited access to student loans has
been the rise of "degree factory" for-profit universities and their super
aggressive and deceptive recruitment tactics. It is yet another lesson in the
law of unintended consequences:

[http://www.latimes.com/business/la-fi-for-profit-college-
set...](http://www.latimes.com/business/la-fi-for-profit-college-
settlement-20151116-story.html)

------
dovereconomics
Inflation-adjusted, $10000 in 1981 translates to $26109 in 2015.

------
jxramos
LOL, didn't even realize this was a historical piece going in. I was about to
be impressed if someone in the modern era created some means of achieving a
college degree equivalent for the stated price tag. I was envisioning some
sort of online thing, but too good to be true.

------
reubensutton
I think the real problem in education is that credentials have become prized
over learning.

------
j1o1h1n
For reference, wages in 1982 -
[http://www.bls.gov/opub/mlr/1982/10/rpt2full.pdf](http://www.bls.gov/opub/mlr/1982/10/rpt2full.pdf)

------
abecode
I play devil's advocate with a Cuban friend sometimes: an expensive education
is better than a free one because it shows that our culture highly values
knowledge, at least in terms of money. When education is free or cheap, it is
devalued, at least in terms of money. It's a bit of a tongue-in-cheek argument
but I think that it's good that people highly value education and it would be
even better if the tuition increase would trickle down into pay for professors
and post-docs. The high tuition does already trickle down to scholarships for
good students, at least in personal experience.

~~~
roymurdock
Students in the UK pay £9k (~$13.5k) per year out of pocket for the 3 year
university system. They were paying just £3K (~$4.5k) until 2012. University
was free in the UK until 1998. Many universities in Germany still remain free.

Is this because the British or German society values education less? No, it's
because Europeans pay more taxes on average, and their governments use this to
subsidize the sticker price of tuition in tandem with funding and guaranteeing
student loans. In the US, tax money is only used to guarantee student loans,
while private universities are left to their own devices when it comes to
pricing tuition.

Price is not always a good proxy for value. You need to look at who is paying
for it, and when.

~~~
distances
And of course, free (meaning paid in taxes) in all of the Nordics.

At least for smaller countries this makes total sense, I think. There are
enrolment limits, so the brightest get in regardless of their social status or
wealth, ensuring that the country gets the educated workforce for its needs to
stay competitive.

------
1812Overture
Classic case of Baumol's Cost Disease. The core of a university education is
still sitting in a room writing down what a professor says. This hasn't
changed in more than a thousand years. It hasn't gotten more efficient while
just about everything else has, increasing its relative cost. Unlimited easy
loans have allowed the problem to spiral out of control by preventing economic
forces from forcing innovation and increases in efficiency.

------
zekevermillion
Higher Ed in the US has long been a luxury good, where price is no object. Or
rather, there is a correlation between price and demand. Or at least, sticker
price and demand -- institutions discriminate between customers by offering
scholarships and need-based aid to maximize income, and to maintain a high
sticker price.

------
outside1234
The question I have: What is the actual cost of having a student at a
university in the US per year?

~~~
sreyaNotfilc
I couldn't say. Honestly, I wouldn't think that it would be much. A lot of the
courses haven't changed much year-over-year.

The question I have is with modern technology, why isn't there a startup that
had figured out how to remedy this issue.

Surely there's a way to provide top notch education without having to break
the bank doing so.

------
fecklessyouth
>'If there's no major reduction in Government loans and grants, we're in good
shape,' said Donald Routh, dean for financial aid. 'If there are reductions,
then we have some very real problems.'

Yes, if only...

------
ouiyaaa
I know its uncool to here to talk about Bernie, but if you dudes are really
serious about this- vote for Bernie, even if you're rich because rainy days
may come anytime

------
jnardiello
My tuition fee in a top-notch european technical college (automation
engineering) was roughly 3000$/year. But yeah, let's keep cargo-culting the US
model.

~~~
outside1234
You probably forgot taxes in that cost (that you will pay for the rest of your
life as a high earner) but, that said, that is a great model: the country
makes an investment in you, you prove you are serious about it (the $3000 a
year), and in return, the country gets a higher wage earner (and more taxes)
to pay for the next generation.

~~~
jnardiello
No, I didn't. That was the total tuition fee including taxes. Obviously that
didn't include any sort of college accommodation or meal plan - as I lived at
reasonable distance from the campus. It was just standard "classes & exams".

That said, because tuition and taxes are proportional to family income, I was
in the highest and most expensive tuition fee. Most of the students in the
campus would roughly pay half of it - unless they would start to repeat
classes and not pass exams (for which you automatically jump to the most
expensive yearly fee).

~~~
thesis
The person you're replying to mean't taxes you pay on your income after
college.

------
lsc
I have a different perspective. I'm in my mid-30s, and I'm considering going
to college. Now, I can get very senior sysadmin/sre roles, and believe I could
get a mid-level swe role (certainly could get a junior swe role)

Point being, I do okay; the Stanford budget of $65K/yr[1] would be super easy
if I could work a half-time job/half-time school; or something of that nature,
and comparing to getting accepted by Stanford[2], paying for it should be
trivial. I've talked employers into letting me work part-time before.

I guess that what I'm saying is that for a nerd, the real cost here is not
what you pay for college, it's the time off work. Now, maybe it is worth it
and maybe it is not,[3] but even when I was 18 (in 1998) I was making close to
$50K/yr.[4] Considering how everything has gone, I bet that was rather more
than Stanford charged at the time.

I mean, sure, I see that it's a problem that people pay that much for a degree
that doesn't convey a lot of privilege, but if my impression of how much
privilege is implied by a degree from a top school is correct, two or three
hundred grand for such a degree is downright cheap. We're talking like two
Teslas, and as far as I can tell, it doesn't depreciate like a car does,
unless the school falls in reputation later on.

I don't want to make light of the problems people who work in lower-paying
fields have, and personally, I think it sounds absolutely crazy that you ask
people who are all but children to decide if they want to take out loans
without the fallback of bankruptcy, and I personally don't have a problem to
some extent subsidizing people who want "education for education's sake"
-people who want to get educated and then work in a poorly remunerated field,
but I'm just saying that as far as I can tell, at least for us nerds, if a
school can do what is says it can do[5] and you aren't capable of doing that
by yourself, at today's prices, it's a hell of a deal.

[1][http://financialaid.stanford.edu/undergrad/budget/](http://financialaid.stanford.edu/undergrad/budget/)

[2]And qualifying for Stanford will take a lot of test prep, effort and luck
on my part. Qualifying is not anywhere near a sure thing for me; and that's
the first step. If I can't get into a top-20 type school... I'm probably not
gonna bother. My impression is that the benefits drop off pretty sharply.

[3]My impression is that if I want to continue on as an individual
contributor, a degree, even a Stanford degree isn't gonna get me all that
much. I already can get pretty good individual contributor gigs. But, if I
ever want to switch fields or advance into management, a degree from a top
college would be extremely valuable.

[4]I haven't yet gone over all the tax details here; all numbers are pre-tax.
I do have an accountant, though; _if_ I manage to qualify, I will spend the
money to learn what the tax status of educational expenses are in my case.
Obviously, if you have to pay for college out of post-tax dollars, that makes
a huge difference (and makes the "work half time/school half time" bit
essential, because you earn less and pay less in taxes)

[5]The theory is that a school can take a normal person and teach them how to
do my job. Maybe this is true, maybe it's not, but _If_ you accept that as
true, then even top schools are not expensive.

