

Why higher education is in trouble, in one graph - agconway
http://mfeldstein.com/why-higher-education-is-in-trouble-in-one-graph/

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ihodes
What a load of crap.

Look at the CPI: that should be subtracted from the ENTIRE graph to show that
most things on there have in fact deflated over time (is that even true), and
that the apparently HUGE increases in College Tuition are still big, but not
nearly as large.

Also omitted is the vastly more important figure of how much students are
_actually_ paying. Financial aid doesn't come in only loans. Less than half of
those attending the more expensive institutions pay full price.

Additionally, those paying full price _generally_ come from families
(professionals, businesspeople) whose income has increased more than the cost
of tuition over that same time period.

While it's certainly a problem for the future, right now the rising costs
haven't had a large effect. This is FUD.

~~~
TomOfTTB
A few points...

Your CPI point is nonsense. The graph compares the growth of expenses to other
consumer products. So subtracting CPI from the college costs and then
comparing that number isn't comparing apples to apples.

The fact that the Government is pushing money into these universities from
both sides does not justify high costs. Even with Government Subsidies going
directly to the University and Government grants going directly to students we
still have a situation where Student Loan debt has passed Credit Card debt in
this country. Adjusted for inflation Student Debt is up 50% in the past
decade.

Since when do costs automatically go up with Income? If Exxon decides to
double their prices because people's incomes have doubled would you think that
was acceptable? Despite its importance to society education is still just a
product with a cost and a profit margin. If it's cost is going up
exponentially its because someone is making a lot of profit.

Edit: Just to drive home the point. The average salary for a University
Professor is $118,054. The average length of an academic year in days 187. So
your average professor is making $631 a day NOT including benefits.

(Source: <http://bit.ly/gyfAz2>)

~~~
ihodes
Maybe I should have been more clear; the costs of education go up concurrently
with with CPI. CPI is used as a general measure of inflation. If you're not
taking that into account, you're measuring the change in nominal, not real
dollars. That's much less useful.

My point about income increasing was meant to show how the burden of college
has not increased significantly to those who are paying the full costs. The
fraction it is of their income has decreased or remained roughly the same.

If the issue is that people aren't getting their money's worth out of the
investment that an education is, then that's one problem. On the other hand,
if the $25k of debt is worth more than $25k + inflation (measured by CPI ;) +
opportunity cost, then it's worth it.

>If Exxon decides to double their prices because people's incomes have doubled
would you think that was acceptable?

If the market would bear it, why shouldn't they?

>If it's cost is going up exponentially its because someone is making a lot of
profit.

I don't speak for all colleges out there, but at least many of the smaller
liberal arts colleges that command these very high prices of ~$50k/yr, the
costs of education are indeed increasing. Instead of vapidly speculating that
"someone" is making a large profit because, prima facia, costs are increasing,
take a look at the improvements in education since the first half of last
century. Things are changing. No longer is education a matter of a room and a
professor. It is more costly to provide.

------
zer0her0
Without knowing what the Y axis is this actually doesn't even look yikes, if
anything I got flashbacks of this graph I remember seeing in one of Tufte's
book: [http://wattsupwiththat.files.wordpress.com/2008/11/djia-
suns...](http://wattsupwiththat.files.wordpress.com/2008/11/djia-sunspots.png)

EDIT: Just saw the link at the bottom of the "article".

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shii
Before we all jump on the higher education is a vascous bubble !!11!
bandwagon, can anyone verify whether this blogspam is using any Al Gore style
statistics? For example, are the $s adjusted for inflation since the 70s? I'd
check this all myself, but the iPhone really isn't conducive to this sort of
thing.

~~~
isamuel
Are they adjusted for inflation? _One of the lines is the Consumer Price
Index._

~~~
HistoryInAction
CPI is useful as a baseline for understanding higher education pricing, but
check out the Commonfund's HEPI modeling of inflation specific to the higher
education market, which this posting compelled me to add:
<http://news.ycombinator.com/item?id=2451737>,
[http://www.commonfund.org/CommonfundInstitute/HEPI/HEPI%20Do...](http://www.commonfund.org/CommonfundInstitute/HEPI/HEPI%20Documents/2010/CF_HEPI_2010.pdf)

Inflation was lower in '10 than it's been in decades, 0.9%, after several
years of 2-3% inflation, generally around 1% higher than CPI every single
year.

Recently, the inflation was driven by volatile, high energy prices, since
research labs especially are growing increasingly electricity-intensive as
high-powered computing becomes a key part of more and more research fields.

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Aron
Also, Apple is doomed. Have you seen their stock charts in the last few years?
Straight up.

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michaelpinto
At the end of the day you have you deliver value, and being in debt for a
lifetime isn't value. My fear is that the higher end schools won't change
their ways and that only the very rich will be able to get a degree from a
name school. I really see this as hurting the middle class in a huge way...

~~~
masterzora
With the number of expensive top-ranked schools giving out large need-based
grants, the situation is far less dire than the graph would have you believe.
At least right now they're pretty generous even to the middle class, although
I will not deny the existence of some outliers who do get totally screwed.

~~~
michaelpinto
You know maybe it comes down to a definition of "top ranked" — perhaps I'm
really thinking of the second tier (say an NYU) next to the very top (say a
Harvard).

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jff
What is it with HN and its continual, deathless drive to prove higher
education is worthless? Christ, OK, some of you dropped out of college,
_that's fine_ , you're doing alright these days. You all don't need to keep
posting this kind of shit to make up for your own feelings of inadequacy.

~~~
HedgeMage
Okay, there probably _are_ a couple of HN readers wandering around feeling
inadequate about their lack of degrees. I, for one, have a different motive
when I upvote the "college is broken" posts (well, the ones I like enough to
upvote).

I'm tired of meeting smart people who completely lack useful skills (and have
been "educated" out of the ability to acquire them on the fly without hand-
holding) and need ridiculous salaries (that they don't have the skills to
justify) in order to service ridiculous college debt. It's just sad.

We had another one on HN recently asking what to do with his mountain of debt
and unprofitable degree. I meet about two a month, and I don't spend that much
time around recent graduates.

Yes, _some_ people leave their degree program without unmanageable debt and
having gained enough to make the sacrifices worth it. However, they are in the
minority.

In America, getting a degree is held out to all students as a panacea. It's
even illegal to take a special needs child off the college track before age
16, regardless of how unlikely it is that that child can benefit from
university study, or how much the child needs other types of education. For
the bright, it's worse: high schools are graded on how many of their graduates
go on to college, so the pressure can be incredibly intense even when college
is an incredibly bad fit for the student.

People who _don't_ think that university study, as most commonly implemented
in the US today, is the One Right Way for all individuals, are usually shouted
down as unambitious or not contributing to the economy. Entrepreneurship
communities are among the few places that students can find an attitude of "do
what has the most value to you, and be skeptical of anything that involves
mountains of debt -- it takes a lot of earning power to service that debt and
live at the same time" from a group of people whom no one can rightly call
unambitious.

