Just as the fix for the real estate bubble was to cut off the easy credit (i.e., tightening lending standards and having the Fed raise interest rates), the solution is the same for college tuition. The bubble is being inflated by access to easy credit and federal funding. Get the government out of the business of subsidizing student loans, and you’ll see the bubble pop real quick. Unfortunately, Obama and the Dems have gone in the opposite direction: have the government monopolize student loans and crowd out private lenders.
“Crowd out private lenders”? Huh? Please explain to me the mechanism by which the changes made by the Obama administration re: private loan administration has any effect whatsoever on the economics of higher education? I’d *love* to hear this. More likely I think we’ll find that you don’t actually understand how things were before and the changes that were made.
Further, as is usually the case when we have these sorts of discussions, the facts don’t jive with your worldview. The largest entry of the Government into college funding came in 1965 which in addition to the GI Bill that already existed provided for Pell Grants, Stafford Loans, and other related forms of funding. Until the 80s tuition remained relatively flat. It wasn’t until the 80s and then early part of the last decade that tuition prices started to increase and then shoot through the roof relative to the CPI.
One of the real reasons for the rise in costs (certainly not the only though) is an astronomically rising cost of administration per student. This began to rise quickly in the 80s and has not stopped.
There was a good discussion on this very subject on NPR last night. I can’t remember what show it was, it was the one were the male host always goes, “Mmmmhmmm, mmmmhhmm” in agreement.
David K.
Sorry Andrew, but making it harder for the non-rich to go to college is not a solution. Its both bad for the individual and bad for our economy. Affordable college is a good thing, the problem is why the cost of education is skyrocketing.
Sorry Andrew, but making it harder for the non-rich to [buy a house] is not a solution. Its both bad for the individual and bad for our economy. Affordable [housing] is a good thing, the problem is why the cost of [housing] is skyrocketing.
Some people never learn.
Casey
Universities are by far the most globalized of American institutions. You know how the S&P 500 has been insulated from domestic shocks because it derives so much revenue from foreign sources? Our universities have the same sort of insulation, though perhaps even more so.
We had one year in the Rochester Econ PhD program where there was not one single American student. Just 20 foreign students.
Similarly, in the Masters program at Simon right now, the students are at least 1/2 international. There are tons of students from China and India. And they pay full price.
It doesn’t matter that our own economy collapsed. So long as other countries are surviving, and our universities keep offering the best education in the world, they will continue growing revenues.
That’s a globalized America. The best education in the world, preparing students for the best corporate jobs in the world, being provided to the richest foreigners in the world (who also happen to have far superior primary educations), on beautiful campuses where so-called “native Americans” cut grass, trim flowers, and mumble quietly about how this used to be a land of opportunity.
David K.
Huh, I never would have guessed that you consider replacing the words people use in their arguments with something else as a valid rebutal to an argument. Since you do I think i’ll try it!
[AMLTrojan] never learns.
Wow! That was FUN!
Get the [private industry] out of the business of [for profit health care], and you’ll see the [the nation’s health improve] real quick. Unfortunately, [Boehner] and the [GOP] have gone in the opposite direction: have the [private industry] monopolize [health care] and crowd out [the public option].
Even MORE fun!
Considering how culpable private industry was in the housing crisis I am amused that you still think they are the heavenly angel’s sent to save us from big bad government.
But yeah, lets try it your way, lets let only the rich kids go to college. Those poor and middle class kids don’t need an education, they can work in the factories like their dad’s. Meanwhile, while we aren’t educating our own citizens other countries will be. Brilliant idea for keeping America competitive.
Of course i’m sure you intend for the cost to drop, and college to evenutally reach affordable levels again. Perhaps that might happen, but you are completely ignoring the side effects and consequences to get there (if we get there) what happens to the generations of students who can no longer afford to go to college? Fantastic plan to have a whole lost generation or two most of whom aren’t qualified for many jobs. You’ve now set up a system where we either have to accept significantly more foreign workers to fill these jobs OR accept people who are underskilled. There’s a fantastic idea.
Of course you are forgetting the biggest fallacy with your plan, the idea that private loan companies wouldn’t step in to fill the void. As it is they allready DO and with far worse terms than government backed student loans.
But hey, continue to push the simplistic view of: Government BAD, private industry GOOD. Meanwhile those of us who can look beyond such obvious partisan bullshit will continue to try and solve the problem.
Alasdair
While David K #4 was a fairly classic straw-non-sequitur, I’m not sure how to classify #7 …
“Those poor and middle class kids don’t need an education, they can work in the factories like their dad’s. “ – is either incoherent politics of envy or just plain incoherent … after all, if the factory they are going to work in is their dad’s, then presumably they can afford to go to college, no ?
As a parent whose 4th daughter just started at Tulane, I am all too keenly aware that good education ain’t cheap …
As the bumper-sticker says, however …
“If You Think Education Is Expensive, Try Ignorance !”
Casey, there’s a huge difference in the economics between graduate programs and undergraduate programs, and you’re right — the international aspect plays a big part for graduate programs. The exceptions to this help prove the rule: MBA and JD programs are swollen so far past what market demand supports, many folks graduating with those types of degrees face sharply lesser job prospects than they thought they’d garner going in.
As far as David at #7, I almost spit out my drink laughing. Aside from the fact that my comparison made perfect sense because it built off the comparison in the original linked article about the housing bubble, David’s attempt to counter was fall-flat-on-its-face hilarious. Private industry monopolizing? That’s self-contradictory! If it’s an industry, that means many companies are participating in the market, and therefore by definition there’s no monopoly! How can an industry possibly monopolize something like health care, vs. the government, which by definition is anti-competitive, and yet you that hold up as the non-coercive alternative to this so-called industry monopoly?
Man, I always thought U-Dub was a decent academic institution — now I’m really questioning that conclusion.
– The high-tech industry illegitimately monopolizes IT
– Energy companies unfairly monopolize oil refining
– Agribusiness unethically monopolizes food production
Seriously, tuition costs are out of control, but i’ll be honest, I don’t know what the fix is.
Just as the fix for the real estate bubble was to cut off the easy credit (i.e., tightening lending standards and having the Fed raise interest rates), the solution is the same for college tuition. The bubble is being inflated by access to easy credit and federal funding. Get the government out of the business of subsidizing student loans, and you’ll see the bubble pop real quick. Unfortunately, Obama and the Dems have gone in the opposite direction: have the government monopolize student loans and crowd out private lenders.
“Crowd out private lenders”? Huh? Please explain to me the mechanism by which the changes made by the Obama administration re: private loan administration has any effect whatsoever on the economics of higher education? I’d *love* to hear this. More likely I think we’ll find that you don’t actually understand how things were before and the changes that were made.
Further, as is usually the case when we have these sorts of discussions, the facts don’t jive with your worldview. The largest entry of the Government into college funding came in 1965 which in addition to the GI Bill that already existed provided for Pell Grants, Stafford Loans, and other related forms of funding. Until the 80s tuition remained relatively flat. It wasn’t until the 80s and then early part of the last decade that tuition prices started to increase and then shoot through the roof relative to the CPI.
One of the real reasons for the rise in costs (certainly not the only though) is an astronomically rising cost of administration per student. This began to rise quickly in the 80s and has not stopped.
There was a good discussion on this very subject on NPR last night. I can’t remember what show it was, it was the one were the male host always goes, “Mmmmhmmm, mmmmhhmm” in agreement.
Sorry Andrew, but making it harder for the non-rich to go to college is not a solution. Its both bad for the individual and bad for our economy. Affordable college is a good thing, the problem is why the cost of education is skyrocketing.
Some people never learn.
Universities are by far the most globalized of American institutions. You know how the S&P 500 has been insulated from domestic shocks because it derives so much revenue from foreign sources? Our universities have the same sort of insulation, though perhaps even more so.
We had one year in the Rochester Econ PhD program where there was not one single American student. Just 20 foreign students.
Similarly, in the Masters program at Simon right now, the students are at least 1/2 international. There are tons of students from China and India. And they pay full price.
It doesn’t matter that our own economy collapsed. So long as other countries are surviving, and our universities keep offering the best education in the world, they will continue growing revenues.
That’s a globalized America. The best education in the world, preparing students for the best corporate jobs in the world, being provided to the richest foreigners in the world (who also happen to have far superior primary educations), on beautiful campuses where so-called “native Americans” cut grass, trim flowers, and mumble quietly about how this used to be a land of opportunity.
Huh, I never would have guessed that you consider replacing the words people use in their arguments with something else as a valid rebutal to an argument. Since you do I think i’ll try it!
[AMLTrojan] never learns.
Wow! That was FUN!
Get the [private industry] out of the business of [for profit health care], and you’ll see the [the nation’s health improve] real quick. Unfortunately, [Boehner] and the [GOP] have gone in the opposite direction: have the [private industry] monopolize [health care] and crowd out [the public option].
Even MORE fun!
Considering how culpable private industry was in the housing crisis I am amused that you still think they are the heavenly angel’s sent to save us from big bad government.
But yeah, lets try it your way, lets let only the rich kids go to college. Those poor and middle class kids don’t need an education, they can work in the factories like their dad’s. Meanwhile, while we aren’t educating our own citizens other countries will be. Brilliant idea for keeping America competitive.
Of course i’m sure you intend for the cost to drop, and college to evenutally reach affordable levels again. Perhaps that might happen, but you are completely ignoring the side effects and consequences to get there (if we get there) what happens to the generations of students who can no longer afford to go to college? Fantastic plan to have a whole lost generation or two most of whom aren’t qualified for many jobs. You’ve now set up a system where we either have to accept significantly more foreign workers to fill these jobs OR accept people who are underskilled. There’s a fantastic idea.
Of course you are forgetting the biggest fallacy with your plan, the idea that private loan companies wouldn’t step in to fill the void. As it is they allready DO and with far worse terms than government backed student loans.
But hey, continue to push the simplistic view of: Government BAD, private industry GOOD. Meanwhile those of us who can look beyond such obvious partisan bullshit will continue to try and solve the problem.
While David K #4 was a fairly classic straw-non-sequitur, I’m not sure how to classify #7 …
“Those poor and middle class kids don’t need an education, they can work in the factories like their dad’s. “ – is either incoherent politics of envy or just plain incoherent … after all, if the factory they are going to work in is their dad’s, then presumably they can afford to go to college, no ?
As a parent whose 4th daughter just started at Tulane, I am all too keenly aware that good education ain’t cheap …
As the bumper-sticker says, however …
“If You Think Education Is Expensive, Try Ignorance !”
Casey, there’s a huge difference in the economics between graduate programs and undergraduate programs, and you’re right — the international aspect plays a big part for graduate programs. The exceptions to this help prove the rule: MBA and JD programs are swollen so far past what market demand supports, many folks graduating with those types of degrees face sharply lesser job prospects than they thought they’d garner going in.
As far as David at #7, I almost spit out my drink laughing. Aside from the fact that my comparison made perfect sense because it built off the comparison in the original linked article about the housing bubble, David’s attempt to counter was fall-flat-on-its-face hilarious. Private industry monopolizing? That’s self-contradictory! If it’s an industry, that means many companies are participating in the market, and therefore by definition there’s no monopoly! How can an industry possibly monopolize something like health care, vs. the government, which by definition is anti-competitive, and yet you that hold up as the non-coercive alternative to this so-called industry monopoly?
Man, I always thought U-Dub was a decent academic institution — now I’m really questioning that conclusion.
More future wisdom from David:
– The high-tech industry illegitimately monopolizes IT
– Energy companies unfairly monopolize oil refining
– Agribusiness unethically monopolizes food production