College Tuition Inflation.

With the rate that college tuition has gone up in the past 10 years, I still wouldn't have been able to save up enough and have living expenses for 4-5 years of college.

And that is with my job that required a college degree.

They would be in their 30s, and then still have to find a job.

Student loans have their place, but they should be limited to $20 or $30k. $50k for medical or legal. Colleges will cut costs and new buildings to meet those prices or they would lose students to other schools.

 

Actually, it doesn't lead to massive debt. Welfare is a miniscule proportion of the budget.

And what do you mean, both parties aren't exchanging anything? If anything, welfare compensates those who have been failed by the status quo. It buys their continued complacence in a system that they have no reason to embrace. It buys peace of mind for people who don't like the idea that the children of poor people ought to go to bed homeless and hungry. If you don't think welfare buys anything, then you're failing to consider the alternative.

 

How old are your kids?
My son's first year of college (which he subsequently decided was not what he wanted to do) ran $50k, of which almost $40k is currently deferred, the rest was paid in scholarships. How long do you think a kid who began working part time at age 15 and now works full time while going to school full time at age 19 would be working to save $50k? The community college he is currently attending in Boston is 1/10th the cost and we are still making sure that any grants, etc. he can get he will. He's going after a doctorate; while I'm pretty certain he will continue to work while going to school, it is completely unreasonable to assume that he can and will pay as he goes.
Living doesn't stop while going to school, either. There is still rent to pay, food to eat, transportation to take care of.
I encouraged both my kids to go for scholarships. Encouraging and succeeding are two different things.
Your quoted remarks do not reflect reality.

 

You beat me to it in subsequent posts.
I'd maintain that most 18 year olds can't realistically grasp how much work it takes to earn enough to pay $1500 or $2000 a month for a mortgage or rent, plus other living expenses, etc, plus another $500 student loan payment. They may even have the math skills, but they haven't lived in that world yet. I'm not saying that you couldn't grasp it, because clearly you did, but I don't think most kids know what they are getting in to when they sign those loan forms.

 

If you say so.

 

I think we really need to get back to what college is, and what the college experience should be. And that will be very different.

My German Calculus teacher was no frills, no technology, learn by reading the book, asking questions, and doing the assigned problems kind of guy.

Outside of class, I happened to live the resort lifestyle with pool parties, all you can eat food, 24 hour computer tech support, WiFi, 6am-midnight gym, football tailgates, etc...

I don't think that costs are going through the roof because of the calculus teachers.

 

I repeat the question: How old are your kids?

 

I need my fall bulbs planted, Eddie. I'm paying $5.00 $4.00/hr under the table. When are you available?

 

I am catching up on what is being written in this thread and start from the oldest posts first. The trend on this issue is going off track. First, no degree is "useless". However, different degrees have different market values. To ignore this, is silly.

 

there are basic problems with the way education works in the united states.
at the primary and secondary level, tying school funding to property taxes makes education a direct mirror of class structure. which is a significant aspect of what education does in any event----social reproduction. funding should be flat across localities and administered by states. its a basic condition of possibility for anything like the meritocracy. as it stands, basic education in the united states is rigid in its reproduction of class stratification, but is also decentralized enough that making coherent adaptations to changing labor pool requirements is excedingly difficult. plus there is the political actions of the right which sees in teachers who are unionized a basic political enemy and which has repeatedly moved to damage primary and secondary education so as to weaken that political adversary in the name of not leaving any child behind, for example.

university education should be free and should not begin until students are 20. there should be a non-military national service period after high school. my experience with undergrads over about 15 years is that they are not in the main developmentally in a position to make choices about this thing they call the future, or design their cirricula to get them toward that place and still less to manage things with entirely abstract consequences until they aren't like taking on giant debt, which is easy peasy to do, just a wave of the pen every so often. and everything will work out, they tell you, because everything always works out because that's why you're in school so that everything will work out and because everything works out your alumni association will want to keep tabs so that when everything works out you too can contribute to the endowment and maybe also write idiotic, racist letters into the alumni magazine complaining about entitlement and the welfare state and those letters will appear no matter how stupid they are as part of the yes yes whatever give us the money thing that's an aspect of the fastest-growing sector of actually existing universities: administration. that and adjunct faculty pools. what's not growing is tenure-line teaching gigs. because power has transferred away from faculty and toward administration. ask anyone who teaches university anywhere and you'll likely hear the same kind of stories.

because there are too many phds being produced because they're cheap labor while they're graduate students and also are cheap labor as adjuncts until they burn out and go do something else only to be replaced with other graduate students who are cheap labor who are also cheap labor as adjuncts until they burn out and so on, every generation of graduate students even now getting told that everything will work out because that's what universities are, great big machines that produce everything working out except they don't any more. but i digress. so graduate students are encouraged to take on debt in the same way as undergrads because even if you get stipends and work-study there's never quite enough to actually live and that continues for about 3/4% of new phds these days all the way through adjunctworld.

but administrations keep expanding and universities become more fund-raising machines the main purpose of which is to keep the universities themselves afloat and the educational function becomes just one part of what draws consumers and tuititions keep rising despite the fact that you can get a good education almost anywhere if you know what you want, but most kids at 18 have no idea what they want so they and their parents default into the simple-minded idea that what costs more must be better because, like a lot of americans, people seem to think they're entitled to not having to think so much and price--well price is rational in cultural markets like universities and not at all subject to arbitrariness like, say, happens all the time around the relation of the ivies to bennington, a jockeying i've pointed to before but which has the effect of driving tuition rates up across the board, across the private-public continuum. there is no rational connection at this point between quality of education and tuition levels. none.

btw: i simplify for argument's sake the role of bennington and the ivies--which is true enough in itself, but it not the only driver of tuition increases. this is another example:

http://chronicle.com/article/Rise-in-Sticker-Price-at/129532/

and has some useful aggregated data.

 

This is an important question. My wife and I started a 529 savings plan for my son years ago, we have added to it over the years and the money has added up - but it won't be enough. Now, I can either save more aggressively - sacrificing in other areas, including retirement. Or, we can put the burden on my son - where he works and uses loans. Or, we can focus on using other peoples money. The current system clearly has a perverse incentive set up. If we save too much we risk being ineligible for certain forms of financial assistance. There is no advantage to using one's own money. Even using low interest loans is better than using savings because in theory the loan payments are covered by higher income for the student after graduation. So, as it has been stated, when using other peoples money or deferring payments the system has no pressure to control costs and in fact has been subject to greater demand. The irony is that every dollar being made available in aid or in loans is most likely being met with close to one dollar or more in increased costs. Academia and government allow this perverse charade to continue.
--- merged: Oct 31, 2011 4:10 PM ---

On this point, in theory it makes some sense. From a practical point of view, and I speak from experience - people in wealthier communities will always invest more in their children's education. If government funding is perceived inadequate you will see active parent associations raising large sums of money for their school. Or you will see a migration to private schools and supplemental education programs. I argue the better solution is giving responsible parents choice.

 

I love the jerks who say "if you can't afford college don't go" or "work a job until you have saved enough."

My dad was granted on the job training and became a land surveyor and Civil Engineer by apprenticeships and taking a licensing exam, without a college degree. He was able to be licensed as both and became quite good making a decent living doing such and he was able to pay for my mom to go to nursing school for her LPN and eventually her RN. Those opportunities are gone. First and foremost, if you want a decent paying job you need a degree and even then you aren't guaranteed to make enough to pay down the loans. Secondly, as tuition skyrockets and pay doesn't "saving" to pay for college is almost impossible. When looking at the stats MAYBE 20 years ago that was feasible, today it is unrealistic. Especially when people at McDonald's and other places that hire where no degree is needed pay about the exact same wages they did 15 yrs ago.

I know in Ohio we now have to have bachelor's or Master's degrees to be chemical dependency counselors, where 7 years ago you didn't need either one to get a job. The pay at some places was very good and yes, you could pay your way through college if needed and you knew how to save. This was a field that started out in most states not needing ANY college because most of the ones getting into the field were in recovery themselves and as such didn't have money to get a degree. But insurance companies and liability demanded that degrees be obtained. Which in all honesty is killing the field. Why? Because, books don't teach you how to talk to an addict and MOST people who are in recovery and have the talent for this field cannot afford to go to college to get a degree in a field that won't pay the loans off.

I find it pathetic that colleges will pay their presidents and AD's a million dollars +, their tenured staff in the upper 70's to 100,000, while they raise tuition and build million dollar buildings. Those buildings will sit empty if they keep raping the system that keeps them alive.

Student loans were a great idea. Someone borrows the money to go to college and pays it back with interest and as that money comes back the gov't makes money off the interest and loans the principle out again. that is what home loans and small business loans were set up to do. INVEST in the populace to keep the tax base growing. Today, the colleges know what students are getting loan wise and charge every penny of it. Thus students pretty much need those predatory credit cards to buy those very expensive books and laptops/computers needed. Then there are the fees, student union fees, fees for the athletic department, fees to park, dining hall fees etc. All of which I had to pay 7 years ago when I was going to U of Akron and I was a commuter and I was charged a commuter fee. I was dean's list every semester. I carried a 3.67 GPA. I thought that would open me up for scholarships and lo and behold I was wrong. So every semester I maxed the loans. Then I got married to ... and she didn't want me to finish saying I was far enough in debt. That was my fault for listening to her (won't even go into the marriage). Then I get the divorce, have the stroke and am fighting for disability. Which disability should nullify the loans according to all the paperwork I signed but the bastards want their money. Now, if I get the disability as I should the loans from my past will go away. However, if I want to go back the loans I accrue once on disability, I will be responsible for.

Now, the sad case there is I could feasibly go back to school get my degree and be off disability, which is what I would like to do. However, I'd probably make less and live on far less than if I stayed on disability (which is not what I want) but if it comes down to it, making less and working at a job that MAY pay the student loan bills and MAY give me enough to live on as opposed to being able to live a decent lifestyle and not have to worry about student loans or a job I feel I am underpaid in, then..... and I worked my ass off for close to 30 years paying into the system, I was Navy and served my country, so where is the incentive for me to better myself for less money? Well self pride for one and the desire to educate myself.

Anyway, I ramble and have no idea where I was going with this.

 

What education truly needs is competition. The private schools and online for profit schools are able to use their prestige or convenience to attract students and thus keep tuition high knowing they'll get the loan money. The public state funded schools are hurting because states don't have the revenue and for the last 20+ years the GOP has totally disparaged education as an important necessity for the future of this country. In order to compete and get quality professors and attract students, the states like California, Florida and so on that had little to no tuition for in state residents had to adjust the rates and decided that they could use that loan money to build buildings and football stadiums and pay the staff great wages and the loans would pay for it all. They lost track of their purpose. You see that every time you hear about a college moving to a different conference for sports or how much they get for Bowl games and so on. Even "publicly, state funded" colleges are getting into education as a business and not to advance the students. It's become about buildings, sports and in some recent cases kickbacks to the university presidents. The states don't want to touch the subject because the fed is paying the loans and the states get a slice. But there is no true competition in colleges, private or state funded. No competition means no need to be any better than the next guy, especially when you can get the same amount of money out of the students.

But having competition where a college says, "we'll charge less, AND have recruiters for jobs and/or help with job placement AFTER you graduate." you'll see more colleges follow suit.

But right now the more tuition you charge the more they will loan and so the vicious cycle keeps going unchecked. To me it's not so much the Fed it's the states that allow their state colleges to unnecessarily raise tuition. Ohio has allowed their state schools to raise tuition every year for the past 10. And not just small dinky amounts but you are talking 2-10% a year. So the states themselves are to blame as much as anyone else.

Also, in the last 10 years a lot of "colleges" have changed names to "university" without changing much of their curriculum because the fed is willing to recognize an Ashland University, far faster than it will Ashland College.

 

Given the pivot point we could go in several different directions. One being this:

On average a college degree means a person will have about $1 million in additional lifetime earnings. Assuming a working span of 45 years and a $100,000 cost of education we can crunch some numbers.

At a 5% discount rate the net present value of $1 million is $111,296. meaning if we invest $111,296 at 5% for 45 years we get $1 million. If the cost of college is $100,000 the investment pays off given our assumptions to the amount of $11,296. If I use my money the return is that amount. If I use your money (or governments money, etc.) my return on a $0 dollar investment is $1 million. A big difference. A big incentive to use your money.

If we increase the discount rate to 6% the net present value of $1 million is $72,650. Here if I spend $100,000 of my money it is a bad investment given the assumptions. But again, if I use your money my return on a $0 investment is $1 million. Using my money from a financial point of view I would decide not to spend $100,000 to go to college and get a degree. Using your money I would be foolish not to go to college and get a degree from a financial point of view. The demand is artificial. With the increased demand colleges have greater control to drive prices up.

http://usgovinfo.about.com/od/moneymatters/a/edandearnings.htm

 

Yeah, actually paying for services with money we have is such a bummer. Let's just charge it! That's the ticket. And then when we can't pay it back, let's blame the those who provided the service and extended the credit. Point that finger...because we all know it could never be OUR fault. Blame the MAN.

 

Eddie Misses the Point, Part 364