College Tuition Inflation.

I recall reading that the typical student loan debt is currently in the $20,000 range. I suspect that there is a combination of personal funding, loans, and grants - I don't know what the mix is. My point was more directed to where the incentive is, which is to use other people's money or to defer payment. It inflates demand one way or the other.

First, regarding the math being legit - it is a simplified calculation. It took me longer to type than to calculate. I have a calculate with NPV (net present value) functions. We can easily make it more realistic if needed.

High-schoolers don't need to make the calculations - the marketeers (the folks selling the product, in this case higher education) do. Hence, you will have a ROI on an investment in education that is reasonable in relationship to the costs. If my product will return you $1 million (given the assumptions I used) I want the NPV calculation as close to a million as I can get it, and more if possible - moving into exploitation territory by knowingly selling something at a price greater than its value. Academia and government know the routine - the worst example is with government sponsored lottery where the government sells a lottery ticket for $1 that has a real value of a percentage of a penny - with total gross payouts discounted to NPV of pennies on the dollar. The worst level of exploitation I have ever seen - and they do it mostly on the poor!

All the high-schoolers need is the "million more over a life time" line - forget about thinking it through.

 

Required education depends on the person's career aspiration. Bill Gates did not require a Harvard degree to become the wealthiest person in the US. The education he required for his aspirations was not being offered by any institution, he was self-educated in what was required for his aspirations. Once a person has basic reading, writing, and math skills what comes from that is more a function of time and effort. Degrees are often used as a simple way to screen out candidates having little to do with ability. Kids should focus on following their career related passions, not an artificial pursuit of college degrees. On a side note perhaps this explains the stagnation we see in middle class earnings - if large numbers of people are trapped in a rat race with no passion for what they do perhaps it is reflected in earnings. I know an auto mechanic who makes a 6 figure income and seems to enjoy what he does more than a few medical doctors I know, one is even considering getting out of patient care. I am not going to say his education was a waste if he changes careers, but think about the money spent on his education.

The demand for what? The demand for college admission is derived from students - this may or may not correlate to the demand for college educated workers in the work place.

 

I don't see this issue the way that you do. What does a Vet Tech do? In order to do the job, a Vet Tech can easily be self-educated or trained on the job. Government often comes in and says that a Vet Tech (or something similar) requires this form of education or that form of education from this or that source - it often has little to do with a person's actual ability to do the job.

I can pay my 14 year old son to do accounting work in my business. Again what makes a person an accountant? Is it doing accounting work or is it having an accounting degree - potentially not qualified or being able to do accounting work. In order to be a CPA, they determine the requirements which may include certain education (I am not sure), and a test. If it is just a matter of passing a test a person can be self taught. Existing CPA's want to make it difficult to become a CPA to control supply and pricing. Academia supports them because they provide the "education". There is no incentive from those in control to change the system to make it less costly for the prospective CPA.

I argue that demand is mostly driven by those selling their form of education. Institutions of higher learning have to make a case for their product. They want demand to be greater than supply so they can control price - and the data clearly show that they do control price and the demand is in fact greater than supply. Most Universities brag about their application to acceptance ratio. Little Johnny has to be made to feel special - in order to get Johnny to jump through the hoops to pay. Harvard costs significantly more than a state school, but that doesn't mean the person gets a better education.

There is a difference between education and having a degree.

At one point I considered getting an MBA, I took the time to examine the curriculum of various programs - including looking at material in text books. I concluded that an MBA was not going to be educational compared to what I already know. The value would have been in networking and being more marketable to large corporations as an employee. For some companies saying they have X number of MBA's, etc. on payroll is a marketing thing for them. In small and medium size business the focus has to be on real ability because of smaller margins for failure by hiring a person who can not do the job.

 

I gather that you are in academia.
Do you want to have to teach this group of students?

 

Once upon a time (yeah, I'm old) one attended university for the purpose of furthering their education with the side benefit of getting work in their field. The purpose now, is all about getting a good paying job because good paying jobs without a college degree don't exist anymore. It's the reason why there are fewer university students pursuing degrees in any of the standard liberal arts. Engineering, computer science, health related degrees and so on, are the big draws. Liberal arts colleges and universities are slowly becoming a thing of the past. Trade apprenticeships are as well.

Could it be that it's just more expensive to educate an engineer than it is to educate someone pursuing a degree in the Social sciences?

On another note, I'm currently looking for work in my field. I've been a full service office administrator for a good number of years now. I don't have a 4 year degree but that never used to hinder my employability. It does now. I find that many companies I apply to now require a college degree for admin assistants - the folks I used to supervise. Because they can, I suppose. But I feel that the practice probably exacerbates the current jobs situation without providing any extra benefit to the company.

 

I agree. However in some cases the required education is not a BFOQ (bona fide occupational qualification)

I am not familiar with Vet Techs but in many occupations there are apprenticeships, even if they don't formally call them that. Often what is learned in the classroom is different than the actual application, so even "educated" professionals need OJT (on the job training).

 

So I was at kroger today and looked at US News and World Report's annual Top Colleges mag/book. Flipping through I saw A LOT of colleges that had over a $20,00 tuition and average student aid of around $15,000. There was one college I looked at (can't remember the name but I am sure there are a few) that the average aid was more than the tuition.

Now excuse me, I don't fucking care how greedy you are, but how can ANYONE justify putting their average student in a $15,000 debt every fucking year and just as they are ready to graduate, change the curriculum requirements on them so they go another year or two further into debt? Especially in a very weak job market where income growth is stagnant? How can the government be ok with that? IF YOU own a business and the vast majority of your customers can't pay and so you will over 4-5 years time put them gladly 60-75,000 in debt KNOWING that they can't pay that in this economy, KNOWING that you are going to burden ALL of society because of those unpaid loans, KNOWING that yes short term I'll make a fortune, long term this cannot possibly go on because we are bankrupting the very system we are abusing? Knowing all those facts are you going to keep charging those customers those prices they cannot afford?

Government knows what's going on, why a year before elections are they just now figuring it out when this has been happening for over 10 years? Ah, because it is going to be an election issue and front page news and we'll see promises that something will be done but in the end the colleges are going to continue to rape and pillage and get rich by our government in doing so.

Fuck the banks and GM this is an ongoing far more expensive bail out.

 

fflowey: eliminating tuition rates---or drastically reducing them---would change nothing about selectivity of admissions. the two are not necessarily linked. want proof? think legacy admissions.

 

This thread has been enlightening to me in several ways.

Connecting wealth disparity or the diminishing middle class with this issue, it has become clear to me that because of the escalating costs of education and the use of debt to fund even a portion of those costs we put young people at a big disadvantage. Ignoring the fact that most people measure wealth on income rather than net-worth, if we have two grads (all other things being equal) where person A is paying a $200 per month student loan for 10 years and person B saves $200 per month for those 10 years that is a $400 swing during the most important stage in establishing a foundation for creating wealth. $400 per month at 3% is almost $56,000. Then assuming at 32 years old both earn and save at the same rate but given a $56,000 difference, the difference grows to $309,000 in 35 years. And that is being extremely conservative with the assumptions. The reality is that person B could buy a home sooner (bigger return than 3/5%), perhaps contribute more to a 401K (more than a 3/5% return), perhaps start or invest in a business sooner, perhaps be less inclined to use debt for other things, perhaps invest in more education, perhaps just have more confidence from greater financial security and having it reflected in job/pay performance.

The cycle of high tuition and the use of debt is the worst thing we can do to young people. Adults should know better and we should do better for young people. For once I think I agree with Roach. Public universities should have admissions based on merit and costs to the student minimized or free. Currently I doubt the costs to educate are in line to what is being charged to the student - I still don't understand where the surplus money is going.

 

If you regard a higher education as a commodity, then the economic law of supply and demand comes in to play. A college educated labor force is in high demand. The number of students now seeking/needing a college degree has grown in response to that demand. Colleges and universities have responded as well by expanding facilities and providing not just more educators but high tech programs geared to meet the demands of specific markets. The additional costs are passed on in the form of higher tuition rates.

It costs more to provide students with a college education but then again, the cost of everything has risen .
What leads you to the assumption that there's a pool of surplus money floating around colleges and universities? Yes, some are the beneficiaries of huge endowments and I trust that those endowments are being used where they can to offset the growing costs. More corporate based endowments would certainly help.
But how is it fair to put all the blame on the colleges and universities themselves?

The problem, as I see it, lies more with the source of the demand than with the response to it. But it is, what it is.

How we as a society deal with the increasing cost and still manage to provide a higher education to each generation is the challenge. I agree absolutely that students themselves should not have to bear the major brunt - not as long as it's in our own best interests that we, as a society, have an educated populace.

The student loan option is a poor one. I'd like to see government pick up more of the slack - which in essence means taxpayers pick up more of the slack.

I'd like to see more than a token show of assistance on the part of businesses and corporations - the entities driving the demand and who benefit most from a college educated work force.

I'd like to see more merit based scholarship and admission opportunities offered by universities who are currently more focused on giving away free degrees to academic underachievers who just happen to be able to run a football well.

An ease in the pressing need to have a degree in order to earn a decent living would be the ideal answer but would require a different economic environment than the one we currently have and I don't expect to see anything like it rising over the horizon any time soon.

But it's not as if there are no options.

 

The problem as I see it is if you're a college and you charge 25k/yr and your average student is having to borrow 15k/yr to pay then maybe you should drop costs 10k.

The colleges I have looked at when I ask about job placement or senior year internships, I get laughed at and a look like they have no idea what I am talking about. So, let me get this straight, 1) I work my ass off carry a 3.67 GPA 2) am told I am not eligible for ANY school sponsored scholarships (which I thought that was where excess money was to go in a state funded school) 3) I'm going to pay 60-75K over 4 years and you can't even help me get a job? Yeah.....

Now for OJT, I have stated in another thread my dad in the 70's was able to do that, take his test and got a license for Civil Engineering and Land Surveying, BUT the government also helped pay the employers that took the chance on him and trained him.

That said If I wanted to be either one of those professions in Ohio I would need a college degree and to pass the state tests. So that avenue is no longer open.

10 years ago someone could pass the licensing test and become a chemical dependency counselor, they would be a lower leveled but as they worked hours and trained in the 12 cores under a superior they could move up in the licensing, 7 years ago you could do the same thing BUT to get started you needed at least an Associate's degree and while you still needed hours in the field and trained in order to advance in licensing you need a bachelor's and from there a Master's. AND a lot of the old timers are retiring and there are people that got in 10 years ago that in order to advance or even KEEP their jobs they have to go back to college and get the degrees, there is no "Grandfathering".

Now this was a field 20-30 years ago people entered once they found their own recovery, most were broke (addicts tend to be broke when they start over) and it was a new and growing field to get into. They wanted to help people get clean. Once government and colleges and insurance saw that there was indeed money involved and to be made and companies started popping up they started regulating the field more, which is cool, but now it is to the point where the recovering addict in his 30's and can't afford college and doesn't want to be 100k in debt in a field where you 'd be lucky to make 100k in 4 years. You'd never be able to retire. So NOW you are getting a bunch of med school drop outs or psych school drop outs thinking it's an easy field. Books don't teach you how to deal with an addict. I admit I am prejudiced that way. IF you never went through withdrawal and you never had issues with your parents disowning you and friends walking away because you embarrassed them, stole from them and just basically were scum then you can't relate to the addict and if you get into that field simply because you think it'll be "easy" and not for the right reasons, the clients will know and they will eat you alive. The burnout rate in the field has skyrocketed compared to when the licensing rules and regs were a lot looser. Then you have the ones who get into the field and think they can drink. LOL I had a coworker at detox who had DUI plates on her car. Addicts aren't going to take her seriously because obviously she has some form of active problem and would deny it, using every excuse you can think of for the DUI "party" plates.Yet she had the degree and there are a lot like her in the field.

So OJT at least in Ohio doesn't exist in decent waged jobs. You can move up in fast food and convenience stores. But even then you may make at most 30-35k/yr and have to work the field for a longggg assed time and hope they don't bring in college dropouts who upper management thinks may have more book smarts than you, so you get passed over. I worked both fields in the 90's, the C-store business is very stressful.

 

In some senses, you could view the situation as "business" out-sourcing training - but not paying the true cost.

The idea is that the students are the beneficiaries and that they should pay the true cost. However, as it has become more of a commodity (when I left school, university was seen as an option rather than a need in order to get a reasonable career), the payback for the student is becoming less than it was. A degree is no guarantee of a career any more, if it ever was. It seemed crazy to me to create many more "university" places and push people into this route when it first started, and it seems no less crazy now. I don't believe that the rapid expansion in secondary education has been achieved while maintaining high standards.

Anyway, is college really the only way of getting a "better-educated" workforce? And is it delivering? From what I can see, that is debateable. Apart from the artificial lowering of the statistics for unemployment, I don't see huge advantages being delivered by the "everyone should go to college" idea.

I'd like to see a return to better government funding for secondary education, targeted at those who would most benefit along with a return to more on-the-job training, apprenticeships and so on. I'd also like to see business picking up more of the tab, especially in the latter.

I am already seeing potential students from poorer families who are being priced out of secondary education even though they are academically well suited to benefit from it (and that's our loss as well as a failure to provide equality of opportunity).

 

It seems harsh but labor is very much like a commodity even highly "educated" labor. Use the legal profession as an example. Law schools can pump out lawyers as much as they want, but the market responds in traditional supply and demand ways.

Is the demand artificial or real? That is my question.

There are many "blue collar" jobs that pay more than entry level jobs for college graduates. To me that says the demand for what they teach in college is inadequate. It can often take a few years of on the job training before college grads start to earn real market based salaries.

Let's take a history major - how do colleges justify tuition increases well above inflation to teach history? I can understand the Air Force Academy experiencing highly inflated costs if they teach some students to fly $100 million dollar jets - but history?

Did you see the chart showing the inflation trend in the first post? I think there is waste/inefficiencies, perhaps not surplus.

Government shares blame. It is clear that for every dollar in aid given by the government we see a corresponding increase in tuition. No one is being held accountable for the increasing costs. It is a system destine for failure - perhaps sooner than later.

http://www.denverpost.com/election2010/ci_19244420
--- merged: Nov 3, 2011 9:17 PM ---

When state or local governments pass laws sponsored by trade/labor associations to require certifications/licenses/etc. along with a formal education/degree requirements before taking a qualifying competency test -it is government at the root of that restriction.

 

Can you cite this please.

Everything I have read would indicate that state aid to higher ed (on a per student basis) declined through most of the last decade and is at the lowest level in 30 years.

 

From my vantage point, I see a lot of foolish spending that the students are forced to pay for.
Fancy homes for Presidents and top administrators.
Huge luxurious gym and athletic facilities.
Exotic campus festivities that have nothing to do with the mission of learning.
Dining halls that resemble nice restaurants and serve a wide variety of expensive foods.

A lot of this could be done away with.
I wouldn't trust at all that they are using the funds to offset growing costs. I think they're still spending freely and sticking the kids with the bill.