This is what the past decades have wrought. The federal student loan program has been an unmitigated disaster for almost everyone, except (so far) the university administrators.
5 thoughts on “Annals Of Higher Education”
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This is what the past decades have wrought. The federal student loan program has been an unmitigated disaster for almost everyone, except (so far) the university administrators.
Comments are closed.
Rather unsurprisingly, much like housing, the easier loans are to get the higher the price goes.
I think it is a much better idea to create state schools with low tuition fees in order to bring the market price down rather than making the loans easier to get. In fact quite often these already exist on a state level. People get too attached to college names.
“I think it is a much better idea to create state schools with low tuition fees in order to bring the market price down rather than making the loans easier to get.”
Here in America, we do both, actually. We create State schools with low tuition for in-state residents, and high tuition for out-of-state residents. And then we also make it super-easy to get loans.
The current first-year class at the University of Iowa is prescriptive:
Iowa Residents: 47%
Illinois Residents: 30% (and mostly from Chicago’s suburbs, I might add)
Other out-of-state: 11%
International: 12% (none of whom are eligible for loans, but still pay full tuition)
53% of the incoming class pays the out-of-state tuition rate (339% of the in-state tuition) at a State school. University of Illinois, another Big Ten school, has only 23% out-of-state students.
The State government has, in a misguided attempt to “retain in-state talent”, recently issued a bounty on in-state admissions by using in-state admissions as an elevated factor in determining funding from the Regents. Never mind there are only so many students to go around. Never mind that 52% of those incoming students won’t ever make it to graduation.
When 79.2% of your tuition income is derived from only 53% of your students, there is almost no economic incentive to actively recruit within the state, and no incentive to lower your tuition prices for out-of-state residents. You could make in-state tuition FREE and it would have a minor effect on tuition income.
And the average student only receives $6,000 in grants or scholarships, which means the rest of tuition, room, and board is out-of-pocket or from student loans. After all is said and done, the average student at a State school is on the hook for $22,000 a year. For a Public, Non-profit, State-funded college.
The school employs 1,500 Full time, part-time, and adjunct faculty members, and 2,300 administrative staff members.
Their head football coach is paid $3.65 Million per year, which is only 0.1% of the total annual budget of $3.513 BILLION. The athletic department is ostensibly financially self-sufficient and claims to contribute approximately 30% of the total scholarship payout of the University each year.
In-state tuition isn’t the primary reason why market prices are as high as they are.
The student loans are responsible for raising the tuition. Every time students get more money, the universities raise tuition. There is nothing unusual about this, it is merely a consequence of the expansion of the money supply. Expansion of the money supply usually means increase costs.
If you really want cheap tuition, drop the student loans. But that will never happen because Big Education is addicted to them.
Yup, state schools may be more inexpensive than some of their big name alternatives but they are still expensive. Your average pell grant or subsidized loan will be just enough to cover tuition, leaving books, rent, and other expenses up to the student.
Maybe this seems reasonable and certainly some students do well under this system but it is also an example of what I call Wodun’s law: The price of a good or service will always rise to the base subsidy plus whatever a person is willing or able to pay.
Any increase in the availability, or the amounts rewarded, of loans or grants will be met by increases in tuition. This negates any benefits to the students.