When people ask why college tuition is so high, defenders of the higher-education system point to things like “Baumol’s cost disease” (costs in industries without much productivity growth tend to rise, because they have to compete for labor with more productive industries) and declining state contributions to public colleges. No doubt these play a part. But this cannot explain the vast upgrades in college residential amenities that have taken place in the 20 years since I graduated from college, when a student union and some ivy on the walls was about the best you could expect.
But of course, our parents were paying for it, and they didn’t care whether we had a swimming pool. A certain Spartan element was supposed to be part of the ritual of college attendance, just as it had been when they were in college. What changed? I suspect the answer is that rising tuition, and the increasing reliance on student loans, has placed more of the financial responsibility into the hands of students. And the students shop for colleges based on … well, about what you’d expect when you give tens of thousands of dollars to 18-year-olds and ask where they’d like to spend the next four years.
This is policy insanity.
It’s amazing that we have a concrete example of how subsidies will inflate the cost of an industry. Adding more money to education will just exacerbate the problem.
This is also true in real estate, where subsidies have distorted home prices. Also, the current explosion of car sales is fueled mostly with sub-prime auto loans.
Medicare and Medicaid have been raising the cost of health care for 50 years, but still the answer is “more money”.
Remove subsidies and prices will normalize. Unfortunately, those who depend on a debt fueled economy are running the government (and most of these are democrats, the supposed champions of the poor.)
It’s not just subsidies, but also indirect payment structures (“insurance” for medical, loans for college) that make the costs less immediate and apparent. But it all amounts to the party incurring the cost not clearing seeing it immediately if at all.
But you don’t need to know what the cost is when its freeee. /s
Yes, I agree. I should have been more clear.
Exactly Peter, and note how things are phrased, Obamacare forces people to buy insurance, and we are told “more Americans have access to healthcare”. Healthcare are doctors, nurses, hospitals. Healthcare is not accountants. Between doctors, nurses, hospitals vs accountants, guess which one Obamacare mandates you pay?
Then we have Sanders offering free education. I know a Sanders supporter, and he was running his mouth about how Trump is lying with stupid promises. So I brought up Sanders offer for “free education”. The response, “smart people knows what he means!” By that, we are supposed to all recognize that Sanders understands that professors should be paid, that facilities to teach cost money, and therefore education isn’t free; but that Sanders just means he will subsidies students. And the result of subsidies is that the students think education is free, so they can spend their money on expensive dorm rooms, TV, and Starbucks coffee; none of which is education related. I had a lot of fun with the Sanders supporter, when we met with a Cuban that made it to America. The Cuban made it very clear what he thought about Sanders and socialism.
In the CNN Democrat debate the other night, the talking heads were saying how risky it was for Sanders being a socialist and his statements on socialist leaders were to getting the Latino vote.
It blew my mind. This was the first time I had seen Democrats speak out against these countries rather than defend them. Do latinos just not known anything about the Democrat party? It is the only way this hispandering makes sense. Also explains why Democrats don’t want people to know English, they might read history books and communicate with other Americans.
Spring Break is here once again. I wonder how many of those trips are funded by student loans and grants.
Far too many.
“This is policy insanity.”
This is buying the votes of the academia-industrial complex. The best part is that they offload the cost onto the kids, and make the debt impossible to eliminate through bankruptcy.
They should bring back bankruptcy. Have any of the candidates brought this up?
Bankruptcy never went away. The problem is that college loans aren’t dischargeable in one. If they were, the banks wouldn’t do them. Which, of course, would be a feature, not a bug, but that’s not the way they look at it.