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The Rising Cost of a College Education

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June 26, 2012 8:23:24 PM

I figure that since this has started to become a topic in the race that a discussion here at Tom's would be in order; however, no one has brought up this topic lately. Here it is.

The rising cost of education not only is detrimental to our nations integrity, but to our national security. It is apparent that the rise of education has been noticed ever since the 1980's, but was never a true issue as long as it was not a danger to the well being of the American people. That is, until financial instability came about later in the New Century. The cost of education has risen about 30-35% over the last 20 years. http://nces.ed.gov/fastfacts/display.asp?id=76 Needless to day that this is not a large change, but take this into account of different colleges and their institutions and compare them to their own history. Here is the state of Washington. A state known to have a very progressive look on education. Its main flagship schools are listed here:

http://www.wsu.edu/
http://www.washington.edu/
http://www.cwu.edu/
http://www.ewu.edu/

Provided is a state who has given rise to proper education for its people and desires to be a state leader of the Union. Now look here:

http://www.usdebtclock.org/state-debt-clocks/state-of-w...

Ass you can see, they have a debt system that looks very uncomfortable. Could this have a direct link to the rising cost at let's say WSU?

Here is the debate:

-What is the general consensus to the rising cost of College?
-What factors have contributed to the rise?
-Is it the state, feds, or the institution itself?
-What if we end funding of colleges? Will that help lower prices? End subsidization?
-How can Congress act to help this issues, or is this a single state issue?
-What would you like to see happen to education (specifically college) in the near future?
-What Presidential Candidate has the best policy for college issues such as tuition hikes?
-Anything I missed? You have a question for me or the thread?

Discuss.

NOTE: Deviation off topic will end with a temporary closure and perps will be warned by Reynod. Second offense on this thread after reopening will be an automatic ban. Do not discuss this maliciously. I, dogman_1234, hereby swear to ask Rey to terminate this thread and or others at his (dogman_1234) pleasure. Follow all ToS. Thank You.
June 26, 2012 8:41:12 PM

Just off the top of my head an argument I would make is:

College educated people make almost a million dollars more than a person who didnt get a degree over a lifetime.

So wouldn't it be in a societies best interest to spend the 50-100 grand to get every citizen educated at a college level?
June 26, 2012 8:48:27 PM

wanamingo said:
Just off the top of my head an argument I would make is:

College educated people make almost a million dollars more than a person who didnt get a degree over a lifetime.

So wouldn't it be in a societies best interest to spend the 50-100 grand to get every citizen educated at a college level?

Interesting argument. So, you say that rising costs are not an issue due to the fact that individuals make more money with a degree than without one? With that logic, college is the one of the best financial investments to make on an Americans life. Okay, what about the rise in tuition though? Should it be that high?
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June 26, 2012 9:45:44 PM

wanamingo said:
Just off the top of my head an argument I would make is:

College educated people make almost a million dollars more than a person who didnt get a degree over a lifetime.

So wouldn't it be in a societies best interest to spend the 50-100 grand to get every citizen educated at a college level?


If that is so, then Harvard alone could pay for the tuition of their current student body for the next 30 years. Why don't they do so?
June 27, 2012 12:48:27 AM

So how do people pay for university/collage in USA? Do they borrow money from the government and repay after they graduate and find a job?
June 27, 2012 5:44:55 AM

Pyree said:
So how do people pay for university/collage in USA? Do they borrow money from the government and repay after they graduate and find a job?

Basically a college, or University as it may be called formally, is an institution with the intent to sell a higher level of education discipline. Required, is a sales of service called educational vocation. You sell knowledge in a transaction via money. That is the basic economic principle behind it.

Now, the United States higher education system works by:

1) A University sets a price for needed sales to pay for resources, utilities, faculty and administration costs. Your basic expenditures. Next, a price is set by gurus who I am not familiar with. Some may say the colleges' administration sets prices, but many could refute that claim.

2) After a price of tuition is set, the US government comes by an audits the school and is supposed to give a certain amount to subsidize the cost of tuition.

3) After that, a final price is set. Here, may private investment, R&D, and other minor and major corporations sponsor the school or its program. Here is where you get some scholarships for those who excelled in High School.

4) Once benefits have been payed out by private firms, the State of the school will provide some basic scholarly aid to students via grants. This will help drop the price for individual students who excelled in High School. The State then takes the extra money and subsidized the tuition for their own residence. That is why here in the US, we have two forms of tuition: One for Instate, the other for out of state.

5) The federal government, not only subsidize, but also issues loans to persons of higher education. This one is of debate the most. A fixed rate is set by the (I think it is the Treasury Dept.) and Uncle Sam gets a cut in interest...even after taxes. One could get private loans, but are much more risky.

So, yes, the US people do borrow money after the gov't has subsidized ALL schools of audited records. Citizens are obligated to pay back all in full. Even the gov't has loan men who seek your family out if the event you die before all payments are met. Years will go by to see if you are really dead. NOTE: Even private banks do this.

The issue seems to be that the US gov't is the culprit for rising prices, others say it is the Administration across the country who are conspiring to make Uni a business. A basic 'get-rick-quick scheme' if I may say. Some blame the devalued dollar since the early 70's when tuition began to hit home.

All in all, everyone wants money, more money, and wants it now!
June 27, 2012 6:09:23 AM

I know university used to be free. I just got my statement yesterday and it is about $35000. I am also wondering why it was free back then without all those private company sponsoring research and international students paying crazy money for their degree, but it cost me money now.
June 27, 2012 6:22:27 AM

Same here Amigo!
June 27, 2012 12:23:29 PM

Education is a business, there is no incentive to make it cheaper. Why sell a car for 25,000$ when people will buy it for 30,000$?

But you cant argue with the results, people with higher education make on average a million extra dollars in their lifetime. This is a hell of a long term investment, what kind of stock could I invest in that I paid 50,000$ (Average for a 4 year school) for the opportunity to make a million $ over the next 50 years?

And the gov gets a piece of that through taxes, so having a population capable of making more money is both good for the person, and good for society.
June 27, 2012 12:59:55 PM

It would be so much better for young people if they are not like 50000 in debt after they graduate so they can start saving money for a deposit for a house and car instead of paying the tuition fee.

House price is already high enough 350000 for a crap one and 380000-420000 for a decent one in my area. I don't see myself starting a family until mid 30s to early 40s because of the house price which is made worse by having debt after graduation.
June 27, 2012 1:50:04 PM

Prices are cheaper out of the city (Adelaide) though pyree ... head up toward Brinkworth and a great house is half that.

Who wants to live in the city?

I am an hour away from Perth ... I have foxes on my lawn sometimes ... and Llamas across the road ... seriously ... well Alpackas actually ... but they look the same.

Magpies have adopted us ... they swoop the neighbours but eat out of my hand.

I still hate Collingwood and Port Adelaide though ... lol.
June 27, 2012 2:51:20 PM

This topic has been closed by Pyree
June 27, 2012 2:55:08 PM

This topic has been reopen by Pyree
June 27, 2012 3:03:52 PM

Sorry, on phone. Pressed submit but it become close.

No, I am not going anywhere. Where I am is 5 minutes to the beach, large Westfield shopping centre and a new Olympic standard aquatic centre. 10-15 minutes to MSY, Dominos pizza and airport, IKEA, Harbour Town and 15-20 minutes to city, Rundle Mall, Chinatown and the restaurants, etc.

You can probably triangulate my location.

Ok, I don't go to the beach or swim but I shop, eat and travel.
June 27, 2012 3:30:55 PM

OK figured that out.

Not that keen on Adelaide though.

I am from there originally ... well North of it.

Good Universities there ...
June 27, 2012 7:09:15 PM

Too much to read. My neighbor is a college admissions person over the finances.

If you are a student getting a loan they review your status and determine if you are able to pay the tuition loan. If you are able to pay, you get in.

In order to offset the losses of students who stop paying, anyone who pays cash is instantly enrolled. Mainly, as she said, the students from India are the highest cash payers and therefore get enrolled easily.

A few years ago they had 6 campuses. Today, they have 93. For the school, it is all about how much money they can get. Never was the quality of the education brought up.

Higher education has become a greedy institute, yet heavily protected from paying taxes and other things. In my personal opinion, many colleges and universities are far more evil than the corporate world when it comes to money and producing quality products.
June 27, 2012 8:06:38 PM

Plus, kids theses days get liberal arts degrees. Yeah, like Intel wants to hire a guy form a Philosophy school to argue logic and knows nothing about the world of the transistor.

We are rewarding athletics more, and we are punishing the sciences. I say give all aide to the school of science , then athletics can get the scraps. Don't have cash? Well, have corporations sponsor you like they do for the school of science!
June 28, 2012 12:14:23 AM

Agree. Also, they can use some cut on the law school as well.
July 4, 2012 7:14:15 AM

Just a thought from you guys: Should tuition truly be this high? I mean 40-60 thousand US dollars per year for a piece of paper?
July 4, 2012 8:05:32 AM

Should be free. We pay tax when we work.
October 7, 2012 5:05:37 AM

Sorry, a little late to the thread:

dogman_1234 said:

Here is the debate:

-What is the general consensus to the rising cost of College?


It will result in the "you MUST go to college if you want a decent job" mantra of the 1960s to the present being seriously questioned. Most jobs do not require a college degree and most college degrees are a waste of time. 4+ years of partying is great and all if you can do it cheaply. But if you have to take out a mortgage at 2-3x mortgage rates to do it, it suddenly starts to be seen as the waste of time that it generally is.

Quote:
-What factors have contributed to the rise?


1. The "everybody must go to college" mantra. It is a somewhat self-fulfilling prophecy as businesses are more than happy to now require a degree when no degree is actually needed, just because they can do so. There was a fairly recent national news story about a job listing for a garbage collector in California that stated that applicants must have a college degree. :ouch: 

2. The government nationalizing the student loan market and loaning absolutely enormous sums of money to students in a "you don't pay anything for SEVERAL LONG YEARS" fashion. The interest rates are absolutely ridiculous on federal loans and you absolutely cannot get rid fo the debt, so the government wants to loan out as much money as they can.

3. Absolutely no restraint on college costs due to #1 and #2. Students are going to come no matter what you charge as they "have" to go to college, and besides, the feds will loan them the money. It is in the universities' best interest to charge as much as they can, and they certainly do so.

Quote:
-Is it the state, feds, or the institution itself?


It's the universities and the feds, see above.

Quote:
-What if we end funding of colleges? Will that help lower prices? End subsidization?


Many "public" colleges get very little money from the state so reducing state funding won't help. AFAICT my alma mater gets about 80 cents of every dollar they take in from tuition and fees.

Quote:
-How can Congress act to help this issues, or is this a single state issue?


De-nationalize student loans and prohibit the federal government from offering loans. This will make student loans for people going for useful degrees (and likely to pay the loans back in the future) less expensive than today, like they were before 2006 when the nationalization of student loans happened. It will also make student loans for useless crap more expensive and harder to get due to the high risk of default, stopping the endless money train that has driven up the cost of tuition.

Quote:
-What would you like to see happen to education (specifically college) in the near future?


- End of professor tenure. Nobody gets an iron-clad job for life, especially when I am paying some of their salary.
- College returning to the "you only go do it if you really need to, otherwise go to work/trade school/etc." that it used to be.
- Getting rid of all of the liberal indoctrination crap in college.
- Getting rid of useless majors like womyns' studies and basket weaving (oops, sorry, it's now called textiles management.)

Quote:
-What Presidential Candidate has the best policy for college issues such as tuition hikes?


Romney, since Obama has done nothing but exacerbate the problem. Romney hasn't said anything in particular about this issue that I am aware of. However he wants to repeal Obamacare and some of the text in Obamacare was a student loan interest rate hike (in a joke of an attempt to make Obamacare "budget neutral" so it never had to undergo pay-as-you-go reauthorization) so this will be a plus. Romney would also likely be in favor of de-nationalizing student loans if it ever came across his desk while Obama would certainly be against it.
October 7, 2012 1:23:12 PM

MU_Engineer said:
Sorry, a little late to the thread:

It will result in the "you MUST go to college if you want a decent job" mantra of the 1960s to the present being seriously questioned. Most jobs do not require a college degree and most college degrees are a waste of time. 4+ years of partying is great and all if you can do it cheaply. But if you have to take out a mortgage at 2-3x mortgage rates to do it, it suddenly starts to be seen as the waste of time that it generally is.


Well if colleges start losing $$ then I'm sure it'll be "You MUST go to college or else be fined!" if Obama gets re-elected, requiring the IRS to hire 16,000 new tax agents to make sure everybody is doing their fair share of subsidizing college for all :D ...

October 7, 2012 5:29:23 PM

fazers_on_stun said:
Well if colleges start losing $$ then I'm sure it'll be "You MUST go to college or else be fined!" if Obama gets re-elected, requiring the IRS to hire 16,000 new tax agents to make sure everybody is doing their fair share of subsidizing college for all :D ...


I wouldn't say he would make sure that everybody needs to do their fair share of subsidizing, only the 1%. Well, actually the 53%. Or maybe it's 42% of the 87% or something like that. :D 
October 9, 2012 1:06:37 PM

Student loans, the next bubble.
January 16, 2013 6:11:48 AM

Cost for college education is commonly rising yearly for some kind of reason and me too those question always keep in my mind.
January 16, 2013 11:08:10 AM

Wouldnt making college cheaper for all be better for us in the long run?

I know they used to tell us that student who had a degree of any kind made about 1 million more in their lifetimes vs students who went into the workplace after high school.

Thats more taxable dollars, more money coming into the economy, more money in average peoples pockets.

Is the problem just how do we make higher education more affordable?

Also FYI India graduates more Doctors in a year than there are Americans graduating from college with any degree.
January 16, 2013 11:45:58 AM

India's doctor program costs about $7,500 total, whereas a doctor in the US can expect $170,000 and 7 years.

I know this because my former neighbor was an India trained doctor. They had the exact same technology that the US has. He was the first heart surgeon in the Midwest certified to use some robotic camera thingie for heart surgery 6-7 years ago.

Demand dictates price. Everyone needs in, all these professors making $100k a year and not really producing much, more worried about their own legacies.

It is the next bubble. The greed of higher education will burst soon.
January 16, 2013 12:24:29 PM

Definately the next bubble. Society has conviced people that the only way to be successful in life is start out with $100,000+ in student loans to pay back. This is insane. There is no hope of ever paying that back and we will see default after default with the American taxpayer being on the hook since Obama took over all the student loans.

Giant ponzi scheme. And the bubble WILL burst.

I'm sending my daughter to community college.
January 16, 2013 12:46:05 PM

Well, higher ed is just like the government, exactly so as a matter of fact.
The heads all push their agenda, and each student is saddled with paying for every prof and class type the uni offers.
Wise choice OMG, notice how CCs tend to not have tons of frivilous classes?
January 16, 2013 1:07:05 PM

Government is full of acadamia idiots anyhow. They never hold real jobs, sit in their ivory towers, then move into government and say it's everyone else's fault their plan is failing.

cough bernake cough
January 16, 2013 9:01:47 PM

What about the decrease in price? Would that not increase the quantity demand of the market?

Are the current prices of tuition greater than that of the equilibrium price? or are we in a surplus of supply of education? ( Too few people chasing to many goods)
January 16, 2013 9:58:36 PM

Too many people chasing too few goods, hence the artificial increase in price. You are right dogman.

So, we should eliminate the debt limit in the USA. Wait, what did I just say?


January 16, 2013 10:19:39 PM

riser said:
India's doctor program costs about $7,500 total, whereas a doctor in the US can expect $170,000 and 7 years.

I know this because my former neighbor was an India trained doctor. They had the exact same technology that the US has. He was the first heart surgeon in the Midwest certified to use some robotic camera thingie for heart surgery 6-7 years ago.


The 7 years, $170,000 is at the very, very low end. The average graduating debt from somebody who went to public undergrad and a public med school is a little under $200k. However during the next 3+ years of residency required after med school, the amount balloons to $250k or more because interest payments alone on ~$200k of debt at the ~8% average interest rate will consume pretty much a resident's entire take-home pay. Also 7 years total of med school + residency is at the low end too. Only three specialties require only three years of residency IIRC- family medicine, internal medicine, and pediatrics. Most medical specialties are 4-5 years in length, a general surgeon goes for 5 years, and surgical specialists are residents for 6-8 years. A guy doing 8 years of residency for neurosurgery will see his $200k loans go up to close to $400k by the time he's done with residency. Also there is a very strong rumor that all residencies are going to move to at least 4 years in length in a few years, apparently the 2011 rules actually enforcing the 80 hours/week (double full time) restrictions put forth in 2003 made the hospitals whine too much about not getting enough cheap (a resident makes ~$40k/year, a midlevel like a PA makes $90+k/yr) labor out of the residents so they need to stay in residency longer. So what you get is docs graduating with even more debt.

The best solution to the huge cost of medical school is to break up the legalized monopolies that are the accrediting bodies- the LCME, NRMP, FSMB, and ACGME. Also getting the federal monopoly in graduate student lending and the resultant ~8% loan interest rates out of the picture would be great as well. (Private lenders had ~3% rates in 2005 before the banhammer was dropped, and rates would be even lower today with mortgages now hovering around record lows of 3-4%.) These groups are largely responsible for keeping the status quo of who gets to have a medical school and a residency. Having several possible supervisory bodies will break the unholy med school/residency/governing body cartel that is responsible for keeping enrollment way down and as a result, price way up. Oh, this will also SLIGHTLY help with the fact that few people want to go into anything less than THE highest-compensated subspecialties as well- if you have to pay off hundreds of thousands of dollars in loans, why go be a family doc and beat your head against a wall for 60+ hrs/week for about $70k/year after taxes but before loan payments when you can be a dermatologist and work less and earn twice as much, or be a radiologist and earn four times as much and work the same amount of time? The disparity in pay dictated by Medicare's Relative Value Scale Update Commission is really the fault of why nobody wants to do anything but subspecialities, but the high cost of med school sure isn't helping.

Demand dictates price. Everyone needs in, all these professors making $100k a year and not really producing much, more worried about their own legacies.

It is the next bubble. The greed of higher education will burst soon. said:
Demand dictates price. Everyone needs in, all these professors making $100k a year and not really producing much, more worried about their own legacies.

It is the next bubble. The greed of higher education will burst soon.


The bubble will burst but it will take a little while. Enrollments at small hugely-expensive liberal arts colleges are dropping, which is the very first sign of the bubble bursting. There is a big lag between starting college and graduating only to find that you have no employment prospects. That is particularly true with people continuing to get higher and higher degrees such as master's and PhDs. That lag is why enrollments are still fairly high despite the past few years demonstrating that many college degrees aren't worth the paper they are printed on. Higher education is also not really a free market since the established players have enacted such a high barrier to starting a new college and getting its degrees accredited and accepted by employers. Otherwise you would expect a much larger exodus of people from high-cost institutions to newly-established, low-cost institutions without all of the baggage of billions of dollars in capital assets to pay for and hundreds of high-salaried, tenured professors that do little but are unfirable. The bubble will come, watch for it in the next decade or so. You will see Big State U's tuition level off (in the face of heavy inflation, reducing the real price of the tuition you will have to pay) and the super-expensive little private schools go belly up.

dogman_1234 said:
What about the decrease in price? Would that not increase the quantity demand of the market?

Are the current prices of tuition greater than that of the equilibrium price? or are we in a surplus of supply of education? ( Too few people chasing to many goods)


The current prices are far above the marginal benefit of obtaining a degree vs. not obtaining a degree. We have a surplus supply of higher education but there is an apparent artificial demand by people who are already in school who after they started wished they didn't start but continue on due to sunk costs, and the myth that a college education really does improve earning potential. That will all shake out in the next decade or so as the current students graduate, more decide to forgo college, and the myth of "without college, you will not do well" fades away in the face of the reality that actually very few jobs really require material that can only be learned in college. You will continue to see people like chemists, engineers, and physicians go to college but the days of the desk clerk having a bachelor's degree is very much numbered.
January 16, 2013 10:51:15 PM

I look at all this, our ed system, our government, and it all reminds me of
Asimovs foundation trilogy.
They all keep pushing forwards, in their minds, when truly theyre just spinning their wheels, where greed and power runs rampant, and where people like Hari Seldon are found to be traitorous.
Once again, a perception of design is found faulty, and those defending it all of the same mindset with little or no room for growth or understanding outside of what they believe, and mostly, for the leaders/profs/pols etc, the sake of greed and ease
January 16, 2013 11:25:59 PM

What about the trade sector for both private and public contract? What education should they receive? should they get a 2 year or should an apprenticeship w/o benefits at entry level salary be better for our nation? Create a tax incentive for all firms to employ and train individuals who wish to learn a trad skill and become employed in the US.

I think we should really "defund" the 'arts' degrees and mainly focus on STEAM (Science, Tech, Eng., Academics, and Math.) They offer a better return on tax payer dollars, also help increase productivity of a nation. Associated with all that is an increase of new technology which will lead to an expansion of the US economy and being competitive against many developed and upcoming developing nations like China. Another bonus ofis the initial investment will lead to an increase of available income, which will help for revenue sources of our current bureaucracy and help pay off the debt we owe to ourselves and others to the world.
January 16, 2013 11:36:23 PM

If we avoid or dont push culture, the people in power will revolt, never happen
January 17, 2013 12:57:38 AM

Does the high price reflect the fact that the consumer is willing to pay for an inflated price so that there is no price equilibrium that is ideal for the market?
January 17, 2013 1:04:54 AM

Just like the newest bright and shiny thing, until people perceptions, or the bubble bursts thru unsustainability, pricing/costs will hold like any other market.
January 17, 2013 12:15:19 PM

Hey, I saw this last night. I know exactly how the government can keep running and solve all the issues.

Review rule #11 in the game Monopoly.
January 17, 2013 12:23:59 PM

I just so happen to have access to millions of pieces of paper, each 1$ of course, tho you can make them what you wish, and no this isnt another pyramid scheme ;) 
January 17, 2013 4:42:04 PM

When the bank runs out of money, use slips of paper with numbers on them. Rock on.
January 17, 2013 5:34:48 PM

dogman_1234 said:
Does the high price reflect the fact that the consumer is willing to pay for an inflated price so that there is no price equilibrium that is ideal for the market?


Maybe you should quit the engineering route and go be an economist. They both start with E. Just say you got confused between the two when you were applying for classes. :D 
January 17, 2013 8:14:48 PM

riser said:
Maybe you should quit the engineering route and go be an economist. They both start with E. Just say you got confused between the two when you were applying for classes. :D 

Are you making fun of me?
January 17, 2013 8:34:28 PM

No, I'm saying you seem to have a better understanding of it. :) 
!