[phkahler]

He misses what I consider a major issue. The price of college education is going up much faster than the cost of providing it. If you look at tuition vs what a professor is paid, one goes up much faster than the other. If you look at housing costs things don't add up either - renting an apartment seems to be a source of revenue for the schools. These are the obvious places the schools are making a ton of money - where does it go?

And then there are the absurdities. Where I went to school they now have all sorts of fancy places to eat on campus. I can't imagine students paying $4 a couple times a day for a Starbucks coffee when they're paying with borrowed money. This is just grossly irresponsible. I imagine the justification is "but everybody does it". The problem is nobody is teaching the general public anything about managing their money or evaluating costs of anything.

Sure, if you get a good job you can pay off your loan in X years, but that has nothing to do with the fact that you drastically overpaid for what you got (services provided).

[nerdponx]

These are the obvious places the schools are making a ton of money - where does it go?

This is exactly the reason why I don't donate to my alma mater, neither should most people. Less "alma mater" and more "greedy mater who funnels taxpayer money into a growing bureaucracy".

[stephengillie]

I decided not to donate to my college when I saw them moving an entire historical house up a hill. They're a major research university with a $3 billion dollar endowment, a Pac-12 football team, and the largest employer in Washington State after its own government. I'm pretty sure my $100/month has more utility to more people at a food bank, than it would at that school.

[distances]

Also the mixing of sports and education seems weird to start with. Are there other countries besides US doing that?

[andyman1080]

Curious, which historical house?

[stephengillie]

Cunningham Hall.

http://www.washington.edu/news/2008/06/05/moving-cunningham-...

[CocaKoala]

> I can't imagine students paying $4 a couple times a day for a Starbucks coffee when they're paying with borrowed money. This is just grossly irresponsible.

When I was in college, undergrads would have to purchase a meal plan, which could take a few forms. You could have a designated number of meals, and buy things from the cafeteria that qualified as a meal (one entree, one side, one drink), or you could have balance of food dollars which could only be spent on campus. There were also plans that involved a mix of those two types of currencies, but the better plan was to get the food dollars (which were called Declining, for whatever reason), and use that to buy food, because that gave you more flexibility. You could spend Declining at the cafeterias, at the corner store, at the Starbucks on campus, it was literally cash that you could only spend on the campus and only on food.

At the end of the academic year, though, your balance gets zeroed out, no matter how much you have left in Declining. So every year starting in April or so, people would start buying stuff in bulk from the corner store or from the Starbucks just to get something out of the money that was going to evaporate. My senior year, my girlfriend spent like two hundred dollars on coffee beans and gave them to people as presents, because what else was she going to do? I myself spent like sixty bucks on fifteen pounds of sour patch kids.

No reason to not buy that four dollar coffee every day when the money's already spent and you're not getting it back.

[RobertoG]

I don't think he is missing it, it's kind of the point of what is saying: the price is disconnected of the cost, it's a function of the money available to the customers who are, also, a captive market.

In standard economic teaching, Is not this what happens when there is a cartel acting?

[cjmb]

Hey, OP of the article here, didn't realize someone submitted it here too!

Yeah, this is exactly a rephrasing of the point I was trying to get across.

[phkahler]

Toward the end you said because you paid off your loans in 2 years instead of 10 that they didn't charge enough. I understand that seems to be how they think, but it's just not right. That's the problem.

It reminds me of when I realized that banks have an interest in balancing income from issuing more loans with default rates. Someone responded who was close enough to banking to say that they were aiming for about a 7 percent default rate as optimal. In other words, lower lending standards until you're at that rate for optimal profit. These forces are obviously financially good for the institution, but bad for the public. We need to find a way to fix that and the only thing I can think of is educating people on how they are getting screwed so they can make their own judgements on when to participate in such games.

[maxxxxx]

" The price of college education is going up much faster than the cost of providing it. If you look at tuition vs what a professor is paid, one goes up much faster than the other. "

That's the most important question. Same applies to health care. Where does the money actually go and how has that changed over the last 50 years? Everybody immediately complains about their favorite scapegoat but there is no comprehensive accounting.

[diogenescynic]

Steve Ballmer was talking about how healthcare costs have gone up like 400% over a 30 year period but expected lifespans only increased by .6 years. We’re pahing exponentially more for relatively insignificant gains.

[gumby]

Let's not ignore quality of life, though I agree it probably hasn't increased "4X" (whatever that would mean).

[maxxxxx]

But where does the money go?

[bunderbunder]

Here's one study on the subject:

https://www.air.org/system/files/downloads/report/Delta-Cost...

The table on page 11 summarizes the story. The big consistent increases in spending are on student services and academic support.

The growth in spending on student services covers a lot of things. One big chunk is explained by the trend toward organizing and professionalizing things that were historically handled in a sort of ad-hoc manner by a student's academic advisor, sometimes by the Greek system, or by nothing at all: Career counseling and networking, academic advising, mental health services, stuff like that. Another big chunk is non-academic, non-instructional activities like student clubs and athletics. I believe advertising costs also tend to get lumped in under the "student services" budget item.

Academic support is stuff that's related, but maybe not quite so directly student facing: Dean's offices, instructional material development, the IT department, stuff like that.

[toomuchtodo]

In the case of healthcare, profits and inefficiencies.

[miscreanity]

Regulation inevitably squeezes it into government one way or another. The only long-term beneficiaries are the government itself which constantly requires more funding through any means possible, and those involved in regulatory capture - typically banks and large corporations.

It is important to note that relaxation of regulation is important as well, since the direction of that easement usually favors banks and big business[1] - it's a matter of perspective. Always ask what the true purpose of a political action or movement is and follow the money; more often than not there's an ulterior motive.

"All politicians should serve two terms: one in office and one in jail." ~My Grandfather

[1] https://thehill.com/blogs/congress-blog/economy-budget/28362...

[neffy]

That´s not actually the case for the United States, if you look at government spending carefully, it´s actually shrinking as a percentage of the total money supply. People who like to claim that it´s growing, invariably fail to factor inflation and/or money supply growth into their charts.

The actual answer appears to be that it´s being squeezed into the financial sector by several positive feedback loops operating around lending, and in particular securitized lending - but that´s not the sort of answer that helps to pander to populist sentiment, and securitized lending is a trillion dollar industry - so you won´t see it discussed very much.

[miscreanity]

As I pointed out: entities involved in regulatory capture.

Money creation through debt is another topic, but still benefits primarily the same parties.

[dsr_]

It seems likely that your grandfather was quoting someone else, or perhaps he published the quip widely.

The earliest reference I see in Google is from 1992, with an Arizona anti-Semitic pamphlet.

[miscreanity]

Probably, I always wondered but hadn't found anything from a cursory search - thanks.

[andrewmcwatters]

> I imagine the justification is "but everybody does it".

A member of one of the administration teams at ASU (a dean or someone of similar position) told my sister, "everyone carries debt," as if to justify that 40k a year at an honors college is a valuable investment compared to virtually any alternative.

The comment was so asinine and destructive, I can only gather as a blanket statement that the members of administration there are either incompetent to help direct students, or are explicitly volatile for one's growth in the context of broader society, and are out to protect the institution's interests. It may be sensible to assume a bit of both.

[diogenescynic]

I went to a public university and on top of tuition there was some student registration fee of around $750/quarter that went to clubs and paying for the gym. It’s such a ridiculous expense to add to poor students taking our debt. College campusss have really become like luxury resorts. If they wanted to trim some fat, they definitely could.

[CM30]

Makes me wonder if all the facilities and staff and extras and what not may be why college tuition in the US is so much more expensive than in many other places, like in Europe. Cause it seems like US colleges are trying to be mini towns offering everything and the kitchen sink, whereas the average UK uni is built in such a way you'll have to leave the campus to get access to those things. Over here it feels like the universities are part of the town, whereas over in the states they may as well be the town.

[throwaway5752]

Since the current expectation is leisure, access to top technology, low class size from highly educated scholars, medical care, lodging, and administrative help... it costs $60k to house a prisoner per year, why do you think college costs should be much lower?

I'm not defending it, but there isn't Trader Joe's or Aldi of college yet (slightly better than average generic product with low/no frills).

If you want the answer: college loans are very lucrative, so they are pushed on the consumers heavily, just like home loans were 10-15 years ago. The people that profit from that benefit from irresponsible behavior and a broken system.

[unstuckdev]

>> "I'm not defending it, but there isn't Trader Joe's or Aldi of college yet (slightly better than average generic product with low/no frills)."

Community college.

[WalterSear]

Not 'slightly better' though, IME.

[poulsbohemian]

FWIW: many community colleges in my area are beginning to offer BA/BS degrees. I've seen data that shows students who get their two-year degree are often able to get into better 4-year schools than they would have had they applied straight from high school. Certainly given the cost, community colleges make a great deal of economic sense, though are perhaps held back by reputation.

[WalterSear]

Universities give preference to community college students for a number of reasons that have nothing to do with the quality of the education they have received.

They tend to be older and more focused on their education; to have already demonstrated that they can complete 2 years of basic coursework without dropping out; and have mostly completed their general education classes, meaning they are much less of a drain on the institution. None of these reasons demonstrate 'better-than-average' quality of community college education, just the quality of the kind of students that pursue it successfully, and where they are in life when they apply somewhere else.

The very strategy of doing your first couple of years (ie - the general stuff you can teach yourself from the text book) before going somewhere else to your final degree belies the argument that the education is 'better than average'.

[dlhavema]

Is that 60k a year just housing and food or guards and administration too? I'd hope there were more guards and security measures in place for prisoners than for college kids.

[throwaway5752]

Yes, but that's probably offset by professors, researches, et al. (as well as better accommodations, food, entertainment). It's not apples to apples, but it felt roughly comparable.

[dlhavema]

I hear ya. Thanks for the clarification.

[manquer]

The fundamental problem is that education was priced traditionally priced using a cost + plus or a %cost basis what you can pay. Today education is getting priced using value pricing, if in theory you can get a job which pays X you can pay sum of multiple of X.

The second problem is that even if this was a reasonable system, people estimate the risk associated with getting the job paying X very poorly, colleges exploit this, even if only few people get a job paying X everyone pays the same costly multiple of X.

[paulddraper]

> Today education is getting priced using value pricing, if in theory you can get a job which pays X you can pay sum of multiple of X

Doubtful. If that were true, you would pay differently for a English degree than a Chemical Engineering degree. And I've never seen that.

[manquer]

That is surprising to me. In my country the cost of english degree is totally different than a chemical engineering degree.

Even without the commercial angle , the cost of teaching English is not remotely the same as chemical engineering, you need lot more labs , more depts with different expertise , more courses to cover etc. why is it costed the same ? Unless both are heavily subsidized and cost is a just token amount it doesn't make sense.

[paulddraper]

And that is from India?

[manquer]

Yes..

[megaman8]

It's an excellent point. As for housing, where does the extra wealth go? Nowhere. No one benefits when you lock up land that can't be used by anyone. Now you might argue that existing land owners benefit: but they actually don't. Because they're not moving and selling, they haven't realized any gain at all. If they sold but stay in the same area, there's no gain. And in states without the reprehensible prop 13, those in expensive housing will pay even higher property taxes.

We could literally print nearly free wealth, inflation free, if we just opened up land for development. It's a win win win.

[toomuchtodo]

> We could literally print nearly free wealth, inflation free, if we just opened up land for development. It's a win win win.

Doesn't neighboring real estate value decline as you put more capacity on the market? You can't print real estate wealth anymore than you can print dollars without consequence. At the end of the day, all of this "value" is trying to get dibs on the output of labor today (housing prices are usually tied to incomes, with some distorted market exceptions).

The more interesting question is: can you provide these basic necessities at such a low cost that you can drastically reduce the labor output required to enjoy them? What if you only had to work three days a week to meet your basic needs? What if healthcare inflation wasn't consuming wage increases as rapidly as it is?

[megaman8]

True, but the total wealth increases. Money is just a proxy for the things we want. the things we want are the actual wealth. When you can buy 50" LCD screen for 200$ instead of 700$, you've got more wealth, same for land: that's Progress.

[toomuchtodo]

> When you can buy 50" LCD screen for 200$ instead of 700$, you've got more wealth, same for land: that's Progress.

Great example! More to the point, total wealth is useless, just as GDP is useless as a measure of citizen wellness and happiness (US GDP was 18.57 trillion USD in 2016). It's the distribution that matters and where we're utterly failing. Your example is not progress when necessities inflation (housing, food, education, and healthcare) races ahead of other consumer expenses and incomes in general, unless one is expected to watch that 50" TV in a van down by the river.

https://www.yahoo.com/news/blogs/lookout/fed-official-heckle... (March 11, 2011)

> Reuters reports that New York Federal Reserve Bank President William Dudley was heckled at a speech in Queens today when he suggested that the rising cost of food is offset by how cheap iPads are. "Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," he said referring to Apple Inc's (AAPL.O) latest handheld tablet computer hitting stories on Friday. "You have to look at the prices of all things," he said. This prompted guffaws and widespread murmuring from the audience, with one audience member calling the comment "tone deaf." "I can't eat an iPad," another quipped.

[megaman8]

believe me, i find it equally frustrating that all the crap we don't need is getting cheaper and cheaper with more progress. And yet, the bare essentials of life which are so important, aren't making any progress at all: shelter and medical insurance, etc.

[randomdata]

Food has become substantially cheaper over time. I don't think that can be discounted as a bare essential.

Shelter and medical services have ballooned due to ever increasing regulation. That regulation may be necessary, but it unquestionably comes with a cost.

[nradov]

Which land are you referring to? I certainly don't want our open spaces to be sold off to developers.