UChicago 2011 graduate here. When I attended, I paid about $20k/year in tuition, given that I had various merit scholarships, worked for the university, and that my siblings also attended school. My parents were in for a RUDE awakening in my fourth year, however, when my brother graduated his undergraduate program...UChicago found out via a survey, that I was now the sole college attendee, and without warning they jacked the tuition from $20k to $32k for my final year. My parents were absolutely livid and it left a terrible taste in our mouths.
I must say, it was not a pleasant undergraduate experience. On top of being expensive and working very long hours daily, it was immensely competitive and the social life was very poor for me. I have always had numerous friends in life, but I constantly felt lonely at that school, not to mention receiving MUCH worse marks due to grade deflation, which made medical school applications a nightmare.
In hindsight, I absolutely should have gone to my state school, and I'd be a Tesla and a Steinway piano richer for it if I had. I think these ridiculously expensive, 4 year educational vacations need to end...let's encourage our young, bright minds to stay local, to save money, and to use their brightness and talents to lead very productive and EFFICIENT lives.
UChicago 2011 here as well, except actually class of 2010 because I couldn't afford to keep paying the tuition as my parents were both unemployed due to the financial crisis. I remember the financial aid office saying they could use the last two or three years of prior income rather than consider unemployment as a current and urgent condition. They literally said something along the lines of, "Your parents are smart, they will find a job soon, statistically speaking." They also capped my work at 20 hours a week as an employee of the University, which made it really fun for various departments to pay me via bonuses instead.
I feel you, and had a very similar experience academically and socially. It's not easy to get by minimal GPA filters when math professors declared that a C would be a great grade worthy of a good recommendation to a PhD in math. There's no easy way to tell that to an HR screener! I also found to great sadness by the end of my first year that I had more online friends than classmate friends. Looking back, it seems this was the time when the university just started to realize that it needed to prepare students for practical work. And that sort of experience can be gained at a lot of different universities.
I got in to University of Chicago, but the finances were rough. They expected my parents to pay around 30% of their (combined) income in tuition after scholarships and loans. Presumably this would have dropped when my brother entered college a year after me, but given that I got into other schools that cost less than half as much it wasn't really a question.
My parents didn't really know what to tell me because on one hand they felt like they were being punished for not making profligate decisions like going into debt for a fancy car or buying a bigger house, but on they other hand they didn't really want to outright tell me not to go somewhere like U of Chicago.
Made me feel like college admissions spiels saying not to worry about finances were a lip-service scam designed to make college look accessible while mostly benefiting the rich and very poor and screwing those in-between.
Went to a state university instead, but never really fit in there. Too much alcohol, greek life, and sports.
In any case, I don't mean to imply that my parents didn't have a decent income, just that the way things worked made them feel like they were being punished for trying to be financially responsible, and being asked to pay the equivalent of a 2nd mortgage for your kid's college only for them to be in debt on top of it anyway, and not knowing how things would work once they had a 2nd kid in college wasn't a strong sell. Even though they didn't say not to go there, I would have felt super super guilty about saying yes.
Fun fact: the scholarship U of Chicago offered would have covered the cost of attendance at each other college I got into and then some, but still didn't cover even half of the cost of attendance there.
just that the way things worked made them feel like they were being punished for trying to be financially responsible
100% feel you, as I my son just started UCSD. He was looking at a bunch of private colleges and I did the financial aid (for early decision) and it was really shitty. I felt that because I had so much equity in my house and no debt, I was screwed. And, when the numbers came back, it was true. Very little help.
I have a work friend who has a very close friend. They're both Dr's pulling down > $500k/yr, but with huge debt. Their kid got into Princeton and they paid $15k/yr. I was more than double that for some equivalent schools, but I make far, far less than $500k/yr.
So is the life advice to go massively in debt (and jack up your income) before your kids apply to colleges? How far in advance do you have to go massively in debt?
EDIT: Looking at Princeton's financial needs calculator, assuming a constant income, to maximize your financial aid you should:
- Reduce your assets: Buy a really expensive house, have nothing in savings/investments/other equity
- Reduce your income: Pay a ton for private school tuition, medical expenses, or child support.
EDIT 2: Looking around some more, apparently FAFSA doesn't consider:
Your primary residence
A boat you may own or furniture in your home
Untaxed Social Security as income
Not quite just the very poor: U Chicago gives free full tuition to students from families making under $125k.
But as for the very poor at nearly every other private college, the picture is more bleak: The average private is in the ballpark of $35k. Maximum grants from the feds and state of Illinois total about $16k. That's not enough. However, it is generally plenty for attending any public state school.
The most squeezed bracket financially are families making around $65k a year. They earn too much and so lose a large portion of need based grant eligibility, and have and "estimated family contribution" (EFC) 3 or 4 times higher than families making not too much less. Even state schools are difficult here. My recommendation to such families is to begin by getting an associate's degree for 1/3 the cost for those 2 years, then only pay the higher rate to finish the bachelor's degree in the last 2 years.
It's true families making > $100k a year are expected to contribute the lion's share, absent merit scholarships, but they also tend to be families with assets, including houses with equity they can leverage, to help pay. Yes, it sucks to have to do that, but many thousands of families in the $65k bracket are much worse off without even that option.
To be clear, I'm not really disputing what you said on that topic: I just wanted to add more detail and nuance.
You need to do something about your “fixed” meritocratic society where your future is largely determined by your parents’ wealth.
You need tax reform, healthcare, cheaper education. I had a discussion with an American friend recently, he offered that the American society has produced marvels such as Google and Facebook and Tesla and countless others, fair point.
Can you imagine a new social media today competing with Facebook? A new search engine? Wanna open a retail online store? AWS will eat you alive.
I grew up thinking America was the greatest country on earth, truly. You know who also had some absolutely amazing achievements? The Egyptian pharaohs.
Social mobility is basically invariant across societies, with a heritability of about 0.7 according to Gregory Clark’s research (A Farewell to Alms, The Son Also Rises, the upcoming For Whom the Bell Curve Tolls). The difference is explained by the number of generations covered.
upward mobility doesn't scale well. USA is doing epic for the scale on the upward mobility. If you were born here or get to become a citizen you've won a lottery compared to the bottom 50% of the world. To claim much worse and to be a US citizen is to say you've 'earned winning the lottery' .. Not to build up the US or put down any other country just the way it is imo
The Thirteen Colonies were the richest group of states under the British and as the US grew it continued to be land rich and labour poor. Americans were noticeably taller than Europeans until week after WWII. The rest of the world has caught up some but the US is without a doubt in the top ten by GDP per capita though competing with city states and what would be individual states there. Measured by average individual consumption it’s probably number 1. The US may not be a good place to be in the bottom 10%, possibly even the bottom 20% but by standards of living for normal people nowhere else compares.
I'm a graduate of Uchicago (from shortly after you), and to offer a different perspective, I'm still paying off my loans (and will be for another 6 years), but I'm incredibly glad I went. I thought the undergraduate experience was perfect, and about half of my friends from around the world are people I met while I was there. I did get much worse marks that I had ever gotten before, but the University being very difficult is part of the package.
One question: I think a large part of the social experience for me was based around the house system. Even though I moved out of my house when I was a second-year, the house and dorm I was in provided a big chunk of my social network. Did you not have a good experience with your house? And if so, were you placed in the house you wanted to be in?
So how does having more realistic grades (i.e. not everyone gets B or above) feel when it comes to graduate admissions?
I went to the university with the hardest admissions score for EE, some of the brightest people I've met, graded on a curve, and yet for graduate admissions I'm competing with people who took much easier classes and ALL have much better marks. The GPA system is just insane really.
It helps a lot if the university you're coming from had a reputation for difficulty and grade deflation. Academia is incestuous enough that people will usually be clued into that.
Barring that, having excellent rec letters and GRE scores, having been published or done research in a lab, having written an undergraduate thesis etc can all help provide signal that you'll make a good candidate for the department you're applying to. I don't know much about EE departments, but generally grad school admissions will be more holistic and thoughtful than undergrad admissions.
Well, I found UdeM pretty awful, difficult to talke to anyone, took a long time and really screwed me around. In retrospect I would say hard avoid based on the incompetence of the admin (DIRO specifically). It seems like if you're coming from overseas they really don't know what to do, and its impossible to get past the admin. In retrospect, talk to professors first, do admin process second, and allow at least 12 months for the process.
I don't know what's happened in the last 25 years since I last went. But my college started testing the snot out of incoming freshmen. Basically they didn't trust the students GPA or the classes they took in high school to tell whether they were ready for college level classes.
Different schools do the sibling calculation differently. I had the same experience you describe in my third year at Swarthmore, which jacked up the "parental contribution" after my brother graduated from Carleton College. But Carleton does things differently, with the same parental contribution each year. They know going in how many siblings you have and just come up with a flat rate that you pay each year.
Each method has its pros and cons: the flat-rate method gives certainty, and the adjustable method is more appropriate if you don't know whether siblings will actually go to college. It seems the most important thing is for each institution to communicate which method they are using, so nobody gets a rude awakening.
I'm curious what you think could have convinced you to attend a state school as opposed to where you went? Did you know the state school was a viable option at the time? Did your parents push you toward a state school, were they upfront with you about the cost difference?
I agree with your last line, but am unsure how we would best implement that as a practicality. Young people tend not to always think in the most efficient ways, and parents aren't always knowledgeable nor around to help.
One thing I remember from my college admission process years ago was how overhyped it all was, especially the soap opera aspect. Everything was about numbers, and where you would get in, and where you would 'fit,' which was far more ambiguous, sinister, and completely unrooted in any logic or reasoning because you just aren't going to ever understand what your personal experience will be like until you get there.
Fretting about 'fit' keeps schools like u chicago alive. A radically unwise decision in pursuit of some romantic youthful ideal. Otherwise, everyone would just go to a state school, have largely the same college experience, end up with largely the same career outcomes, but with far less debt.
Sorry to hear that. I graduated the same year as you but had an incredibly positive experience, and one I look on more and more fondly over time. Having said that, I immediately recognize that IT IS NOT for everybody. There are a few peculiarities about the school that can really make it or break it for you, even beyond simply the matter of fit. To me the house system was the epicenter of my social life, and I know full well that had I simply been assigned to a different random group of people my experience could have been significantly different and possible way worse.
Grades are determined by curves. There's no absolute scoring in most university classes, especially in engineering and science programs.
Professors usually draw something similar to a bell curve along the grade distribution and set the average to be a particular grade. Grade inflation would be setting the average to something high (as practiced at Harvard this is usually an A-).
Grade deflation which both U Chicago and my alma mater Johns Hopkins are notorious for has professors set the average grade to a B-/C+. In classrooms full of students who have excelled their entire life, where the average represents a pretty high standard of work and achievement, setting the average to a B- is grade deflation.
One thing I find crazy is the very same institutions that are generally very left leaning, decry income inequality, and espouse generally liberal views then turn around and having tuition costs that having been rising at rates so far above inflation.
Student debt is a major issue in the US and the ever increasing costs of tuition are a MAJOR culprit in pushing this crisis. Where are these costs coming from? How can you politically espouse free college while ratcheting up tuition costs?
I work at one local university, and my wife works at another. One thing we've definitely noticed (and this is a widespread problem) is that the administration is becoming more top-heavy. There are cutbacks in faculty, support, and teaching staff, more reliance on adjuncts (academic temps, basically), and so on, while central administration grows. Expensive new buildings contribute, but less than people suppose. But that is a tangential problem, in that wealthy donors want to give big gifts for vanity projects rather than to, say, scholarship funds.
I think your impression is generally spot-on although there's nuances and it's more complicated than that.
In general, universities are suffering from many of the same pressures as other fields. Nonprofits are being run as profit-generating centers, and the implicit promotion track goes from faculty to senior faculty to administration, if you're even on tenure track. The administration salaries are increasing, as are the number of administrative positions (deans, associate deans, vice associate deans, assistant deans, etc.), and the structures are becoming increasingly hierarchical. Things are very top-heavy and expensive to run because the salary budget is so disproportionately distributed.
I don't think that's all of it, though. The rest of it is harder to quantify, but is the flip side of the educational bubble coin. Students are rushing to go to college in record numbers, which then puts pressure on colleges to stand out to attract more students and more high-paying students who become high-donating alumni. Institutions that should be getting public funding are not, which then trickles down to students; other private institutions then benefit from the increased tuition norms etc.
It's a complicated problem that involves HR and administrative practices and norms, economic incentives within university funding structures, incentives coming from a broken employment system in the US, problematic incentives coming from federal grant structures, etc. etc. etc. etc.
If I had to complain about things, it would be these:
1. Lack of workplace training - very few employers will pay for you to train/gain experience, partly because there's nothing preventing someone from jumping ship for better pay once the training is complete
2. Credentialism - the things that actually matter in hiring are either difficult or illegal to test for (conscientiousness, knowledge, intelligence), and so degrees are used as proxies instead
> very few employers will pay for you to train/gain experience
Yes and no.
Most HVAC shops will pay for technician's training.
Most dev shops pay for technical conferences.
Most managers have access to management seminars and training.
Expecting an employers to pay tens of thousands of dollars seems weird, but many employers do pay on a smaller scale for skills training.
> degrees are used as proxies instead
Though conventional wisdom is that a degree doesn't matter 5 years after graduation.
Nor does it seem that prestigious positions are even that picky in practice. Yes, there are a number of Harvard, Stanford, Yale alumni in Congress, but other seven of the top 10 colleges for Congress members are public state schools. 
The degree you get certainly matters for graduate admissions though. For example, at both MacGill and U of Montreal they don't take any account of industry experience when you are applying for grad school. And they assume grade inflation, so unless you scored A average you can give up.
Schools in QC are a different breed, though. The cost for QC residents is very low, and the cost for non-QC residents is still pretty tolerable. This means there are lot of applicants -- like why not, it's cheap -- and they can be picky.
I've also noticed that Canada and Australia place far more emphasis on formal credentials than US colleges. US Uni's will take you if you can demonstrate competency and can pay; Uni Melbourne won't talk to you unless you have the exact, specific kind of degree. Ditto for UBC, U Sydney, etc.
I'll just throw this out here: for IT you almost don't want your in-house trained people to stay very long because it's pretty important less experienced people to get a variety of different experiences. I would say that people who stick to their first job for a decade or so tend to become under performers and I don't think it's generally because they can't find another job. Breadth of experience is really valuable in this field.
I've often thought it would be amazing if you could do the equivalent of professional football (soccer) lending of players. Lend a developer to another company for a few years with the expectation that they will come back. If they decide to stay then the borrowing company give some compensation. But it would mean having very strict contracts that limit the freedom of workers, so it's almost certainly a no go. I wish there was a way to make it work, though...
I think in general I mean that people are seen as cogs in a machine, rather than individuals to be trained, and there's no safety net from the government, either in terms of real retraining or advanced education or life benefits or anything.
HR gets a million applications, people are evaluated on what boxes can be checked off rather than their skillset, etc.
With regard to the educational system, the problem is that degrees are seen as signals or credentials (to use the language of the article) rather than as a background. That's admittedly a fuzzy distinction, but it really reduces the degree to the degree per se rather than the host of courses and experiences the person during college. So, we talk about "useless degrees" without recognizing that someone might have had equivalent coursework and experience without majoring in something else per se. In the end it doesn't matter.
I worked for five years at a private university a few years ago, and my experience is similar, although to add a little:
It never felt like a plan or conspiracy to make administration costs bigger. It's just very easy to do when you have more money coming in, year after year. In another economic environment, you'd get a "hard no" because the money isn't there. But when there is, expenditures become just another bargaining chip. Maybe you get your seventh librarian this year, and I get my fifth network guy next year.
New buildings (as you stated) aren't as big of a contributor as expected due to the convoluted role of donations, grants, etc. But another big factor for those buildings is that we were getting loans for them, too, and those were based on (big surprise) long term forecasts presuming this gravy train is going to keep on chugging for the next 30+ years. And even then we were getting projections of our "debt capacity" and always riding that line, so it's debt on top of debt all the way down.
I don't know about big schools, but for a smaller one like ours, there was no visible bad faith. These kind of things just happen when you can keep bringing in more and more money and so can your competitors.
>But another big factor for those buildings is that we were getting loans for them, too, and those were based on (big surprise) long term forecasts presuming this gravy train is going to keep on chugging for the next 30+ years.
Harvard got spectacularly burned by the genius planning of Larry Summers in that regard.
I wasn't in a position to be explicitly told, although I did at one point see an anonymized list of faculty salaries and they did not seem unreasonable (only one in six figures). This school is about 40 minutes away from a city with an international airport.
I think "diverted" is perhaps a strong word here. The way administrators see it, the administration is necessary to even reach the point where faculty can teach classes, and provides a significant role in empowering them to do so.
And there's some validity to it. Besides, students' expectations with regards to faculty haven't changed nearly as much over the last ~20 years when compared to administrative departments. Students absolutely expect good WiFi, good Internet speeds, Google Apps-quality e-mail, and that's just tech stuff. Colleges are implicitly competing with other colleges with things like on-campus events, residence halls, modern cafeterias, online course registration, athletics... all kinds of stuff. There's a lot of money involved in these expectations that has outpaced the faculty side.
But it's cyclical. We pump money into those things to keep retention up because we need to because the other schools are doing it.
> Students absolutely expect good WiFi, good Internet speeds, Google Apps-quality e-mail, and that's just tech stuff.
My personal internet with Comcast is ~$60/month, so assuming universities have greater bargaining power due to scale that shouldn't make much of a dent in tuition. And my college email interface was clunky but I just set it up to forward everything to Gmail, which is free.
It's not really reasonable to compare a residential ISP to one for a college campus. It probably is cheaper if you count only the Internet service itself, but everything between that ISP and each end user's device has significant fixed and maintenance / upgrade costs attached. Your residential ISP can give you an all-in-one modem / WiFI router and you're good to go.
I lived at home, with my parents, and went to a state school and paid in-state tuition. Found online PDFs of all my textbooks, and I'm still just barely scraping in at under 40,000. This is from 2016 to 2020 (finishing up my last few courses over the next 6 months.) And the administration is still considering (aka going to pass) an 11% tuition increase, after a 9% increase just 2 years ago.
It's even worse for people who don't live near a university and need to live on campus, pay for meal plans, etc.
150k/year. Let’s assume the professor teaches 4 units per semester and maybe 2 in the summer (or research or some equivalent). Comes out to 15k/unit. Let’s say 15 students per unit just to represent smaller classes comes to $1k/unit/student/year. Each unit is like 3hrs/week for 12 weeks on average. So comes out to something like $28/hr. Doesn’t seem unreasonable to me.
Average course load for a student is like 6 units a semester so using the back-of-the napkin math above it should cost roughly $6k/per semester for students to have a full course load of $150k professors. $12k/year + other expenses is a far cry away from $100k that is being charged.
Do colleges make their budgets public? When a program is taking too long to run the first step is to profile. What does the data say on college costs?
> But that is a tangential problem, in that wealthy donors want to give big gifts for vanity projects rather than to, say, scholarship funds.
In the past I've felt quite motivated to give to scholarship funds. It resonates a lot if you yourself relied on scholarships to go to college. But I feel somewhat more cynical about this since I've seen costs spiraling out of control. The actual price of college can have anything bundled in there. I want to support students, but I feel less good about supporting ballooning costs that are twice inflation when I haven't heard a good reason for this.
You're right that they're libertarian/conservative in this regard. But they've published a number of articles with relevant facts about the growth of administrative roles in higher ed, and the associated costs. I haven't seen those facts questioned anywhere — have you?
The tuition price being talked about is the top sticker price. If you care about inequality, that isn't the metric to care about. You should instead focus on something like median tuition paid since financial aid can mean that any individual student is paying anything from zero up to the full tuition costs. The concept of the richest students paying a six figure sticker price in order to help compensate for the students on the other end of the socioeconomic spectrum who can't afford it is the exact type of thing you would expect from a "left leaning" institution.
But as the article says, low income students are scared away by high tuition. My fiancee was raised poor and I kind of understand the mentality -- when the tuition is a multiple of what both your parents make in a year, you say "this place isn't for me" and move on. You've been told in various ways throughout your life which places aren't for you (there are a lot of them), and a $100k sticker price is a pretty damn good signal.
And besides, no one wants to rely on the generosity of paternalistic college administrators. That's not safe. You don't want to wake up and suddenly find due to some technicality you again owe more money than both of your parents make in a year. And you don't want to feel like a charity case.
(If you think that's a remote possibility, think of the people who went into teaching with the promise of debt forgiveness, and found it revoked. They don't have any choice in the matter -- they're totally screwed.)
Better to go to the local city college. Your cousin went there and a few other people from your school go there, too. It's a safe choice, and there are people like you there.
> One thing I find crazy is the very same institutions that are generally very left leaning, decry income inequality, and espouse generally liberal views then turn around and having tuition costs that having been rising at rates so far above inflation.
It's weird you chose to make this comment on an article about the University of Chicago, the home of Milton Friedman, Supply-side economics, "no safe spaces" and so on.
This really isn't true anymore, but people keep regurgitating it. Chicago has a lot of behavioral economists like Thaler/List/Levitt, a lot of people who work on econometrics or mathematical economics like Harberger/Uhlig/Stokey/Tesler. There are still some Chicago school of economics folks at the university, but increasingly "the Chicago school" is an independent beast. There are a few emeritus professors in the old guard, but claiming that the department is one of the most "right-leaning" in the country is wrong.
Given that most (yes, most) students at the University of Chicago receive financial aid, what you're seeing is a sticker price. The school is using the high sticker price + financial aid to perform very efficient price discrimination, so they can get a lot of money from people who can pay.
That is part of it, but the term "financial aid" is usually trotted around to make people think that the less wealthy are getting "aid" but in reality, the majority of that "aid" is in the form of non-dischargeable student loans.
I don't consider a loan "aid". Especially since that loan has interest.
Yes, this. The nameplate tuition is paid by a vanishingly small percentage of students. What I think each school should do is publish data showing what the median tuition paid is, and the quartiles. That would help a lot to fight this perception that "tuition is going up every year!"
If its about the claim that this is an example of price discrimination:
that is an opinion I formed while I was at the University and spoke with some folks in the economics department about it. There is a class offered in econ about the economics of education, and that certainly hit the point home that financial aid is a type of price discrimination. I couldn't have paid for the tuition in full, so I myself received significant financial aid and supplemented with some student loans, so I got to see a bit of it first hand.
Right, I also assume a lot of these MSRP prices are what they want wealthy foreign nationals to pay, not necessarily a US citizen. We really need the data on the average cost and what the distribution curve looks like.
> One thing I find crazy is the very same institutions that are generally very left leaning, decry income inequality, and espouse generally liberal views then turn around and having tuition costs that having been rising at rates so far above inflation.
Eh...the UChicago economics department and the people of Chile would like a word with you on that.
It's pretty clear how these schools operate. They charge high tuition for people with a lot of money and cover the costs for people that can't afford it.
>With over $159 million in financial aid distributed this year, UChicago is committed to ensuring that its students graduate debt-free and prepared for lifelong success, no matter their chosen major or background prior to enrolling in The College. UChicago is a need-blind institution, which means we make admissions decisions independent of a family’s financial circumstances
That seems like a hallmark move of progressivism, no?
No, especially at well-funded not-for-profit private universities, “financial aid” often includes generous need-based grants (not scholarships, which are merit-based) that reduce the amount that must be met from student/family resources (including loans) substantially for non-wealthy students (not unheard of for it to be down to $0 for the poorest who manage to get admitted, and that's not just tuition but sometimes housing, books, etc.).
> Guaranteed Free Tuition
Families earning less than $125,000 per year (with typical assets) will receive a financial aid award that covers the full cost of tuition. Families earning less than $60,000 per year will have tuition, fees, and room and board covered by financial aid. UChicago’s need-based financial aid involves no loans and is awarded as grants, which do not need to be repaid.
Looking at the sticker price can be confusing, when the majority of students are receiving some financial aid. You'd need to look at the average tuition paid by students at different family income levels. But is that data even publicly available?
- Rampant cronyism in the administrative bureaucracy. Too many inflated titles with ~$200k yearly compensations.
- Building architecturally impressive (but questionably prudent) faculty buildings/dorms/libraries/etc. in hopes of luring prospective students, many funded by alumni looking to stroke their ego via their name on the structure (reminds me of that scene from House of Cards when Kevin Spacey's character does this very thing)
- Federal government showing no signs of abating the giving out free money to attend college, which enables the entire cycle to continue
> the very same institutions that are generally very left leaning, decry income inequality, ...
These schools are price discriminating, which means only the richest families are paying the full price. This kind of heavily graduated pricing where the wealthy pay for most of the cost of the school is very much in line with their principles.
While this is true of its peers, no one has ever accused the University of Chicago of being left leaning. The unrestrained neoliberalism (deregulation of consumer protections, unwinding of antitrust policy) that characterizes our time is literally called the "Chicago School" of economics.
I think most people would say you're correct about the Econ department, but that isn't the whole university. Plus, it's not like U Chicago is that far off from other universities when it comes to tuition and fees. They cost $58k, but Columbia University is already above $59k, Dartmouth is $55k, Penn is $56k, Duke is $56k, Brown is $55k, Tufts is $56k,
There are plenty of liberal schools whose sticker price is going sky high.
> One thing I find crazy is the very same institutions that are generally very left leaning
Why? Being Left leaning is easiest when it's not your money. Yes! Raise our tuition! More levies! Mommy and daddy will pick up the tab. If not the government-backed loans will take care of it and I just won't pay for it. After all, those capitalist boomer tax payers should subsidize my virtuous leftist existence.
It's just like left leaning policies everywhere in the world.
Assume that inherent skill is evenly distributed, Assume that the environment to foster that skill is not. Why would we not make college affordable if we can produce high quality college graduates. The US isn't a closed system, we make a lot of money in the knowledge economy, a fight we're slowly losing to China and India.
As a US citizen, I see the US debt bomb ending it two different ways
1. Sanders/Warren get elected and somehow forgive 1.5 trillion in student loans and make education free going forward.
2. 2008 level crisis
with (2) is the more probable
I think universities tuition is way too expensive in our country, but I'm against (1) currently because I don't think retroactively forgiving debt is a good policy. The students took those loans out, signed the docs, and knew (or should have known) what they were getting themselves into. I think forgiving all of the debt would be obviously ridiculously expensive (1.5 trillion is a lot of money) but also possibly creates moral hazard.
I would be more supportive of (1) if the government took more of a "Canadian pharma industry" approach and just said "this is how much we will pay for this citizen to go to Harvard, take it or leave it". I have no faith that any of the current presidential candidates will be able to negotiate and pass that type of law, so I currently cant support (1).
Is my line of thinking wrong here? I think education should be more affordable but have no faith we have leaders that can get us there.
I'm completely against forgiving student loans. I want to solve the problem, which means no more Government backed student loans. (I'm all for the Government building more low-cost public Universities, though.)
But if they are going to forgive them, certainly the students who prided themselves on being the best and the brightest should have known better! Therefore, anyone in the top 10% of SAT scores or at the top 100 schools should not be eligible for discharge. If you're smart enough to get into Chicago or Harvard, you're smart enough to know how loans work.
I would be angry because I lived in the cheapest apartment I could and biked as much as I could until I paid everything off. Had I been less responsible, I would get more money under debt forgiveness. The incentives are inverted. I'm all for wealth redistribution but messing with incentives is shown over and over again to be a bad idea.
Also, my perspective as the kind of frugal guy that everyone else calls cheap is that we live in the most rampantly consumerist society that has ever existed on the planet earth and we think we need all kinds of things that we really don't.
I just can't stomach the idea of throwing money to people who knew what they signed up for but then decided paying back what they owed was too hard.
I agree with what you're saying in general. But hypothetically, if the forgiveness was made retroactive to say 10 years (or however long ago you paid your loans back) and you got all your money back, would your opinion change?
Why do people think this is a good argument whenever I bring that up? Because I signed an agreement that I must pay back my loans, I paid back my loans.
For the record, I didn't suffer. I felt fine and did plenty of fun things. I think the biggest mistake Americans make as a society is confusing convenience with happiness.
I would in fact be in favor of free college for everyone, but I hate this victim mindset floating around, and I think the largest benefits should go to the most prudent and responsible, instead of taxing people who withheld in their younger years to pay for people who didn't.
I'm against loan forgiveness. I went to an inexpensive local college, took the public bus to class, lived with my parents (I realize I was "privileged" enough to be able to do this), worked 25 hours/week while going to school, and took as many classes as possible at a low-cost community college that could be applied for credit to my 4-year degree.
I graduated with no debt.
I don't think others should also suffer. That's why, I want the government to stop backing student loans, and make new non-government loans like any other loan, including bk discharge.
Tuitions would drop rapidly, and nobody "in perpetuity" will have to suffer.
Most people who are against forgiveness are also against continuing to write new loans!
If this argument is made in public, people will never support debt forgiveness. not only it breaks the social contract with severe entitlement, it's also very hard to accept that people who can afford harvard or stanford "suffer"
populist emotional arguments are good when there is the populus to empathize with it. the vast majority of people won't care for such "plight".
You have to realize a lot of kids who went to Harvard and Stanford were just smart kids from normal suburban families and middle class homes. And many of them have middle class jobs, just like people with similar SAT scores who went to state schools instead.
Be wary of populist urges to tear down people you perceive to be "better" than you because maybe they're really not, or they're not the cause of the problem. Do things that will improve society, not just satiate your urge for blood.
What’s the endgame though? You have the federal government pay UChigago $100k a year times however many kids? And then when UChicago raises the price to $120k, the federal government pays that?
Where does it end?
I’m not against free college, or debt forgiveness, but sometimes even if you have a goal
there’s no regulatory framework that can meet it.
If I wanted to prohibit abortions, while discouraging birth control, and ensuring victims of abuse get to control their bodies... well, sorry. There’s just no regulatory framework that can achieve that. Doesn’t matter what I think is “right”.
yeah no, i m not from the US and didn't study there so i don't perceive anyone as better or worse. But if the smartest, non-poor people can't keep their promises and are looking for shortcuts that would really make society worse. Painting what's normal (paying off debts) as "bloody" revenge is pure hyperbole
What you're asking for is a solution in 10-15 years for a problem that's rearing it's head now. If you were to remove government backed loans, you would be locking a significant amount of the US population out of higher education. Without a higher educated workforce, where do you think workers for various jobs are going to come from if we decide to go full protectionist and reduce immigration potential?
Low cost universities don't just pop out of thin air and neither do the professors that staff them.
So I actually have a question wrt to the fact the government backs most tuition loans: what is really the difference if the US starts a forgiveness program or everyone defaults and the government pays back the lenders? Aren't the tax payers paying something similar both ways?
Hi, quant here (in Uni). I have some obligation to respond to (2), because I know something about it and you've mischaracterized it alot.
We have around $1.5T in student debt currently, at its peak in 2008, there was around $12.7T in housing debt (there's more now, interestingly). Like 2008 era mortgages, student debt is securitized and sold in the form of SLABS (Student Loan Backed AssetS; ). However, to my knowledge, there are no derivative securities trades on these SLABS, whereas in 2008, nth derivative securities were trades on mortgage-backed securities (MBSs; when I say nth, I mean derivatives were traded on derivative were traded on derivatives, increasing leverage). In Q2 '08, around 4.5% of mortgages were "seriously deliquent" (i.e. were over 90 days past due). This figure jumped to over 21.0% in July '08 . In contrast, serious delinquency for SLABS is around 0.254% . This is different by a full two orders of magnitude (a little less) from the crisis levels.
While I get why you might be led to believe that (2) is possible, the data doesn't back it up at all. Remember that almost everyone takes out a mortgage, but only around 50% of relatively young people take out student loans.
I think we should stop offering government backed loans to all institutions that aren’t in-state public. Then, tie them to a graduation period. The moral hazard of taking out hundreds of thousands of debt that may never be paid back is (Ideally) gone.
There's a few other options, such as it levels off. But something must change, whether social or governmental or economic. At the current rate of growth, by the time my kids are of age, four years at many colleges is going to cost a good deal more than my house- each. Which is not to say that can't happen- but if it did, it would go hand-in-hand with a cultural return to the days of college as a finishing school for the aristocrats, and not something normal people do anymore.
Yes, because I dont want to live in a world or a country where someone can go bankrupt and/or end up in poverty because of medical problem - this is still possible in the US unfortunately (though I suspect vastly over stated), Regardless, I would never support forgiving of debts for elected/vanity surgeries.
No because I would not want to just forgive all medical debt without fixing the system, which currently seems impossible in the US, politically. Because of lobbying, big pharma, etc. , free heath care would just be too expensive to implement. Obama changed some things, Trump repealed some things. It's a political hot potato.
Fixing our system is like trying to turn the titanic at this point, and any changes we make alienate a large portion of the population.
Scenario (2) more likely indicates that before (1) happens, a number of colleges would have to go bust in rapid succession.
TBF my biggest problem with scenario 1 happening would be if scenario 2 DIDN'T happen first. Colleges have too long been promoting degrees that they knew students would never be able to pay off reasonably.
The data is this article are pretty misleadingly framed. The only time they quote the current cost, they use the base tuition number of $57,642. In the next sentence they say that in six years the cost is projected to be over $100,000. But the latter number includes all additional costs: tuition, room and board, books, fees, supplies, transportation, and living expenses. The former number is just tuition. UChicago is crazy expensive, but it's not doubling in cost in the next six years.
The .gov backs student loans. And, they are non-dischargeable. So, it is zero risk for the lender to give loan to the 2.7 GPA moron getting a worthless basket weaving degree from the local private lib arts school for $100k. So, they give as many loans as possible, since they can't lose (taxpayer on the hook). Colleges are incentivized to drive up costs of tuition b/c tons of free money.
It's a classic moral hazard created by .gov guaranteeing the loans. Same thing we saw in the housing crisis.
Make student loans dischargeable in bankruptcy or take away the .gov guarantee and watch the market for student loans for worthless degrees dry up and tuition costs plummet.
This is my thought as well. These universities have had very little incentive to cut costs for a long time and have padded out administrators and built opulent and unnecessary facilities driving costs ever upward. Universities used to be little more than professors and classrooms with very few administrators.
It is incredible to me how straightforward and undoubtedly true the point you are making is, yet I've had 0% success in bringing it up in conversation without immediately being called all sorts of names or accused of hating poor people.
Easy classes and grading aren't going to help people not default.
The school can really only improve the education they provide or make their admissions more stringent. If they are going to do the latter, we might as well go back to direct government support, no need to have a loans process and all that noise.
Or, track the loan payback percentage for each degree, let’s say 5 years after graduation. Publish those results, and stop making loans for programs where the repayment is less than X%. Then, basket weaving degrees won’t get loans, the cost for basket weaving programs will go down, as only those with parent’s stupid money will pay for basket weaving degrees. Students will be directed by market forces to degrees that actually pay, and repayment percentages will go up.
This will of course cause universities to encourage student loans for students with wealthy parents who could have paid up front, as they’re more likely to pay, even if employed as a barista. For every rule, it will be gamed in some way.
More likely, the basket weaving program would entirely go away. Wealthy parents generally aren't idiots and don't encourage their children to waste away in pointless degrees. Well, the ultra-wealthy might not care, but there aren't too many of those.
In any event, congrats, you just made a whole set of degrees inaccessible to anyone except the wealthy. The progressives are really going to love you for that.
It's wise to view a degree of such cost which is unlikely to re-pay itself as a luxury good. We call most other quarter-million dollar products that have little investment potential, such as yachts, luxuries. The whole point of free college is to give everyone a shot at the middle class. Personally I think we'll just get degree inflation; college has been used as a distinguishing factor because there are a limited number of such jobs. That aside, basket-weaving degrees don't move people into the middle class. Would anyone, progressives included, contend that everyone ought to get a free yacht (or other luxury good of your choice)? A free stem degree is at least much more likely to lead to long-term, multi-generational success.
Markets provided some balance here, but were taken out of the picture. No thoughtful lender provides equal capital at equal interest rates to a poetry and a business major. This is reasonable, as the business major has a significantly higher lifetime earning potential. Making more capital available at lower rates to higher-earning majors is a good strategy because it helps to push people into higher-earning jobs. The invisible hand seems better-equipped to do this than a central planner.
I haven't seen ISAs (income-share agreements) mentioned much here, which is a pity. The obvious solution is to modify the incentive structure such that colleges have a strong financial interest in the success of their students, which ISAs accomplish. If you want to read more, I recommend this article: https://reason.org/commentary/a-better-path-to-dealing-with-...
Purdue is currently offering them, so we'll hopefully get some real-world data on how they work, but they seem very promising on paprer.
I’d consider that a good thing. How many basket weavers are really needed in the world? My biggest concern is that politicians will make basket weaving degrees free, forcing me to pay (through taxation) for these over supplied degrees, and then being forced to support unpaid basket weavers on UBI.
> Prior to 2010, Federal loans included both direct loans—originated and funded directly by the United States Department of Education—and guaranteed loans—originated and funded by private investors, but guaranteed by the federal government. Guaranteed loans were eliminated in 2010 through the Student Aid and Fiscal Responsibility Act and replaced with direct loans because of a belief that guaranteed loans benefited private student loan companies at taxpayers expense, but did not reduce costs for students.
Not only that, I remember reading that something like 1/3 of the US federal government's receivables are student loans. A mass default or forgiveness program would dramatically lower the governments ability to pay other obligations.
> You just made college out of reach for everyone that isn't already wealthy
Immediately yes, fortunately, there is a supply and demand curve, so if you cut the demand for a bunch of colleges that already exist; then the price should find a new equilibrium. Of course, as is the science of economics, time and outside influences matter.
You can get a very good education at a pubic university, for example in California's State University system, for about $6,000 a year. It wouldn't put college out of reach, it would put going to an expensive liberal arts school out of reach. I think that's OK.
> Good luck with that. You just made college out of reach for everyone that isn't already wealthy, exacerbating inequality and further entrenching class boundaries.
You could apply that argument to anything. "Good luck with that, now people can't afford mansions, Good luck with that now people can't afford private jets".
Should everybody be able to afford mansions or private jets? No.
College should either be free, thus directly paid for by the government, or not everybody should go to college, you can't have it both ways, or that's how you'll get your big next financial crisis. The government should not back private loans, period.
Cost of education has skyrocketed BECAUSE banks started to loan crazy amounts of money to every students. This is free money for the banks.
Sure. But I said the basket weaving liberal art student. The 100k grad student can be everything from a CS major to a soon-to-be-tenured ivy league history professor. These are not the same people, and it's not what I said.
I don't disagree with you, but when that cost is underwritten and inflated by nondischargeable, government-guaranteed debt that's the product of a decision made by folks scarcely old enough to vote or serve in the military -- it just feels wrong.
I think that's exactly why this kind of a loan product existing is wrong in the first place. Why is it okay to directly profit off of the debt interest of selling hopes and dreams of class mobility to impressionable youth who will be in an even worse position after taking that loan? If we abet it, are we intrinsically taking a dim Darwinian view and saying that they deserve to be exploited?
This is fundamentally incompatible with the idea that everyone should be able to afford to go to college and private institutions need to foot the bill for the costs. We as a society prioritized availability of college education over costs. In order to get both you would likely have to change to some income percentage based repayment system instead of traditional loan repayments and that probably wouldn't be possible unless the government is heavily involved.
Half of all college students don't finish their 4-year degree in 5 years, and it's not due to cost. Even countries like France, Netherlands, etc which have lower costs for college, place you in a track when you're in your freshman year of high school. This track determines if you're going to college, a trade, or somewhere in between, and it's hard to switch from lower to higher tracks. College should not be a goal for 100% of the population like we have now, there should be a greater push for trades like chefs, electricians, HVAC technicians, plumbers, woodworking, metal working, glass blowing. You're an apprentice, you get paid a livable wage, and you have 0 student loans.
You're describing a caste system, except instead of having your life determined by your lineage it's determined by some standardized tests given when you are 14 years old. It might work for some societies but that flies so directly against the "American Dream" that it will never work here.
In reality it isn't as limiting as you think in the Netherlands. You get different levels of education based on previous school results, but after finishing "mid level" highschool you can continue and take the last two years of "upper level" highschool if it turns out you developed more and are now a better learner at 17 than you were at 14. In total that takes only 1 year extra, because "upper level" is a year longer by default.
Same in college vs university, you can continue from the lower level program into a masters degree as long as you pass the acceptance test or have the required grades.
>Based on the success of bootcamps etc.... I do wonder if software engineering would be better as a trade skill rather than university
There's plenty of data plumbers (myself included) who are writing a check a month to pay for skills they don't use but a lot of them don't have degrees in the first place. That blurry line between corporate IT and software development is where people would probably benefit most from trade programs.
Edit: Apparently a lot of people took offense at this comment and I'm not sure why. Please explain.
I looked for tuition costs over time, but didn't find much online. I did find Stanford tuition data going back about 100 years. Here's a graph of the log of Stanford tuition over time . The log of tuition has grown pretty much linearly.
There doesn't seem to be much difference between how it grew before government backed loans and after them. Somewhere I've got a spreadsheet where I compared the growth rate to the inflation rate. I can't find that right now, but if I remember correctly the tuition growth rate was about twice the inflation rate.
It would be interesting to get this kind of data for a variety of schools, but I couldn't find it.
College was also dirt cheap in an entirely different era where people could earn a living even with menial labour and where the average purchasing power was higher.
Trying to correlate the two and say it's because of government loans is just plain ignorant. Or are government loans also to explain why people can't save money, or afford rent, or survive off of a single 40h job etc.
Debt as an investment is fine. If you are investing in your future with your education, okay, but that requires the education be practical. It must have a value greater than its cost. That is not true for most education and thus we are not investing in our future as a society with this debt.
I'd rather the debt we incur as a society be spent on infrastructure and engineers than wicker baskets. Wicker baskets don't last very long. Roads and bridges do. Engineers do.
Sure, but once you bring financial value into the equation it starts limiting access. Not everyone can be an engineering major. Not everyone even belongs at college in the first place. But we as a society want everyone who wants to go to college to be able to afford it (at least initially). That is not compatible with a profit minded view of that education being a sound financial investment for each individual student.
This doesn't mesh with my perspective of education. Universities are non-profits for a reason. yes, there are profit minded University of Phoenix's but that is not the historical norm and they are the worst offenders.
Not everyone should go to college. We shouldn't enable everyone to go to college. If you shouldn't go to college, going to college won't change that. You'll struggle and fail out or get a worthless degree because it's the only one you can pass enough classes to get.
We have trade schools. We have apprenticeships and on the job training. Lots of folks for home those paths are better, are turned off to them by social pressure, not logic. I've taken welding classes and vehicle maintenance classes and they have shown themselves to be valuable assets to me. I can connect steel at the atomic level. I can keep my vehicles safe for me and my family and friends.
There's no one-size-fits all approach to human evolution and we need all of us. Maybe I'm idealistic.
We need to stop doing stuff that only makes sense to the banks. They are entirely self-interested and provide negative value back to society. We are squandering our futures to the fat cats.
My sister is a 3rd-grade teacher and I'm not sure I would be equipped to handle 30 children without lots of training. Teaching someone how to teach 3rd-grade math is not that difficult. Teaching someone to start building positive learning habits with 8-9-year-olds sounds incredibly complicated.
I might be reading into your post too much but it seems like you think STEM grads are superior to non-stem grads. I don't buy that. STEM grads have a specialty that is in demand in the labor market. It doesn't make STEM grads better then non-STEM grads.
You may be right about elementary school teachers, I'm thinking more about high school STEM teachers specifically. Although the grade school teachers in my city seem to struggle even with fractions .
Only one of my high school math teachers seemed to have any idea what math was about (not just regurgitating formulas, but deriving them and proving them from a set of axioms and only then using those formulas to solve free-form real-world problems).
My High School CS teacher was a geography teacher who just read one chapter ahead in the CS textbook and had no idea what he was talking about.
Being good at teaching seems kind of useless when you don't know anything to teach.
I didn't know that, thanks for passing it along. The reason I think the government needs to be involved is because this isn't going to be financially viable for every student at every college and therefore private banks won't want to participate. Purdue seems to have found a way around that by funding the program themselves but I wonder if that self funding is scalable.
The ad hominem hyperbole turned me against your much simpler - add moral hazard - argument. Do tell, which universities provide this degree in basket weaving that you denigrate? Sure, you may have drawn on this often invoked mythical degree as a standin for courses of study that you see as useless and valueless but implicitly know would quickly and easily get called out for revealing your bias about obviously subjective determinations of worth. Maybe basket weaving is really art or history or the study of native cultures. And there are plenty of smart people who have been 2.6 GPA students at some point, as GPA is not a measure of intelligence but an abstraction that simply measures one's ability to adhere to and excel at a fairly arbitrary framework.
Moral hazard may or may not be a simple, good solution but your argument for it, as presented, disincentivizes me from even considering it, since so much seemed to be missed in the argument, the same was probably true for consideration of the solution.
Those colleges exist, but they exist in the form of for-profits like Strayer and University of Phoenix. They prey on veterans and marginalized folks, many of whom don’t get jobs that can a pay off the debt afterward. It’s not “basket weaving”
> The .gov backs student loans. And, they are non-dischargeable. So, it is zero risk for the lender to give loan to the 2.7 GPA moron getting a worthless basket weaving degree from the local private lib arts school for $100k. So, they give as many loans as possible, since they can't lose (taxpayer on the hook).
The only lender who is allowed to issue government-backed student loans for many years is the federal government, and their policy on what loans they’ll issue and on what terms are set in law, not a response to market incentives.
>So, it is zero risk for the lender to give loan to the 2.7 GPA moron getting a worthless basket weaving degree from the local private lib arts school for $100k.
I don't see how any degree LAC, Computer Science, Math etc is worth risking a dischargeable loan for from a bank's perspective. There's no reason to single out LAC degrees, which by the way can be pretty useful.
The smartest thing for any student to do is declare bankruptcy right away after college when they have nothing and risk losing nothing. That makes no loan worth giving, which is the problem.
I mean, you're not wrong. I'd say 9/10. Its pretty easy to see the parallels to gov involvement in many other areas, where they create a special type of problem, by only being partially involved. Then everyone can stake out their positions, and just work on fighting over the middle of the issue, never letting gov be involved enough to be effective, nor entirely removed enough to let the market fix it.
Its the worst kind of half assed capitalism, that only benefits the political class. Kinda like our healthcare system, among others.
Loans for education are different from loans for a house or car since your lender cant repossess your degree/the connections you made while in school, which is the original reason these loans were made to be non dischargeable.
I totally agree but unfortunately a lot of people can take the same situation and twist it up to fit their own views.
Where I live we just passed a minimum wage increase. A fairly substantial one that keeps up with the rest of the country by increasing every year until we hit 15 an hour in a few years. It's been a couple of years into it and someone asked why local restaurants are ending services, closing some locations, increasing prices, shrinking their menus, and basically cutting costs. I saw a lot of answers that boiled down to "greed" and my favorite was "labor costs are increasing" because of "late stage capitalism".
I wouldn't be surprised if a lot of answers you see in the wild involves doing exactly what we've been doing but on a larger scale.
Kind of off topic, but I'm very much a fan of the "shrinking their menus" effect. Restaurants have way too many things on their menus. This usually means that they aren't very good at those things leading to lower quality food. Smaller menus generally mean a restaurant is going to be more focused, and able to produce quality food. I'm all for quality food.
I mean, if you reply "Go fuck yourself" you are probably done with the thread, not planning engaging further with the asshole.
Really, my point is that there is too much effort to engage assholerly as if it is actually reasoned conversation, when it is just assholery. Maybe we could go with the milder "This is ridiculous" as a reply or something.
Just downvote and flag. If it's genuinely negative behavior, the mods will usually deal with it.
If you're going to reply, it's better to give the uninformed reader some idea why it's ridiculous, rather than just the bare claim that it is. But hey, I just told someone that their post was "paranoid drivel", so I'm maybe not the best one to talk...
One big problem here is that they'll be rewarded in the rankings. A bit part of the various rankings models (US News, etc) is how much money is spent on each student. So squandering $10k more on students next year is, in certain respects, a good investment for a university with decent cash flow.
And the question of how much money is spent on a student can be disconnected from the question of tuition, at least at top-tier schools:
At my alma mater, Bowdoin, the college spends just shy of $100k per student each year. The comprehensive fee (incl. room & board) is around $72k per year, and for students qualifying for financial aid (abour half), the college provides grants that bring it down to about $24k per year, which almost resembles something sensible.
But if you're a donor, and you give an unrestricted gift to a top-tier college or university, there should be absolutely no expectation that your donation will be spent frugally. In fact, for rankings purposes (which help all the cash flow stuff above), it just matters that it gets raised and spent.
I think this is one of the biggest problems in American higher ed, and I'm hoping there are a few institutions with the fortitude of character to stand against it and work toward, rather than against, a cost-effective education model in the US.
For those interested in background on this, Paul Tough's 'The Years that Matter Most' has a lot of really interesting, surprising facts about college admissions.
Many of the ideas touched on in the comments here so far are covered in much more detail in that book. One interesting fact is that although there is a lot of publicity from colleges about reaching out to lower income students, there are massive incentives (often necessities) for admissions offices to take less qualified kids who can pay full price.
Overall, I found the book a nuanced and surprising view of the realities of trying to manage college admissions, and of trying to deal with inequality in access to higher education.
Honest question from an outsider: how realistic would it be for the government to stop guaranteeing student loans over a "public university" (community college?) level threshold? What are the unintended secondary effects? Would it help curb wild-growth of tuition fees?
This would be a mistake I think. The nature of a loan is that the lender can reclaim the asset when a default occurs. This works well for assets like cars and houses but obviously fails for knowledge. Combine that with the age and overall assets of graduates (22 and near-zero) and a bankruptcy becomes a less risky proposition to the student. As more and more default on the loans, interest rates will start to skyrocket, to the point that no one will be able to afford one at all.
You can't do that because it would be far more beneficial at this point to just declare bankruptcy out of college and get the loans dismissed than it would be to pay them back. Also there's nothing of value to repossess if you were to declare bankruptcy, banks can't repossess and then re-sell a college degree.
Why are these loans special? Other loans without collateral exist. Maybe private lenders shouldn't have the full force of the government behind them. Maybe they shouldn't be offering some of these loans.
There are loans you can get without collateral, they're typically pretty small loans with higher interest and are only issued to people with good credit.
The problem with student loans is students typically don't have any credit, don't have any collateral and what they're seeking can't be repossessed if they default - banks know that issuing loans to these people without the backing of the government is financial suicide, in other words the free market says these loans shouldn't exist at all.
The student loan crisis was caused by government intervention, guaranteeing loans for people who otherwise wouldn't have even been eligible to receive that type of money allows institutions to jack the price of school up infinitely and banks to keep allowing it because neither can fail - in the long run it's only the student who has to bear the cost long term.
We need to allow institutions and banks to fail again, that's the only way you correct this problem. As soon as you stop guaranteeing loans banks stop issuing them and college's are forced to bring prices down. That would hurt some students in the short term who wouldn't be able to afford college but eventually the free market would do it's work and make college more reasonably priced again.
One secondary effect might be to reduce the percentage of minority students at 4-year universities, if those students are more likely than average to rely on loans to attend. Opponents of the policy change would ask some very loaded questions about that in any public debate, and they wouldn't be wrong to ask.
Throughout history, every time loans are invented to pay for something, the price skyrockets. House, Cars, Education... except credit cards. What credit cards did is flatten the salary curve, filling the gap between where salaries should be if they increased as much or more than inflation and the cost of living, with debt.
Debt is a powerful tool when used correctly, but most people are unskilled in tool use, financial equations and themselves thus, debt is a Market for Lemons.
Consumers do not know what they are buying. They are buying cash and paying for it with future income.
People are generally more optimistic about their futures and irrationally excited about what they consume.
The banks have been allowed to sell cash with impunity. We have to stop that. We're just cooking the books as an entire society.
"People are generally more optimistic about their futures and irrationally excited about what they consume."
I don't think that's quite it. People get comfort from following a plan. Go to college, take a bunch of loans, and it will all work out.
They think if it doesn't, someone will bail them out because they followed the plan. Everyone else is in the same boat anyway, and maybe one of them will find a solution, or they can band together and demand something from someone else.
That doesn't line up with reality though. A lot of people do get left behind. The people with the "plan" are nowhere to be found, and were just repeating what worked for them without looking at the new numbers.
> Before it was said that the reason was skyrocketing prices?
There are several reasons, which may be tightly correlated. You can't deny that interest bearing loans are predatory due to the fact that they feed off the needs of others, some of which are beyond their control. Secondly, because now interest bearing loans are a means of making income (particularly for those with a lot of money), we end up with the cycle where loans are advertised to people, such that people who don't need them are heavily incentivized to get them (e.g. mortgages, credit cards, etc.). We end up in the cycle we see today.
I read somewhere that this is behind the awful stereotypes in the merchant of venice. Because of the historical prohibitions within the religion, loans were taken out with lenders from outside the religion.
In the case of students, the idea is to take some debt now and pay it off with increased earnings. The problem is, those increased earnings aren't guaranteed and students are way worse at determining the return on their debt than companies with dedicated teams.
Thank you FrozenTuna for your input but I was specifically thinking of physical people, as opposed to companies.
I also meant a more specific application rather than a general iteration on the (perfectly valid) idea that if one can make more money with a value now, rather than later, and this opportunity cost is larger than the interest rate minus inflation, then the deal is good.
Student loans would be a good example of that in a well-functioning market. Are there many others?
Companies are people, legally speaking, but I see your point. See ours: Imagine yourself as a company and the same debt equation applies.
Companies, like you, need tools to produce goods and maintain their operations. You, if you're a programmer, need a computer. You don't have $1000 to buy one, but you have a credit card. You know, you can bill your hours out at say, $100/hr writing code. You need to write code for 10 hours to pay for the machine, but you don't have $1000 to buy the machine.
So you put $1000 on a credit card at 20% interest, buy the computer and then bill 100 hours on it @ $100 / hr = $10,000 in just one month.
You incurred a little bit of debt, bought something worth a lot, but worth a lot more to you because you can leverage that tool to make more money than it cost to buy the tool.
Think of debt as leverage. It's a little bit of money pressing down on a lever to lift more money into your pocket.
If you only use that leverage to buy assets that help you make money (fairly easy) or increase in value at a rate greater than the interest rate (difficult, risky, speculative), then your net worth will continue to grow.
That college degree in a practical field like engineering is an asset because you will leverage it to earn more money over your lifetime than you would without that degree. Compare this to a degree in the proverbial "basket weaving." You, in your lifetime, will never weave $400,000 worth of baskets you'd need to pay for that University of Chicago degree. That degree is a liability that will follow you, perhaps your entire life and might make your life worse than it would be had you never gotten it at all. You'll resent that degree so much you refuse to work because every penny goes to some bank that sold you a worthless piece of paper for $400,000.
Companies aren't people, legally speaking. This is a bizarre myth that just gets repeated as a sort of mindless anti-corporate shibboleth.
Companies are legal entities which can sign contracts, hold debt, open bank accounts, etc.
So are government agencies, unions, churches, mosques, guilds, charities. Does that means these are all people, legally speaking? For some reason nobody says 'the IRS is a person, legally speaking'.
Companies cannot marry, vote, file taxes as a human, get a passport or driver's license etc, because they are not human, legally speaking. They're just legal entities, as people also are, but of different types.
Don't get confused about the words used in the legal world around 'natural persons' etc; legal usages of words don't carry their common meaning and there are lots of examples of this you know.
Yes, sometimes companies are 'legal persons' when discussed in a legal context as I mentioned.
We are not in a legal context, so to use such language in a normal context without elaboration will obviously mislead most listeners. It is a false statement since it leads the listener to false conclusions.
>Being human, legally speaking, is different than being a person, legally speaking.
It is incumbent to explain this to normal listeners, otherwise you're misleading them.
Mortgages are, typically, a functional debt market which is good for all parties involved. Well qualified buyers generally lack the capital needed to purchase a home outright. However, a bank can come in and provide long term financing at reasonable rates.
The buyer is pleased, because despite the interest payments, over time the buyer is building equity in a fairly stable or appreciating asset. This is a great example of "worthwhile" debt, and the private market for mortgages is thriving.
Of course, when guardrails are thrown out and mortgages are handed out haphazardly, things can get a bit messy, as we know.
I've been doubting a mortgage is worthwhile debt for society for a while now. For the individual, it's not worthwhile, it's just pretty much the only way you can get a house anymore -- unless you are very adventurous. Even the amortization schedule is weighted to benefit the banks.
The reality is if you get a typical 30-year mortgage, your house costs you 3x the list price you thought you were buying it for.
>In 1940, the median home value in the U.S. was just $2,938. In 1980, it was $47,200, and by 2000, it had risen to $119,600. Even adjusted for inflation, the median home price in 1940 would only have been $30,600 in 2000 dollars, according to data from the U.S. Census.
The majority of a person's labor throughout their life is now given to banks. It doesn't take 30% of your productivity for 30 years to build a house. It doesn't take 10 years for a person to build a house. You can build a 1,000 sqft house in a year with $50,000 worth of materials (even less) and a piece of land.
Where has the rest of the typical $200/sqft home cost gone? To the banks! That's $150,000 cash, and $450,000 total outlay of capital, if you buy that cash with a mortgage.
I propose, the loans themselves are the reason we now dedicate a decade of our life to our shelter. I do not believe this is a good thing. I do not believe this is worthwhile.
You will save money and have a better, more free life -- debt free life, if you save up enough money to buy land, plus $50,000 of materials and build your house yourself.
Loans enable every single level of the housing industry vertical to extract more money from you. Architects costs more. Utility services cost more. Building codes get more onerous. Builders charge more. Insurance companies charge more (since the houses cost more). Taxable values go up, costing you more. All of these increased costs are enabled and exacerbated by mortgage "innovation."
Everyone wants this except the first time buyer, but the first time buyer takes all the risk with a new purchase.
It is completely unbalanced. The younger generation is suffering the most and I think it's unfair and detrimental to the future of society.
What debt does is allow money that won't be available until some time in the future to be used for present purchases. It's a bit like the idea of a chemical catalyst, in that the effort required to trigger a transaction is lowered, though this is a catalyst that requires being paid back.
For the general public, instances of use include:
- Small but seasonal businesses. Farming is the classic case, but any sector in which receipts are seasonal (though relatively predictable) apply: hostelry, tourism, landscaping businesses, construction, etc.
- Small nonseasonal business. Writing or other contract work in which production and income can be disconnected by months, sometimes years. The risk is higher here, but can still be bridged.
- Large-ticket purchases. Automobiles, appliances, and electronics are typical. Numerous present credit banks got their start as the lending arms of large manufacturers, who could rely on a constant stream of incoming payments to advance loans to new customers, increasing net sales. GMAC (General Motors Acceptance Corporation, now Ally Financial, is the classic case).
- Revolving credit lines. These generally started as credit accounts specific to a given store, often a department store. They eventually became much of the current credit card industry, by way of Bank of America. Here again, the general principle is to advance credit, easing purchases.
Credit can be (and very often is) misused. But having a flexible payment mechanism on demand without requiring layaway or specific authorisation, and serving as a general check on other factors (credit cards have effectively been a social credit scoring system for decades) benefits ... at least some.
Interestingly, much of the actual financial risk gets pushed off onto merchants. Though costs of managing credit do land on the individual.
And no, I'm not much of a fan of the system. It exists, and has its uses, however.
>They are buying cash and paying for it with future income.
Yes, that's what interest is, and it often makes sense.
There's a lot of value of having something (that you buy with money) available to you now rather than in a couple of years - especially if the means to make money depends that item (be it a car, education, a tractor, a musical instrument, set of tools, or what not).
Also, there was a lot of value for me to travel when I was a grad student and had a much more flexible schedule - and, frankly, was younger. I wish I took out loans for that, paying them off now that I'm working full time would not be a burden.
But while you rob your future self by taking a loan, you can't donate anything to your former self no matter how much you have.
TL;DR: there's value for people in having the right things at the right time.
The prices in USA look exorbitant. If a worker works full year for minimum wage, they earn $7.25 * 8 * 253 = $14674. Such worker will have to work for 6 years and 9 months to pay tuition costs for 1 year, if we assume that they don't have to pay taxes, buy food, visit a doctor and pay the rent.
A house may cost several hundred thousands dollars or higher. If that worker has paid for a university, no way they will be able to buy a house in their remaining lifespan.
Who is going to study in this university? Billionaires' kids?
Private school tuition is the same as healthcare in the US.
Everything has an enormous sticker price for anyone who asks, but no one is expected to actually pay that amount. And if you do pay that amount, it's just because you're a sucker who didn't get in on the fact that it's just a made up number.
Rich kids may pay that amount, but it probably gets flipped around into some tax-advantaged "donation" that also helps people feel good about themselves.
Poor people get "scholarships", which are really just the university cutting the sticker price down to what they actually need from the person, with some creative shuffling of funds to make it look like they are paying "sticker price".
Healthcare works exactly the same. The key is to have enough layers of bureaucracy that no one can quite figure it all out.
Case in point, my original tuition value of ~16k/year was reduced so much by scholarships that I was actually making money going to school. This is an unusual case, but it wasn't unusual for other people at this school to be getting thousands in scholarships per year.
It's not exactly the same. Tuition had a standard process for showing the school your financials so they can set a price. It sounds like open-ended pickpocketing but it's a competitive market with a clear coordinated timeline for the offer process, so you can choose the school with the best price for offering.
I don’t believe it’s true that rich people are getting to write off college costs as a donation. They might be paying them out of a tax advantaged 529 account. The magnitude of this advantage is such that middle-class people probably care the most about it.
> The prices in USA look exorbitant. If a worker works full year for minimum wage, they earn $7.25 * 8 * 253 = $14674. Such worker will have to work for 6 years and 9 months to pay tuition costs for 1 year,
Someone earning minimum wage does not pay the full cost of tuition. In fact, few people ever pay full tuition due to scholarships, grants, aid, and various discounts. Only very affluent families pay the full tuition costs.
Families with low incomes pay well under $10K per year, all included, for even the top colleges.
Of course, it's all still more expensive than it should be. I don't pretend this system is good, but it's absolutely not true that minimum wage earners are paying $60K+ per year to get college degrees in the USA.
Minimum wage in Chicago is $12, not that it makes a huge difference in the math.
I think you can make the argument that if someone is going to be making minimum wage after getting their degree, they should go to a cheaper school like a community college or a trade school. Or just start working right out of high school.
It's not stated, so I assume that the current "all in" cost is about $75-80k. Some private universities in the Boston area are not far behind, including Brandeis, BU, BC, Tufts, and I believe MIT.
I have a high school senior and have been visiting many schools across the U.S. and Canada since last summer. The schools with sky-high all-in costs are not even consideration. If they lop off $10k-$15k per year, we will still be paying a quarter of a million dollars for a four-year education. There are no guarantees of this, either, considering grades and our middle class AGI.
The schools we have looked at are mostly public. Our in-state dream option, UMass Amherst, is "only" ~$30k/year all in, but is now super-competitive, likely because of outrageous private college costs driving families to the affordable options. The only comparable values are the schools we have seen in Canada - University of Ottawa, Carleton University, and Concordia.
Out-of-state public universities for out of state students in New England (URI, UConn, UVM) plus Pitt and Temple are generally high 40s/low 50s. CU Boulder was mid-upper 50s. I can't remember UCSD but it in that range, plus travel considerations.
> I have a high school senior and have been visiting many schools across the U.S. and Canada since last summer. The schools with sky-high all-in costs are not even consideration. If they lop off $10k-$15k per year, we will still be paying a quarter of a million dollars for a four-year education. There are no guarantees of this, either, considering grades and our middle class AGI.
You might want to reconsider those "schools with sky-high all-in costs". Many of them have very generous non-loan aid packages, which for many people can actually bring the effective cost below those of state schools.
For example, take Harvard, which totals about $74k/year.
A family of 3 (2 parents, 1 child) with $160k/year gross income only ends up having to cover $25k/year. A similar family with $120k/year pays $13k/year. They have a net price calculator here  if you want to see what it would cost you.
I've seen private schools promoting such aid, but for most there is no clarity on A) whether your student will qualify and B) what the amount will be over the 4-year period.
I've heard from friends with students already in college that there are often ad hoc negotiations between parents and financial aid offices about the size of the discount, which is frustrating, unfair, and open to abuse.
Financial aid offices typically offer a lightweight calculator you can run when shopping, and a more intense application you can run in parallel with your application for admission. You get a formal aid offer with your acceptance before you have to commit.
What I find funny in these discussions on HN is how most people seem to be completely oblivious to the obvious solution, proven to work in many developed countries around the world: have the state directly fund universities and don't charge tuition to students (or charge them a small amount). Why is the assumption "universities are private endeavours that should make a profit" something that goes unchallenged on HN?
Most colleges/universities are nonprofits and they still charge tens of thousands per semester. I will also point out that the European model is not free, universal college degrees for all - access is restricted behind rigorous entrance exams. Such a system would be politically untenable in the US wherein a growing movement wants to do away with all entry tests. What would actually happen in practice is that we would get a different flavor of the worst of both worlds.
> I will also point out that the European model is not free, universal college degrees for all - access is restricted behind rigorous entrance exams
WHAT ?? Not. at. all.
I'm french and university is almost FREE (never more than 1000 euros a year and mostly around 300) for anyone with the A-level, at any age. Yeah of course there are exams like for any diploma in the entire world but there are not "super rigorous" especially at uni. There's only a "hard" exam in medecine, and normal "exams" every year (like in every program in the world) that are basically a joke for anyone qualified in these disciplines. If you want you can enroll in elite tracks, which are very hard, but they are almost free too (i paid 0 for the education, 200 a year for housing + around 60 euro per month of food).
Granted you have amphitheater with hundreds of people, but if you are motivated you'll get the education.
The most expensive school in frances are the high end economic school and some engineering school (not the best ones actually) and it's under 10k a year.
You have no idea of how much you get screwed in the US
Standard Univ courses (at least in science and economics) are way subpar compared the same degree pursued in schools or high-end universities with a competitive exam in France. Source: I did an engineering school and did one master in university.
However, I liked more the atmosphere in University.
Also, most private eng schools are crap though they're quite expensive.
So it doesn't seem that tuition have an incidence on quality, at least in France.
French universities are MUCH more competitive then programs in the US to get into (you can get into bachelors programs in the US at community college level / for-profit schools etc with almost no reading / writing or math skills or even English language skills.
Seriously - if you want to be a vet in the EU it is CRAZY competitive. You simply have no chance to get in unless you have top Abitur scores.
Everyone saying you just need a high school degree to get into a vet school or anything else is dreaming. Many of the high schools themselves are tiered schools.
> Living in the Bay Area has made me appreciate my people all the more.
Not enough to still live there, apparently. Sounds like Canada is good in some respects but worse in others, like making good money in your chosen career. Every country has trade-offs, and the US’s is that a lot of safety nets aren’t there but the sky’s the limit for high achievers. Some people like it that way.
Nah, graduated in 2010. My brother paid the same amount, graduated last year.
Current-year tuition fees at Carleton range from $3500CAD/semester to $5800CAD/semester  for domestic students. The province foots the bill for over half, probably closer to three quarters based on the international student fees. It's gone up a little but it's hardly un-manageable. Both my brother and I graduated without debt by working during the summers, and both scholarships and bursaries are available to help cover the costs -- and loans via OSAP .
FWIW I did mean to type $3500 in my original post, which is probably now closer to $5000.
Language problem: A-level isn't an A average. The post you are replying to was written in British-compatible English and you read it in an American-compatible dialect. Think of it as a "full high school" education, as opposed to the early-leaving program for immediate employment or trade school (which in England would be a GCSE, or O-level in former times). Here in Ontario, Canada, we used to have a Grade 13 for university educattion qualification; in Quebec, one attends CEGEP between an abbreviated high school and university.
> You have no idea of how much you get screwed in the US
This is true of many issues the US faces that Europe has solved. Healthcare, education, income inequality, housing, transportation, gun violence...
Just go down down the list and it's easy to find "unsolvable American problems" that have solutions, and that we Americans are totally ignorant about or refuse to acknowledge, saying it "won't work for us".
Has Europe solved these things? I lived in France for a number of years and unemployment, especially outside of Paris is very high, the economy is in the doldrums (especially in smaller cities like Avignon,) the Maghreb continue to be treated like second class citizens, and terrorism is a very real and continual threat. Health insurance is good, but the system is running huge deficits. And gun violence? Spend a few minutes with the Marseille police and you’ll see the gangland violence is dramatic. As far as income inequality— that’s debatable. The upper classes are kept from getting too “upper,” but the lower classes still live in decaying concrete block housing. Americans also have about $14,000 more per year in disposable income compared to the French — that’s after accounting for insurance, education, etc. The very poor do better in France, but should we be optimizing society around the ultra-poor? Doing that means that everyone else is worse off and the ultra poor are still pretty poor. As far as transportation, spend some time in smaller French towns. You better hope you have a car or you aren’t going anywhere. There is also the high cost and oppressive regulation around starting a business. Entrepreneurship in France is very difficult despite the word itself being invented there. France rewards mediocrity.
>not free, universal college degrees for all - access is restricted behind rigorous entrance exams.
As another user pointed out, US universities are also restricted in the same manner. Perhaps you're attempting to describe a difference in how they would be perceived and thus perhaps politically digestable, but college admissions is extremely competitive in the United States as well.
The bar for entry has certainly lowered/widened, likely related to financial incentives being discussed in this post.
oh, interesting. I hadn't heard of that. racial disparities appear in the distribution of different degree "tiers" in states that use those systems, too, and in some the degree you get in high school determines your eligibility for some types of college funding, so it sounds like it's a similar problem potentially.
Yes, fwiw your high school level is determined at the end of primary school based on your teachers' recommendations and a standardized test. But there is quite some mobility possible between high school levels.
If that's the case, it's a privilege afforded to about 50% of each year's students (Germany, presumably it's not much different for our neighbours). For people who don't qualify due to their high school education, there are opportunities to gain access later in life, and people who did that make up about 30% of each year's university students.
Sweden here, we have different quotas. They need to be balanced but for specialty more art based programs like architecture they might involve auditions or similar.
All programs have requirements, to take a STEM program you need to have calculus, physics and similar from high school. If you don't have it there's generally a system to study for a year to pass those courses, allowing you to change track.
The entrance is then essentially. (Checked my program)
1. 66% based on high school grades
2. 34% on a SAT/ACT like test.
The test is different though, no essays or other subjective stuff. It essentially has two parts both multiple choice, one testing language and one testing logic. Score is assigned by bell curve of all takers. Generally not as good predictor of student suitability as grades but allows people who just barely passed high school due to lack of motivation, issues at home and similar to still have a chance getting into their dream career if they are smart enough.
You can generally with really high motivation study for the test and raise your score a bit, not hugely though, and having that motivation is another predictor for success studying so works itself out.
People saying you just need a high school diploma and their are no standardized tests are misleading the issue.
There are STRICT entrance requirement - basically tied to your Abitur or similar. This means big waitlists if you are not a top scoring (on Abitur). European systems DO have exams and they can be pretty high stakes for classes. There are lots of quotas - as should be obvious given the education is free.
"The remaining places not reserved for the aforementioned advanced quota groups are filled following the Abiturbestenquote, i.e. applicants with the best higher education entrance qualification grades, and Wartezeitquote, applicants with the highest amount of accumulated wait semesters. The admission criteria within the selection process of institutions of higher education (Auswahlverfahren der Hochschulen, AdH) are set by the universities and institutions themselves according to the respective state law and their own requirements. Therefore, the AdH is not an additional application and admission procedure, but only one of several quotas."
In France there are two systems. Competitive and non competitive. Competitive is for med school and high end schools of engineering or economics / management. The entry tests are nation-wide and standardized.
The non-competitive may have an entry test but non standardized.
Both further tests are up to the discretion of the teachers.
There used to be public graduation rankings, but they are no more.
I think Americans need to be a little more discriminating about tossing around “non-profit” without qualification. Many public and private universities are essentially hedge funds with schools attached to them. This money is used to do everything from real estate speculation to handing out patronage jobs to well-connected elites (and often not to running the schools well or humanely, e.g. all the labor issues around perpetual adjuncting).
That a given university is a non-profit tells you almost nothing about whether it functions like a state-funded school in a social democracy. Many are actually quite predatory in terms of saddling students with tuition, fees, unnecessary courses, etc.
It’s a non-profit because the investments, the real estate, the patronage jobs, and the shortchanging of staff all serve the institution itself. Surplus enables it to expand or execute better on its mission. A rich dude can’t invest in the university hedge fund and then redeem for a suitcase full of cash. Only the university itself can do that, and instead of a yacht it’s going to buy a research vessel, and instead of hosting kickass parties it’s going to study fish. And if hiring the customs inspector’s son gets it out of port faster, then so be it. But overpaying for custodial services isn’t going to get the fish studied any better.
Economic inequality is an important problem but it’s not the only problem. It’s okay to sometimes accumulate and deploy funds to other ends.
Universities don’t act like specific cost centers of governments, they act like governments.
I don't know which nations you're talking about, but I'm not certain that I'd call entrance exams in France "rigorous". But the entire system is different than in the US, so I guess maybe it's not comparable?
In any case, trying to get a perfect score on an SAT is way harder. Probably the whole reason an industry has popped up around increasing your score on the SAT/ACT/GRE/GMAT/MCAT etc etc etc.
It's similar. Pupils are evaluated on their last 2 years of high school. The bacalaureat (equivalent of the A level) doesn't factor in because it comes too late (July-August, after it's already decided where you will be going).
This can be very selective or not at all depending on where you're going, there are totally different tracks so it really can't be discussed in general (Law, Medicine, Engineering, Business, Art, trades, etc...). All are basically free, except business schools that are always private and super expensive.
I think that's the main difference between the US, US always have gigantic college of 30000 students that cover everything, whereas France is rather fragmented.
It is true, you cannot get in without your Hochschulzugangsberechtigung (University Entrance Qualification).
Can you name a SINGLE well known major university that does not have this and allows anyone a free education? I will post the requirements here. It is not open to all by any means - their are STRICT quotas.
You are not understanding the way free university works.
Your acceptance depends very very significantly on your performance in high school - there are strict cutoffs based on how you did on your abitur, which in turn relates to a series of high stakes exams and earlier tracking in high school (europe has tracking already in high school where entire high schools are different track).
It's not get a high school diploma and go to university for free. To be a vet, a doctor, a lawyer etc - you basically need to track into these positions VERY early. The good news, they limit the number of graduates through these screenings so the jobs on the other end tend to pay pretty well.
A lot of the posters are claiming you get to go to top universities for free to study subjects that lead to good paying jobs without even taking standardized exams etc. This is totally false.
It's actually much easier for joe blow to become a lawyer in the US then in Europe - including going to law school - including the non ABA schools EVEN if they didn't do well in high school. It does cost money though and for many the jobs don't pay what they would expect or hope for.
Seriously, I wish people would name the top universities without cutoffs - they don't exist.
Very true. And what works in Europe will not work for the US because
1. No kids should be left behind, so let's dumb down the test.
2. Kids should have stress-free life and academia is for boring people, so let's dumb dow the curriculum.
3. Math is racism. STEM for sure is racism. As Seattle educator put it, why don't we teach kids aboriginal math, and tests are surely racism. So, let's get rid of entrance exam and possibly reduce course work on model civilization.
With all the progress in civil rights, charging hefty intuition is the only way to go
It's worth remembering that the US does not lack for excellent, public, shockingly expensive universities - California, Illinois, Michigan, Virginia, Minnesota, and North Carolina all readily spring to mind.
We're not accepting uncritically that universities are private endeavors. We're accepting that some are and they should be allowed to continue to exist.
It's only not shocking because we've normalized the absurd in this country. In what world can someone earning around median US yearly income (about $32k) pay $8,834 a year in tuition + housing costs + normal costs of daily life? Now account for the reality where being successful at both a full-time job and in a full-time student role is effectively impossible, where that $32k/year disappears.
Let's assume that the average high school graduate is an outlier, some financial wizard or an uneducated but driven high-earner with the wisdom and ability to save an entire years' base income for a college fund before they're out the high school's door, giving them just around enough to pay for four years of tuition at a cheaper public university.
So let's assume they have some kind of neat free housing deal where they work the dorm cafeteria and get their meals free as well.
They would then also have to be one of the 33% of undergrads who actually complete a degree in 4 years in public universities to wrap this miracle up without debt.
This person doesn't exist. And yet, achieving a debt-free college education at a reasonable age has been possible in previous decades and continues to be possible in other nations.
I agree it's high, but these are all state schools. You're picking the out-of-state tuition number that's not supposed to be subsidized by local taxes. It's far easier to raise tuition on out-of-state kids so that has happened in recent years as well.
I still don't consider it shockingly expensive - it's been the top value public university in the country for 18 years in a row.
> have the state directly fund universities and don't charge tuition to students
That's how you end up with "Education" being the first cost element of the French budget (about 72 billions EUR per year) despite pretty poor academic results (that can be easily observed in the ever-decreasing level of the national exams). When government manages everything in one field, that field becomes mismanaged (trains: SNCF always in the red, the post office: ever increasing costs for users year after year, etc...)
I see your point and it can be true, in particular when the state is officially controlled by a single party, and/or in societies with systematic corruption.
And while your examples are also true, I would argue that it's actually normal for rail and post to be in the red. This is because their primary purpose is not to generate revenue for the state, but to provide a service to taxpayers. For example, unprofitable train routes have to be kept because they link remote areas to cities.
In fact, when private industry handles these type of public services, users tend to have poorer service and higher costs, because there is a natural monopoly.
For train service, take a look at the UK, where different companies "compete": service is worse than France at a higher cost.
La Poste has been a publicly traded company for about 10 years if memory serves. Service has been getting worse ever since.
For train service the counter example is easy to find. Japan where all trains and metros are private and service is infinitely better than in France. The shinkansen makes the TGV look absolutely ridiculous.
Good point, although stefano also said "don't charge tuition to students (or charge them a small amount)". In-state tuition is probably still considerably higher than what stefano had in mind (see comments in this thread about costs of attending McGill University in Canada).
The US has state funded universities that charge an order of magnitude less than 100k. In fact there are 3 of them in Chicago. Generally, anyone with acceptable high school grades can find a spot in a state university if they want. Students attending U of Chicago would have specifically decided not to attend a state university, typically because their local state university is less prestigious.
They used to do this in the UK probably until the 90s but then they'd start charging "tuition fees" although to be fair I think they were standardised, so the same fees for any university, and fairly small, with support for poorer families. I think having so many people go to university is a big burden to pay for. Part of the solution is not so many people going to university.
But that's a very short term solution. Because with low cost labor globalizing and moving out of the EU and US, you will either need more highly educated knowledge workers to be competitive or accept a bigger group in society get very low wages or unemployment.
If the workers were getting educations that were worthwhile, they wouldn't need the state to pay for them. No one cries for a doctor leaving school with $150k in loans, since their starting salary will likely be $150k.
But yeah, the grandparent is right - the US's problem is non-dischargable loans which removed back pressure on schools to control cost.
California did this as part of their master plan back in the 60s. Tuition has been around for decades but up until recently tuition was not legally allowed to be named as such. Instead there were "fees".
We’ve strayed far from that, unfortunately. UC schools have some pretty high cost of attendance for in-state students (whose parents have been paying years worth of taxes to support that school system).
> proven to work in many developed countries around the world: have the state directly fund universities and don't charge tuition to students (or charge them a small amount).
That would probably work if the system was designed that way decades ago. But we’re already in a situation where “free money” is driving tuition costs sky-high. Taking the next step and just having the government cut a blank check for “operating expenses” to every university will just kick the whole thing into overdrive.
If universities in the US were responsible and could a) keep expenses under control and b) not cry like little children when whenever the state demands some belt-tightening, it could work. But that’s not the world we live in. Universities just keep spending more and more and keep hiring more and more administrators.
My favorite experience with this was when I was in school many years ago at a state university. The state government said that their share of the funding was decreasing by 2% the next year (FYI, state universities are funded by state governments to some degree, it’s not all tuition). Two freaking percent! Basically asking the school to cut back to where they were two or three years ago. Sounds like a relatively reasonable ask, don’t you think?
Oh, you should have seen the wailing and gnashing of teeth that generated. The school was claiming that there wasn’t any fat in their budget (ha), and immediately proposed cutting like 10% of all class sections in math, science, art, etc. Then they riled up the students enough to have them march to the capitol and demand the cuts be rolled back (to be fair though, doesn’t take much to get students to get interested in joining a protest).
Anyway, my point is that US universities only know grow, grow, grow and to top it off they all have a fetish for turning campuses into lavish, over-the-top affairs. Getting them to cut back on anything is next to impossible, and giving them a blank check to be paid for by taxpayers in perpetuity would be a disaster.
"Why is the assumption "universities are private endeavours that should make a profit" something that goes unchallenged on HN?"
1) that's a true statement - private institutions are free to be for or not for profit and charge whatever they like.
2) public universities are already funded (in part) by the government and the problem exists there as well, just not to the same extent
I agree entirely with the OP that the source of the problem is in what I will refer to as the "financialization" of college. As OP mentioned, we saw the same thing with the housing bubble. We see it anywhere this type of "easy" money is offered because most people are not long term thinkers or don't fully grasp the details of the terms of the contract or the impact. Put simply, if you offer people money (even with interest attached) as a loan - especially when they are young and broke and want to pay for something expensive - they are going to take it.
The same thing happened with housing. People's incomes didn't magically do up. Rates went down and so the banks said "hey, we'll loan you more money now" and people did exactly what people do - most of them took out the most that the banks would offer them to buy the biggest houses they could afford. This drove up prices across the board.
The same thing has happened here. The actual cost of educating a person hasn't gone up dramatically. Faculty to student ratios are largely the same as well. Yes, the colleges added a bunch of non-teaching staff that increased cost, but they didn't actually need that money to function (in the beginning). They were just suddenly able to charge a lot more because the government guaranteed a bunch of loans to people who otherwise couldn't get them or at least could get them at reasonable rates. So now there was more money chasing after the same amount of services. Unsurprisingly prices went up (a lot). The colleges then spent money on building new dorms and offering all types of new programs and things. And they hired a lot of administrative staff. Now they need that money to function because they got bloated with all that easy money.
It's just the same process we see over and over. With the federal, state, and local budgets - it's not a tax problem, it's a spending problem. Similar story here. There is far too much bloat and debt within these universities. But it all started with the same shitty easy money crap that we've seen before. Same scam, different industry.
I'm all for that. My only concern is that it starts covering up one of the fundamental problems: a lot people are graduating high school, becoming eligible to vote, to be drafted, and in all other ways be adults, and they can't seem to do the cost/benefit analysis on college, or research a career that they're about to spend 4 years educating themselves for. They're surprised by how much debt costs, when they should have learnt the match behind compound interest years earlier.
We also need to move away from the idea that nearly every non-trade position requires a degree and as a society need to stop looking down on trades works. College is expensive because everyone wants to go.
My understanding is that the US system is dual: On the one hand there are private universities that charge freely, but on the other hand there are also public universities that charge reasonable fees (at least for state residents).
It's not unreasonable to charge tuition fees that are significant enough to make sure student will choose seriously and study diligently. I say that because it is certainly not always the case in countries where university is free...
It also makes sense to provide scholarship for deserving student who could not otherwise afford it.
The "real median household income" in the US is $76k . This means that $10k a year for university is far from being unreasonable considering that a family has 18+ years to save for it if they decide to do so. That's $185 a month (3% of income), ignoring inflation and interest rates, to get $40k in the bank on the day your child turns 18.
It is therefore not a question of affordability but a question of priority for most families. If they cannot set aside that much money it is, bluntly, because they chose to spend their money differently.
Edit: Apparently the average price paid for a new car in the US is $37k ... So basically the same as the average price of a 4 year degree in-state. People make their choice.
Plus, what do you do if you have 4 kids? $200ish might be ok, but you don’t want to give only your eldest a university degree.
The $76k figure is median across all US households, I’d be more interested in the median amongst those aged 25-45, which is basically the ages you’d be saving for university (and even then you have to take into account that your income at the start of that range is not going to be what it is at the end).
There are a variety of systems that 'work' around the world. The United States' model clearly works to some extent as its universities are still able to attract talented professors from around the world and produce a lot of great research.
There are a few reasons why people would resist the idea of making all universities publicly funded. One of them is that Academic pursuit is now beholden to the state and its interests. In the current system, you can find funding for research in universities from both private and public investment. Also, when all funding is from the government, its bureaucratic nature tends to increase costs. Anyone that has worked with a government contract in the US probably understands how lucrative it can be because the government is not incentivized to reduce costs in a way a private entity would. Anyone that has worked in a department of the government when they have to spend the rest of their budget so it doesn't get reduced also understands this. Interaction with private entities that are incentivized to increase profits with what is basically an infinite money pit is dangerous (who then use said money to push for regulatory capture in congress), and you can see the effects of this in almost every aspect of the U.S. government.
It also further cements the idea that you must go to University in order to be eligible for any sort of job in the U.S. Jobs that traditionally only required a high school education or less now require a 4 year degree. This already is happening to an extent because it's an easy way to eliminate candidates, despite the fact that their profession may or may not require any sort of post-secondary education.
It also is a program that benefits and subsidizes people that either don't need it (wealthy upper class) or are already relatively advantaged in life (middle class). It would unlikely benefit the poor as much as you'd think, as there are still a lot of barriers to getting into higher education that the poor face that the middle and upper class simply don't. From the bottom up they have worse schooling and less opportunities. They may be under pressure to find a job immediately out of school (or drop out of high school) to support their family. The exceptions that can benefit from some program like this likely already can benefit from the current system of scholarships and grants to underprivileged students.
I would like to see a shift to something more similar to Canada where the distinction between college and university is clear. Academic and Vocational (but still professional) schooling being separate can be valuable and serve students with different learning styles better than the largely liberal arts education that universities in the U.S. provide. I'd also like to see some of this theoretical money that is funding tuition-free university towards improving educational opportunities from the bottom up in places that desperately need it. It doesn't matter if your postsecondary education is tuition-free if you can't make it to college.
Because I'm the next person about to decided where to go/what to do. The narrative informs my choice. If the narrative is false then the market is basing decisions on incorrect information producing unrelated results but will never be aware to self-correct.
This thread is working off the assertion that our top universities are overrated.
What you're talking about is just introduction to the concept of pricing. Each person has to determine for themselves what it's worth. It will be worth more to some than to others. Everything of economic value gets priced, even if it's socialized.
You can't escape the market. If you think you can get a better value at a cheaper school, or in a different country with socialized schools, go there. Some will let you attend their universities for free even if you're not a citizen. Meanwhile people from all over the world will continue to scramble to get into our top universities. Maybe you know something they don't.
> have the state directly fund universities and don't charge tuition to students (or charge them a small amount)
See how well this works out in France. Overcrowding, declining facilities, students that have no business in college continuing to go since they have nothing at stake. The top tier schools are still pretty good, but normal schools are a crowded mess.
"The total cost of undergraduate education for the 2010-11 school year will be $53,244; of that amount, tuition is $40,188, and the remaining $13,056 is for room, board and fees. For about 60 percent of students, that cost is significantly reduced through need- or merit-based aid. And for the 49 percent of undergraduate students receiving need-based aid, the average amount of grant assistance from all sources, though not yet final, will be more than $35,000 per student in the coming year."
Same here. I paid roughly $5k/year for undergrad and about $10k/year for grad. After graduation, only reason people ask me where I went to school was to see where it ranked in college sports. Since my school barely registered, it's easily dismissed. Even better for me since I don't follow sports.
What I did find more interesting is that it all depends on your work ethic and how you carry yourself at the workplace. My lack of interest in sports has hindered me at work slightly because I'm not part of certain groups at work. I've come to find out that they all participate in fantasy sports and meet on Saturdays to talk sports and a little bit of work gets involved. Usually I wouldn't care but some important work-related decisions have come out of that.
Many of the problems that the median software developer is working on can be acceptably solved with o(n^2) ideas which are the types of implementations that the median developer can reasonably think of "on the spot" with little prior training. Or the job is HTML CSS and basic js.
However many interviews demand many rounds of demonstrating o(logn) ideas quickly, which I would argue takes x months of preparation, not x weeks or x days.
I think its still very important to learn these structures, but the way they are applied in brain teaser format is not effective at finding the best all around candidate in terms of salary, general skills, sociability, iterative ability, etc.
And that's just taking the process at face value. Some interviewers will take this exercise to its extreme as a reason to deny you and make themselves feel good by giving you genuinely obscure and difficult problems that even Linus Torvalds and Guido admit they can't solve today in a reasonable time frame.
It's a reference to the "land of the free" dig. The U.S. already spends similar amounts of public money on higher education as Germany, etc. (As a %-age of GDP). We don't have free universities, however, because our universities spend vastly more money. That has benefits for students. In my own experience, going to an expensive private law school was a much nicer experience than going to a rigorous, but more spartan, public engineering school for undergrad. There was much more academic support, hand-holding, mental health services, beautiful facilities, etc. Even American community colleges are really nice. (My mother in law works at a community college in rural Oregon. It's got a fantastic, brand-new fitness facility with sweeping views, etc.)
We can debate about whether that's a good use of money, or what spending priorities should be. Maybe the right thing to do is cut costs, preserving an equivalent education experience while cutting frills. Or, maybe Americans are so rich it's reasonable for us to splurge on all of that stuff. But Americans aren't irrational. It's not like Americans are just sitting here refusing to adopt an approach that would get them the same college experience for vastly less money.
> We can debate about whether that's a good use of money...
It's not. I can get a gym membership for $10/month. And I'm not going to college to get a degree in physical fitness.
And, your argument doesn't hold numerically. Say 440 euros/year = $500/year. That's 1/200 the cost to the student of the University of Chicago. So Chicago spends 5 times as much per student; it still looks insane from the cost/benefit perspective.
Yep, there are no additional fees. https://www.tum.de/en/studies/fees-and-financial-aid/ Compared to the U.S. situation, it's funny to see universities talking about financial aid for those that cannot afford the yearly fee of €258.80. Note that many other things are also vastly cheaper at German universities; for example textbook prices are reasonable, on-campus dining is dirt cheap, etc.
I see a lot of people telling everyone to just go to another university if the one you want is too expensive or isn't up your standard in the degree you're chasing. Remember that out-of-state tuition effectively bars students from attending any university outside of their state and, if you're in a smallish state like Oregon, your options can be pretty limited, particularly if you'd like to stay in one geographical region.
Which state schools have out-of-state tuition rates north of 100k a year? Not all of them, that's for sure. U of Chicago is notable for how expensive it is, meaning that virtually any other option is a cheaper option, almost certainly including out of state tuition in another state.
> "particularly if you'd like to stay in one geographical region."
I'm a student attending UT Dallas.
Not only am I in the honors programs there, but I also have an AES scholarship which grants me a stipend of $3,000 per semester.
I know several people who've gotten into prestigious institutions such as John Hopkins who are going to UTD instead.
It's not like options don't exist. Yeah UTD isn't some brand name, but it's a good starting point.
I blame universities to some degree for this problem, but I also blame consumers. I was once a starry-eyed high school student who applied to the likes of CMU and got rejected from all save UTD and A&M, with A&M basically giving me nothing. People realize that these schools open doors through elite social connections, more so than say UTD, but you can still network outside these elite institutions, it'll just be a little harder.
Any seller who can legally charge different prices based on means is under impossibly strong pressure to exercise that power. Universities do this by having "full" tuition rates that almost no one pays.
Is University of Chicago even that good? Genuinely curious, as I know nothing about it. I live here in Chicago, and feel like I never hear about it, compared to say Northwestern or like UIC (University of Illinois at Chicago). Why would anyone ever pay that much for college yearly, if it wasn't like the #1 school, by a landslide, in the US?
EDIT: I guess it is good? haha The more you know. Just surprising that I've been here in Chicago for almost 10 years now, and feel like I never hear about it compared to other colleges in the city. Maybe it's cause they aren't downtown or something? ¯\_(ツ)_/¯
From US News, its #6 in national rankings so its pretty good. But the way the economy is structured around knowledge work and with the effect of credential signalling, our society is convinced of the need to get into the best school possible. This belief could be utter bullshit, have some truth (top rated schools teach better), or be somewhere in between.
What is probably very true is that getting into a top school is a signal that you did very well in the competition of getting into a good school. And employers absolutely pay attention to where you went.
so getting into a good school becomes a societal self fulfilling prophecy in terms of importance.
The high school student needs to ask the question, "where is the best place to get a undergraduate degree in a specific field"? Generic rankings, especially ones that are heavily influenced by the university's research record, are pretty useless for undergraduate education quality.
The University of Chicago doesn't have an engineering school, per say.
They recently started a "School of Molecular Engineering" with a large donation from the governor of Illinois. But that is certainly not a general engineering school and isn't going to be, so it will never show up in these kind of ratings.
> Our program was established as the Institute for Molecular Engineering in 2011 by the University in partnership with Argonne National Laboratory. In 2019, in recognition of our success, impact and expansion, and the support of the Pritzker Foundation, the institute was elevated to the Pritzker School of Molecular Engineering—the first school in the nation dedicated to this emerging field.
> At PME, our educational outreach initiatives begin with K-12 students. We offer youth-focused events, internships, and workshops throughout the year, from teaching molecular engineering fundamentals to extracting DNA from bananas. We also have a partnership with City Colleges of Chicago. The multi-year program connects city college students interested in STEM fields with our faculty and labs, with the goal of helping more students transfer into four-year STEM degree programs.
UChicago is respectable, sure. But they also host the Toyota Technical Institute:
> TTIC offers a graduate program leading to a doctorate in computer science, and is currently focusing primarily on theoretical computer science (algorithms and complexity), applications of machine learning (computational biology, computer vision, natural language processing, robotics, and speech), and scientific computing (including numerical analysis, numerical optimization, and signal processing).
> Both regular and research faculty receive endowment-provided research funding sufficient for equipment and normal academic travel. Research faculty are not expected to raise external funding. However, regular faculty are expected to eventually raise their summer salary and to support their students with external funding.
> Research faculty are in non-tenure track positions with no teaching requirements. This is similar to a postdoctoral fellowship, but comes with endowment-provided independent research funding. Regular faculty are expected to teach only one quarter per year.
> TTIC is located in Hyde Park on the University of Chicago campus and has a close affiliation with the University of Chicago Computer Science Department. An agreement between the University of Chicago and TTIC allows cross-listing of computer science course offerings between the two institutions, providing students from each institution the opportunity to register in the others courses. Faculty and students enjoy full privileges of the University library system, athletic facilities and other services.
I grew up on the North side of Chicago and also didn't feel like UChicago had a very large presence. Now that I work in the research world (both in CS and biomedicine), it's very obviously the dominant institution in Chicago. Northwestern comes in at a distant second and UIC isn't really in the race. I'm not sure about their undergrad education but if a student wants to have access to teachers who are also leading voices in their fields, UChicago would be a better bet than other local options. Nationally you would have to look to places like Harvard or Stanford to do better.
Yeah, that makes sense. I think it's a mix of not being in that field, and probably just cause UIC/Northwestern/Columbia all have a campus/extensions here downtown (I see them every day on my way to work), I think of them more.
Yes, it is a top school in the country, equivalent to an Ivy League school.
In terms of the price, a few things come into play. First, most other schools have similar pricing. Northwestern is $54.6k and U Chicago is $58.2k. Yep, it's $3,600 per year, but is a 6% difference that meaningful? Maybe not given that university education has lots of other expenses. Room and board might end up eating a grand or two at another school out of that $3,600.
Plus, as a student, often you don't get full choice. It's not like going to the store and being allowed to buy whatever phone you can afford. The university has to pick you first.
Beyond that, the sticker price isn't what most people pay. For students coming from families earning over $110k/year, the net price is $40.8k. Northwestern's sticker is $3,600 cheaper, but the net for rich kids is $40.3k or only $500 cheaper.
Not only that, for lower-income students, U Chicago is cheaper. In the $0-30k bracket, $3.2k vs $13.4k; $30k-48k, $6.3k vs $7.4k; $48k-75k, $7.9k vs $10.7k.
So, is U Chicago more expensive? If your family is making half a million a year, maybe you're paying sticker everywhere and your family has to pay more for U Chicago. However, the sticker price isn't that meaningful given the parental income based sliding scale that universities use.
University of Chicago has amazing economics, and is know for its unique approach. The Chicago school is descended more from the right-leaning Austrian than the left-leaning Keynesian that essentially every other school has. One of the best places you could hope to study for economics.
You can attend a public university in the US for a fraction of the cost. UCLA is $12,000 a year for tuition. You can also do two years at a community college which costs almost nothing like $50 a credit and transfer to a 4 year university for the the remaining two years.
Oxford (UK) tuition for overseas students is $35-45k/year (and people generally pay sticker price), so not radically cheaper, though you get the B.A. in 3 years not 4. Other EU countries are much cheaper, but with a language barrier (except maybe NL).
I can’t imagine paying $100k even for a 4- or 5 year degree. My student loans (zero tuition, only food/rent/books) was $35k for 5 years I think. I have paid over $200/month for 15 years and I’ll be done paying it back this year. I just can’t even imagine my calculation if the loan had been 10x. My US paycheck would certainly be bigger, but I still fail to see how it could be a good investment.
Chicago is one of the private schools where the sticker price is essentially fictional. There may be a small number of students each year from wealthy families who pay that, but I'm reasonably sure it's nowhere near what the average student actually pays.
I still fail to understand why in US the university is so expensive, compared to 99% of universities in Europe.
Not even private universities in Europe are so expensive like there, plus there are countries where university is free (e.g. Germany).
Is the American Dream just the one who wants their kids don't go to university because it's so much expensive?
The boomer generation has really broken it. Imagine now that millennials could not send their kids to colleges because of the high tuition fee, connected to low salaries. It's a system that has its destiny doomed and that a day will collapse badly
"It also manages a staff that receives more than $1 billion in salary, $230 million of which is for its roughly 1,350 instructional staff and faculty, according to federal data for 2017-18. Producing and employing Nobel laureates does not come cheap."
In other words, only 25% of expense is for instructional staff and faculty, while 75% is not. I'd love to know how much of the $750M salary goes to administrative execs who don't actual do anything.
Not Harvard, not Yale, not MIT, not Cornell...but U of Chicago? Why would they be able to charge so much more than the other big name schools? It may very well be they have a specialty they are the best in that I'm not aware of.
Also, if you are in Maryland take advantage of the MD program that lets you pay your kids college while they're in high school and lock in the college price as of when you enroll in the program. At the average 8% rate of college price increases you could save around %57 of the money you'd pay otherwise.
The vast majority of jobs/careers/professions do not require sitting in a classroom for 4 years to learn enough to do them. Even less require sitting in an extremely expensive classroom for 4 years.
At the same time learning has never been more accessible. I can study Python, mechanical engineering, calculus, aviation ground school, etc all without leaving the house if I wanted. So how does a commodity like education, which is basically free for the people who want to learn, increase in price?
You're assuming the entire point of college is to make you a worker. But a lberal arts education has always been about making you a complete human. If nothing else, it's important for citizens to be well-rounded enough to be informed voters.
If some more education is needed to make people informed voters, maybe we should add a couple more years to the end of high school. Effectively, community college for all. After all, we expect everyone to be a voter, not just those who go to college.
Let's assume a full time student taking 4 courses at a time. A professor might (should) be able to teach 4 classes. I'm not sure how much profs make, but let's assume between 1 and 3 students could pay them. Now where does the money from all the other students in the classes go? Sure, there's admin overhead, room costs, etc, but that stuff is hopefully less than the prof costs. So 6 students max to cover costs for a class. Where does the money go from all the others?
A few years ago an American friend told me the cost of his masters at Colombia was about USD$180K for 1 year, taking all expenses in to consideration. Journalism.... insane... no way that money is coming back without a pivot to public policy!
No degree, no matter how gold-plated, is worth $400K. Go to a community college, get a degree in accounting or whatever and spend the rest of your life laughing at the idiots still paying off their tuition debt...
Is there any data on what % of student loans are spent on things other than tuition? You have things that could be school-related like laptops but then you have kids paying credit cards with student loan money.
I guess you're being downvoted for your sarcasm but I do think a giant uneven payoff is a bad idea and cheap populism. Part of the reason the price keeps going up is the ready availability of money via student loans.