The true cost of college and reasons for it

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President Obama is on a bus tour today in New York. One goal of the trip is to spread the word about his new plan for lowering the cost of higher education. He wants to tie federal aid to a new ratings system. Instead of basing aid on the number of students enrolled, it would take into account data on graduation rates, tuition costs, student loan debt and even how much money graduates make after they leave school.

But let’s start with this basic question: Has federal aid money made college tuition more expensive? “Virtually all of the research that has been done suggests it has not,” says David A. Longanecker, president of the Western Interstate Commission for Higher Education. One exception: "Particularly at the for-profit institutions,” Longanecker says.

The list price at both private and public universities has risen much faster than median income, according to higher education economist Robert B. Archibald. But “net price, when you factor in financial aid, has not gone up nearly as much, though I think still faster than median income,” he says.

It’s important to point out that 75 percent of students attend public universities and colleges, where financially pressed states have been raising tuition faster than private universities.

“If the federal government really wanted to directly affect the problem of state finance for higher education, the single most effective thing they could do is to get the cost of state Medicaid programs down,” says Jane Wellman, executive director of the Delta Project on Postsecondary Costs.

She says public college tuition is going up because rising health care costs from Medicaid are consuming state dollars that used to go to education. This is an issue that the president’s new plan doesn’t address.
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http://www.marketplace.org/topics/economy/education/true-cost-college-and-reasons-it
 
The TRUE reason why college tutition are so high all across the country, in one chart:

fredgraph.png
 
AmazonTania said:
The TRUE reason why college tutition are so high all across the country, in one chart:

fredgraph.png
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I don't see anything in that chart to suggest that recessions have caused the price of college to rise, which I assume is what you're arguing.

Or is it some out of context attack on Obama?
 
I blame increased demand and increased quality of living.

Everyone is encouraged to go, even if a trade school would be better. This takes up space.

I heard that once upon a time a college dorm was a communal area and abunch of tables, chairs, beds. No cable tv, no ac no dancy game rooms. In addition a BA is almost required to operat a fry machine. OPEC hardly has it so good.
 
Rose said:
I don't see anything in that chart to suggest that recessions have caused the price of college to rise, which I assume is what you're arguing.

Or is it some out of context attack on Obama?
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I can't speak for the OP but my interpretation of why he posted that is to show the more the federal government has gotten involved in education the higher the prices have gone.
 
cawacko said:
I can't speak for the OP but my interpretation of why he posted that is to show the more the federal government has gotten involved in education the higher the prices have gone.
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I believe the opposite. The government has nothing to do with private universities and colleges raising tuition levels by double digits, nor does it have anything to do with the used car lots otherwise known as for-profit colleges.
 
Howey said:
I believe the opposite. The government has nothing to do with private universities and colleges raising tuition levels by double digits, nor does it have anything to do with the used car lots otherwise known as for-profit colleges.
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With respect I find it difficult to believe you can see the increases in the amount of money the federal government is spending on college education and believe it has no role on the increase in tuition.


This is from a study done by a Cornell professor on the increase in tuition:

Federal Government Policies

The federal government has contributed to the cost pressure on selective private institutions in at least three ways. First, the Justice Department’s breakup of the collective agreement of several elite institutions to target their financial aid to students with the greatest need has led to the increased use of merit aid and more expensive financial
aid packages. Second, the value of the maximum Basic Educational Opportunity Grant (BEOG) has not kept pace with inflation. Viewed in 1997 constant dollars, in 1975, the maximum BEOG grant was $4,000; in 1997, it was $2,700. Private institutions have had to make up the difference in the form of institutional financial aid, putting more pressure on tuition. Finally, the cost of doing research has skyrocketed in recent years as the government has put pressure on private research universities
to reduce their indirect costs rates, and, at the same time, raised its expectations for matching funds in grant applications.


http://net.educause.edu/ir/library/pdf/ffp0005s.pdf


This is a column by the President of Vasser college talking about the consequences and unintended consequences of the government's involvement in higher education and how it's contributed to rising costs.

http://www.washingtonpost.com/blogs...rtly-to-blame/2012/03/13/gIQA5Pu89R_blog.html


http://chronicle.com/article/Study-Backs-View-That-Colleges/38316
 
Rose said:
I don't see anything in that chart to suggest that recessions have caused the price of college to rise, which I assume is what you're arguing.

Or is it some out of context attack on Obama?
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It's basic supply and demand.

I mean, really basic.
 
Howey said:
I believe the opposite. The government has nothing to do with private universities and colleges raising tuition levels by double digits, nor does it have anything to do with the used car lots otherwise known as for-profit colleges.
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Government has taken cost out of the equal and has written a blank cheque for students to go to school at any price. Hence the creation, Government Guaranteed Student Loans.

If the Government is willing to cover any amount, the institutions will charge students any amount. As a result, their prices rise. In response to rising prices, the government subsidises more and more. It's a never ending cycle.

Sooner or later, some of you will have to learn that the government is the cause of what it is trying to prevent.
 
cawacko said:
With respect I find it difficult to believe you can see the increases in the amount of money the federal government is spending on college education and believe it has no role on the increase in tuition.


This is from a study done by a Cornell professor on the increase in tuition:

Federal Government Policies

The federal government has contributed to the cost pressure on selective private institutions in at least three ways. First, the Justice Department’s breakup of the collective agreement of several elite institutions to target their financial aid to students with the greatest need has led to the increased use of merit aid and more expensive financial
aid packages. Second, the value of the maximum Basic Educational Opportunity Grant (BEOG) has not kept pace with inflation. Viewed in 1997 constant dollars, in 1975, the maximum BEOG grant was $4,000; in 1997, it was $2,700. Private institutions have had to make up the difference in the form of institutional financial aid, putting more pressure on tuition. Finally, the cost of doing research has skyrocketed in recent years as the government has put pressure on private research universities
to reduce their indirect costs rates, and, at the same time, raised its expectations for matching funds in grant applications.


http://net.educause.edu/ir/library/pdf/ffp0005s.pdf


This is a column by the President of Vasser college talking about the consequences and unintended consequences of the government's involvement in higher education and how it's contributed to rising costs.

http://www.washingtonpost.com/blogs...rtly-to-blame/2012/03/13/gIQA5Pu89R_blog.html


http://chronicle.com/article/Study-Backs-View-That-Colleges/38316
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Huh. That agrees with my premise. Read it again.
 
Howey said:
Huh. That agrees with my premise. Read it again.
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If you mean the government did not pass legislation that mandated colleges must increase their tuition by X amount then yes you are correct but I've never heard anyone argue that.
 
I'd also sort of agree with that AmazonTania said. Only, it's good to note that institutions are being forced to compete with one another, as the higher costs are acceptable to many students. So the solution wouldn't be loans, it wouldn't be the free market, because both of those have failed. It'd be price caps.
 
Price controls never work. No really, they don't. They've been utiliised for centuries. Since Rome, actually. They don't check inflation, they only create shortages, rationing, declines in quality, black markets, and terrible economic distortions, etc.
 
Government involvement is only a piece of puzzle, although obviously the biggest piece. The problem is the money made available to pay the outrageous prices.

If home mortgages did not exist, were never invented, if banks never made single loan to someone looking to buy a home.... how much more/less do we reckon homes would sell for?
 
Two words......FOR PROFIT.

Anytime people try to make money off a basic human necessity....one where the individual has little choice if he/she wants a better future....gouging, collusion and ever rising prices are the norm.

Look.at all of our basic needs in this country of ours. Education, healthcare, housing, healthy food, basic utilities, cars, gasoline to run those cars and fuel to heat our homes... all shut aw pay through the ass for, because they know they have us between stock and a hard place.

Those are areas of our economy that need government intervention and subsidization.
 
So we need to have the government gouge us first through taxation, filter that gouged money through a government bureaucracy, and then have it go to the for profit businesses?

How exactly is that going to lower costs?

And for the record; the government already taxes my home, my utilities, my car and the gasoline in it. And my employer provided health care is next up to bat for them.

Far from reducing costs, this government intervention has increased costs.

Can you explain your vision a little further?
 
Taft2016 said:
So we need to have the government gouge us first through taxation, filter that gouged money through a government bureaucracy, and then have it go to the for profit businesses?

How exactly is that going to lower costs?

And for the record; the government already taxes my home, my utilities, my car and the gasoline in it. And my employer provided health care is next up to bat for them.

Far from reducing costs, this government intervention has increased costs.

Can you explain your vision a little further?
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Let me finish....to pay for "for profit schools, hospitals ans even.our prison system. Of it was mandated that essential services could mot be for profit, it would save the taxpayers. Trillions.

EDIT: gotta go to bed.
 
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