Don't give me that BS about how universities need the money.
During undergrad, I squatted in a 600 sq. ft. apartment shared with 3 other people. I seriously doubt my health is unaffected by the mold, mildew, vermin, etc. I had to live with every day. Across the street was the president's mansion(!). He had a team of gardeners, fountains, a gilded mailbox, and some pretty nice carS in the driveway. His army of administrators never worked a minute after 5:00, as evidenced by the steady stream of Bimmers, Benzes, and Lexuses that poured out of the administrative building's parking lot every day at 5:01 pm. Oh BTW, their building was the only one on campus with glass doors, bronze handles, oak furniture, marble floors, etc.
Trim the fat, and make the university answer to a more sane market force.
The primary factor driving tuition rates up is reduced funding from State governments for State Universities and Colleges. Private Universities, of course, keep increasing their tuition rates to keep them at the same level relative to the State schools. Even the state schools (at least those trying to do something besides cut the quality of education and pass the costs on to the students) are getting a significant amount of their budget through private fund-raising.
Of course, when it comes to private funds, it's easy to get someone to pay for a building or renovations if you're willing to put their name on it. You may even get some scholarships for students, some equipment, extra funds for high-profile faculty (or high-profile administrators, in some cases), and many people are willing to donate their time to speak to students as guest lecturers. Good luck getting someone to pay for faculty & staff wages and benefits, though.
Yes, interest rates would go up, to cover the risk of defaulters, but then only serious students would go to college.
Here's a glimpse:
"The first step in grappling with the rise in the cost of higher education requires understanding where students go to school. There are three main categories — public schools (which include both four-year public universities and two-year community colleges), private nonprofits (the Ivys, most liberal arts colleges, etc.), and the for-profits (Kaplan, University of Phoenix, Corinthian Colleges, aka “career schools”). Here’s the key statistic: Fully 70 percent of the 19 million undergraduates and 3 million graduate students enrolled in post-secondary education in 2010 attended schools considered to be in the public sector — by which it is meant that some portion of their funding comes directly from government."
"The problem: The word “public” doesn’t mean as much as it used to. Direct state support for public colleges has cratered over the past 10 years, and really fell off the cliff after the financial crisis. Yes, tuitions have risen, but not by as much as state and local appropriations for higher education have fallen. Just between 2008 and 2009, for example, average tuition revenue at public research institutions increased by $369 per student, but the loss in state and local appropriations per student was $751. Similarly, at public community colleges, tuition revenue rose by $113 per student, while appropriations fell by $488. Since the recession of 2001, tuition hikes, as exorbitant as they have been, still haven’t kept pace with the fall in government support."
In reality, young adults don't go to college to learn. They did that for ~15 years (even worse, they did for 15 years by compulsion without much say in the matter) and the vast majority want to do something else. Most of them are there for credentials, not knowledge, and that is the problem.
The most important problem here is the necessity to disconnect education from schooling. The intent of the latter is to cause the former, but the former is not dependent on being confined to the latter. You can apprentice, you can self-teach, you can dive in as a high risk newbie in an industry. None of those involve going to prohibitively expensive summer camps turned annual to get lectured at.
The Internet enables a lot here - where previously it was very hard to find like minded individuals interested in participatory group learning about a subject, now it is stupidly easy, a search away. Learning resources are also rampant online in what used to be confined to a tome from the local library or a prohibitively expensive book purchase.
So the third viewpoint is that the problem has nothing to do with how the government behaves here because it is symptomatic of a baby-boomer irrational quest to get pieces of paper saying "bachelors" on it for everyone currently under the age of 30. The solution is to get a significant chunk of the people currently attending college and accruing these insane debts into more productive and better directed paths to careers in the things that interest them without the cultural baggage touting a phd in some field writing on a chalkboard as the golden goose of learning.
The real, true, bottom of the barrel reason I think this entire debacle even exists or came about in the first place, and I think it is at the root of most societal shifts for 30 years, is that the ultra-concentration of capital and wealth into so few people has dramatically slowed down the productivity engine of the first world. There is little motivation when you already pull the strings of international business to invest in risky youth labor, and when you control a huge chunk of the economy your lack of risk taking on new talent means huge droves of the population are never given a chance to succeed. It is safer and (here is the key) more profitable to play games with rigged fiat money and banks or stocks of fortune 500ers than to actually create goods and services by growing productivity and creating value.
To be quite honest I don't see the internet usurping them either.
Consider that: (1) the cost of tuition has grown FAR faster than inflation, and is now sky high, (2) A huge percentage of students need and get student loans, (3) student loans are one of the few types of liabilities that bankruptcy can't wipe out.
So "everyone" (speaking loosely) goes to college, and "everyone" gets a loan. The college gets its money up front, and bears no risk of having that money taken away. This represents a huge flow of money into universities. Where does it go from there?
How does college tuition revenue yearly compare to Apple's revenue from iphones yearly? In the case of Apple, I can see where the money goes ... Apple employs a huge number of people working on expensive ongoing operations.
What are colleges doing with all this money? Surely all of it is not being soaked up by overpaid administrators?? A money stream that large ought to have a big, obvious wake behind it, but I don't know where that money goes. Can anyone enlighten me?
But in one category, expenditures have nearly doubled over the last five years. That category is "institutional support," which consists essentially of central administration. The 2008-09 budget plan increases expenditures for institutional support by more than $143 million, or 80 percent, over the figure for 2004-05. The spending increase in this category alone covers the amount by which the governor proposes to reduce the state’s annual appropriation to the university.
What has the university bought with all this additional money spent on "institutional support"? Among other things, a growing array of vice presidents and associate vice presidents. The university now employs 12 VPs, several of whose positions have been created during the last five years. Every occupant of such a position earns a six-figure salary, starting at around $250,000 per year. Multiply by twelve, add a number of associate VPs, then staff support, plus assorted expenses for everything from office supplies to travel — and the institution spends millions more each year on central administration
This same pattern can be seen at almost any state university in the United States.
UW Slush Fund Exposes Hypocrisy of Liberal Group http://mediatrackers.org/wisconsin/2013/04/23/uw-slush-fund-...
UW slush fund insults citizens http://www.beloitdailyneaws.com/opinion/editorial-uw-slush-f...
Outrage grows as University of Wisconsin System admits it 'did not draw attention' to cash http://www.jsonline.com/news/education/outrage-grows-as-uw-a...
I wonder how many more state-run institutions of higher education will have similar scandals in the next few years.
Exactly.
This is an American problem though, the Europeans figured out many years ago that making tuition free for the students is a win-win for society. Everyone wants to go to college, so just make everyone pay for it, progressively, over time.
For example, if you want to study engineering you have to have certain math skills. Otherwise university won't let you in, no matter how much you pay.
Oh, free college no. But tuition is something like $700 annual in germany/france. There is no housing or anything.
A question for a question ;)
It's not just the number of administrators but also the pay. They tend to make many times that of actual professors. And there's no question which camp brings more value to students.
This may seem cruel, but it's actually kind. Were it not for government control of education, education would have already undergone the same kind of massive transition that has happened to every free-market industry: much better, much cheaper, much more widely available.
If you want to see what happens to an economic sector as the government becomes more invasive, look at the finance sector, which is the most controlled sector in the US, or look at the "federal telecom bureaus" (AT&T, Time Warner and Verizon).
> Were it not for government control of education, education would have already undergone the same kind of massive transition that has happened to every free-market industry: much better, much cheaper, much more widely available.
Yes, like the for-profit prisons.
I completely agree. A better example is food, clothing and shelter. Those are available to most people without government coercion. We could easily handle the remainder with charity, if it weren't for government programs that breed endemic poverty.
> Also, the "lazy poors" "stealing" your money
I did not say any of that, and I definitely don't think about it that way. I don't think poverty is a problem of laziness, but of ignorance. And I don't think the poor are stealing from me. If anyone is, it's Republicans and Democrats, with broad support from the middle and upper "classes." But I don't even think of it that way.. it's more of a societal decision. And we have a much better society, in many ways, than most of those in the past, so overall, I'm pretty thankful.
> Yes, like the for-profit prisons.
That's a highly government-regulated industry, so it's not a valid counter-example. The prison system is corrupt for the same reasons the finance system is.
(I wouldn't have any problem with prisons being completely government run, since prisons are a function of law enforcement, which is a necessary and proper function of government.)
Where you start in life doesn't matter, but how big a jump you make in improving your lot does, and that's something that's entirely up to you. Please lay off the Rawlsian stuff - it doesn't square with the things I've observed in my own life. Nor does it square with the experiences of many of my friends that started life out poor, and chose to make something of themselves.
At this point, some might say, "you didn't earn your brain/parent's money/etc." I say that's nonsense, because the entire idea of "earn" arises in order to distinguish real people who choose to act toward a goal from those that choose not to. To do that, we have to look at adults - lots of them, ranging from bums to billionaires, across time and professions, on and on. Then at young adults, then at small children (to fully see the contrast with adults). Choice is the crucial thing here: nobody could arrive at the idea of "earning" or "deserts" or "justice" by studying newborns or fetuses.
Relying on "earn" (which depends on the idea of choice and free will, as I've indicated above) in a statement intended to undermine the idea of choice and free will is bogus.
EDIT: I am making some serious points here. Disagree all you want in comments, but downvoting me reflexively does not refute my argument.
What you're actually implying, which wouldn't be a logical fallacy, is that my view is subjective, because of the circumstances of my (middle class) upbringing.
I don't think that argument holds water. The subjectivity or not of things is probably too big of a discussion to really tackle on hacker news, though.
The US, to Obama and congress's credit (those who know me know I'm not a huge fan) engaged in some credit reform in the wake of the 2008-2009 economic crisis. Credit cards firms were required to allow their customers to restructure their loans and became obligated to outline the loan payments afterward, and rotating credit became dischargeable in bankruptcy proceedings. One wonders why college credit hasn't undergone such reforms. Does academia have that powerful of a lobby?
"Gov'ment causes those poor helpless colleges to overcharge."
Bullshit.
The growth in the cost of college is tied to big fat administrator salaries. It is control fraud pure and simple. To paraphrase, the best way to rob a college is to run one.
What's more he doesn't propose eliminating federal aid or loan guarantees, he advocates letting you discharge student loan debt in bankruptcy and putting colleges on the hook for some percentage of that default.
Sounds like a great idea to me. Schools that equip their students for well-paying jobs have nothing to fear, but diploma mills out for easy loan money will suffer.
Of course they wouldn't. That's the idea though. Back-pressure. The idea is that it would then become unrealistic for institutions to try and charge 200k for an arts degree which no one can afford, even with loans. This should lead to lower tuition.
Bear in mind that that what any institution wants to charge is the absolute maximum the student can borrow, plus any government subsidies or fees they can extract.
Despite its best efforts, economic law is the only one that the government can't find a way to violate.
The article makes a good point, IMO. Schools can pay "big fat administrator salaries" because students have practically unlimited access to money via student loans. Give everybody a 10% raise, and tell students to take out 10% more loans. If the student can't pay the loans then it's not the school's problem, but maybe it should be.
It is not just giving your deans a big loan to buy a house and the forgiving it. It includes paying yourself excessively.
If someone is stealing from you, the answer is not to make them share the risk.
So, poor students are disproportionately denied loans, and we continue to see generational wealth inequality expand.
There are no great solutions, and there are tradeoffs everywhere. However, leaving it to the market seems immoral too.
It's also kind of insulting for you to assume 'the poor are the ones who won't be able to pay back'. In my experience (and it's possible that I had a unique college experience) it was the students who came from tougher backgrounds that buckled down, didn't get stupid degrees, or even if they did, managed to pull decent, well-paying jobs out of college, because they used their education, and it was the upper class students that were loafers or chose their degrees in a silly fashion, so in a way, the good education of the less privileged was subsidized by the poor choices of the rich.
People automatically assume economic inequality is bad, though here's an argument for its merits: http://www.paulgraham.com/inequality.html
I'm more concerned about the wealth floor in a society going down, which is at odds with the general trend over the past centuries of it going up, even if not at the same rate as the wealth ceiling.
He has the facts right but, to get published in the WSJ, he can't point at the real issue. It is same problems we have the with banks. These institutions have tons of hidden subsidies. They always will. Subsidized industries behave differently from non-subsidized ones in general but the WSJ approved solution is to pretend that it is possible to remove the subsidy.
For public goods (utilities, parts of finance, education), you have to have government intervention and deal with the side-effects. That means regulation and rules about what you do with the money.
I don't think the author would disagree when I say that the administrator are stealing from the taxpayers. But what is 'bullshit' is saying that we just have to accept it. When people are stealing from you, you deal with it head on. If they were employees, you would fire them.
I don't have a great answer for colleges but you need to at least let the administrators know that they are acting immorally. It is not the loan process that is immoral -- it is the people who are running the colleges.
And, for an individual looking to maximize earnings & employment, a bachelor's in STEM/business is still a really good buy, supposing you didn't go to $$$ SLAC/Ivy League. Whereas subjects that are less fiscally shiny lead their students into a dark hole of debt.
One solution is to simply collectivize the cost: everyone gets free college. That's really expensive and without good cost controls, well, is susceptible to being taken advantage of.
Another solution is to go at colleges with the dieting plan. That's the current one. IMHO, that's exactly the wrong way to go about it.
Another solution is to aggressively force state schools to cut overhead; i.e. cut the administrator staff. Well, asking people to fire themselves is sort of utopian, doncha think? :)
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I don't really buy any of the solutions that I currently know about in the US. My thought is that there are far too many colleges in the US. Too many states trying to stretch too few dollars over too many campuses. I instead think that federal funding should go to a select few - perhaps three or four - in the US. These colleges would be fully free and fully funded by the feds. Professors would be encouraged to congregate there and focus on having huge departments where all sorts of research could go on. The overhead per college is so high; it's considerably more scalable to focus on having a few large campuses than the small ones everywhere. Each campus requires a mini admin to be set up. Worse, the larger a department is, the more interesting collisions can happen: small departments work against this by not having that interesting person to run into(they are in the other state).
Anyway, that's my undercooked idea to help college education.
Education in the US is, I think, a wreck, and it has a variety of causes. Among them, the historic anti-intellectualism of Americans, the loss of historic mission, the rank foolishness of levelling egalitarians, the shrinking dollars for defense research, etc. More causes could be added.
By the way, it also seems that student loans for US students mainly consists of tuition payments. There is rarely any mention of livings costs which I find curious. Do people just take it for granted that the parents will pay that part? Myself, after 5 years, I was roughly $50,000 in debt, all of it living expenses (note, that's only $10,000 a year in a country with high cost of living). My family didn't (and didn't have to) pay anything to put me through college. From what I can tell, this is the norm here, students take loans for their living expenses and parents are not expected to support them.
My understanding of collectivizing costs is that it's proved extremely expensive for countries such as Germany and the UK, which are moving towards a paying model (last I heard). There's also a pyschological effect when you're paying for your own way vs. someone else paying for it. I'll let someone else more learned in physchology & motivation research comment on the details, but the change in mindset does exist. My gut feeling is that its entirely reasonable for society to generally pay the bulk of the cost of college in exchange for getting the benefit of an educated society.
If you examine the historical cost of education in the US, the tuition began its upwards run around 1980 and has not ceased. So did healthcare. I don't know if there's a connection; and, if so, why. I do know that educational costs have gone wildly up beyond inflation.
To your aside; my student loans were designed to cover the cost of housing & life in general.
I'm very sorry that you did have to go into such steep debt for college. I don't think it's right that higher education costs so very much either. I do want it reformed, but I don't want it done in ways that simply funnel money into someone's pockets without lots of people getting a quality benefit.
[1] between 1945 and ~2000
My wife went straight from putting her parents' income on her student aid forms to my income, so nearly all of her higher education not paid by her parents is on student loans (because by the time we got married my expected contribution to her education was outside the realm of our financial reality).
These calculations do include the estimated costs of room, board, & books, though, and student loan eligibility is largely based on those numbers. Of course, the room & board costs are often based on living in dorms and eating entirely on campus meal plans, each of which, depending on where you go to school, can be significantly different from the cost of living off-campus.
Does US universities really outpace European ones? I don't know if that statistic means anything in reality. I guess it also depends on the percentage of the population with a degree.
[1] http://www.conferenceboard.ca/hcp/details/innovation/scienti...
We have those. West Point, Annapolis, USAFA, USCGA, and the Merchant Marine academies.
So undercooked, in fact, that consuming it would make everyone sick.
Good ideas are born out of bad ideas sharpened and the bad bits thrown out over time. I am not a professional administrator in college, but I did spend time at a variety of institutions of higher ed and wound up with a Master's degree and experience teaching, researching, and studenting. I think my thoughts are not entirely worthless. But they are not taking into account the full picture, as I've not been a professor, support staff, or an admin. However, if experienced people from each side of the University structure contribute their ideas, perhaps out of the pool of undercooked ingredients will be the parts for some really great pieces; and those ideas would be truly awsome.
So. Yes. My idea is undercooked. But maybe it can help contribute to a better solution. Maybe. :-)
