my money blog
[T]uition has been been increasing annually (7.88%) at more than three times the rate of inflation (2.37%) since 1978.
Carpe Diem
You can't attribute the fantastic increase in college tuition to special education.
Or to unions, for that matter.
This has got to be a big part of it:
The Bankruptcy Abuse Prevention and Consumer Protection Act was enacted in 2005 to include private student loans as one of the 10 debts that can't be forgiven.
Robert Siegel talks with Stephen Burd, senior research fellow in the Education Policy Program at the New America Foundation, who says federal loans had long been included in this list, but private loans were included in 2005 because lenders had been reluctant to take on the risk of student loans.
Now that lenders have no risk, Burd says, student loans have become a very lucrative business.
2005 Law Made Student Loans More Lucrative
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ReplyDeleteAccording to the a New York Times article, over the past two decades colleges have doubled their non-teaching staff, while enrollment has only increased by 40%.
ReplyDelete8 Reasons College Tuition Is the Next Bubble to Burst
There are several factors at work here. One is that state contributions to public universities have dropped, transferring the costs to tuition. The growth of administration is another. The increased dependence on research to pay the bills has also resulted in needing more faculty and staff per student taught, since teaching is a reduced fraction of the time spent per faculty member.
ReplyDeleteOver 30 years ago, I wondered how it could possibly continue. But exactly what "bubble" will burst? Will people realize that a college degree is not the key to everyone's future? Will students not be able to get the money one way or another, considering that increased college enrollment is a cornerstone of K-12 education? Even our community college costs are getting obscene.
ReplyDeleteWhere are the horror stories of people who have dropped out or are in jobs that don't require a college degree and have loans of $50,000 or more? I don't want to see statistics of how much more money college graduates make. Do these analyses ever include a risk factor for those who start but never get the degree? Do they reduce salaries of the graduates by the debt repayment? What if your tuition is paid by your parents, and, rather than go to college, they give you the money? Also, do they consider the difference in salaries between two people of equal ability, one who goes to college and one who does not?
I'm waiting for the "college for everyone" bubble to burst. However, in my son's high school, you are either on a "college prep" track, or on the track where they just hope that you graduate from high school.
Where are the horror stories of people who have dropped out or are in jobs that don't require a college degree and have loans of $50,000 or more?
ReplyDeleteThey're cropping up. The Times has been running them.
Are banks securitizing student loans?
What happens now that only the government can make student loans?
fyi: now that I'm engaged in this world, I realize that 'it's always worse than you think.'
ReplyDeleteEightteen year old students are getting student loans to take arithmetic, and they're getting college credit for doing so.
I had thought that kids coming out of high school with middle school skills had to take non-credit bearing courses teaching them those skills. All the reports I saw on this subject lamented the fact that if students had to spend two years taking non-credit bearing courses before taking real college courses they were much less likely to graduate.
Turns out that's not the half of it.
As we went through the whole college process this summer I was HORRIFIED at how the college pushed these loans. That we weren't taking one was a subject of amazement. All that doesn't count the incredible number of loan offers my daughter received through the mail. Someone, and probably lots of someones, are making big money off these.
ReplyDeleteIts always worse than you think
ReplyDeleteThis is a great info-graphic of the student loan ponzi scheme out there...
Worth the click through
http://www.ritholtz.com/blog/2010/09/student-loan-debt-credit-card-debt/
Dee Hodson
I was listening to the California gubernatorial debate last week and was mind-blown when Jerry Brown started talking about how low the tuition used to be in the UC system. Even adjusting for inflation, they were ridiculously low. He said that when he attended UC Berkeley, tuition was only $120 for the entire semester. He graduated in '61, so that figure in today's dollars is $876. That speaks to how heavily subsidized by the taxpayers the UC system used to be.
ReplyDeleteFrankly, I don't think that the taxpayers should be the ones picking up the bulk of the tab. Especially considering that the majority of the students who attend UC Berkeley come from families with incomes over $140k.
Generous financial aid should be available to students from low-to-moderate income families and there should be loan forgiveness programs for students entering public service careers like teaching and so on. But I don't think it's fair to ask a secretary to subsidize the education of a doctor's kid.
Kids who don't have college-level skills - measured by SAT/SAT II/ACT/AP scores - shouldn't get ANY taxpayer-subsidized assistance for college. (I don't think colleges should even admit them) Kids who need remediation at MS-HS levels should be in night HS or equivalent; putting the problem right back where it was created. Kids who have HS-graduate skills but need more coursework in a specific field can be handled in CCs and apply for assistance.
ReplyDeleteI also think that any loan forgiveness programs for teachers, nurses etc. should be tied to work in areas of need (might be urban, might be small rural towns, Indian reservations etc) as they often are for physicians.