Posted on 07/20/2011 5:11:16 PM PDT by Kaslin
Eventually students are going to stop paying highly inflated tuition costs and once enrollment begins to drop, the bubble will pop and colleges will start going bankrupt in droves. Like most government programs meant to make something more affordable, our government’s meddling in education has done the exact opposite and has completely stifled any good innovation or progress (health care is another classic example). Technology, on the other hand, will fill the void when colleges are exposed as poor investments. For a fraction of the cost, online virtual courses can teach students just as effectively as physical classrooms. They can offer lessons by world class professors and let the students learn at their own pace. This is the future of learning, and one that is much different than the stale model that’s currently our educational system.
The economics of colleges are quite interesting. Costs always rise and productivity never increases. Not very sustainable. One can only subsidize a limited amount of philosophers and anthropologists.
1) Enough schools with enough slots to accept all these students, whether there will be work for them in the future or not.
2) Government programs to make sure that there's always money available for students who want to go to college to borrow.
The students are encouraged to borrow six figures, and the taxpayer winds up supporting educational institutions that are turning out more graduates that can't find work. When the students can't find work they default on the loans, if they never find work capable of paying down the loans they never repay the loans.
The schools will always have the slots while the easy government money is there, since the easy money means there will always be students to fill the slots and keep the professors and school administrators in the style to which they have become accustomed.
How will this resolve itself? Cut the easy money programs (which we can't afford anyway) and the students will have to pay their own way or choose themselves (no government bureaucracy needed) future professions that will actually allow them to repay the loans. If they can't come up with a profession that will allow this they won't go to school and won't waste the money, because it's now their money that's being wasted, not the government's. The schools will be forced to reduce capacity to that level, and the overpaid professors and administrators will be forced to take pay cuts down to what their abilities actually justify.
Will this be painful? Will this mean some kids who want to go to college won't be able to? Yes, but why should a kid be allowed to go to college just because they want to? Will there be schools that retrench, merge and consolidate and go out of business? Yes, because we have overcapacity, and the only way to cut overcapacity is to cut overcapacity.
Welcome to an America that is not living beyond its means. It might seem tough and unpleasant, but reality is always more pleasant than unreality in the long run.
How about taxing the Billions in the University Endowments that are at the Moment TAX FREE!!!!
The cost of higher education has risen much faster than inflation since 1965 when federal grants and loans for higher education were passed by the far left. Now known as Pell Grants and Stafford Loans, the tax money dumped into these schemes has constantly increased and the prices charged by schools has chased those increases.
As tax dollars were thrown at both government colleges and private colleges the schools raised the prices they charged the students. In short order the schools raised prices even faster than the federal government threw money at them. The states also threw money at both government colleges and private colleges causing even more inflation and causing ever larger numbers of people to join those feeding at the government trough.
In 1965 Harvard’s tuition was $1750.00 a year. Their tuition hadn’t gone up since 1963. Had their tuition gone up just at the rate of inflation it would have been $11,823.00 in 2008. Instead it was $32,577.00. Harvard ‘s product was not better in 2008 than in 1965. The increase over inflation was just a matter of sucking up the tax dollars being thrown at schools.
The saddest part of this is the average person has not benefitted from these schemes. Students and their parents pay a larger percentage of their income to attend school today than they did in 1965 even after taking the government handouts because the price the schools are charging has gone up more than double inflation.
In 1965 the average income was $6,469.00 the minimum wage was $1.25 an hour. In 2008 the average income was $40,712.00, minimum wage was $5.15 an hour.
It took 27% of the average family’s annual income to pay for a year at Harvard in 1965. In 2008 it took 80% of a family’s annual income. In 1965 it took a student working for minimum wage 35 weeks to earn enough for a year at Harvard. In 2008 a student working for minimum wage would have to work 158 weeks to earn the cost of one year’s tuition at Harvard.
The solution is to eliminate all tax funded subsidizes of schools and for the states to sell off their government schools. The price of a college education would drop to an affordable level over night.
This is definitely the next bubble to burst. The cost of ‘higher’ education is grossly inflated and the product delivered is deficient.
This is definitely the next bubble to burst. The cost of ‘higher’ education is grossly inflated and the product delivered is deficient.
...something other than market-driven economic decision-making. Take away the bubble financing that is causing the "rent-seeking behaviors" described in the article and all sorts of miracles can occur: enrollments balanced more closely to the actual job market along with the corollary effect of eliminating on nonsense "degrees" with names that end in "studies". Always follow the money and the truth will become self-evident.
I guess they're closer to Indianapolis cronies.
I hope they do go after them HARD
The most insidious aspect of college today is that the government has inserted itself into every aspect. Set aside the obvious indoctrination and funding-curriculum extortion fears. The government controls the only lending scheme available.
If you wanted to go to school in the old days, you went to the bank and the local banker judged your fitness and whether he thought you were worthy of the risk. The fed guaranteed the loan, but your cosigner (mom & dad) were first in line. The banker in your community judged you.
Nowadays, if you want a loan, you get it from the fed directly. You’re as good or bad as any other anonymous applicant.
Fifty years of subsidy later, as others ably point out on this thread, the government interference has skewed the market up so high that you need... government money to get a degree. Forget that the cost of the degree far exceeds what you could hope to earn in the first years out of school; this is part of the plan. When no one can afford the cost of education anymore, the government will have to make it ‘free’.
The catch is that the loan today comes at a very high cost: there is no way out of it. If you fall down on your luck, if you can’t pay back the loan, the ancient remedy of bankruptcy is not available. The enforcer is the IRS, and they can raid your assets, encumber your paycheck and dun your cosigners equally. It cannot be discharged.
The old joke is that if you think you own your home, try skipping a tax payment. If you think you can afford an education, try skipping your loan payment.
The insidious part strikes me differently.
I want an education, however I can not afford the college of my choice, in olden days I would apply for education loan thru local bank.
Nowadays I need to apply to govt entity, what happens if they deem ( whoever they be) that they do not need a watch maker, mico precision expert, clockmaker, or jewelery repairman.
I am SOL . There still is a need but I cannot get education for that field.
I may have have appitude but I cannot get training.
They will control who gets trained for whatever field, may not be best fit, but govt will make the square peg fit in triangular hold if it kills us.(it probaby will)
In addition we will be over run with useless trades, buggy whip makers, wheelwrights, basket weavers, politicians, or what have you.
All noble professions in time gone by(except the politician field), but next to useless now.
I am running my course now, but what happens for the next generation.
They are going to be put in triangular holes, when the should be round or squares.
These bastards wanting to control my destiny and coming generations destiny should be hung from light poles.
For anyone reading this post I am not kidding, no sarcasm is intended.
The whole education system (lower and higher) is run by liberals these days... until we can rectify that, it’s screwed.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.