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Economics 101 (College Costs Soar)
Forbes ^ | 12 November 2007 | Alex Davidson

Posted on 11/10/2007 3:59:42 PM PST by shrinkermd

There's a long history of legislation that has increased student aid but hasn't reined in tuition. After the avalanche of federal subsidies is factored in (plus colleges' own aid and the private scholarships that students win), the price that students pay out of pocket--called the net tuition--still rose 28% after inflation over the past decade at public colleges and 33% at private ones, the College Board says.

As with any subsidy, Congress approving a handout is a signal to raise prices and capture that money, leaving the intended beneficiary--college students, in this case--no better off. The handouts "encourage colleges to raise tuition," says Representative Tom Price, a Georgia Republican. "An increase in federal monies inadvertently subsidizes increases in college costs."

...Their study looked at 14,238 full-time workers who were freshmen in 1976. The ones who were bright enough to get into the highest-ranked--but usually expensive--schools but then didn't attend, did just as well in their careers as the students who did matriculate at those schools. "What we found is that it doesn't matter where you went to school, but who you are," Dale says. Someday parents and students may wake up to this reality and balk at the prices being charged for a college education. Until then, colleges can continue to be blase? about costs.

(Excerpt) Read more at members.forbes.com ...


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: college; costs
This is a long, fact filled article. Very hard to excerpt. Here are some more points


1 posted on 11/10/2007 3:59:44 PM PST by shrinkermd
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To: shrinkermd
There's a long history of legislation that has increased student aid
but hasn't reined in tuition.


You want more of something...subsidize it or tax it less.
A law of nature that colleges and universities depend on!

(Each fall my brother and his tenured wife shake their heads in
wonder at how parents continue to send their kids to university
despite the accelerating cost of tuition/fees/housing.
And thank their lucky stars that it goes on year after year.)
2 posted on 11/10/2007 4:08:29 PM PST by VOA
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To: shrinkermd; VOA; gidget7; jpsb; little jeremiah; Iscool; junta; ClearCase_guy; Penner; IrishMike; ..
What would the price of things be in a market un-hyped/un-inflated/un-impaired by financing, insurance, subsidy, and third-party-payers? What then would be the 'real market' prices of education, medical services, houses, cars, etc...paid for by 'cash on the barrellhead'?

A: pronouncedly lower.

3 posted on 11/10/2007 4:26:50 PM PST by ProCivitas (Duncan Hunter = Pro-Family + Fair Trade = Pro-America. www.gohunter08.com)
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To: shrinkermd
Economics 101 (College Costs Soar)

while quality of education plummets.

4 posted on 11/10/2007 4:29:24 PM PST by the invisib1e hand (keep the heat on the hillary.)
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To: the invisib1e hand
Yep. You're paying for a lot of leftist indoctrination and very little real education.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

5 posted on 11/10/2007 4:35:36 PM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: goldstategop

but they really teach you how to strut.


6 posted on 11/10/2007 4:37:18 PM PST by the invisib1e hand (keep the heat on the hillary.)
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To: shrinkermd

I always post on threads like this because there is a way to get college and grad school completed tuition free.

1. Dual credit (many states have it) allows students in high school to earn AA during high school years. College credits also count as high school credits, and the credits are tuition free.

2. Attend a state institution and qualify for state merit scholarship that pays for student’s tuition who are residents and attend state public colleges (Florida has Bright Futures, Georgia has the Hope scholarship, etc.)

3. Do well in college, keep your GPA high, score well on your GMAT and when you apply to grad school chances are you’ll be offered a graduate assistantship to cover the cost of your tuition, plus a stipend for living expenses, books, etc.


7 posted on 11/10/2007 4:52:44 PM PST by dawn53
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To: ProCivitas

Solutions to college costs:
1. If the school gets public money, their budgets must be public record. How much they pay professors who do little and outrageous admin overhead would become public knowledge.
2. Either have classes taught by TAs or by professors, but not both. Having the professor who makes 80K lecture several hours a week but not have to grade papers or answer questions is a waste of money.
3. Fewer illegal aliens equals fewer competing for the number of slots.
4. Get rid pro sports limit and let them sign up at age 18, and stop using college money to subsidize college sports.

Just a few ideas.


8 posted on 11/10/2007 4:57:23 PM PST by tbw2 (Science fiction with real science - "Humanity's Edge" - on amazon.com)
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To: the invisib1e hand
while quality of education plummets.

Yeah, that's the other thing that happens with subsidies, doesn't it?

We can expect that those best qualified to be professors would be teaching, somewhere, even if there was zero government money offered.

Now add a government money and demand goes up. So where do you get additional teachers to fill the increase in demand? You draw deeper and deeper from the less qualified to fill the demand.

The scary thing is that this also happens in medicine, where government subsidies account for about 50% of the money spent on health care.

9 posted on 11/10/2007 4:59:08 PM PST by mc6809e
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To: dawn53

Our state has the West Virginia PROMISE (Providing Real Opportunities for Maximizing In-state Student Excellence) is a merit-based scholarship program designed to keep qualified students in West Virginia by making college affordable All WV universities are tuition free for those who maintain a 3.0 in HS and score above 22 in the ACT’s. Room and board is all you pay.


10 posted on 11/10/2007 5:05:14 PM PST by MadelineZapeezda (Madeline Albright ZaPeezda)
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To: shrinkermd

The only cost which has risen faster than pharmaceuticals in the last 20 years (or even 10 years) is colleges and universities. Hmmm. And since most of them are run by government entities, seems like the government would be able to have some control over this runaway cost. Or, maybe we should just believe that the cost of prescription drugs are just ‘cheap’ by comparison.


11 posted on 11/10/2007 6:39:58 PM PST by bpjam (Harry Reid doesn't even have 32% of my approval)
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To: dawn53

It can be even better than tuition-free, if you play your cards right.

I’m in my junior year, and between state and federal grants and scholarships, private scholarships, and a little part-time work (between 8 and 20 hours a week, depending on my courseload), I’ve managed to keep myself well in the black, putting away some savings and living fairly high on the hog as well.


12 posted on 11/10/2007 7:32:25 PM PST by Ursine_East_Facing_North
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To: MadelineZapeezda

Wow...good for West Virginia.

I graduated from WVU in 1980, and paid $115 total in tuition per semester. But free is even better!


13 posted on 11/10/2007 7:46:26 PM PST by Hischild
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To: dawn53; tbw2

Ya’ll forgot another avenue for college, the military.


14 posted on 11/10/2007 8:17:31 PM PST by swmobuffalo (The only good terrorist is a dead terrorist.)
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To: Hischild

My daughter is 3rd generation WVUer.
Did you watch the game on Thurs?


15 posted on 11/10/2007 9:21:16 PM PST by MadelineZapeezda (Madeline Albright ZaPeezda)
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To: MadelineZapeezda

No, I watch Kansas games now...that’s where my daughter is! Although I see WVU is having a good year too.


16 posted on 11/10/2007 10:01:22 PM PST by Hischild
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To: swmobuffalo

My nephew did JROTC in high school, and he is on a full 4 year ROTC scholarship to the college of his choice.


17 posted on 11/11/2007 3:16:52 AM PST by dawn53
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To: ProCivitas
Depends on what you are buying. Way back when I was in a dorm room in a concrete block and steel building. We had two 15 amp electric outlets and were allowed one fan and two lights (and all rooms were "double" meaning you had to have a roommate).

More recently my son has occupied a similar dorm room at the same university and he has a half dozen 20 amp outlets in each room. There's cable TV, internet connectivity, a refrigerator, a stove, a microwave, no other roommate, etc.

Considering inflation and the current price of utilities, his living costs are less than mine were.

It's the tuition and fees part that's gone up but that now includes an oncampus bus service and more parking lots. The professors complain less about low income.

18 posted on 11/11/2007 7:06:52 AM PST by muawiyah
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To: ProCivitas
What would the price of things be in a market un-hyped/un-inflated/un-impaired by financing, insurance, subsidy, and third-party-payers? What then would be the 'real market' prices of education, medical services, houses, cars, etc...paid for by 'cash on the barrellhead'?

As our current crises deepens, refuses to go away, as more banks report "surprise" losses, as the dollar refuses to reverse course and surge back up, more and more folks are catching on that we have been living a fantasy finacial life since the retirement of Paul Volker as chairman of the Federal Reserve.

One man presided over this credit expansion system during this entire period, former gold-bug turned profligate Alan "see-no-bubbles" Greenspan.

19 posted on 11/11/2007 7:16:24 AM PST by AndyJackson
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