The College Tuition Bubble

[Lemur]

A personal rule (which I'm sure has been formulated before): Trends that cannot continue indefinitely don't. College tuition (http://chronicle.com/free/v55/i37/37a05601.htm) is one such trend.


With tuitions, fees, and room and board at dozens of colleges now reaching $50,000 a year, the ability to sustain private higher education for all but the very well-heeled is questionable. According to the National Center for Public Policy and Higher Education, over the past 25 years, average college tuition and fees have risen by 440 percent — more than four times the rate of inflation and almost twice the rate of medical care. Patrick M. Callan, the center's president, has warned that low-income students will find college unaffordable.

Meanwhile, the middle class, which has paid for higher education in the past mainly by taking out loans, may now be precluded from doing so as the private student-loan market has all but dried up. In addition, endowment cushions that allowed colleges to engage in steep tuition discounting are gone. Declines in housing valuations are making it difficult for families to rely on home-equity loans for college financing. Even when the equity is there, parents are reluctant to further leverage themselves into a future where job security is uncertain.

Consumers who have questioned whether it is worth spending $1,000 a square foot for a home are now asking whether it is worth spending $1,000 a week to send their kids to college. There is a growing sense among the public that higher education might be overpriced and under-delivering.

Thoughts?

[A Terribly Harmful Name]

It has been self evident for quite a long time. And now the loan market gets blasted due to the crisis, so all of sudden people have no way to keep themselves there...

[Marshal Murat]

It's difficult to price your education, especially in increasingly competitive job-markets, where simply graduating from college rarely ever ensures that you're qualified above other applicants. In Florida, the state is essentially giving students a college education at state institutions to hold onto the students living in Florida.

I think that the college tuition changes have to start at the colleges; with teachers willing to take pay cuts, smaller and more amateur athletic programs, and making college students less reliant on college services. I especially want smaller athletic programs simply because (for example) Florida State is paying their coaches in buckets (hundreds of thousands of dollars) not only as salaries but in severance packages. The severance packages are huge too, MILLIONS.

[Philippus Flavius Homovallumus]

My sister was told to budget £30,000 for three years BSc, my UG (finished last year) was half that. Accross the developed world fees are rising at an insane level, and yet Universities continue to loose money.

Exeter survives on foriegn, i.e. outside EU, students.

[Xiahou]

There is a growing sense among the public that higher education might be overpriced and under-delivering.Absolutely. Unless you're getting a six figure job right out of school (you're not), it's hard to make sense out of going up to a quarter of a million dollars in debt to go to school at a high-priced university.

How many people go tens of thousands in debt with student loans only to end up taking a job that they could have gotten right out of high school? I think people should quit pushing the notion that "everyone" needs to go to college to succeed. If you're going to be a ditch digger or a WalMart cashier, college is a waste of money. If you're going into a technical career- consider community college or a technical school that will give you the job skills employers want without pushing you into decades of debt.

It's interesting that the tuition bubble is mentioned with the mortgage bubble, since I think the government is at the root of both. In both situations, free-flowing, government backed credit caused a wild, unsustainable run-up in prices. May as well add medical prices into the mix as well. When the government takes actions that divorces a service from the associated costs people become divorced from common sense with their financial decisions. :yes:

[ICantSpellDawg]

University is a scam. Years ago it made sense, but today it is nonsense. You are essentially paying $100000 or more to go to mardi-gras for 4 years. You'd probably get more life experience by working full time and actually having an interest in knowledge (reading, listening to local classes at libraries). Save your money and go on a year long cruise.

People use the statistic that those with college degree's make on average 20% or so more than those without degrees. That is a no brainer. Brighter people go to college, retards don't. Do you really think that if college didn't exist bright people would make the same amount as the braindead pothead who recieved his GED?

College was once an excellent leg up for a reasonable price and it will be again when we get the balance right.

[Marshal Murat]

University is a scam. Years ago it made sense, but today it is nonsense. You are essentially paying $100000 or more to go to mardi-gras for 4 years. You'd probably get more life experience by working full time and actually having an interest in knowledge (reading, listening to local classes at libraries). Save your money and go on a year long cruise.


Years ago it was prestigious to go to a college, a place dedicated to learning and boyish pranks. That was almost 100 years ago. However, a 100 years ago, all you got from college was a 1.Place to stay and 2.Teachers. Today, college provides you with food, wifi, internet, professors, clubs, athletics, and half-a-dozen other things.

I also have to say that the constant re-perpetuation of college as "party-party-party" isn't helping students coming in realize the enormous responsibilities that they face. Which is why I'm going to VMI (http://en.wikipedia.org/wiki/Virginia_Military_Institute)

[Samurai Waki]

Brighter people go to college, retards don't. Do you really think that if college didn't exist bright people would make the same amount as the braindead pothead who recieved his GED?

I take some offense to this statement, since I got my GED and also this year received my LL.B. (Bachelors of Law) and will now be working on my Masters very soon. I believe your pay grade should be given based on skill, and not merit. I've met a lot of people who have gotten college degrees and couldn't tell you the first thing about what they've studied. Serves em' right, if the guy with the GED is more intelligent... The United State's High School system is a laughable at best, and depressingly dumbed down at worst. Real world experience and how you handle whatever adversity comes your way, its what separates the truly talented human beings, and the not-so-much. Not a piece of paper, as someone like Richard Branson might tell you..

[Major Robert Dump]

Large universities are massive, city-like entities with their very own power players and enormous workforce. They have their own culture, their own laws which can preclude even the Constitution, their own investment scams, their own fund raising machines, their own landscaping crews, their own police forces.

I predict Large Universities will eventually raise tuition so high that the only people who can afford it will be the very rich, or employees who agree to work as endentured laborers and have the university logo tatooed on their bodies in exchange for free tuition for their children. Universities will start to declare their own independence as the state gravy trains dry up, they will attempt to break away from the city and state as their own sovereign nation, open up smokeshops and casinos to fund their expansion into the securities and hedge fund markets, and will eventually go to war with each other in attempts to unsurpe power and gain more rich students. The wars will last ages, the blood of frat boys and hippies and that one ethnic girl who gets offended by everything will stain the streets, and eventually, one very large educational institution will emerge the victor and rename itself to something like University of the Universe. It will attempt to gain nuclear capabilities and challenge the federal government, until it eventually collapses upon itself because the all the theatre majors transmit AIDS and anal warts to frat boys during Natural Light-induced orgies, and the frat boys will in-turn transmit AIDS to the rest of the university, including the squirrels and the animal mascot. In 1000 years all that will be left of universities will be buried ruins, and future generations will have to learn of the university peoples rich history by deciphering cryptic messages and drawings from bathroom stall walls, such as wellessly foundatiun R jews! and hook em horns kappa phi woot

[ICantSpellDawg]

I take some offense to this statement, since I got my GED and also this year received my LL.B. (Bachelors of Law) and will now be working on my Masters very soon. I believe your pay grade should be given based on skill, and not merit. I've met a lot of people who have gotten college degrees and couldn't tell you the first thing about what they've studied. Serves em' right, if the guy with the GED is more intelligent... The United State's High School system is a laughable at best, and depressingly dumbed down at worst. Real world experience and how you handle whatever adversity comes your way, its what separates the truly talented human beings, and the not-so-much. Not a piece of paper, as someone like Richard Branson might tell you..


You didn't stop at the GED. I'm referring to those who barely eked out of High School and stayed in the doldrums.

I'm sorry that you take offense, but are you arguing that people who receive their GED's and do nothing beyond that tend to be brighter than people who go on to college?

There are exceptions to every rule.


Marshal. the only conversations that anyone is capable of having regarding their educational experiences seem to revolve around getting mangled beyond belief. Believe me, When I'm dragged to a bar I try to talk about the same things that we talk about here. Whoever masterminded out higher educational system should be dragged into the street and bludgeoned.

[Strike For The South]

I like being crushed by debt. Makes me feel warm.

[lars573]

Large universities are massive, city-like entities with their very own power players and enormous workforce. They have their own culture, their own laws which can preclude even the Constitution, their own investment scams, their own fund raising machines, their own landscaping crews, their own police forces.

I predict Large Universities will eventually raise tuition so high that the only people who can afford it will be the very rich, or employees who agree to work as endentured laborers and have the university logo tatooed on their bodies in exchange for free tuition for their children. Universities will start to declare their own independence as the state gravy trains dry up, they will attempt to break away from the city and state as their own sovereign nation, open up smokeshops and casinos to fund their expansion into the securities and hedge fund markets, and will eventually go to war with each other in attempts to unsurpe power and gain more rich students. The wars will last ages, the blood of frat boys and hippies and that one ethnic girl who gets offended by everything will stain the streets, and eventually, one very large educational institution will emerge the victor and rename itself to something like University of the Universe. It will attempt to gain nuclear capabilities and challenge the federal government, until it eventually collapses upon itself because the all the theatre majors transmit AIDS and anal warts to frat boys during Natural Light-induced orgies, and the frat boys will in-turn transmit AIDS to the rest of the university, including the squirrels and the animal mascot. In 1000 years all that will be left of universities will be buried ruins, and future generations will have to learn of the university peoples rich history by deciphering cryptic messages and drawings from bathroom stall walls, such as wellessly foundatiun R jews! and hook em horns kappa phi woot
If you worked in Hollywood TV and movies would be 1000x better.

[Beskar]

My sister was told to budget £30,000 for three years BSc, my UG (finished last year) was half that. Accross the developed world fees are rising at an insane level, and yet Universities continue to loose money.

Exeter survives on foriegn, i.e. outside EU, students.

Nah, it is £20,000. It is only £30,000 if you blow it all on alcohol and other things. So unless your sister is crap with money, she should be fine. I know people who were spending like £200 a week on alcohol alone getting tons of debts on various cards while I never went in debt at all except for my student loan. Also, I worked part-time so I can pay a big chunk of it back as well at the end of it. The student loans company also has a really great repaying facility. In fact, it used to be more economically viable to take the loan then stick it into high interesting savings account. But since there is basically no savers interest that sort of disappeared.

[DemonArchangel]

I've been keeping careful track of how much colleges and universities spend. It takes a great deal of money, most of which goes towards fairly basic things like educating, feeding, housing and keeping healthy the students, all of which cost money. Then you have the professors and faculty, who need to be paid salaries, health insurance, dental, and money to conduct research and subscribe to academic journals. Then you need to have facility and facility maintenance. You have to make sure all the buildings used by thousands of people each day don't just fall apart.

For example, I attend the University of Maryland, College Park. It has an operating budget of $1.5 billion a year and around 36,000 students. That means that per student spending in FY 2009 will be $41,666.67 per student. However, the University charges only $8,000 per student for in state tuition and $23,000 a year for out of state tuition. That means that the University is operating at a sharp loss, just by tuition revenues. However, the state of Maryland funds the University, so that state taxpayers keep the University financially afloat. A private institution, say Georgetown University, which is a short metro ride away from UMD, does not have the option of having state taxpayers fund its operations. It must thus charge $48,000 in tuition per year in order to maintain fiscal health. Most private universities still operate at a slight loss and depend on alumni donations to cover the shortfall. However, those are drying up, as job markets become more and more uncertain, and people are more careful with their money, so tuition thus has to go higher.

As for athletics, they are mostly a for profit enterprise engaged in by the school. They bring in revenue (at least for Division I schools)

http://money.cnn.com/2006/11/10/commentary/sportsbiz/index.htm

[Philippus Flavius Homovallumus]

Nah, it is £20,000. It is only £30,000 if you blow it all on alcohol and other things. So unless your sister is crap with money, she should be fine. I know people who were spending like £200 a week on alcohol alone getting tons of debts on various cards while I never went in debt at all except for my student loan. Also, I worked part-time so I can pay a big chunk of it back as well at the end of it. The student loans company also has a really great repaying facility. In fact, it used to be more economically viable to take the loan then stick it into high interesting savings account. But since there is basically no savers interest that sort of disappeared.

I take your point, and it was the same for me. However, consider this:

Fees: 3,000 a year

Rent: 4,000+ a year now

Food, books etc.:around 3,000 a year.

10,000 a year is not unreasonable, mine was about half that but I had help, went local etc. My sister is going farther away, and my parents have better jobs now, so we get less help.

[ICantSpellDawg]

Online courses and their ilk are the future of education. Get rid of facility cost. Learn to learn. Experience your life outside of the bubble

[Lemur]

Online courses and their ilk are the future of education.
Agreed, I've been thinking about this for years. It's just too expensive to send teens to a distant place to be housed, fed and educated.

[Crazed Rabbit]

It is getting ridiculous. And part of it is because the government acted as an enabler - they give out loans and the like so the universities were able to keep jacking up the price. With the extra money universities have spent it, heavily. At my alma matter they spent 80+ million redoing a student union building. They are paying a Russian lit professor 250k a year in a satellite campus. That's unusual, but it shows a result of their idiot planning. They hire to many people and pay them too much. And the government kept increasing the loans that made it possible.

Stopping that will be difficult, but it is an important step in getting college cheaper.

CR

[Strike For The South]

While I think there are many problems with the system, a college education is still worth very much.

I think it's very eaiser to sit there with a degree and say "Yea it didn't help much, all you plebs don't need one" As the first in my family to go to a four year university (whos family saved all there shekles to be able to send my dumbself) It is a badge of honor and pride.

[Alexander the Pretty Good]

You guys better not cut me off.

[Crazed Rabbit]

While I think there are many problems with the system, a college education is still worth very much.

I think it's very eaiser to sit there with a degree and say "Yea it didn't help much, all you plebs don't need one" As the first in my family to go to a four year university (whos family saved all there shekles to be able to send my dumbself) It is a badge of honor and pride.

Oh, I think it's worth it and it will help me a lot. But I got an engineering degree, and engineering's something they won't hire you for unless you have a degree.

There are some degrees that aren't worth it, though. Like philosophy - why not just read books on your own?

CR

[ICantSpellDawg]

The current system has become a burden on education. Entitlements and add-ons weigh down the important aspects that spur the economy and make lives better - from what I always though education was supposed to do. Education should give people skills so that they are able to go out and create. The current system fails kids who go out to fail other kids even worse in a perpetual downward spiral.

It can be corrected, but we need to crush the backs of those who benefit at everyone else's expense, ie administration, those with tenure, etc. Life long teachers should be few and far between. There are no respectable cop-outs in this life. It's time that our much celebrated failure-jockeys understand that. With a new system you would need fewer teachers, but people would benefit from it.

[Beskar]

I take your point, and it was the same for me. However, consider this:

Fees: 3,000 a year

Rent: 4,000+ a year now

Food, books etc.:around 3,000 a year.

10,000 a year is not unreasonable, mine was about half that but I had help, went local etc. My sister is going farther away, and my parents have better jobs now, so we get less help.

They are actually closer to 3,500 a year, due to inflation over the last few years. Food isn't that expensive. You can easily budget for around £5 a day. The cheat to it, is to buy in bulk and not on luxury items. My rent worked out around £60 a week for 42 weeks.

But yeah, 10,000 a year is making me tingle and just glad I am not having to pay it.

[Philippus Flavius Homovallumus]

They are actually closer to 3,500 a year, due to inflation over the last few years. Food isn't that expensive. You can easily budget for around £5 a day. The cheat to it, is to buy in bulk and not on luxury items. My rent worked out around £60 a week for 42 weeks.

But yeah, 10,000 a year is making me tingle and just glad I am not having to pay it.

Well, there yah go then. You can easily find the number rising, and buying in bulk is not so easy. Especially if you want to feed yourself properly, with real meat and vedge, bread that isn't all sugar etc.

[Samurai Waki]

You didn't stop at the GED. I'm referring to those who barely eked out of High School and stayed in the doldrums.

I'm sorry that you take offense, but are you arguing that people who receive their GED's and do nothing beyond that tend to be brighter than people who go on to college?

Absolutely Not! :laugh4:

However, I am of the opinion that High School (or maybe it was just my experience) teaches you subjects that bare no resemblance to things you'll learn in the outside world. If somebody wants to be a mathematician or Rocket Scientist, then by all means they should take classes that relate to their fields of interest. Having that said, the average Joe that just wants to know how to manage his finances shouldn't have to take a course in calculus. The education system in the US pretty much stunts people's educational growth (and interest in education), opposed to enabling them to go further.

Learning life's lessons the hard way usually makes for more determined people, however, if you don't learn how to swim in a hurry, you drown. I think this is true for anyone, and explains why so many High School grads drop college, since for the most part, they aren't taught how the real world functions.

But the same could be said of High School dropouts who don't stick by their aspirations, and aren't determined to make their lot better in life.

[Hosakawa Tito]

Here's a thought provoking article. Kinda long but worth the read. The Case for Working With Your Hands. (http://www.nytimes.com/2009/05/24/magazine/24labor-t.html?_r=1&scp=1&sq=working%20with%20your%20hands&st=cse)

[Uesugi Kenshin]

Oh, I think it's worth it and it will help me a lot. But I got an engineering degree, and engineering's something they won't hire you for unless you have a degree.

There are some degrees that aren't worth it, though. Like philosophy - why not just read books on your own?

CR

Though a degree in Philosophy will almost never get you a job, you're probably going to learn a lot more at an institution with professors, student discussion and so on, than in a cave reading Socrates' complete works while at the same time trying to understand the context of his writings as well. Sure the latter could perhaps give you a more complete picture of Socrates' views and theories, but it will take far longer and there's no way you're going to be able to do that and get anywhere near the same breadth of knowledge as someone with a degree. Unless you're extremely dedicated and have the spare time to painstakingly research 10-20 philosophers and their times.

The point: Having a professor to help explain context and to bounce ideas off of and debate with is very useful, and I think the allure of small colleges like Gettysburg College, which I am going to.

[Samurai Waki]

The point: Having a professor to help explain context and to bounce ideas off of and debate with is very useful, and I think the allure of small colleges like Gettysburg College, which I am going to.

I certainly agree. I went to UCLA for two years, and we basically got handed down from professor to professor without much face time in between. When I transferred to University of Montana, which has a much, much smaller population; I realized how much more information I've retained since I could actually sit down and debate semantics with a Professor. Actually more often than not, if we felt we needed to discuss whatever topic we going over in more detail, a few students and the professor would go across the river to a pub, order a round of Beers, and get into the nitty gritty of it. So, I went from being a 2.5 GPA student, to a 3.75 GPA Student..:laugh4:

[Alexander the Pretty Good]

Here's a thought provoking article. Kinda long but worth the read. The Case for Working With Your Hands. (http://www.nytimes.com/2009/05/24/magazine/24labor-t.html?_r=1&scp=1&sq=working%20with%20your%20hands&st=cse)

Keyboards require hands.

:smug:

[Vladimir]

Here's a thought provoking article. Kinda long but worth the read. The Case for Working With Your Hands. (http://www.nytimes.com/2009/05/24/magazine/24labor-t.html?_r=1&scp=1&sq=working%20with%20your%20hands&st=cse)

Working man's hero: http://dsc.discovery.com/fansites/dirtyjobs/dirtyjobs.html

[Ice]

University is a scam. Years ago it made sense, but today it is nonsense. You are essentially paying $100000 or more to go to mardi-gras for 4 years. You'd probably get more life experience by working full time and actually having an interest in knowledge (reading, listening to local classes at libraries). Save your money and go on a year long cruise.


I'd disagree. The accounting degree I'm currently working toward is not a scam.

[ICantSpellDawg]

I'd disagree. The accounting degree I'm currently working toward is not a scam.

Some degrees, as it has been discussed, are worth the time and money. If your field pays well and ONLY or predominately accepts college grads with related degrees - you are gold and the degree will pay for itself.

However.

The vast majority of degrees are a waste of money from most private institutions. Go local, commute, get a good and affordable education and you will be able to compete with the big dogs while they are still paying off that 4 year hangover that drags into their 30's.

[Ice]

Some degrees, as it has been discussed, are worth the time and money. If your field pays well and ONLY or predominately accepts college grads with related degrees - you are gold and the degree will pay for itself.

However.

The vast majority of degrees are a waste of money from most private institutions. Go local, commute, get a good and affordable educations and you will be able to compete with the big dogs while they are still paying off that 4 year hangover that drags into their 30's.

I'd agree with this. A liberal arts or history degree (many more too) without graduate school is generally a waste of time.

[Crazed Rabbit]

Here's a thought provoking article. Kinda long but worth the read. The Case for Working With Your Hands.

That article makes some good points. But it seems like a lot of kids view college as a four year long chance to party, without giving thought to the long term debt incurred.

CR