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 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.

[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

[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..

[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.

[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.

[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.

[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.

[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.

[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

[Alexander the Pretty Good]

You guys better not cut me off.