<p>Does Tim want to be able to drive over bridges knowing he won’t go in the water? Does Tim want to drive cars that won’t blow up when he turns the ignition? Does Tim want to ensure that his elevators don’t plummet at the 8th floor? Does Tim want to be sure that his house doesn’t fall down around his ears? When Tim need a replacement hip at age 65, does he want to be sure that his body doesn’t reject it and that it works properly within his body?</p>
<p>Then Tim has a vested interest in making sure that the US has well-trained engineers and scientists.</p>
<p>If every would-be engineer in the US had to bear the entire cost of an engineer’s education either out of pocket or through bank loans, we wouldn’t have that many engineers, and we’d be stuck in the Industrial Revolution.</p>
<p>I agree that individuals should bear some cost in their own secondary education, but we do live in a society. Also, most college majors are not occupational training.</p>
<p>Overall, it should be the colleges own choice to go about how it charges it’s students.</p>
<p>Although I must ask, why should the government support tuition costs more? That’s why it’s so high in the first place.</p>
<p>The government needs to completely step out of the game with student loans (such as PLUS) and only offer maybe pell grants. The other key step it must take if it chooses to do so, would be to make student loans dis-chargeable through bankruptcy. The shark private lending market in student loans would all but disappear and all the easy money to colleges that gets spent on giant new stadiums would disappear as well. If nobody is able to go to college because they can’t take out loans to do so, where will college’s get their money from? Nowhere. No demand at current price levels means prices either go down, or the college goes out of existence.</p>
<p>Something else I’ve thought of, though which kind of goes against my ‘free-market’ beliefs is to have the government require college’s to make any loans directly to students (if the college chooses to ‘approve’ the student) and of course still keep the loans dis-chargeable through bankruptcy. It would suddenly be in the college’s best interest to make sure you get a job that can pay back the loans, and/or to also have tuition at an affordable level which can be paid back. Because if you default, there’s a loss that cuts directly into the college’s balance sheet.</p>
<p>With loans from the federal government and private lenders, colleges do not care if you are otherwise able to pay back your loans eventually. They already have the money, it isn’t their problem.</p>
<p>$11,000 or so combined Pell grants and Stafford loans per year is far short of the $60,000 per year cost of many private universities. It is unlikely that, in the case of these private universities, that government aid by itself is the main driver for cost increases, nor by itself would make them affordable to those from lower and middle income families.</p>
<p>If they charged more for STEM majors, then there would be some backlash about how to identify which things qualify as STEM at different schools.</p>
I believe the idea was to charge based either on costs or on income potential, both of which are at least somewhat directly quantifiable, so categorization would not be an issue.</p>
As juillet noted, the sum total of federal student aid is far lower than the cost of private universities. When you look at public universities, even the expensive ones are already far cheaper than privates, so I am not sure how you can take away funding and still do any good there. The main drivers in costs have been the combination of supply-and-demand (there’s your free market!) and prestige-chasing.</p>
<p>
If loans were dischargable through bankruptcy, you would see student loan rates go up to credit-card levels. They are unsecured loans for a large sum, against a person with as-yet-undetermined earning potential, with deferred payments for 4+ years… if recoupment is not more-or-less guaranteed then the risks become HUGE. I think you would see rates for “sure-thing” schools and majors in the 20% range, and loans just flat out refused for a lot of schools and majors as being simply too big a risk against even best-case projected incomes.</p>
<p>Oh, and stadium costs are generally levied against the athletic departments and paid from future ticket sales, and not paid out of the general fund. For those schools where that is NOT the case there is a problem, but you should not make categorical assumptions.</p>
<p>
You are making the fundamentally flawed assumption that “college” is available for any given price, when the reality is that there are bottom limits on the tuition that a school can charge while still funding a marketable education. That limit is already well above what a great many people in this country can pay, and messing with student loans and grants will do more to drop people out of school than it will to lower tuition.</p>
<p>
The same is true of every item purchased under any loan. Does the homebuilder care if you can make the payments on your mortgage? Does the car dealer care if you can make those loan payments? Heck, does Sears care if I can pay the bill for my drill on my MasterCard? No. Because those are issues for the lender to address, not the vendor.</p>
<p>I really don’t like that I have to pay more for an engineering degree. However, flight, management and technology students also have differentials to pay as well.</p>
<p>We have several problems other than the cost of education in the current system: </p>
<p>o Students are having trouble graduating in four years, if at all
o Students are choosing “easy” majors with little prospect of employment
o Students who do graduate are having trouble finding employment
o Students (and parents) are saddled with interest-bearing student debt
o We have a redistribution of wealth mentality in education, where many
families pay much less and some pay much more than the actual cost
of education.</p>
<p>It is not just the government, but private colleges who actively redistribute wealth based on means. The sticker price for private (and public out of state) college is well above actual cost, and colleges redistribute the excess to those who pay less than actual cost. The upward spiral in college costs is thus in part simply caused by fewer families able to pay full fare (due to the last increment in price), and thus the need to generate more revenue to dole our more financial aid by charging a higher price to full-fare families … you can see how this cycle feeds on itself. So far wealthier families have been willing to pay ever-higher prices. </p>
<p>Have you noticed, however, that tuition at private colleges has leveled off this year for the first time in recent history? Is this because costs have somehow leveled off more so than in the past? No, it is because colleges fear public sentiment, indicating that the full-fare market may not be able to bear yet higher prices. As a result, a higher proportion of private financial aid is in the form of loans (rather than grants) this year.</p>
<p>Here’s an idea. Just food thought.</p>
<p>One possible solution to both the issues of education access, cost and student failure would be for the federal government to restructure the way it funds higher education. If the federal government offered vouchers for the actual cost of public state four-year education up front (which could be used for any major, at any college or university in the U.S., even if the college has a higher rate for some majors), for all domestic students who are admitted regardless of means, then taxed <em>that same individual</em> with a special income tax until the education funding they received was <em>fully</em> recovered, then education would be open to all who qualify, and yet there would be no net redistribution, and the current student debt problem would be tempered by payments being required iff there is income. Students would have a strong incentive to choose majors based on the employment market, knowing that they personally are ultimately going to pay for the full cost of their education out of future earnings. Parents would be less apt to pay for their children’s education, and this and the four-year limit would incentivise students to pursue higher education only if/when they are ready to work towards a degree in four years that would offer subsequent prospect of employment. I think this would also lead to lower costs for private colleges, as many fewer families would require additional financial aid from colleges in order to meet the actual cost of the private college (hence, less need for the tuition bubble due to financial aid), and private colleges would be competing more directly with public colleges, as this plan would give all qualified students the financial option of attending state schools.</p>
<p>This is a really hard problem with no easy answers. Is there some optimal answer? Likely, yes. Is it independent of major? Almost certainly no. However, developing a credible predictive model is probably out of reach, and empirical research is logistically (and possibly ethically) challenging, to say the least.</p>
<p>Students should also be accountable for selecting an affordable school rather than assuming they will be automatically hired because they paid more for a designer degree.</p>