<p>Can’t speak for other colleges, but at the 4th tier directional state U that I teach at, the college spends substantial time and money analyzing these issues concerning our students. We know many of the <em>causes</em> of the problems; we are working (not too successfully in my humble opinion) on addressing the issues that are at least somewhat in the college’s “control” for lack of a better word.</p>
<p>For example, we know that many of our students step out (or drop out) for financial reasons, but teasing out the particulars can be difficult. Most of our students work anywhere between 10 and 40 hours off campus per week while at the same time attempting to take 18-19 credit hours per semester (our standard load is supposed to be 15). They miss class because their car died on the NY Thruway while they were commuting to either campus or the job, but right now they don’t have transportation. They miss class because of family obligations—taking care of their own kids is not that unusual; taking care of sick parents also happens. And sometimes they miss class because they can’t or won’t tell their boss they have a class at time x:xx and simply can’t be at work at time y:yy. Or they’re working the night shift but also are registered for an 8:00 or 9:00 morning class. Or they work MWF, so they try to take all 5 or 6 classes on TR, meaning that if they need office hour help, there is literally NO time to meet with the prof.</p>
<p>If you want to talk about whether higher education benefits society, you first have to separate research and teaching, at least at the undergraduate level. I don’t believe teaching in higher education benefits society, at least excluding higher tax receipts. Thus, in an ideal world, the government might not finance the teaching aspect of higher education. The problem is that there appears to be a market failure with respect to how college is generally financed. Student loans, without a cosigner, are almost non existent in higher education. If college was supposed to be a great investment, then banks should be willing to lend students money for college, using the students’ future income as collateral. However, some students don’t end up with high paying jobs. Thus, the best way to insulate students’ from that risk would be to charge the students’ X% of their salary for the first Y years after they graduate. Perhaps, Brooklynborndad, as an economist, can speculate on why contracts like this have not come into existence on any scale.</p>
<p>I really give families like yours all the credit in the world. Really, I think it wonderful that you were willing to give up things to put your children through college. I also really appreciate the fact that you do not begrudge posters like me for my situation. The fact of the matter is that many people view college students like me as leeches off of their full freight tuition money. I agree, the price of tuition HAS TO COME DOWN. It’s not fair that the highest income levels have such a large burden. I do think that the more you make, the more you should pay, but the ceiling has gotten too high. it should still be reasonable for all families. I don’t have a solution, I won’t pretend to have all the answers. Maybe we simply have too many colleges in the US? If we decreased the number and made state schools a bit larger(which creates it’s own problems), we could bring down cost for most families? I don’t know. Most of the ideas that would work would make people far too angry to ever be implemented</p>
<p>I went to WUSTL when tuition, quite shockingly, rose from 5 thousand something/year to 7 thousand something/year. </p>
<p>I had student loans (capped at 2500/year), a small amount of grant aid, and my parents paid the rest. I think my Dad made about 50K then. He was an engineer.</p>
<p>Now that WUSTL’s tuition is 39K, how much would he have to make for it to be a comparable situation? 390K? What engineer makes that???</p>
<p>And THAT is the problem. Somehow, tuition and expenses have been rising faster than inflation and wages for decades. I don’t know the reasons why. It seems there were more tenured faculty then compared to now. And WUSTL wasn’t bare-bones ascetic back then either. </p>
<p>Maybe the building boom? The costs of doing research? Too many perks in too many places???</p>
<p>My two D’s applied to many schools this year and a few stood out as being moderately affordable. Not state schools, not expensive privates, but schools that have somehow reigned in their costs to be about 20K/year for everything without government aid. How do they do it? I must say they didn’t look very different from the other schools we visited.</p>
<p>"Thus, the best way to insulate students’ from that risk would be to charge the students’ X% of their salary for the first Y years after they graduate. "</p>
<p>From the lenders POV, that creates terrible incentives. The borrower is already facing a non-trivial tax rate on marginal income. Add in a sliding scale loan repayment, and a borrower, faced with a choice between a high paying job, and a lower paying one with countervailing advantages, would be unlikely to take the higher paying one. This might work as a govt sponsored program, or even by a more innovative university, but I cannot see private for profit lenders doing it.</p>
<p>"Do you think that the typical state flagship provides sufficient access to higher social mobility? I think so, but I’m sitting here in the midwest where, frankly, a degree from a Big 10 school will get any poor kid pretty much anywhere where he wants / needs to go. "</p>
<p>quite possibly. That particular sentence was intended to discuss potential benefits of subsidies to higher ed in general, not to make the case that subsidies should be extended to schools other than state U’s. </p>
<p>I personally think a case can be made that giving subsidies to students, and letting them use them as they wish, makes more sense than public funding of individual institutions. The reasons are analogous to those made in discussion of voucher systems for k-12, though IMO it makes more sense at the higher ed level than in k-12, as I have discussed elsewhere. OTOH the obvious problem with that is the abuse of such funding by fly by night, usually for profit, private instutions, which, IIUC, has been an issue with Pell Grants and existing subsidized Federal loan programs. I am not sure of the best way to address it.</p>
<p>I am heartened that its being addressed. I would suggest that this may be so big an issue, it warrents attention at the federal Dept of Ed, or by other education/human resource policy makers.</p>
<p>Some of the issues you mention implicate other policy areas that are not obviously related education - transportation alternatives, availability of child care and elder care, etc. Issues that impact many other social problems as well.</p>
<p>There was a company called “My Rich Uncle” which was doing exactly that. They were using models to predict your future income based on a variety of factors and lending you money based on it.</p>
<p>They went out of business when they couldn’t raise capital during the banking meltdown/liquidity crisis.</p>
<p>I’ll be honest, I don’t know how much involvement the US Dept of Ed has in studying these things, but it is involved, at least tangentially, in helping (some) colleges tackle some of the issues that lead to poor graduation rates for low income and working class students. If nothing else, it provides [through grants] money for institutions such as mine to study issues related to the academic success/failure of large groups of students. It also does provide so-called Title III funds which are used to support both changes in pedagogical policies and the gathering and analyzing of data concerning whether the changes are really doing anything to strengthen the institution’s students’ success.</p>
<p>And yes, some of the issues do implicate other policy areas not related to education. But that’s the whole point—when you are looking at college access and college graduation for low and lower-middle income students, the money-issues go far beyond simply affording the COA of the institution. Hence even if a low-income student is lucky enough to be in a state where the total of Pell+Stafford+state grants is enough to cover COA at a directional state U, the need-based aid is seldom enough to make college genuinely affordable simply because the student (and his/her family) is living so close to the edge even before attempting college.</p>
<p>"the money-issues go far beyond simply affording the COA of the institution. "</p>
<p>I guess my point was that all three of those issues, child care, elder care, and journey to work, also are key in such areas as welfare to work and other equity issues. Adding the college drop out issue adds urgency, and makes a stronger case for action.</p>
<p>So does this mean taxes should support only the * research * part of the college’s mission, and not support the * teaching * part at all?</p>
<p>And which tax dollars are we talking about? Federal dollars? State dollars? County/city dollars?</p>
<p>It’s important: If no taxes (of any sort) should support any undergraduate level * teaching *, how the heck is a community college supposed to be funded? And what is the purpose of having a state university system at all? Should all state colleges simply become * private * and charge tuition that actually reflect the money they currently spend on undergraduate education?</p>
<p>Remember, research plays NO PART in the mission of a typical community college—they’re all about providing affordable access to post-high school education. And without the state and local tax subsidies, tuition at your local cc would have to increase rather dramatically, and hence not be affordable to the vast hordes of really low income students who aren’t good enough to get the free ride at HYP and have no other affordable options.</p>
<p>And at most state flagships and almost all directional state U’s, the in-state undergraduate tuition is less than (and often substantially less than) the per capita cost of educating a student. So we take the state subsidy (funded by state taxes) away and just increase the tuition? So all colleges (and not just the over priced privates) will need to charge $20-25K or more in tuition each year? Yeah, and how exactly will that make stuff more affordable for the middle class? [And if you look at the state colleges that already <em>have</em> in-state tuition as high as $20K, you’ll find that the state subsidies already make up a tiny smidgen of the college’s overall budget.]</p>
<p>And if we’re only talking federal tax dollars? Well, the vast majority of federal tax dollars that go to state colleges come in two forms—need-based financial aid tied to individual students and * research * dollars distributed through a highly competitive grant system. </p>
<p>There’s very little or no federal grant money distributed to colleges that does not * require * some significant research component. Even the grants that directly fund novel pedagogical approaches to undergraduate courses require research components to rigorously measure whether the new approaches are actually accomplishing anything. [And if the data indicates they’re not, there’s little or no chance the college will continue them.]</p>
<p>So is your beef really with the fact that federal tax dollars are used for Pell grants and are used to pay the interest on subsidized Stafford loans? Remember—the Stafford loans ARE LOANS and the US Government fully expects students with Direct Staffords to repay every single cent since student debt is the one kind of debt that can’t be wiped out by going through bankruptcy!</p>
<p>
</p>
<p>Given that the * average * six year graduation rate for low income and lower middle income students at directional state U’s is often as low as 40%, there’s a reason why a bank wants a cosigner on a student loan. There’s no way for a * bank * to predict whether a given low income student is likely to graduate or not. And the only way they were ever persuaded to make non-cosigned loans available at all was through the Federally subsidized Stafford programs. Given that for many students the * privately * funded, but federally guaranteed/subsidized loans often entailed more paperwork and longer waiting periods than for the Direct loans from Uncle Sam, it’s not really a surprise that * students * haven’t complained about the feds deciding to eliminate the middle man.</p>
<p>
</p>
<p>Brooklynborndad has already pointed out weaknessess with this idea.</p>
<p>This is, in fact, how most other countries keep the cost of college affordable—through very generous subsidies given directly to the U’s. (Canada and many European countries come immediately to mind.)</p>
<p>
</p>
<p>The state-based system is, for better or worse, part of our federal system heritage and the tenth amendment.</p>
<p>
</p>
<p>Think of field day the Tea Party types would have if any federal level politician even came close to proposing the idea of federalizing the 50 state university systems and equalizing tutition across all of them!</p>
<p>“And what is the purpose of having a state university system at all? Should all state colleges simply become private and charge tuition that actually reflect the money they currently spend on undergraduate education?”</p>
<p>IIUC, Harvard started out with funds from the then colony of Massachusetts (they wanted home trained ministers) and Penn (UPenn, NOT PSU) started with funds from Pennsylvania. So thats not an impossible model for many State U’s. </p>
<p>That leads to the two key questions - do we want to fund higher education (and no I dont mean research - which is not funded to general needs, but to the specific research agendas of the agencies in question) for its broader benefits to society - a better educated citizenry, economic externalities (the possibility that a more educated populace will have economic benefits exceeding the monetary returns to the educated, which is a topic which, AFAICT, economists disagree about) and social mobility. The second question, is the relative costs and benefits of a voucher/Pell/subsidized loan system vs direct line item grants to public universities. </p>
<p>Community colleges present an interesting issue. The economies of scale = local monopoly/oligopoly issue is stronger for them than for 4 year schools, and historically the private non-profit sector has not been successful (AFAIK) in creating any significant number of quality 2 year colleges able to do anything like what Comm colleges do.</p>
<p>I see much justification, and even urgency, for maintaining or expanding public funding of Comm colleges than for State U’s.</p>
<p>"Think of field day the Tea Party types would have if any federal level politician even came close to proposing the idea of federalizing the 50 state university systems and equalizing tutition across all of them! "</p>
<p>I don’t think I would necessarily pursue that idea. the advantages of a more sane tuition system would be offset by issues of bureucratic centralization, I suppose. I think the other possibility is to gradually redirect resources from line item subsidies, to direct to student subsidies. To some degree that is already happening, as states cut subsidies to state U’s, and the feds expand tax credits and Pell grants (?), modify loan programs for the issue of borrowers in financial trouble, etc. This isnt a binary thing. </p>
<p>The main negatives I see is that States are cutting community colleges for which there are no adequate private substitutes, as much as for flagships where there are.</p>
<p>Yes, in an ideal world no tax dollars would support the teaching aspect of higher education. Banks or other financial institutions don’t have to predict whether an individual student will graduate and pay back the loan. They should be making hundreds or thousands of these loans and only care about the average return on investment. Diversification protects the lenders from worrying about whether an individual student pays back the loan as long as their portfolio rate of defaults stays below some threshold. If only 40% graduate, then maybe too many people are going to college.</p>
<p>Brooklynborndad,</p>
<ol>
<li>Assume a marginal tax rate of 28% federal + 15% social security and medicare + 7% state tax = a 50% marginal tax rate. Assume a lender asks for 20% of gross income. That works out to a 70% marginal rate. Further, assume an ETI of 1. Then people will earn (1-0.7)/(1-0.5) = 60% as much. 20%*60% = 12%. I believe such loans could be viable if amortized over 15-30 year loans.</li>
<li>The example illustrates that middle class taxpayers pay far more than they should in taxes. If the federal and state governments truly supports higher education, they should reduce marginal tax rates.</li>
</ol>
<p>Summary
My main problems with the system are
college tuition increases faster than inflation.
There is almost no private loan market to students, not their parents. I agree with Brooklynborndad that the main cause of this is excessive government taxation.</p>
<p>Seems to me that the cause behind most of the reality (colleges keep raising prices) is that those opposed are only in the battle for a handful of years…then we “graduate” and we have less of an opposition. The other side of the battle lines is steadfast with a war counsel that doesn’t have to re-arm every 4 or 5 years. </p>
<p>The simple fact of the matter is that a college degree costs significantly more than it has to. Technically, we are fine with an age of high speed communications, en masse webinars, and education at the speed of light EXCEPT for a college degree. There’s really no reason why a degree from HARVARD requires physical attendance and corresponding tuition that supports the buildings, the grounds and the endowment funds etc. In fact, a high speed connection and a few bucks a month from 10,000 students simultaneously taking a single course would cover the costs of communication and a support staff of evaluators for the required tests and essays.</p>
<p>The simple reason we continue to pay is the cultural NORM that suggests we HAVE to do it that way. That plus the fact that most employers assign a higher value to a brick and mortar degree than one earned through the technosphere.</p>
<p>My daughter has taken distance learning, in the year she was homeschooled. I think you do not have a clear idea of what goes into a quality distance learning program. I would suggest that even a quality distance learning program (see JHU CTY for example) is not equivalent to the intellectual life on an Ivy league campus. It MIGHT be an excellent substitute for much lower tier on campus learning, but those aren’t that expensive to begin with. Maybe.</p>
<p>Timmy - from the banks POV, the tax rates (which I think you are overestimating, as fasr as most new grads, BTW) are already a problem, to the extent they incent lower income choices (which are not necessarily BAD choices, BTW) An additional “tax” from a sliding scale repayment compounds the problem.</p>