June 28, 2013

"The skyrocketing cost of a college education is a classic unintended consequence of government intervention."

"Colleges have responded to the availability of easy federal money by doing what subsidized industries generally do: Raising prices to capture the subsidy. Sold as a tool to help students cope with rising college costs, student loans have instead been a major contributor to the problem."

38 comments:

Matthew Sablan said...

In other news, Pope Catholic.

SomeoneHasToSayIt said...

The "major contributor to the problem" is the same one it always is and always will be, namely, everyone acts in their own self-interest, all the time.

The word "unintended" is irrelevant to the discussion. Rather, why are the consequences at all surprising?

And anyone who is surprised by the consequences should certainly be banned from policy making roles.

Tank said...

Tank has said this repeatedly.

Old news.

See also: housing crisis.

AJ Lynch said...

No shit - now can you please try and convince our librul leaders that their policies caused college costs to skyrocket?

Larry J said...

Driving up college costs isn't a bug, it's a feature. That gives the faculty and staff more money to donate to Democrats.

Calypso Facto said...

"Too much money chasing too few goods"?

You think people who profess to be Keynesians on other topics would understand the concept.

Æthelflæd said...

It's always fun to see our fed money architects golly-gee-whiz surprised by Economics 101. Bless their hearts.

The Drill SGT said...

Academia and the Left (I know, redundant) are destroying future generations since the 70's by:

- Administrative bloat
- competing for students on the basis of amenities rather than education
- encouraging far to many poorly prepared students that their ticket to success was a BA
- at the same time destroying the value of a BA be gutting the classical materials and skills that used to be taught
- Rate inflation
- cheap loans
- AA based over match of minorities

In third world countries an oversupply of college grads who can't find good paying work often results in revolution

Patrick said...

Seems so obvious that even the dolts who write editorials.for the New York.Times could figure it out.

Jason Greaves said...

While it might seem emotionally gratifying to force schools to have some skin in the game, instead of being able to take advantage of our stupid policies of subsidized and guaranteed student loans, wouldn't the more elegant solution be to change the stupid policy?

If the market decides who gets loan money at what price, based on things like grades and intended course of study, schools will necessarily have to change their curriculum and prices in response to market forces.

If only we were still a capitalist country.

C Stanley said...

Healthcare, education, housing.

What a surprise that these are the only sectors with job growth in recent times, the ones getting the subsidies. And of course the gig is up with housing, the bubble has burst.

We keep pretending we can continue to inflate the other two bubbles. It's absurd.

Peter said...

A more methodical look at how and why this happens:

http://heartland.org/sites/default/files/introducing_bennett_hypothesis_2.pdf

MadisonMan said...

Universities should definitely hire several new Deans to look at this problem.

Tank said...

Or form a committee.

Paco Wové said...

"Or form a committee."

Oh come on. Where's the beak-wetting in that?

n.n said...

Only people who are not familiar with the concept of "supply and demand", and the limitations imposed by reality, would think this is an unintended consequence. The same people who proposed and voted for the revenue generating scheme known as "Obamacare". The same people who do not appreciate the consequences of trillion dollar account deficits.

Oh, well. The middle class lifestyle was overrated anyway. FORWARD to dysfunctional convergence.

pduggie said...

There is an additional problem, which is that there is little a college can do to become 'more efficient' and lower cost.

A factory can get modern, better equipment and lower costs over time. A college has profs who want to do less as they age, get paid more as they age, and have health plans that are needed more as they age. How are colleges supposed to lower costs?

Anything they do will dilute your connection to the teachers.

that COMBINED with the subsidy is, I think, the full picture of the cost spiral.

The Drill SGT said...

MadisonMan said...
Universities should definitely hire several new Deans to look at this problem.


LOL,

Looking to move up to Deandom?

Paco Wové said...

"there is little a college can do to become 'more efficient' and lower cost."

Really? It's my impression that a great portion of the bloat of the past few decades has been in administration and facilities - often non-academic facilities. I don't think spending on actual academics is responsible for much of the cost increase at all. (Or maybe it's just being a tuition-paying parent that makes me think that.)

AprilApple said...

Kill it so the government can take it over and it becomes tax payer subsidized?

Wow, the shrinking pool of hard working tax payers better get busy and work harder.

SteveR said...
This comment has been removed by the author.
SteveR said...

Not an unintended consequence. The "right" to a college education creates all sorts of fantastic things for liberals, all of which could be seen, and were obvious for over thirty years. Sun rises east

traditionalguy said...

The jig is up. Reynolds is as good as Snowden at blowing the whistle.

elkh1 said...

Unintended? Taxpayers' money to enrich the connected?

The connected "contribute" to elect the politicians to enrich the connected...


john said...

MadisonMan said...
Universities should definitely hire several new Deans to look at this problem.


Instead, hire more "Assistant Vice Provosts for Diversity and Climate Change".

Deans are passé.

Larry J said...

pduggie said...
There is an additional problem, which is that there is little a college can do to become 'more efficient' and lower cost.

A factory can get modern, better equipment and lower costs over time. A college has profs who want to do less as they age, get paid more as they age, and have health plans that are needed more as they age. How are colleges supposed to lower costs?

Anything they do will dilute your connection to the teachers.


Some things they can do to lower costs:

1. Reduce the administrative bloat. No more Third Deputy Assistant Deans for Diversity and other made up administrative positions.

2. End the facility arms race. Colleges across the country are on a building spree. Dorms don't need to be resorts and student centers don't need to be spas.

3. Concentrate on the core mission of providing education. Research is dandy but no at the expense of education.

4. Require the faculty to teach more courses per term so you don't need so many of faculty.

5. Incorporate technology where appropriate to make teaching more efficient.

6. Eliminate the fluff courses (e.g. "angry studies") from the curriculum so that the available faculty will teach the required courses often enough that a student can have a reasonable chance of graduating in 4 years.

MadisonMan said...

Looking to move up to Deandom?

LOL. I'm not an Ed Psych or Sociology or Gender Studies major, and therefore am SOL.

Dad was an Assistant Dean for a while when I was growing up. Then he became a Department Head. He said being a Department Head was 100x the work, 1000x the aggravation, and the same pay.

edutcher said...

What was the sign at OWS?

"I have a Native American Lesbian Studies degree, a half million dollar debt, and I can't find a job"

Pretty much says it.

Bill R said...

It's true that people in the top 10% tend to have college degrees.

It's wrong to conclude that if everyone had a college degree, everyone would be in the top 10%.

elkh1 said...

Larry J said... "6. Eliminate the fluff courses (e.g. "angry studies") from the curriculum so that the available faculty will teach the required courses often enough that a student can have a reasonable chance of graduating in 4 years."

Huge assumption that the faculty that teach fluff courses can teach other courses. It's their adroit politicking not their scholarship that guarantee their jobs. How do faculty whose degrees are from women-studies, minority-studies, various-victims-studies teach anything else?

You have to eliminate fluff courses and the faculty who teach fluff courses. Good luck with those bloated tenured profs. Oh, those administrative bloat jobs are to reward cronies, can't be eliminated.

Revenant said...

There is a reason it is called "the LAW of supply and demand", not "the casual suggestion of supply and demand" or "the bad habit of supply and demand".

Just sayin'.

Mitchell the Bat said...

It's true what Professor Reynolds says but still I like the way they put the botanical signs on all the trees.

ken in sc said...

Anyone who has ever lived around a military base has noticed that the rents go up when the military housing allowance goes up. It's the same principle.

Methadras said...

Oh, now they are just getting to that conclusion to what I've been for years?

Larry J said...

elkh1 said...
Larry J said... "6. Eliminate the fluff courses (e.g. "angry studies") from the curriculum so that the available faculty will teach the required courses often enough that a student can have a reasonable chance of graduating in 4 years."

Huge assumption that the faculty that teach fluff courses can teach other courses. It's their adroit politicking not their scholarship that guarantee their jobs. How do faculty whose degrees are from women-studies, minority-studies, various-victims-studies teach anything else?

You have to eliminate fluff courses and the faculty who teach fluff courses. Good luck with those bloated tenured profs. Oh, those administrative bloat jobs are to reward cronies, can't be eliminated.


If those faculty can't teach anything else, then they'll have to learn how the cold hard world works, the same as everyone else. Boo freaking hoo. Businesses go through this all of the time. It's time that colleges and government face the same economic reality as the rest of us.

Mark Nielsen said...

Madman: I agree 100% with your dad's assessment. I'm an Associate Dean and enjoy that because the job is basically helping students solve problems. Deans and Department Chairs have to solve *faculty* problems, which is a lot less fun.

At my university the percentage of the budget going towards "general education instruction" has decreased over the past 20 years from just over 50% to just over 40%. Some of that is administrative growth (more VPs, Associate VPs, etc.) but most of it is growth in the cost of "support services" -- human resources, assessment office, grant compliance, disability support services, etc.

Eric said...

Some of that is administrative growth (more VPs, Associate VPs, etc.) but most of it is growth in the cost of "support services" -- human resources, assessment office, grant compliance, disability support services, etc.

My impression is there's quite a bit of administrative bloat, but some of that bloat is unavoidable due to government programs.

Eric said...

Anyone who has ever lived around a military base has noticed that the rents go up when the military housing allowance goes up. It's the same principle.

For awhile I worked as a government contractor near a military base. We got an $80/day housing allowance. Since the surrounding area was a resort town, you could rent peoples' vacation houses in the off season. The cost? $80. $80 for the mini-palaces and $80 for the ones that were one step above a refrigerator box.