Students foot the bill for flagship state universities

https://www.wsj.com/articles/state-university-tuition-increase-spending-41a58100

by paulpauper • 3 years ago

49 80 3 years ago

johnny99k• 3 years ago

When you have students taking out Federal loans, the University getting paid with virtually no risk, and they don't if the student can get a job or pay off the loan, they have no incentive to curb spending.

The federal government need to force these universities to take the risk and loan out money directly.

echelon2• 3 years ago

It's all about risk. Currently the loans don't factor in the associated risks, and therefore are unlimited streams of funny money.

The expected value of the degree, the cost of the degree program, chance of graduation, chance of employment, student risk factors (grades, attendance), etc. are important, yet not considered.

When pricing is artificially kept independent of the underlying risk model, it leads to the kind of huge distortion we see today.

All of this is immediately obvious, of course. But the counter argument has weight too -- that putting risk into the equation isn't equitable. Poor and underserved students won't receive the same access.

A healthy medium might be to allow federal loans to continue for only programs with an expected value in four years that exceeds that of the degree program cost plus loan interest plus double the cost of living. Basically, just STEM, nursing, radiology, etc. at mostly community colleges and state universities. If you want an art school history major, you need a real loan.

haldujai7• 3 years ago

Basically, just STEM, nursing, radiology, etc.

So "Basically, STEM or STEM-adjacent"? (depending how consider nursing)

The expected value of the degree

To society or the individual? Calculated how?

If you want an art school history major, you need a real loan.

So only rich people are allowed to be educated in the humanities unless you're willing to get what will be a very expensive and likely cost-prohibitive private loan? This seems like a step backwards.

A healthy medium might be to allow federal loans to continue for only programs with an expected value in four years that exceeds that of the degree program cost plus loan interest plus double the cost of living

So basically only engineers? This wouldn't apply to anyone getting a graduate degree or even most other professions. A mathematician from MIT entering academia wouldn't meet this calculation. Neither would almost all physicians, even if you ignore years spent in residency, unless they're moving somewhere with a very low COL.

Respectfully, as someone with a humanities undergraduate and two graduate STEM degrees, I find your proposition incredibly shortsighted and fails to consider the individual and societal value of non-STEM degrees beyond direct salary.

I would argue my undergraduate degree has provided me far more value, financial and otherwise, than either of my other degrees.

abeppu• 3 years ago

I think the federal government just needs to have a 'fitness standard' for schools to be eligible to receive federal loan dollars. Like, >80% of tuition dollars must be spent on instruction staff, instruction-specific facilities that serve students, students must be able to opt-out of substantial non-instruction services (e.g. dorms, recreational facilities), etc. If you want to build a new building that doesn't have classrooms, you need to find some other source of funding than students.

I know people hate this, but I also think it would be reasonable if you weren't eligible to receive federal student loans until you had filed your own taxes without being anyone's dependent, or been out of high school for 2 years, or _something_. What if we still agreed that federal programs can help make college accessible and affordable -- but we should want students to have some perspective on what they want their life to look like, and what it will mean to pay off a giant pile of debt over years, and what kind of education might give them a chance at balancing those concerns.

tyoma• 3 years ago

Re: fitness standard.

The federal government already has the bureaucracy for this in say the DCAA (https://www.dcaa.mil/).

I would very much like any universities accepting student loans to be audited and publish audited financial statements detailing where the money goes.

Manuel_D• 3 years ago

In theory, that's what accreditation is supposed to represent: a set of standards to ensure students are educated to a certain minimum bar for a given major.

However, the cynical reality is that university is as much about signalling competence relative to the rest of the population as it is about learning. Fun fact: Stanford's computer science program is not accredited. The department explained that it's a mountain of paperwork to get accredited and it wouldn't benefit Stanford at all because it's already so prestigious.

fallingknife4• 3 years ago

This will just be gamed. The universities need to take on some of the financial risk of loan default. No other system will work.

dv_dt3• 3 years ago

It would also help to require administrative salaries to be below a certain percentage in order to qualify to accept federal loan money. (I would think 8% or lower).

WalterBright7• 3 years ago

More regulation to micromanage things is never going to work. For example, what if you've got an opportunity to hire Feynman, but he expects 9%? Maybe you'll skirt the 8% requirement by giving him a company car to use.

Nobody is smart enough to write a regulation that can't be gamed.

lsmeducation5• 3 years ago

I always had a very simple way to do student debt forgiveness:

1) Have universities foot the bill, not the tax payer (shocking, I know). A literal refund.

2) Institute an audit every 5 years on their price to success rate on a per major basis. Have them refund north of 50% of the tuition if overpriced.

Cool, now run your little game.

This is literally a consumer protection issue and this industry has hid far too long under the veils of sanctity of “but tis’ but education, maaaaan”.

—-

Like many have already mentioned, the federal loans going toward these costs are essentially like donating to a charity that you will never get actionable data on. Did the money go to the right place? Did it work? No? Okay, stop donating to that charity, as nice as it feels to be charitable.

If a charity doesn’t work, it doesn’t work, doesn’t matter how great it sounds. Even a charity named Education.

sokoloff• 3 years ago

What does “work” mean in this case? If a student goes to university and gets a degree in medieval French literature and then serves coffee for life as a job, the university did its job iff the student demonstrated a level of mastery of medieval French literature.

The inadvertent economics education that came later was not the university’s doing and they take no credit nor blame for it.

mrtesthah• 3 years ago

That's the wrong argument to be making. Education should be free.

https://www.brookings.edu/articles/is-free-college-a-good-id...

AdamJacobMuller• 3 years ago

Agreed, simple solution though.

Students pay a maximum of N% of their income over Y years and anything above this is forgiven. The university has any forgiven amounts deducted from their actual cash payments for future student loans.

beej71• 3 years ago

This is an Income Share Agreement, which I certainly approve of.

Another option available to public schools is that you can use tax as a mechanism for collecting that money.

sowbug• 3 years ago

https://archive.is/wwB4A

29athrowaway• 3 years ago

Overproduction of elites

https://en.wikipedia.org/wiki/Elite_overproduction

throwawaaarrgh• 3 years ago

I thought it was common knowledge that it's a racket? You pay exorbitant fees to get a piece of paper with a famous name attached hoping it will get you a job or contacts. They know this so they keep raising prices as long as the money keeps flowing.

WalterBright7• 3 years ago

If there's no math requirement for major X, you can be assured that there are no jobs in X that pay more than minimum wage.

Besides, there's no excuse for not googling "starting salaries for X" before committing to it.

Aurornis• 3 years ago

The catch is that universities must spend on impressive new facilities, buildings, housing, and sports if they want to remain attractive to their customers (students).

Most universities are still competing for students. Many students survey a lot of universities and do campus tours to determine where they want to attend. The short campus tours don't really show them anything about the education they receive, but the state of the facilities and leaves a lasting impression.

Given the choice, undecided students tend to be drawn to universities with the nicest campus, most impressive facilities, best sports arenas, and other expensive things.

Universities know this, so they spend like it's an arms race.

spicyusername• 3 years ago

I'm not saying it's true or not true, but this is definitely the same story the school administrators are telling themselves.

figassis• 3 years ago

Why. It just maintain them well, instead of building new structures every quarter?

lumost• 3 years ago

This doesn’t really make sense for state institutions. If I am a state institution, why do I need to compete for students?

If students have choice, then isn’t my job complete? I’d suspect that spending on premium faculty would have a better chance at business generation than saddling students with debt for stadiums.

WalterBright7• 3 years ago

I must be weird, because I paid no attention to facilities, etc., when I looked for a university. I looked at the value of the engineering education they provided, and that was about it.

s1artibartfast2• 3 years ago

I would argue that they're not competing for students, they're competing for Prestige. Most universities have a wait list a mile long, so they're not going to run out of students.

However, very few colleges want to be the university that produces an adequate education with extremely low cost. They all want to be the most prestigious University, costs be damned.

If you want to get a sense of the differences, community colleges are focused on students, not prestige. Community college costs is California are $550 per semester, while UCs are in the $13-14k/yr ballpark.

Undergraduate lecturers can actually be better at a community college IMHO, because they are career teachers, not career researchers.

drewda• 3 years ago

Most universities have a wait list a mile long, so they're not going to run out of students.

Have a look at the stats at https://nces.ed.gov/programs/digest/d22/tables/dt22_305.40.a...

Add up the percentages and you'll see that only 7% of American undergrad institutions accept fewer than 50% of their applications. That means half of colleges and universities take at least half of everyone who applies. Not much of a waiting list, in other words.

Anyway, as someone who has attended a California community college and a UC and an elite private brand name school, I very much agree that California community colleges have some fabulous faculty and can be both extremely supportive and cost effective for their students!

mech7654• 3 years ago

The college bubble is popping. Enrollment is down 15% from its 2010 peak. My intuition is that the bigger state schools will be well insulated financially, but smaller independent colleges will have a bloodbath.

m_0x3• 3 years ago

Until companies ditch the stupid degree requirement for jobs that obviously do not require a degree, everybody is going to suffer.

Fewer colleges mean:

1) People out of jobs. Teachers will lose their main income and the remaining colleges will have no incentive to increase their payroll because where are they gonna go?

2) Getting into a college will be even more competitive. As companies will still look for people with degrees, colleges can charge even more and candidates to study there will have less choices.

This will only change when NOT studying at a college has no impact in your future income. Or the impact is lesser than today.

SoftTalker2• 3 years ago

While many jobs do not in reality require more than a high-school level education, a college degree is a valuable filter for people who can commit to something that requires learning and applying what has been learned, and seeing it through over a period of 3-4 years.

For jobs that require a college degree, but the major subject of study doesn't matter, that is what they are using it for.

A High School diploma used to mean a lot more, when education was compulsory only to 8th grade. A modern high school diploma pretty much just certifies that you showed up, and the only people who don't have one are people who dropped out.

the_only_law• 3 years ago

Until companies ditch the stupid degree requirement for jobs that obviously do not require a degree, everybody is going to suffer.

It’ll never happen. They need low effort filters.

bosie• 3 years ago

Where would you learn the skills for that first job? And which jobs would that be?

endominus• 3 years ago

There's a common belief that education is being underfunded in the United States, that the problem with schools is that they lack the budget to improve their learning outcomes. Statistically speaking, total spending on education had increased year on year, accounting for inflation, per student, since the 1970s. Conversely, test scores have remained relatively stagnant (see https://slatestarcodex.com/2017/02/09/considerations-on-cost... points to the problem lying elsewhere.

sohex2• 3 years ago

Is total spending per student really sufficient as a means of tracking whether enough is being spent though? I'd imagine that the costs per student have risen a greater rate since the 70s than spending has. Between things like needing to pay for computers and IT infrastructure, accommodation programs for those with special needs, and so on it seems to me that it's actually remarkable in someways that test scores have even managed stagnancy rather than a decline.

WalterBright7• 3 years ago

Computers are not necessary for K-12 education. They're more likely a hindrance.

vxNsr3• 3 years ago

I’ve yet to see any real correlation between increasing technology in the classroom and increasing learning. In general technology in the classroom is a hindrance to real education. It turns out most people learn better writing by hand and interacting in person vs staring at a screen.

AlbertCory2• 3 years ago

Cost per student is the wrong metric, since the numerator includes all the hundreds of assistant deans, other administrators, and other non-educational costs.

"Instructor salaries, fully loaded, and other direct costs" would be a better choice.

rayiner2• 3 years ago

It’s worth understanding the trade offs countries like France make to offer near free university education: https://voices.uchicago.edu/euchicago/the-problem-with-frenc...

WalterBright7• 3 years ago

"The accessibility of French universities—both from an admissions and financial perspective— paradoxically has had negative consequences on students."

That's pretty obvious to anyone who understands that people tend to not place value on things they get for free. Like public high school education in America.

flexie• 3 years ago

Here in Denmark, all universities are state owned and with no tuition. In fact, you get paid to attend one (around 900 euro monthly). But I can assure you that Danes place a lot of value on the free universities. Some universities are considered slightly more prestigious (often the older ones), and some programs are also more prestigious than others, for example the ones that are difficult to get into, or that lead to jobs with higher salaries, or which are considered particularly difficult.

So how does one compare the "free" (tax paid) Danish universities to the US/UK ones? By citations? Nobel laureates? Amount of foreign students? Salaries of alumni? Patents? GDP per capita? Number of high value companies per capita? I think you'd find that as a whole, Danish, and other Scandinavian universities, easily compete with Anglo Saxon universities, and that the main drawback of Scandinavian universities is the language.

rahimnathwani4• 3 years ago

I couldn't take that article seriously after reading this paragraph:

  The French state spends 6,700 euros per public student per year, but up to thirteen thousand euros can be spent per student enrolled in Grandes Écoles, despite their only accounting for five percent of total students. Thus, though they only teach five percent of French students, these Grandes Écoles receive 30 percent of the government’s education budget.

(I read the paragraph after this as well, but it made even less sense, as it was suggesting the low fees paid by French students, of the order of hundreds of dollars per year, were somehow related to the quality of education, when it's simply because the vast majority of the cost is paid for by the state.)

rayiner2• 3 years ago

What do you think is wrong with that paragraph? It’s just saying that limited funding is disproportionally directed to the Grande Ecoles, leaving the other schools with much less funding.

6,700 euros is not a lot of money. It’s about $7,300. U.S. public universities and colleges spend on average over $28,000/year.

dang• 3 years ago

Recent and related:

Colleges spend like there’s no tomorrow - https://news.ycombinator.com/item?id=37074472 - Aug 2023 (8 comments)

AlbertCory2• 3 years ago

recent, and inadvertently wrong: https://news.ycombinator.com/item?id=37090403

I did archive the same story, but failed to include the URL. Duh.

vxNsr3• 3 years ago

Can we all just agree that colleges not the US government should be on the hook for unpaid loans? I’m all for loan forgiveness if it comes out of the universities’ coffers.

In fact let’s take this to the next level, automatic wage garnishing but still ensure former students have a livable income, but after 15 years if the loan isn’t paid off, the university is on the hook for the rest.

Students foot the bill for flagship state universities

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