PennStateHoops.com Discussion Forum

OT - former GW prez on tuition

Tripling tuition for a great cause!

Wow. One of the biggest crocks of s*** ever. Walmart jeans vs. Ralph Lauren jeans? He might first get his numbers straight, but he’s obviously never set foot in a Walmart. Jeans are more like $11-13. Cut Federal loans and prices would drop like a stone. Community college applications, and schools like North Dakota State(one of cheapest in nation) are way up, as are online schools. The education bubble will burst. Some think it already has. When you add that an estimated 37% of college grads learn nothing, it’s clearly overpriced. The PayPay founder is right.

This from an old post still fits.

[i]California’s budget crisis has reduced the University of California to near-penury, claim its spokesmen. “Our campuses and the UC Office of the President already have cut to the bone,” the university system’s vice president for budget and capital resources warned earlier this month… Well, not exactly to the bone. Even as UC campuses jettison entire degree programs and lose faculty to competing universities, one fiefdom has remained virtually sacrosanct: the diversity machine.

Not only have diversity sinecures been protected from budget cuts, their numbers are actually growing. The University of California at San Diego, for example, is creating a new full-time “vice chancellor for equity, diversity, and inclusion.” This position would augment UC San Diego’s already massive diversity apparatus, which includes the Chancellor’s Diversity Office, the associate vice chancellor for faculty equity, the assistant vice chancellor for diversity, the faculty equity advisors, the graduate diversity coordinators, the staff diversity liaison, the undergraduate student diversity liaison, the graduate student diversity liaison, the chief diversity officer, the director of development for diversity initiatives, the Office of Academic Diversity and Equal Opportunity, the Committee on Gender Identity and Sexual Orientation Issues, the Committee on the Status of Women, the Campus Council on Climate, Culture and Inclusion, the Diversity Council, and the directors of the Cross-Cultural Center, the Lesbian Gay Bisexual Transgender Resource Center, and the Women’s Center.
[/i]

Let’s just say some parents might want to save the $$$$$ for their families, rather than spend on the above BS. Funny how the GW President didn’t mention any of the above. Maybe his school doesn’t have those departments. :wink:

As the dad of a HS junior, I have a lot to learn in the next 12 months. I’ll say this, though. It almost seems as if the tuition model works like this:

  1. Raise price of tuition.
  2. Take incoming $$ and apply savings to individuals based on need, and not to overall tuition rates.

I think in the “old days” when the college got help, it was applied to the overall budget to keep tuition rates down for everyone. Now what’s happening in the new model is that they’re letting the base rate go up, and then provding more need-based aid. What that does is create a sliding price scale based on ability to pay. If you’re “rich” and can pay out of pocket, you pay a higher full rate… If you’re in need, the school finds you aid to lower the price to something they hope you can afford. This allows the school to get more from the upper income brackets, and that can free up other cash to help bring down the cost for those with a lower abillity to pay.

Now, in terms of DOS, I’m not sure if they’re here yet… it’s a little tougher model to manage at the land-grant level.

I do find it interesting how Obama’s been coming down hard on the for-profit higher ed sector. I’m assuming that he’s just trying to protect his ivory-tower buddies… at least that’s what I see when looking at it from the right.

Sounds like this guy and Spanier would get along well.

[quote=“MarkH, post:3, topic:2693”]As the dad of a HS junior, I have a lot to learn in the next 12 months. I’ll say this, though. It almost seems as if the tuition model works like this:

  1. Raise price of tuition.
  2. Take incoming $$ and apply savings to individuals based on need, and not to overall tuition rates.

I think in the “old days” when the college got help, it was applied to the overall budget to keep tuition rates down for everyone. Now what’s happening in the new model is that they’re letting the base rate go up, and then provding more need-based aid. What that does is create a sliding price scale based on ability to pay. If you’re “rich” and can pay out of pocket, you pay a higher full rate… If you’re in need, the school finds you aid to lower the price to something they hope you can afford. This allows the school to get more from the upper income brackets, and that can free up other cash to help bring down the cost for those with a lower abillity to pay.

Now, in terms of DOS, I’m not sure if they’re here yet… it’s a little tougher model to manage at the land-grant level.

I do find it interesting how Obama’s been coming down hard on the for-profit higher ed sector. I’m assuming that he’s just trying to protect his ivory-tower buddies… at least that’s what I see when looking at it from the right.[/quote]
My last is finishing this year (I hope anyway. I’m paying the bills. But, grad school may be in the future.) He received NO need based aid. Their is a WHOLE lot of blame to go around about school prices. They have sky rocketed for MANY years. Blameing the current president…GIVE ME A BREAK. Did prices soar during the Right Wing rule???
But, the college situation is not hopeless in PA. Many kids start at JCs for a year or two. Plus PA has many state schools. Sure, PSU and ~itt are HIGH…but tuition at many of the others is not extreme.

[quote=“MarkH, post:3, topic:2693”]As the dad of a HS junior, I have a lot to learn in the next 12 months. I’ll say this, though. It almost seems as if the tuition model works like this:

  1. Raise price of tuition.
  2. Take incoming $$ and apply savings to individuals based on need, and not to overall tuition rates.

I think in the “old days” when the college got help, it was applied to the overall budget to keep tuition rates down for everyone. Now what’s happening in the new model is that they’re letting the base rate go up, and then provding more need-based aid. What that does is create a sliding price scale based on ability to pay. If you’re “rich” and can pay out of pocket, you pay a higher full rate… If you’re in need, the school finds you aid to lower the price to something they hope you can afford. This allows the school to get more from the upper income brackets, and that can free up other cash to help bring down the cost for those with a lower abillity to pay.

Now, in terms of DOS, I’m not sure if they’re here yet… it’s a little tougher model to manage at the land-grant level.

I do find it interesting how Obama’s been coming down hard on the for-profit higher ed sector. I’m assuming that he’s just trying to protect his ivory-tower buddies… at least that’s what I see when looking at it from the right.[/quote]

You’re mostly right on the pricing model. As a joke at my school, our director of admissions says that his idea number of students to attract to the college is 1… 1 student who will pay the entire cost of the college would give an outstanding student:faculty teaching ratio, would reduce the costs associated with housing and feeding the students, and would greatly improve our rankings.

When he says this, he’s pointing out how the system currently works. While it’s perceived as a problem, and the media are making a big deal out of this, we’re still getting full classes of students coming in. It’s getting more difficult, but if you’re looking at a capitalist business model, the schools are doing what they are supposed to do. As long as the demand is high from the students, the schools will charge what they can get. When they can’t get those funds, they will start to cut their costs.

There’s also a huge government subsidy in terms of student loans, grants and other aid to higher education that skews the equation, definitely. But there’s still immense value in a quality education. One thing we do a ton of in our business is assessment. We assess everything that we do. And we look at what our students do after they leave our school, and compare that to other schools. There’s no denying that a quality education is worth a healthy chunk of money in terms of what it gives you in the long run. Where is the tipping point? We may be approaching it, but we’re definitely not there yet, at least for most schools.

So I think comparisons to the housing bubble are somewhat overstated at this point. The facts and data simply don’t support this. It’s definitely possible, but IMHO we’re not there yet. At least, based on what I see with students coming through the doors of our institution. And my school is somewhere in the middle of the pecking order… we’re not one of those top institutions discussed in the article.

[quote="MarkH, post:3, topic:2693"]As the dad of a HS junior, I have a lot to learn in the next 12 months. I'll say this, though. It almost seems as if the tuition model works like this:
  1. Raise price of tuition.
  2. Take incoming $$ and apply savings to individuals based on need, and not to overall tuition rates.

I think in the “old days” when the college got help, it was applied to the overall budget to keep tuition rates down for everyone. Now what’s happening in the new model is that they’re letting the base rate go up, and then provding more need-based aid. What that does is create a sliding price scale based on ability to pay. If you’re “rich” and can pay out of pocket, you pay a higher full rate… If you’re in need, the school finds you aid to lower the price to something they hope you can afford. This allows the school to get more from the upper income brackets, and that can free up other cash to help bring down the cost for those with a lower abillity to pay.

Now, in terms of DOS, I’m not sure if they’re here yet… it’s a little tougher model to manage at the land-grant level.

I do find it interesting how Obama’s been coming down hard on the for-profit higher ed sector. I’m assuming that he’s just trying to protect his ivory-tower buddies… at least that’s what I see when looking at it from the right.[/quote]

You’re mostly right on the pricing model. As a joke at my school, our director of admissions says that his idea number of students to attract to the college is 1… 1 student who will pay the entire cost of the college would give an outstanding student:faculty teaching ratio, would reduce the costs associated with housing and feeding the students, and would greatly improve our rankings.

When he says this, he’s pointing out how the system currently works. While it’s perceived as a problem, and the media are making a big deal out of this, we’re still getting full classes of students coming in. It’s getting more difficult, but if you’re looking at a capitalist business model, the schools are doing what they are supposed to do. As long as the demand is high from the students, the schools will charge what they can get. When they can’t get those funds, they will start to cut their costs.

There’s also a huge government subsidy in terms of student loans, grants and other aid to higher education that skews the equation, definitely. But there’s still immense value in a quality education. One thing we do a ton of in our business is assessment. We assess everything that we do. And we look at what our students do after they leave our school, and compare that to other schools. There’s no denying that a quality education is worth a healthy chunk of money in terms of what it gives you in the long run. Where is the tipping point? We may be approaching it, but we’re definitely not there yet, at least for most schools.

So I think comparisons to the housing bubble are somewhat overstated at this point. The facts and data simply don’t support this. It’s definitely possible, but IMHO we’re not there yet. At least, based on what I see with students coming through the doors of our institution. And my school is somewhere in the middle of the pecking order… we’re not one of those top institutions discussed in the article.

Remember, they were buying up houses rigt up to the point where the bubble burst. Hence, that analogy.

To put something as basic and needed as higher education to a capitalist market is perverting it. What if the electric companies “charged what they could until you stopped buying”? What about gas and water? What if our road systems were privatized and they charged you per mile? How much could they get before you decided you did not want to drive?

[quote="MarkH, post:3, topic:2693"]As the dad of a HS junior, I have a lot to learn in the next 12 months. I'll say this, though. It almost seems as if the tuition model works like this:
  1. Raise price of tuition.
  2. Take incoming $$ and apply savings to individuals based on need, and not to overall tuition rates.

I think in the “old days” when the college got help, it was applied to the overall budget to keep tuition rates down for everyone. Now what’s happening in the new model is that they’re letting the base rate go up, and then provding more need-based aid. What that does is create a sliding price scale based on ability to pay. If you’re “rich” and can pay out of pocket, you pay a higher full rate… If you’re in need, the school finds you aid to lower the price to something they hope you can afford. This allows the school to get more from the upper income brackets, and that can free up other cash to help bring down the cost for those with a lower abillity to pay.

Now, in terms of DOS, I’m not sure if they’re here yet… it’s a little tougher model to manage at the land-grant level.

I do find it interesting how Obama’s been coming down hard on the for-profit higher ed sector. I’m assuming that he’s just trying to protect his ivory-tower buddies… at least that’s what I see when looking at it from the right.[/quote]

You’re mostly right on the pricing model. As a joke at my school, our director of admissions says that his idea number of students to attract to the college is 1… 1 student who will pay the entire cost of the college would give an outstanding student:faculty teaching ratio, would reduce the costs associated with housing and feeding the students, and would greatly improve our rankings.

When he says this, he’s pointing out how the system currently works. While it’s perceived as a problem, and the media are making a big deal out of this, we’re still getting full classes of students coming in. It’s getting more difficult, but if you’re looking at a capitalist business model, the schools are doing what they are supposed to do. As long as the demand is high from the students, the schools will charge what they can get. When they can’t get those funds, they will start to cut their costs.

There’s also a huge government subsidy in terms of student loans, grants and other aid to higher education that skews the equation, definitely. But there’s still immense value in a quality education. One thing we do a ton of in our business is assessment. We assess everything that we do. And we look at what our students do after they leave our school, and compare that to other schools. There’s no denying that a quality education is worth a healthy chunk of money in terms of what it gives you in the long run. Where is the tipping point? We may be approaching it, but we’re definitely not there yet, at least for most schools.

So I think comparisons to the housing bubble are somewhat overstated at this point. The facts and data simply don’t support this. It’s definitely possible, but IMHO we’re not there yet. At least, based on what I see with students coming through the doors of our institution. And my school is somewhere in the middle of the pecking order… we’re not one of those top institutions discussed in the article.

Remember, they were buying up houses rigt up to the point where the bubble burst. Hence, that analogy.

To put something as basic and needed as higher education to a capitalist market is perverting it. What if the electric companies “charged what they could until you stopped buying”? What about gas and water? What if our road systems were privatized and they charged you per mile? How much could they get before you decided you did not want to drive?

Rate caps on electricity are gone in PA. They do charge what they want now - except that competition keeps it reasonably priced. Gas is supposed to be following - not sure when those caps come off. As far as paying by the mile, isn’t that basically what the tax on gasoline does?

[quote="MarkH, post:3, topic:2693"]As the dad of a HS junior, I have a lot to learn in the next 12 months. I'll say this, though. It almost seems as if the tuition model works like this:
  1. Raise price of tuition.
  2. Take incoming $$ and apply savings to individuals based on need, and not to overall tuition rates.

I think in the “old days” when the college got help, it was applied to the overall budget to keep tuition rates down for everyone. Now what’s happening in the new model is that they’re letting the base rate go up, and then provding more need-based aid. What that does is create a sliding price scale based on ability to pay. If you’re “rich” and can pay out of pocket, you pay a higher full rate… If you’re in need, the school finds you aid to lower the price to something they hope you can afford. This allows the school to get more from the upper income brackets, and that can free up other cash to help bring down the cost for those with a lower abillity to pay.

Now, in terms of DOS, I’m not sure if they’re here yet… it’s a little tougher model to manage at the land-grant level.

I do find it interesting how Obama’s been coming down hard on the for-profit higher ed sector. I’m assuming that he’s just trying to protect his ivory-tower buddies… at least that’s what I see when looking at it from the right.[/quote]

You’re mostly right on the pricing model. As a joke at my school, our director of admissions says that his idea number of students to attract to the college is 1… 1 student who will pay the entire cost of the college would give an outstanding student:faculty teaching ratio, would reduce the costs associated with housing and feeding the students, and would greatly improve our rankings.

When he says this, he’s pointing out how the system currently works. While it’s perceived as a problem, and the media are making a big deal out of this, we’re still getting full classes of students coming in. It’s getting more difficult, but if you’re looking at a capitalist business model, the schools are doing what they are supposed to do. As long as the demand is high from the students, the schools will charge what they can get. When they can’t get those funds, they will start to cut their costs.

There’s also a huge government subsidy in terms of student loans, grants and other aid to higher education that skews the equation, definitely. But there’s still immense value in a quality education. One thing we do a ton of in our business is assessment. We assess everything that we do. And we look at what our students do after they leave our school, and compare that to other schools. There’s no denying that a quality education is worth a healthy chunk of money in terms of what it gives you in the long run. Where is the tipping point? We may be approaching it, but we’re definitely not there yet, at least for most schools.

So I think comparisons to the housing bubble are somewhat overstated at this point. The facts and data simply don’t support this. It’s definitely possible, but IMHO we’re not there yet. At least, based on what I see with students coming through the doors of our institution. And my school is somewhere in the middle of the pecking order… we’re not one of those top institutions discussed in the article.

Remember, they were buying up houses rigt up to the point where the bubble burst. Hence, that analogy.

To put something as basic and needed as higher education to a capitalist market is perverting it. What if the electric companies “charged what they could until you stopped buying”? What about gas and water? What if our road systems were privatized and they charged you per mile? How much could they get before you decided you did not want to drive?

Rate caps on electricity are gone in PA. They do charge what they want now - except that competition keeps it reasonably priced. Gas is supposed to be following - not sure when those caps come off. As far as paying by the mile, isn’t that basically what the tax on gasoline does?

I knew someone would say that. It is a tax. That’s not capitalism.

Yes, the cap is off electric. How does your bill look now compared to what it looked like before the cap? An average of 30% higher? How long has it been?

[quote="ronb89, post:6, topic:2693"]You're mostly right on the pricing model. As a joke at my school, our director of admissions says that his idea number of students to attract to the college is 1... 1 student who will pay the entire cost of the college would give an outstanding student:faculty teaching ratio, would reduce the costs associated with housing and feeding the students, and would greatly improve our rankings.

When he says this, he’s pointing out how the system currently works. While it’s perceived as a problem, and the media are making a big deal out of this, we’re still getting full classes of students coming in. It’s getting more difficult, but if you’re looking at a capitalist business model, the schools are doing what they are supposed to do. As long as the demand is high from the students, the schools will charge what they can get. When they can’t get those funds, they will start to cut their costs.

There’s also a huge government subsidy in terms of student loans, grants and other aid to higher education that skews the equation, definitely. But there’s still immense value in a quality education. One thing we do a ton of in our business is assessment. We assess everything that we do. And we look at what our students do after they leave our school, and compare that to other schools. There’s no denying that a quality education is worth a healthy chunk of money in terms of what it gives you in the long run. Where is the tipping point? We may be approaching it, but we’re definitely not there yet, at least for most schools.

So I think comparisons to the housing bubble are somewhat overstated at this point. The facts and data simply don’t support this. It’s definitely possible, but IMHO we’re not there yet. At least, based on what I see with students coming through the doors of our institution. And my school is somewhere in the middle of the pecking order… we’re not one of those top institutions discussed in the article.[/quote]

Remember, they were buying up houses rigt up to the point where the bubble burst. Hence, that analogy.

To put something as basic and needed as higher education to a capitalist market is perverting it. What if the electric companies “charged what they could until you stopped buying”? What about gas and water? What if our road systems were privatized and they charged you per mile? How much could they get before you decided you did not want to drive?

I agree completely. My point in my post was a somewhat cynical one, but I do think that it is somewhat correct. The reason tuition is going up so astronomically is because the market can bear it. As government has moved away from the higher education business, it opens it up to free market pressures. It used to be that small private colleges like GW (and my school) couldn’t survive charging super high tuition, because you could get a similar quality education at a state-funded institution for much cheaper. But now the “state” institutions are getting less money directly from the state, affecting their bottom line and increasing their tuition. This allows the private schools to raise their tuitions because the cheaper options aren’t there.

On a separate but related note, I find it somewhat interesting that many of the attacks on higher education are coming from the so-called free-market conservatives. The system is currently running towards higher tuition because it’s an unregulated market. And, like the energy sector (namely, gas and oil) it benefits from large subsidies and tax breaks.

Except that the consumers benefit from government subsidies (financial aid). How much would a jar of peanut butter cost if every buyer of peanut butter received $1.50 in state and federal subsidy toward his his/her purchase of Jiff Extra Chunky?

[quote="ronb89, post:11, topic:2693"]On a separate but related note, I find it somewhat interesting that many of the attacks on higher education are coming from the so-called free-market conservatives. The system is currently running towards higher tuition because it's an unregulated market.[/quote]

Except that the consumers benefit from government subsidies (financial aid). How much would a jar of peanut butter cost if every buyer of peanut butter received $1.50 in state and federal subsidy toward his his/her purchase of Jiff Extra Chunky?

+1

To me, this is also comparable to health care. It’s a “free” market, with the gov’t providing a lot of the purchasing power which causes great distortions.

Why is it we have the greatest post-secondary education system in the world, but our secondary system lags WAY behind? The college/university market is a LOT more subject to market forces, might that be part of it??

Between 1995 and 2010, we paid $3.4 billion to peanut farmers in subsidies.

That was sort of my point…

No industry out there is pure free-market. All receive some form of government support, either local, state or federal.

My point isn’t that higher education doesn’t benefit from government subsidies (it definitely does), but that over the past decade or so, that support has been reduced significantly. This has made colleges turn more and more to private funding, and has put the colleges and universities under more direct market pressures in order to make money. The competition for money from 18-22 year olds and their families (and their financial aid packages from the govt) is motivating them to do things that are more appealing to those students. That fancy new student rec center with the climbing wall and tubing park looks great on a campus tour. More dorms with single rooms, or larger suites, looks better than the old cramped boxes many of us lived in. Dining halls no longer serve mystery meat patties (or chicken cosmos… :frowning: ) but serve gourmet meals and have sushi bars, organic salad bars, and wood-fired pizza ovens. Even though an undergraduate may never step foot in that multi-million dollar research facility, advertising it in their brochures adds a certain panache that generates attention and brings in students.

Another big funding source is big private foundations. Groups like the Mellon Foundation, Howard Hughes Medical Institute, and others invest huge amounts of money into colleges and universities. These groups absolutely pay attention to things like student:faculty ratios, student diversity metrics, recruitment and retention of students, cutting edge resources for students and researchers, etc. Whole new administrative offices and positions have been created to chase after these kinds of funds. So to get the bucks from these foundations, you need to “play the game” and have student diversity offices and other features.

Finally, there’s all the funding from friends and alumni. There is the illusion, especially among the bigger universities, that the sports programs are the most important factor to get these donations. There’s the so-called “Flutie Factor”, where BC raised their fundraising significantly during Flutie’s time there. But there have also been several analyses that show that this isn’t necessarily a universal truth. Still, though, building fancy new athletic facilities is another model that colleges and universities are undertaking to compete for money from alumni and other donors.

All of this is at least in part due to the declining support from government sources. And all of these initiatives cost money to build up and then continue to support.

[quote="ronb89, post:11, topic:2693"]On a separate but related note, I find it somewhat interesting that many of the attacks on higher education are coming from the so-called free-market conservatives. The system is currently running towards higher tuition because it's an unregulated market.[/quote]

Except that the consumers benefit from government subsidies (financial aid). How much would a jar of peanut butter cost if every buyer of peanut butter received $1.50 in state and federal subsidy toward his his/her purchase of Jiff Extra Chunky?

I think the best (and most recent) example of this was the TV broadcasting switch from Standard to HD.

The Feds were giving out certificates good for $40 towards a converter. Well, guess how much these converters were priced at/ You got it, you could not find a single converter under $40. NOT A ONE !!! They all STARTED at $40.

Sorry, but this is not accurate. I wished I saved the article, but in the NY Times Sunday magazine section, about 15 years ago, a writer urged the government not to get into Federal loans for students. He stated at the time that the average national tuition at public universities was ~$3,000. His claim was that if Federal financing became available, costs would skyrocket. Say what you will, but that’s exactly what happened. That is in no way “the free market.” It’s a Federally subsidized one, like health care, housing, etc. You may disagree with free markets, but don’t confuse the two. Canada has no “Fannie Mae” and they didn’t have a housing crisis. People have to actually put down 20% when buying.

Some questions for you. Where would prices go if parents had to use savings to pay for college, i.e., no loans? How many assistant coaches, diversity departments, gender equality departments would survive? In the “bake sale” controversy at Berkeley, the head of the diversity department makes $194,000 per year. This is outrageous, and borne on the backs of parents and students trying to get to give the kids a leg up in life. How does someone like that make $194,000? Well, overseeing a staff of 100, it’s a big job. :wink:

Maybe you missed this, but this will get ugly.

[quote="MarkH, post:3, topic:2693"]As the dad of a HS junior, I have a lot to learn in the next 12 months. I'll say this, though. It almost seems as if the tuition model works like this:
  1. Raise price of tuition.
  2. Take incoming $$ and apply savings to individuals based on need, and not to overall tuition rates.

I think in the “old days” when the college got help, it was applied to the overall budget to keep tuition rates down for everyone. Now what’s happening in the new model is that they’re letting the base rate go up, and then provding more need-based aid. What that does is create a sliding price scale based on ability to pay. If you’re “rich” and can pay out of pocket, you pay a higher full rate… If you’re in need, the school finds you aid to lower the price to something they hope you can afford. This allows the school to get more from the upper income brackets, and that can free up other cash to help bring down the cost for those with a lower abillity to pay.

Now, in terms of DOS, I’m not sure if they’re here yet… it’s a little tougher model to manage at the land-grant level.

I do find it interesting how Obama’s been coming down hard on the for-profit higher ed sector. I’m assuming that he’s just trying to protect his ivory-tower buddies… at least that’s what I see when looking at it from the right.[/quote]

You’re mostly right on the pricing model. As a joke at my school, our director of admissions says that his idea number of students to attract to the college is 1… 1 student who will pay the entire cost of the college would give an outstanding student:faculty teaching ratio, would reduce the costs associated with housing and feeding the students, and would greatly improve our rankings.

When he says this, he’s pointing out how the system currently works. While it’s perceived as a problem, and the media are making a big deal out of this, we’re still getting full classes of students coming in. It’s getting more difficult, but if you’re looking at a capitalist business model, the schools are doing what they are supposed to do. As long as the demand is high from the students, the schools will charge what they can get. When they can’t get those funds, they will start to cut their costs.

There’s also a huge government subsidy in terms of student loans, grants and other aid to higher education that skews the equation, definitely. But there’s still immense value in a quality education. One thing we do a ton of in our business is assessment. We assess everything that we do. And we look at what our students do after they leave our school, and compare that to other schools. There’s no denying that a quality education is worth a healthy chunk of money in terms of what it gives you in the long run. Where is the tipping point? We may be approaching it, but we’re definitely not there yet, at least for most schools.

So I think comparisons to the housing bubble are somewhat overstated at this point. The facts and data simply don’t support this. It’s definitely possible, but IMHO we’re not there yet. At least, based on what I see with students coming through the doors of our institution. And my school is somewhere in the middle of the pecking order… we’re not one of those top institutions discussed in the article.

Remember, they were buying up houses rigt up to the point where the bubble burst. Hence, that analogy.

To put something as basic and needed as higher education to a capitalist market is perverting it. What if the electric companies “charged what they could until you stopped buying”? What about gas and water? What if our road systems were privatized and they charged you per mile? How much could they get before you decided you did not want to drive?

Rate caps on electricity are gone in PA. They do charge what they want now - except that competition keeps it reasonably priced. Gas is supposed to be following - not sure when those caps come off. As far as paying by the mile, isn’t that basically what the tax on gasoline does?

I knew someone would say that. It is a tax. That’s not capitalism.

Yes, the cap is off electric. How does your bill look now compared to what it looked like before the cap? An average of 30% higher? How long has it been?

Tax or toll, it’s still paying a “cost per mile” to drive. I know the higher gas prices a few years back caused people to rethink how much they drive. Don’t know how long it lasted, but it seems to have become forgotten by now. Turnpikes are sort of capitalism in that they charge a tool. They get a lot of use too.

My electric bill went up some. I don’t think it was quite 30% though. The problem is that the government decided to remove the rate caps to encourage competition. But they keep adding regulations making it tougher to generate power. And therefore keeping competition from actually lowering costs. I know a few people who were let go by their electricity provider because they used too much electricity during peak hours. The electric company couldn’t generate enough power to the grid to keep up with the usage of its customers. So they started to dump residential customers. If the company wasn’t so hand-cuffed, could it have met the demand? And maybe more? And would there be more competition and lower prices? Probably.

Anyway, I’m not really arguing with you. I was just pointing out some other details (random thoughts) to contribute to the discussion.

[quote="MarkH, post:3, topic:2693"]As the dad of a HS junior, I have a lot to learn in the next 12 months. I'll say this, though. It almost seems as if the tuition model works like this:
  1. Raise price of tuition.
  2. Take incoming $$ and apply savings to individuals based on need, and not to overall tuition rates.

I think in the “old days” when the college got help, it was applied to the overall budget to keep tuition rates down for everyone. Now what’s happening in the new model is that they’re letting the base rate go up, and then provding more need-based aid. What that does is create a sliding price scale based on ability to pay. If you’re “rich” and can pay out of pocket, you pay a higher full rate… If you’re in need, the school finds you aid to lower the price to something they hope you can afford. This allows the school to get more from the upper income brackets, and that can free up other cash to help bring down the cost for those with a lower abillity to pay.

Now, in terms of DOS, I’m not sure if they’re here yet… it’s a little tougher model to manage at the land-grant level.

I do find it interesting how Obama’s been coming down hard on the for-profit higher ed sector. I’m assuming that he’s just trying to protect his ivory-tower buddies… at least that’s what I see when looking at it from the right.[/quote]

You’re mostly right on the pricing model. As a joke at my school, our director of admissions says that his idea number of students to attract to the college is 1… 1 student who will pay the entire cost of the college would give an outstanding student:faculty teaching ratio, would reduce the costs associated with housing and feeding the students, and would greatly improve our rankings.

When he says this, he’s pointing out how the system currently works. While it’s perceived as a problem, and the media are making a big deal out of this, we’re still getting full classes of students coming in. It’s getting more difficult, but if you’re looking at a capitalist business model, the schools are doing what they are supposed to do. As long as the demand is high from the students, the schools will charge what they can get. When they can’t get those funds, they will start to cut their costs.

There’s also a huge government subsidy in terms of student loans, grants and other aid to higher education that skews the equation, definitely. But there’s still immense value in a quality education. One thing we do a ton of in our business is assessment. We assess everything that we do. And we look at what our students do after they leave our school, and compare that to other schools. There’s no denying that a quality education is worth a healthy chunk of money in terms of what it gives you in the long run. Where is the tipping point? We may be approaching it, but we’re definitely not there yet, at least for most schools.

So I think comparisons to the housing bubble are somewhat overstated at this point. The facts and data simply don’t support this. It’s definitely possible, but IMHO we’re not there yet. At least, based on what I see with students coming through the doors of our institution. And my school is somewhere in the middle of the pecking order… we’re not one of those top institutions discussed in the article.

Remember, they were buying up houses rigt up to the point where the bubble burst. Hence, that analogy.

To put something as basic and needed as higher education to a capitalist market is perverting it. What if the electric companies “charged what they could until you stopped buying”? What about gas and water? What if our road systems were privatized and they charged you per mile? How much could they get before you decided you did not want to drive?

Rate caps on electricity are gone in PA. They do charge what they want now - except that competition keeps it reasonably priced. Gas is supposed to be following - not sure when those caps come off. As far as paying by the mile, isn’t that basically what the tax on gasoline does?

I knew someone would say that. It is a tax. That’s not capitalism.

Yes, the cap is off electric. How does your bill look now compared to what it looked like before the cap? An average of 30% higher? How long has it been?

Tax or toll, it’s still paying a “cost per mile” to drive. I know the higher gas prices a few years back caused people to rethink how much they drive. Don’t know how long it lasted, but it seems to have become forgotten by now. Turnpikes are sort of capitalism in that they charge a tool. They get a lot of use too.

My electric bill went up some. I don’t think it was quite 30% though. The problem is that the government decided to remove the rate caps to encourage competition. But they keep adding regulations making it tougher to generate power. And therefore keeping competition from actually lowering costs. I know a few people who were let go by their electricity provider because they used too much electricity during peak hours. The electric company couldn’t generate enough power to the grid to keep up with the usage of its customers. So they started to dump residential customers. If the company wasn’t so hand-cuffed, could it have met the demand? And maybe more? And would there be more competition and lower prices? Probably.

Anyway, I’m not really arguing with you. I was just pointing out some other details (random thoughts) to contribute to the discussion.

My ppoint was, it’s not a capitalist-controlled price. It’s not a “charge as much as the market will bare” type of pricing. It’s a tax, a set fee. If it were a price set by an unregulated Oligopoly, I’m sure it would skyrocket. Remember, “what the market will pay” means EXACTLY THAT !!! If gas were $6 a gallon, people would pay it. They would complain, but they would pay it.

Kid,
Nice find in the WSJ… Good timing! The aritcle makes an interesting comment:

Universities have been efficient in pocketing the subsidies by increasing tuition after every expansion of federal support. That's why education is a rare industry where prices have risen even faster than health-care costs.

They seem to be advancing the notion that tutition is rising because of the increased Fed $ flowing into the student loan program. They then say…

Perhaps this is because most federal student loans are made without regard to income, assets or credit history. Much like the federal obsession to finance a home for every American regardless of ability to pay, the obsession to finance higher education for every high school student ignores inconvenient facts. These include the certainty that some of these kids will take jobs that don't require college degrees and may not support timely repayment.

The inflow of ferderal dollars to send more kids to school is incresing the demand curve, so schools are reacting by increasing price, and in places increasing supply… but it could be argued that the increased supply is in fields that do not provide necessary skills that are in demand in the workplace, and thus does not provide the graduate with the income needed to pay back the loan!

What will happen when the federal loan dollars dry up? It may not be a bubble in the traditional sense, but there could be some big pain coming all the same…