Rising tuition trumps interest rate among students’ worries

Sometimes, it’s the “principal” of the thing. Particularly when “the thing” is a loan.

As lots of homeowners learned, borrowing too much money can lead to trouble even if interest rates are relatively low. If college students are wise, they’ll realize the current debate about the interest rate for their loans is a sideshow compared to rising prices.

President Barack Obama visited college students last week to argue for keeping the interest rate for federal student loans at 3.4 percent. He urged them to tell Congress, “Don’t double my rate” to 6.8 percent, as current law requires.

He was arguing against … no one. Republicans and Democrats alike propose holding the rate steady. As is often the case, they differ only over how to offset the cost (Republicans would cut spending; Democrats would raise someone’s taxes). Obama’s presumptive GOP opponent, Mitt Romney, also favors holding down the rate.

No doubt, a higher rate would be a blow to students. And the job market, still stagnant almost three years after the recession ended, means they’ll have a hard time finding a job to pay off their loans, whatever the interest rate. But the student-loan interest rate has fallen each of the past three years, and student debt rose sharply anyway. It now tops $1 trillion, more than Americans collectively owe in credit-card debt.

The root of the problem is the soaring amount of principal students are borrowing due to the rising price of tuition.

Tuition at Georgia’s public colleges has doubled during the past 10 years. Add the mandatory fees that figure more and more prominently into their prices, and the price has nearly tripled at both Georgia Tech and the University of Georgia.

In fact, given the past decade’s growth rate, students can expect a four-year degree to run them more than $47,000 at Tech and some $46,000 at UGA. And that’s just for tuition and fees: Living expenses for four years add thousands more.

Ten years ago, the cost of two semesters at either school was about $3,600, for an expected cost of $14,500 over four years (again, for tuition and fees only). It’s much the same story at Georgia’s other colleges. Is a degree really worth three times as much now as then?

Now, like most state agencies, colleges have been getting less from the Legislature: an average budget cut of 3 percent a year since 2008. So they’ve jacked up tuition and fees by 10-14 percent a year since then, depending on the school.

But that doesn’t explain why in the previous five years, when their take from the state budget was growing 5 percent annually, tuition and fees were still rising 6 to 8 percent a year. General inflation was about a third as fast. (The generosity of the HOPE scholarship almost certainly explains part of the faster growth for college prices.)

Had tuition and fees grown at even a 4 percent clip during the past decade, a loan to cover them at UGA for four years — even at that doubled federal interest rate — would wind up costing a student about $31,000, according to the feds’ online calculator.

At current rates of tuition growth and even assuming the lower interest rate, that same student is looking at $54,000. That’s an extra $200 a month in loan payments. For 10 years.

If this tale sounds similar to that of health care, you must have aced the SAT. Health care, education, energy: Markets in which the government plays a large role have seen prices grow wildly. And that’s a big reason many Americans feel they aren’t getting ahead, college degree or not.

– By Kyle Wingfield

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199 comments Add your comment

DeborahinAthens

April 30th, 2012
6:39 am

Good column, good point. What do you suppose caused this rate of inflation in college costs? And how can it be controlled? I don’t understand how Hope makes prices go up. I would like to make one point. The Republicans are screeching that the Dems are manufacturing the “War on Women” and where did they take the money to pay for for keeping the loan rate at 3.4%? They are taking from the funds that would pay for mammograms and pap smears. Word is they wanted to weaken the Obama Healthcare bill buy slowly defunding it piece by piece. With all the tax breaks given to the oil industry (with Exxon being one of our most profitable companies) why did they have to take money from healthcare and why did they specifically target the part of healthcare that was for women? Then, to hear their hypocisy, about blaming Democrats for “making up” an election issue, telling us that all women worry about is the economy, is ludicrous and so typical of the Republican playbook. They make me want to vomit. So, my question to you Kyle, because this is a good column, why didn’t you tell us HOW the Republicans are paying for this bill?

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

April 30th, 2012
7:14 am

And so the president goes around the country pounding the table on issues that are totally misleading or grossly overstated. He goes around righting wrongs that exist only within the overwrought imagination of liberals whose minds are permanently stuck in the righteous and indignant mode of thought.

How else will obozo gin up his dimwit voters?

Run on his record? Hahahahhaha, yeah, ok.

DeborahinAthens

April 30th, 2012
7:15 am

Just read Paul Krugman’s column in NYT. He quotes Romney saying that a college education is a must, borrow money from Mom and Dad….what fracking planet does this idiot live on? At a time when this country is stumbling because our young people are not getting a decent education, Paul Ryan’s budget, which Romney loves to death, wants to cut Pell Grants. Why don’t you point this out, Kyle? The chance for ordinary, middle class kids to go to college is shrinking fast.

ByteMe

April 30th, 2012
7:42 am

As is often the case, they differ only over how to offset the cost (Republicans would cut spending; Democrats would raise someone’s taxes).

Let’s be clear: the Republicans want to cut spending on preventive health care, like mammograms. Democrats want to cut subsidies to big oil (somehow that’s “raising someone’s taxes”).

Obama’s presumptive GOP opponent, Mitt Romney, also favors holding down the rate.

Except that he was against it before he had no opinion on it before he was for it. Da wannabee is a flip-flopper.

ByteMe

April 30th, 2012
7:43 am

Health care, education, energy: Markets in which the government plays a large role have seen prices grow wildly

Same can be said for markets where demand outstrips supply or where the supply is nearly mandatory to survive in this world… like the very same markets you mention.

And if you want to blame government, why does the Republican-run state government keep raising tuition in Georgia?

Really?

April 30th, 2012
7:48 am

Read “The Fall of the Faculty” by Benjamin Ginsberg” and you will find the alarming statistics concerning the increase in administration relative to the faculty. There lies the rub.

Reformed Rightie

April 30th, 2012
7:54 am

Colleges have to change with the times. They currently have way more infrastructure then necessary. Online courses have made much of the cost of traditional college unnecessary. Campuses will probably always serve a purpose, but that purpose will be hugely diminished in the future. Of course no one wants to discuss this because a lot of people would feel they’re jobs will be threatened….and they will. ‘On campus’ colleges as we know them now are soon to become as useful as a typewriter.

Progressive Humanist

April 30th, 2012
7:54 am

I can’t wait for the usual parade of clowns to come in and write about how the rise in tuition is due to liberal professors whose salaries have tripled in the last 15 years and who make $300k a year for working 40 hours a month, none of which is true of course. But once it gets repeated enough on right wing blogs it must be true since opinions hold more weight than facts these days among that crowd.

david c

April 30th, 2012
7:55 am

“And so the president goes around the country pounding the table on issues that are totally misleading or grossly overstated. He goes around righting wrongs that exist only within the overwrought imagination of liberals whose minds are permanently stuck in the righteous and indignant mode of thought.

How else will obozo gin up his dimwit voters?

Run on his record? Hahahahhaha, yeah, ok.”

WTF?

Call It Like It Is

April 30th, 2012
7:55 am

And now back to the subject. Good blog Kyle. College has become a complete scam. You hit it right on the head with the increasing cost and the added filler. I have a niece going to KSU, and another going to UGA. They are forced to buy parking passes, forced to buy lunch plans, forced to pay student activitie fees and it goes on and on. When its all said and done your not getting what you paid for at the end. You put a student 50 to 60k in debt or more and they come out making 20k if there lucky. Then they learn everything on the job anyway. Its beyond sad to start off our youth like this, but the right nor the left do anything about it.

jconservative

April 30th, 2012
7:59 am

I attended college decades ago, graduating in the class of 1964.

I had a summer job. That summer job allowed me to save enough to pay for tuition, books, fees, room and board, all incidentials plus buy all my clothes, etc.

Those days have been gone for a long time.

DeborahinAthens has a solid point; “The chance for ordinary, middle class kids to go to college is shrinking fast.”

I would consider it a national defense priority that we educate our population. That means getting our fiscal house in order. That means stopping 31 years of increasing government spending and decreasing government revenue. And it means that we start paying off the debt we have allowed to accumulate in the last 31 years.

Selected government spending must be slowed. Government revenue must be allowed to grow. The election should be about which specific items are to be cut on both the spending and revenue sides.

But we will not do that, will we?

Ayn Rant

April 30th, 2012
8:08 am

First, to correct the assertion that the President was making an issue over a done deal. In fact, Congress declined to act on the “agreement” until the President publicized the issue in meetings with college students. Now, of course, Republicans give lip service to the notion but block progress by quibbling over the funding.

As usual, the politicians are haggling over problems, not solutions; a huge portion of student loans will never be paid back. The federal and state governments should convert the student loan program to an outright student subsidy program, and be done with it!

And yes, the cost of human development, in education, health care, and social services, keeps rising. And yes, government is involved because profit-making enterprises will not manage it. Human development needs, unlike human consumption needs, are not commodities that can be outsourced to Asia. We’re stuck with plain-old American stubbornness, inaction, and inefficiency.

Education is critically important to the near and long term future of the nation. It should be given equal priority, and equal funding, as defense. The states should pay outright the operating costs of “land-grant” universities, rather than imposing tuition charges.

As far as health care and social services go, solutions are known and commonly practiced in other developed countries, but we are too stubborn and politically befuddled to adopt them. Energy is another matter entirely: it is not a human development need and can be managed as a commodity.

carlosgvv

April 30th, 2012
8:08 am

There is another problem also. Liberal Arts degrees are becoming increasingly worthless while math and science degrees are becoming more and more valuable. Unfortunately, most of us don’t have the advanced mathematical aptitude needed to earn these valuable degrees and must go the liberal arts route. Almost all of the in demand trade jobs also require mathematical skills. So, in addition to being saddled with huge students loans, large numbers of college and trade graduates have degrees and skills that are useless in today’s job market.

JKL2

April 30th, 2012
8:13 am

Doesn’t really matter what the interest rate is when they are not going to pay back their student loans anyway. There’s a reason why the government owns over $1T in student loans and it’s not because so many people are going to college.

If the Democrats care so much, why did they write/pass this bill raising the rates in the first place?

Linkster

April 30th, 2012
8:15 am

Tuition increased when securing student loans got easier when lenders realized they could sell all loans to a Fed govt that agreed to underwrite all student loans, regardless of how unwise they might be. Like the real estate bubble, we are seeing a tuition bubble due to easy money. The universities realized this and increased fees faster than inflation, taking advantage of an inexperienced, novice borrower (college students) that was unprepared and incapable of fully realizing the costs of loans long term. Just like in the real estate market, a correction is beginning and it won’t be pretty.

JKL2

April 30th, 2012
8:16 am

carlosgvv- Unfortunately, most of us don’t have the advanced mathematical aptitude needed to earn these valuable degrees and must go the liberal arts route.

Maybe you should try taking a math or science class. The “It’s not my fault Mom raised stupid kids” excuse doesn’t go very far.

DeborahinAthens

April 30th, 2012
8:18 am

@jconservative, you are so right. One reason I refused to vote for Dubya was his fiscal policies were irrational. You are correct that there is not one idiot in Washington that has the backbone to slice where it is needed. And “where it is needed” is the key phrase. Why are Republicans trampling on the areas that need assistance? Education and healthcare? Everyone agrees that our education system needs to be helped. It will start in pre-k. What was the very first whack Governor Deal made in his budget? Cut more than 20 days out of Headstart. Now, I’d you are a working family with a child in school and a child in Headstart, you have to find someone to take care of the child for 20 days. What does Ryan’s budget whack? Pell Grants. When they have to vote for keeping the student loan rate at 3.4 % what do the Republitards cut? Wmen’s healthcare. Then they go around telling everyone they are doing what their constituents want. Really? Then who are their constituents? People that can “go to Mom and Dadfor a loan”, women who ate fortunate enough to have private insurance. Since these cohorts are in a fast shrinking minority, I can only hpe that the People electing these idiots wake up. We need to eliminate the deficit, save SS and Medicare. Both are easy to do (raise normal SS retirement age to 70 if you were born after 1970, raise the annual SS payroll deduction limit to $1,000,000, stop paying precious Medicare dollars for 80 year olds that want a hip replacement–if they want ‘em pay for them out of pocket, repeal Medicare Part D. — the biggest boondoggle ever passed that was Bush’s pay back to big Pharma), but no Republitard or Democrat will EVER have the political will to do this. We are giving away the store to the old people ate the expense of our kids. By the way, I am 62.

DeborahinAthens

April 30th, 2012
8:20 am

I apologize for the typos. My IPad auto corrects where it deems necessary. Sorry.

Tiberius - Banned from Bookman's and proud of it!

April 30th, 2012
8:20 am

“I can’t wait for the usual parade of clowns to come in and write about how the rise in tuition is due to liberal professors whose salaries have tripled in the last 15 years and who make $300k a year for working 40 hours a month, none of which is true of course.”

Let me begin by citing the recent tax filings of one Elizabeth Warren, who is the current media darling running for U.S. Senate in Massachusetts.

Granny Warren lists $350k per year from Harvard working as a part-time professor.

Oh, she also received an interest-free loan from that august institution when she first hired on.

The one place wages aren’t stagnating and layoffs aren’t occurring at the same rate as in the real world is on our college campuses. Do as I say, not as I do is still the mantra of the liberal elite.

carlosgvv

April 30th, 2012
8:21 am

JKL2

Look up the word “aptitude” in the dictionary before making any more mindless comments here.

Thomas Heyward jr

April 30th, 2012
8:24 am

there are few jobs for graduates, that the actual quality of education our young people pay through the nose for has eroded, and that countless Americans are now slaves to massive debt simply for trying to get a college education — the notion that the status quo must hold is unconscionable.

Like housing and medicine, education costs went through the roof when government became involved. In the last three decades, the overall inflation rate has increased more than 100%, which means we basically pay double now for everything we buy. This price inflation is an inevitable consequence of printing money out of thin air and devaluing our dollar. But compare this inflation to the rise in the cost of college tuition, which has increased almost 500% in the same amount of time.

This is what happens when we print money out of thin air and couple it with government intervention in education.

When I went to school, we didn’t have a federal student loan program, and I was able to work my way through college and medical school because it wasn’t so expensive. What has changed? In the name of “helping” students through federal loans, the government has really hurt them in the long run by drastically driving up the overall cost of education and forcing poor and middle class Americans, who are just trying to better their lives, to take on unreasonable debt.
Centralized government planning is the main cause of so many of the challenges we face, and removing that obstacle is the primary way to ultimately fix education in the long term. The sooner we resolve these problems the better, of course, but it is never too soon and certainly never at the expense of Americans’ best short-term interests to take serious action now.

As we close in on a $15 trillion national debt, we must start such a government-to-free-market transition right away, and this is certainly something that can be accomplished without harming the average American in the process.

But constantly frightening Americans anytime someone dares to offer serious solutions is the easiest way to make sure there is never any transition, never any real reform, and never any recovery.
.
Ron Paul

curious

April 30th, 2012
8:26 am

Since colleges are centers for left wing indoctrination, I propose they be eliminated. Outsource everything to the Chinese and Indians. I do hate losing our semi-pro football and basketball, though.

The HOPE scholarship has encouraged colleges to continue raising their tuition. Families don’t care because somebody else is paying (HOPE). Sounds like our insurance plans.

Probably everyone agrees that spending cuts, along with revenue increases (hypothetical), should be on the table.

Why can’t our supposively intelligent Congress come to some compromise that let’s everybody at least have part of the loaf?

MarkV

April 30th, 2012
8:29 am

Kyle is careful to stay away from anything that might matter. To keep the student interest low the Republicans “would to cut spending” – Kyle does not mention of what they want to cut. The Democrats “would raise someone’s taxes.” No mention of whose taxes.

And what is the result of Kyle’s “brilliant analysis” of the reasons for high cost of tuition? It is all because the government has a role in college education. Really? Any evidence, other than just saying that? And what is your solution, Kyle? No government support? Make all colleges for profit? That will make us competitive with the many countries which understand the value of college education and make it affordable!

Buzz G

April 30th, 2012
8:37 am

Our Federal Government’s debt is nearly 16 trillion dollars. The debt will be a burden for generations. But that is just not enough for some people. They want the government to keep spending and spending and spending. Let someone else pay for it. Give me free this and free that. Give me low interest government loans for this and for that. Let someone else pay for it. I’m voting for Obama so he can give me free stuff. Free stuff for everyone. We all deserve it.

Tiberius - Banned from Bookman's and proud of it!

April 30th, 2012
8:39 am

And before the poutrage over “cutting women’s health care” gets to fainting couch levels, let’s take a REAL look at where funding is supposed to come from the GOP proposal, shall we?

http://edworkforce.house.gov/News/DocumentSingle.aspx?DocumentID=292896

“Here are some examples of how the Obama administration has been using the (Obamacare prevention) fund to squander taxpayer resources:

A public clinic in Nashville, Tennessee used the money to offer free preventive services to dog and cats, not women and children.

$3 million went to lobby lawmakers in New York for legislation requiring chain restaurants to publicly post the amount of calories they serve.

$7 million was used to urge Alabama lawmakers to raise tobacco taxes on working families.

$16 million was allocated to help secure a ban on new fast food restaurants around Los Angeles.

Such waste has become so prevalent the Inspector General of the Department of Health and Human Services (HHS) is investigating how these funds are being spent.

A Host of Other Government Programs Offer Preventive Services

At a hearing convened yesterday, HHS Secretary Kathleen Sebelius was forced to admit services outside the Prevention and Public Health Fund remain available to individuals who seek preventive care, such as:

Cancer prevention and care, including breast and cervical cancer screenings;

Screenings for birth defects and developmental disabilities;

Tobacco prevention at the Center for Disease Control; and

Efforts that promote healthy nutrition and physical activity to prevent obesity.”

So spare us all the angst about how this will affect women’s or children’s health care in any way, shape or form, OK lib?

jd

April 30th, 2012
8:39 am

Kyle,

just 3 % a year, really? Prove it. And, look at per pupil expenditures. For example — the USG got a 5% bump which paid for half of the increase in students counted in 2009 (2010 and 2011 students are not receiving state assistance). Then, they took back 2 % in cuts, and … add em up —

JKL2

April 30th, 2012
8:46 am

Deborah- Everyone agrees that our education system needs to be helped. It will start in pre-k.

It actually starts at home long before pre-k. It begins with a stable family and parents who actually care about theie kids. (feel free to throw your race card here).

My daughter was writing when she was three. She was a nine-year-old fifth grader this year and still hasn’t learned anything in school yet. It’s amaizing what they can do when you work with them.

jd

April 30th, 2012
8:47 am

Last year, for the first time in memory, $0 were appropriated for the growth in the number of students… a cut of amist $182 million, or slighlty less than 10%.

Samantha

April 30th, 2012
8:48 am

The notion that the republicans are taking money from mammograms and pap smears is partisan nonsense. They are taking the money from a slush fund that Obama created to hide the catastrophic effect of his health care reform on medicare from the people till after the election.

JKL2

April 30th, 2012
8:50 am

carlosgvv- Look up the word “aptitude” in the dictionary before making any more mindless comments here.

Maybe you should look up the word “work”. Sorry your Mom raised stupid kids. Someone should help those poor people!

Tiberius - Banned from Bookman's and proud of it!

April 30th, 2012
9:00 am

Oh, and to add to MarkV’s education regarding how the Dems are planning to fund this effort (sad that during a blog on education funding, the people who are complaining about not enough information are too lazy to educate themselves), here’s a summary of that:

“It’s expected that senate Democrats will soon introduce a plan to pay for the nearly $6 billion extension by closing, the ironically nicknamed, “John Edwards Loophole.” The loophole allows certain entities, called S-Corporations, to avoid paying their Medicare payroll tax—it earned its nickname from former Sen. John Edwards who used the loophole during his career as a trial lawyer. Edwards used the loophole to pay his salary from his S-Corporation, of which he was the only employee. The watchdog group Citizens for Tax Justice reported that Edwards funneled $26 million through his S-Corporation saving him $754,000 in Medicare taxes.”

Cosby

April 30th, 2012
9:01 am

The Univdrsity System..the latest great Ponzi Scheme…now comes the next economic melt down..student loans and behind them the government making it very easy to borrow money one cannot pay back…did the government not learn thie lesson with the housing debacle….A Ponzi Scheme promoted by The Federal Government and guess who pays…give ‘em hell Obama AKA Barry

[...] higher education tuition, Kyle Wingfield reminds us that it’s the smoke, not the mirrors, that get you every [...]

carlosgvv

April 30th, 2012
9:09 am

JKL2

There’s something to be said about not going past the 8th grade, and you’re definitely the one to say it.

MarkV

April 30th, 2012
9:10 am

I do not need an arrogant bully like Tiberius to tell me what to do. This is about Kyle’s article, and how he presented the issue.

Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)

April 30th, 2012
9:12 am

You just can’t make this crap up:

One of Mitt Romney’s top advisers claimed over the weekend that “the only economic success that President Obama has had is because he followed Mitt Romney’s advice.” Eric Fehrnstrom was referring to the revival of the American auto industry,…

This man has no shame. Does Romney now NOT like trees that are the right height?

Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)

April 30th, 2012
9:14 am

Ignore Tiberius, extremely low self-esteem bordering on neurotic.

All I'm Saying Is....

April 30th, 2012
9:18 am

“Health care, education, energy: Markets in which the government plays a large role have seen prices grow wildly” — What an idiotic and completely unsubstantiated statement.

Are you telling me that natural gas prices have plunged because the U.S. government is involved? Are you saying that oil prices gyrate because of the U.S. government’s influence?

Are you telling me that education costs climb because the government helps to make loans available or because the HOPE scholarship was established? Education costs have outpaced inflation longer than the existence of HOPE. The reason why education costs climb greater than inflation is because (1) most of their costs are labor which is typically older with higher health costs and due (2) the fact that the higher education industry has been unable to reduce their labor costs through automation which is what other industries have done. You think parents are resistant to paying tuition for their kids now just wait when the ‘teacher’ and ‘classroom’ are both online and virtual.

And healthcare costs skyrocket because no one wants to tell someone that you don’t need additional tests as that spot on your lungs shown in the x-ray is nothing to worry about. Plus no one will force doctors and hospitals to publish their prices. (Well, I guess the government could but then we don’t want that do we, Kyle?)

Get some facts before you publish such nonsense as it completely undermines what little credibility you may still have.

Tiberius - Banned from Bookman's and proud of it!

April 30th, 2012
9:23 am

“I do not need an arrogant bully like Tiberius to tell me what to do.”

No, but you obviously need a non-partisan blogger to educate you on that which you refused to educate yourself, MarkV.

But then whining is so much easier for you libs than to actually do the work needed to (fill in the blank).

Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)

April 30th, 2012
9:23 am

Markets in which the government plays a large role have seen prices grow wildly.

And what’s been the tuition growth rate at private colleges? Harvard, Yale, Berry (if you can call that a college), Presbyterian College, etc?

DannyX

April 30th, 2012
9:28 am

You know who raised taxes for education? Ronald Reagan.

During his first campaign for governor of California Reagan said he would not raise taxes. What was the first thing he did as governor? He raised taxes so California wouldn’t have to cut their expanding college/university system. He said he could blame the mess his predecessor, and that the voters would forget about the tax hike four years later when he would run for re-election. He was right he won re-election easily.

Now California is being rewarded with high tech firms starting up and relocating there.

Don't Tread

April 30th, 2012
9:32 am

“Families don’t care because somebody else is paying (HOPE). Sounds like our insurance plans.”

Somebody got it right.

When a third party payer gets involved (even if that third party “payer” is a loan), the price goes through the roof. Easy credit made home prices skyrocket. Ditto for cars. Eventually the bubble burst on the easy credit mortgages and the taxpayer is now left holding the bag. The taxpayer will be left holding the bag on all these student loans, too…just watch.

Tiberius - Banned from Bookman's and proud of it!

April 30th, 2012
9:34 am

Finn, as usual you miss the “cause” and “effect” portions of this discussion.

“Cause” – Government gets into the business of providing low-cost, ready money for people who wouldn’t normally be able to afford it, with lax or almost non-existent requirements to pay it back.

“Effect” – Colleges have no need to control costs or cut back (as every other entity has to in a down economy) because they still have a ready funding mechanism for their services. Then cry “It’s for the CHILDREN!” when anybody so much as tries to reduce the funding sources available.

JDW

April 30th, 2012
9:36 am

@Kyle..”Markets in which the government plays a large role have seen prices grow wildly. ”

Interesting strawman but do you have any reasonable data anywhere to back up that accusation.

A more reasonable person might note that the biggest factor driving education spending is in fact people. This immediately sets up a disconnect when comparing education, health care or any service where skilled people are the main cost input to general inflation. In education “Compensation accounts for between 60% and 70% of all spending.”*

The main reason general inflation has been so low is due to increases in productivity and import of goods from low cost producers. Industries such as education, which are skilled labor dependent simply don’t reap those benefits. In fact as the cost for skilled labor rises you end up with a cost curve that is disproportionate to the general inflation curve.

The other error in your approach is the combining of public (government involvement) and private( not so much) costs. The rise in private tuition, where government has a very small role far outstrips the rise in public tuition.

“While tuitions in the public sector rose at a higher percentage rate than those in the private
sector, the actual dollar increases for public colleges and universities were much lower. For
example, the sticker price for public research universities rose 56 percent between 1999 and
2009, amounting to an average increase of $2,486. During the same time period, tuition at
private research universities “only” rose 32 percent, but this equaled an average increase of
$7,380. A similar pattern holds for public and private master’s institutions.”*

In fact in 2009, for public universities, tuition increases did not even cover half the appropriations loss.

“Looking at public research institutions, for example, average tuition revenue increased by $369 per student between 2008 and 2009, but the loss in state and local appropriations per student was $751, slightly more than twice the amount generated in increased tuition revenues.”*

Data is from http://www.deltacostproject.org/resources/pdf/trendsissuehighlights.pdf

Of course digging into the problem for the true root causes is a lot more time consuming and difficult to explain than simply saying, yet again….

THE GOVERNMENT DID IT!

Tiberius - Banned from Bookman's and proud of it!

April 30th, 2012
9:41 am

Geez, and some folks accuse Mitt Romney of harking back to the 50’s and 60’s.

DannyX reverts back to the 60’s and 70’s with his California success story which has no basis in fact today.

Bob Loblaw

April 30th, 2012
9:45 am

A’men, Kyle! These colleges act as if money has no value. Most students consolidate and privatize their loans anyway at a fixed (and right now very low) interest rate. This whole debate sucks.

No Artificial Flavors

April 30th, 2012
9:45 am

6-8% is what the interest rate was when I received my student loans in the early 2000s. Big deal. You end up paybabout $1,000 or so more dollars in the end, depending on tuition. If education is worth it then you will pay for it. If not, dont go to college in an already flooded market.

Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)

April 30th, 2012
9:54 am

with lax or almost non-existent requirements to pay it back.

That was the case 15 years ago. Now, the IRS gets involved. Here’s what you can expect:

Tax Refund Offsets
The IRS can intercept any income tax refund you may be entitled to until your student loans are paid in full. This is one of the most popular methods of collecting on defaulted loans, and the Department of Education annually collects hundreds of millions of dollars this way. In some cases, you can challenge a tax refund offset.

Your Paycheck Garnished
The government can take (”garnish”) a limited portion of the wages of a student loan debtor who is in default. It can take up to 15% of your disposable income. However, it cannot take more than the equivalent of 30 times the current federal minimum wage.

Your Federal Benefits Taken
The government can take some federal benefit payments (including Social Security retirement benefits and Social Security disability benefits, but not Supplemental Security Income) as reimbursement for student loans.

You Get Sued
The government and private lenders can sue you to collect defaulted student loans. Unlike other debts, there is no time limit on suing to collect student loans — you can be sued indefinitely.

Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)

April 30th, 2012
9:57 am

When GM needed a steady stream of diesel mechanics they invested in Guilford Technical Community College in NC. One year, that department didn’t exist, the next year, new buildings were in place and the department was educating kids.

Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)

April 30th, 2012
10:03 am

You cons just don’t like the fact that Obama is playing politics with the loan rates. In a Congress where the status quo is “If Obama is for, we’re against it…and vice versa”, what do you expect?

He has to do whatever it takes to get stuff done that he wants done. What if Obama said he wanted it done and then just sat on his hands waiting for Congress to act? It wouldn’t of happened.