> “The original purpose of tuition discounting was to make higher education affordable to low-income students,” Bridgewater president David W. Bushman said in a press release explaining the dramatic shift. “But over time, the practice has resulted in higher and higher tuition sticker prices that bear little resemblance to the actual cost of education.
This somehow seems inevitable in hindsight. It is quite bizarre, as a German student in university, how the education sector in the U.S. is working acceptable-ish[^1] and yet everytime I read something about it is seems to in some stage of self-imploding for colleges/ universities.
It would be interesting to see how this societal issue can be addressed in the longer term. Imoe neither technology alone nor any simple approach will work but it definitely is a great challenge for the future/ present.
The college system in the US works well. The vast majority of students go to community colleges or public schools and end up with very little debt (if any).
The nightmare stories you hear are about the small, vocal minority that go to expensive private schools and/or major in something that doesn't pay well (like theatre) and/or get Masters degrees that put them in debt.
From an educational standpoint, this is arguable, as most students are forced to take classes unrelated to their area of study simply to fill out a the credit requirements. But overall our schools are world class. It's the money side that's a wreck.
> The vast majority of students go to community colleges or public schools and end up with very little debt (if any).
The nightmare stories you hear are about the small, vocal minority that go to expensive private schools and/or major in something that doesn't pay well (like theatre) and/or get Masters degrees that put them in debt.
This is just the exact opposite of the truth, with literally no room for interpretation. The vast majority of students graduate with debt, the number is about 64%. Average debt from non-profit schools is about $35k of debt, and about $60k of debt from for-profit colleges. This is two thirds of students, and the amount rivals car loans, which are NOT insignificant.
> > From an educational standpoint, this is arguable, as most students are forced to take classes unrelated to their area of study simply to fill out a the credit requirements.
The point of this is to help round out an education. I started and finished my college career as a science student, but in the middle I switched to humanities. I witnessed an extraordinary difference in the ability to clearly articulate ideas between those areas which really highlighted for me the value in requiring a curriculum beyond just a student’s chosen major.
That's one argument, another is they're filler to make people think paying huge sums is reasonable for what they get. If these classes were teste for and only given to those who need it, I could believe it was for student enrichment. This is rarely the real case, and many administrators will admit it.
> As of 2023, approximately 44 million Americans carry student loan debt, with the total student loan debt in the United States reaching $1.76 trillion according to the Federal Reserve. This figure includes both federal and private student loans. It's notable that the number of people with federal student loans is around 43.4 million, and there are about 3.5 million private student loan borrowers, leading to a total of around 46.9 million American adults with a student loan. The average student loan debt in the United States as of 2023 is approximately $37,645 per borrower. This figure represents the average amount owed by those carrying federal student loan debt
I held a similar level of student loan debt, and it was worth it. My earnings are much larger thanks to the degree it enabled me to pursue, and I was able to pay it off early. While I don't think the system is ideal, just the existence of student debt isn't indicative of an issue, we'd need to look at statistics around what proportion of borrowers have undue hardship as a result.
Personally I don’t think it’s ideal that people who are going into less lucrative but still incredibly important societal roles should have to give up the ability to have basic needs like stable housing met because the cost of getting into those roles preclude the ability to meet basic needs.
I am not sure if you're in agreement or not, but yes, loans help access things that cost money (like basic needs) in the case that earnings are deferred due to education. Student loans generally require no payments until 6 months after education ends.
Right but it’s also debt that doesn’t need to be incurred, which puts people way behind the starting line, especially when the student loans come due and people can’t afford to pay for a house
Doing things like making it so student debt isn’t dischargeable in bankruptcy effectively creates a market for more credit than would exist otherwise. Student debt should at least be held to the same standards as regular debt.
I think those figures support the GP's "small, vocal minority" argument. Assuming students carry their debt for 45 years (across their earning lifetime -- my gf and her ex both carry student debt in their 50s) that's only 1 MM students per annum, which is 5-6% of the number of students any given year. And most of them aren't complaining.
Working for an international company has really opened my eyes. It's actually fucking insane that someone could be paying off school in their 50s. The cast majority of European schools are in the single digit thousands per semester. The US needs to immediately allow tuition to be discharged in bankruptcy which would at least fix some of the copious problems with our higher education system.
It's a totally bonkers assumption. If it was true, it seems to support a slightly different version of the same point. A 45 year loan on education doesn't seem like the result of a successful system.
Well my n is small. Tenured faculty at Stanford, still paying after 30 y and unlikely to pay off in next decade (note: not in CS, Economics, or business which pay the big bucks). Have heard other faculty discuss this at dinner parties too.
I graduated 35 years ago and back then was able to pay my MIT tuition by consulting over the summer + January. CS of course during the AI boom. Doubt that’s possible today.
I think the financing of education in the US is absurd and broken, but there is some logic to spreading the financing of an asset over the lifetime of the asset.
I'd estimate that the lifetime of a house is generally longer than the "useful lifetime" of an education. House financing, as far as I've seen, rarely exceeds 30 years. There are probably outliers, just like in education financing.
That average is the mean (we can tell because it roughly equals $1.76 trillion divided by 46.9 million borrowers).
The mean is notorious for being affected by outliers, that is, the few borrowers like doctors who owe tremendous sums. (As GP says, "the nightmare stories you hear are about the small, vocal minority")
If 90% of borrowers only owed $10k each, and the other 10% owed 210k each, the average would be $30k per borrower.
In fact, if 90% of borrowers only owed 1k each, and 10% owed 300k each, the average would still be over $30k.
Edit: According to the census, the median student loan debt is slightly under $20k, which certainly seems like an amount that people can pay off.
The median amount of education debt in 2021 among those with any outstanding debt for their own education was between $20,000 and $24,999. This reflects the central tendency of student loan debts, providing a perspective less influenced by extreme high or low values compared to the average debt amount.
To me, that seems consistent with "very little debt" as discussed above. It's less than the cost of an economy car, for an education that increases average lifetime earnings by over a million dollars.
$25,000 is basically nothing compared to the extra earning potential of the degree. It's less than a lot of cars. A good saver could pay it off in under 5 years without noticing a decrease in lifestyle.
Oh good. Glad you make enough money to view 25k as such a measley sum. Most people don't and this median debt load already mostly excludes people like you who payed off thir debt in 5 years.
It so funny that you guys are so quick to point out the difference between media and mean when it serves your world view but completely ignore all the other statistical factors. Like comparing q lifetime average earnings of all college graduates aganist the median debt load of those who still have debt. Rich people don't leave college with as much debt and don't hold it as long. Not all degrees pay equally so people with lower paying degrees will be disproportionately represented in that data set.
I know many college graduates for whom even making minimum payments on a 25k debt would significantly impact their quality of life.
You don't have to feel guilty for your privilege, but don't let it blind you to reality.
> Not all degrees pay equally so people with lower paying degrees will be disproportionately represented in that data set.
This is true. A degree that doesn't increase earnings by at least $1/hour (enough to cover the payments on a $25k student loan), is a financial mistake.
If someone spends four years doing what they love and not working, without a care for what will happen afterwards, they should expect it to significantly impact their quality of life afterwards. Being able to do that at all is quite a privilege.
I come from a working class family in which most people didn't go to college, so I don't forget what a privilege it was to be able to go to college nor how valuable a well chosen education is.
> This is true. A degree that doesn't increase earnings by at least $1/hour (enough to cover the payments on a $25k student loan), is a financial mistake.
1$ per hour seems on the far low end to cover that much debt. Also, the 25k number isn't the amount that was owed at graduation, but rather still owed some number of years into the repayment term so the actuall monthly payment is likely even higher.
Additionally, many of the lower paying jobs are still ones that we need as a society. While everyone picking lucrative degrees is good for them, it would be bad for us as a society.
Even so, I'm not disputing that the vast majority do pay for themselves in time. I'm saying that financial burdens imposed by student loan are significant. I would also posit that this repayment can hamper the ability for people to make other investments that improve their productivity and long term earning potential. Instead of the financial safety net enjoyed by the more well off, it does the opposite and increases risks.
When you add room and board, food, books, and all the extra hidden fees tacked onto tuition, you're closing in on ~20-25k.
Students aren't getting out of that without debt unless they have a sizable nest egg saved up beforehand and/or work a decent number of hours throughout their school life.
And, while it's certainly doable for an individual to make it through school without debt, there aren't enough decently-paid seasonal jobs around said schools for even a majority of students to follow suit.
It used to be significantly cheaper when I got my BS ~20 years ago, but a push by Republicans to make student loans non-dischargeable in 2005 (see https://www.congress.gov/bill/109th-congress/senate-bill/256) along with significant cuts to Kansas spending on education tripled tuition shortly after I graduated.
All true, however the amount of student loan debt (in total) is still a staggering amount.
And while state colleges have sticker prices well below those of privates, the pricey private schools are more likely to discount tuition. So students have to guess at where they’ll get the most aid/discount (most schools do a decent job getting these figures to prospects, but you have to apply to get them).
IMO, “shopping” for college shouldn’t be anything like buying a used car. The prices should be affordable and publicly shared.
> IMO, “shopping” for college shouldn’t be anything like buying a used car. The prices should be affordable and publicly shared.
The price of a used car is more transparent than US universities. I think the main comparison for the cost of going to college is more similar to the cost of going to the emergency room. You get individual bills coming in from every doctor and nurse that gave a sideways glance at your X-Ray. Likewise with a university they talk about the price of tuition, and oh wait you're too far from home and need a place to stay? And you're under 26 years old? Going to need to spend another $10k per semester for staying in a dorm. You'll need food passes and parking passes. You'll need books and everything.
Food and accomodation shouldn’t be a surprise cost, as it wouldn’t be if you buy plane tickets to Thailand. Is there any real gotcha costs that you only find out later?
Food is not really a surprise cost. Accommodation is surprising with how much it costs considering you're basically staying in an tenement home with people stacked on top of each other.
Some states effectively do. Georgia and Florida will pay full tuition for In-State students with high enough GPAs. Students still have to pay some fees, so it isn’t perfect, but it provides incredible value.
I will recommend my kids go to college outside the US unless they get into a household name university. It’s not worth the money anymore. If college was about education surely a benevolent government-university axis would conspire to lower the price by any means; if it were about signaling inclusion into a higher social strata perhaps we might expect college to become ever more expensive…
Thiel and Will Hunting have said it better: “You wasted $150,000 on an education you coulda got for a buck fifty in late charges at the public library.”
Cynically, the university education will be a much bigger boost to job opportunities than the public library books. Because you're right: university's primary purpose is indeed signaling capability. A transcript and a diploma serve as proof of completing and doing acceptably on coursework, which self learning does not confer. And in some fields (e.g. military officer) a university degree is a requirement.
My suggestion would be to get into a high caliber university, and drop out after one or two years if they can find full-time employment. The ability to get admitted into MIT, Ivy League, et. al. is about as good at signaling ability as it is to graduate. If I saw an applicant with 1 or 2 years of uni followed by full-time work, that'd be just as impressive as a graduate.
People don't like to talk about it because it comes off as elitist, but someone going to a university with an >80% admissions rate isn't really effective at signaling capability. If one of my kids only got into such universities and didn't garner much in terms of grants and financial aid, I'd want him or her to seriously consider alternatives like trades, community college, or a technical boot camp.
Yeah, public universities in the US are often comparably priced for in-state students--after financial aid does all their clerical bullshit--to the prices in the 70s and 80s, adjusting for inflation. And you can't replace the experience of being amongst other students, professors, club members, etc. who are all contributing to the ensemble of your intellectual and personal development. Sure there are things you can find in the library, but oftentimes you won't be embedded directly with those who are working on these problems, and you won't be thinking about/discussing them on a day in, day out basis.
Most private schools are heavily discounted from their advertised price--currently well beyond 50% discount on average (see below)--so don't focus too much on sticker price. The old wisdom among the college marketers was 'high prices [i.e., tuition sticker prices] send a signal of quality in the market' and that worked for quite a while. ('Ha! I got a great education and a great discount!') The Forbes article might suggest that's not the case any more.
No...I've heard of this happening in Australia. Its a very sad state of things, but even if they wanted to do something like that, it would be impossible, since American universities are organized usually into just two or three colleges (School of Arts & Sciences being the largest, comprising of everything from CS to English to Physics to Psychology; then there's usually an Arts school--music, painting, etc.--and/or an Engineering school and/or an Agro/environmental sciences school), and you share courses with everyone in your college, and the majority of your classes are not actually for your major, so most students end up learning a great breadth of things and engaging in pet interests (I myself was always interested in historical linguistics). If you charged less for a CS degree, you'd just get a lot of shitty CS students who are only in the major because they want to do something else. And oftentimes engineering/arts degrees are more expensive anyway, since they are seen as purely professional training.
It's true, unfortunately. If we had more funding for public universities, the aid would be re-appropriated, but for now they're struggling to make it affordable for students who are just "average."
> Thiel and Will Hunting have said it better: “You wasted $150,000 on an education you coulda got for a buck fifty in late charges at the public library.”
I used to think this is true. Moving to SFBA has disabused me of any notion that expensive college is about the education. Seeing the network that Stanford kids have access to is wild.
Me: "Oh hey this company just raised <lots of money>". Friend: "Oh yeah I know Joe, he's great, his best friend was my room-mate in college. We've already been talking for a few months about hiring them as a vendor at our company. Happy to see they finally announced the raise I heard about last year"
100% - I went to Cal, however after spending time in finland I would've been equally happy going to University of Helsinki (which costs pennies on the dollar compared to here), or a myriad of other schools - TU Delft, ATH Zurich, University of Oslo, etc. We're definitely not getting our money's worth here in the bay area anymore, and amongst the severe rise in gun violence, theft, extreme politics - my wife and I are trying to plan the next 20-30 years in places with a strong education system and safety profile like Dubai, Helsinki, etc.
Depends on the field. CS can be learned better online than in a school, probably because the people who built the internet are cs nerds, but medical fields, law fields, and some areas of engineering are much less accessible. The big issue imo is employers using a college degree as an easy filter for applicants results in everyone needing one to be competitive regardless of any utility. It’s gotten to where people tell me I oughta go to grad school to look better than the average applicant.
>CS can be learned better online than in a school, probably because the people who built the internet are cs nerds
I would disagree. Learning things, for me at least, was something social. And talking lectures over or solving problems together with other people was crucial for me for understanding things. Furthermore, university was a good place to network. I think it's difficult to find something similar on the Internet.
Whether it's worth taking on tens of thousands to hundreds of thousands of dollars in debt, probably not. But that's not a problem where I come from.
You might even be able to skip the gap year. My brother went to Rochester Institute of Technology a decade ago for less than what public universities cost in California after the university endowment halved the tuition. FAFSA covered enough of the rest that he didn’t have any debt to speak of from school.
Probably worth speaking about in the same vein as high tuition costs and the loans taken to cover them, is that parents (like mine) will have their kids take out student loans so they can supplement their own income. I’ve known a lot of people that managed to go to reasonably priced schools but ended up taking out $20,000 in debt for their parents. There are a few reasons why that range from unfortunate to opportunistic (in my case, my parents are not good people). The fact that university costs so much that tens of thousands of dollars in debt is acceptable to be freely loaned to be arbitraged is a huge problem.
I have a feeling (but no evidence) that this applies upward pressure on the amount that can be loaned and that this increased lending reinforces upward tuition costs.
I question if half of high school seniors should apply to colleges that cost MORE than 40k.
Some of the best educators I had were at community colleges with tuition ~1k per year.
It didn't have the marble buildings and heated pools of my UC, but class size was 20 instead of 200 and the primary vocation of the professor was education, not Nobel prize research
I wonder how the survey question was worded because when I applied I recall most of my applications were to out of state schools meaning which at the time these were been 30k+. Wasn't ever planning to pay this much and would only conisder if I received any substantial scholarships or aid. I think applying does not mean willing to pay that much
Tuition has gone up a LOT lately though (like everything else I guess).
I remember my school was like ~2200/semester and last I checked it was now up to like ~5000/semester. So there's 40 grand right there if you finish in 4 years.
Is that a community college or destination University? Some of the community colleges near me are going in the opposite direction and have even eliminated tuition altogether.
Definitely. Uni in the EU is very inexpensive and all expenses will really be cost of living (or room and board if living on campus). Uni in the USA is outrageously expensive and is in addition to the cost of living.
You get what you pay for though. As with a lot of things, universities in the UK rank highly but I would say - as someone that went to oxbridge - that they are nowhere near the quality of American universities. Smart people attend, the smartest in europe by a wide margin, but still lag behind.
If more Americans were fluent in a second language.
I was held to be very good at French in high school and my head would have exploded at the Sorbonne.
I was lucky a top ten school in my degree was less than two hours away. A lot of Americans don’t want to travel that far. I suspect it’s something about how far you have to go to encounter properly different people here, lulls many of us into complacency. We are just too spread out.
I know its a different era but I always felt like taking two years to work before going to college would of been very helpful at least for me and I assume some types of people.
This is something quite close to me. Our family was fairly poor growing up (though later moved into upper-middle class), and when it came time for college it was a matter of "which college is offering me the most in scholarships?". It was never a consideration to simply choose the highest ranked university. $40k of tuition per year and graduating with $160k in student loans was both unfathomable and untennable.
Looking back on this, it's actually something that I'm now much more unsure about, especially in the light of a fairly large tech salary. When applying to universities, I had an impressive application: a perfect on my math SAT, captain of the football team, professional opera experience, volunteer work and great grades (all credit goes to my parents for pushing me to do all of this). I got into great colleges such as Stanford (#3 on Forbes' university rankings), but turned them all down due to the price. I ended up going to Loyola Marymount (#203) as they gave me a $40k grant for 2 years. When that ran out I transferred and ended up graduating from Hawaii Pacific University (unranked, but objectively quite poor).
Was this the right choice, and would I have made the same call if I could go back? I'm not sure. $160k is much less to me today than it was when I was 18, so the value of the college feels more worth it by comparison. That said, I ended up successful regardless of the university I attended, but this might just be survivorship bias, especially considering when I look around at my peers, almost all of them are graduates of ivy leagues.
From a more objective lens, I think colleges offer three things: education, maturity, and access.
Educationally, there was a stark difference between Loyola and Hawaii Pacific, so I do think there's merit in pursuing a good university, but would there have been the same delta between LMU and Stanford? For that I'm not sure, especially with the resources online today.
From a maturity standpoint, I think I could have gotten this anywhere, as long as it was out of my hometown. Being out on my own was a fairly important aspect of my growth, and interestingly this increased when I moved out to Hawaii and was even further separated. I lived out in Sydney for a bit, and this too stretched me. I'd have loved to have had the opportunity to study overseas for this fact - I think being challenged by a different culture and being out on my own would have amplified the maturization effects of this.
On the access side, higher end universities excel here. They offer both peer connections and a stamp of approval. I've seen these two things open plenty of doors for my peers.
Because of these aspects, I think if I could go back I'd likely pursue the following: Study overseas for the first two years, then transfer into a more prestigeous ivy league to graduate from. Ideally that captures the best balance of optimizing for the three things universities offer, while minimizing the cost.
This somehow seems inevitable in hindsight. It is quite bizarre, as a German student in university, how the education sector in the U.S. is working acceptable-ish[^1] and yet everytime I read something about it is seems to in some stage of self-imploding for colleges/ universities.
It would be interesting to see how this societal issue can be addressed in the longer term. Imoe neither technology alone nor any simple approach will work but it definitely is a great challenge for the future/ present.