I think the article misses the root cause here. Drastically increased availability of loan-based financial aid means far more more money in the system, which means the prices go up.
The article nails the cause of more administrators--the schools have more money to spend and need to spend it--but completely misses the reason schools are able to charge so much more these days.
Yeah, but you're ignoring the mechanics of that happening.
> completely misses the reason schools are able to charge so much more these days.
I don't think it misses it. I think it just ignores it as a matter of practicality. It would take an act of god to get money removed from the system, but there is a very real chance he could cut some cost and bloat from single, incredibly influential, school.
More money in the system doesn’t generally drive prices up in other areas due to supply and demand. Instead you get very expensive options for people with more money and cheap options for the cost cautious.
Collage is largely an exception to that as elite schools don’t charge 100+x the average the way say watches, clothing, etc do, and most people aren’t going with the low cost options.
> More money in the system doesn’t generally drive prices up in other areas due to supply and demand.
Do you have an example?
Supply and demand is exactly what drives the prices up. People have a huge supply of dollars due to financial aid loans, and cannot spend those dollars on anything but education. With more money available, schools charge more.
Manufactured goods generally follow this trend of increasing total money being spent resulting in a lower cost per unit. Microwaves, toasters, dishwashers, flatscreen TV’s, etc are all vastly cheaper today than when they first hit the shelves. The best example bing transistors, we are dumping vastly more money into them and getting ever lower prices.
Commodities often follow a similar trend with global Steel production resulting in lower prices per pound over long stretches of time. The trend is less obvious over short periods of time but compare steel prices every 50 years say 1820, 1870, 1920, 1970, and 2020.
Some things like beachfront property are inherently in short supply, but it’s hard to argue that applies to collages across decades.
It's unreal that most of the comments here are missing this. The government guarantees effectively infinite loans that can be put toward college, and prices rise to meet the supply. Cause and effect.
Yes, but if you control the supply, and the government was guaranteeing infinite demand via loans, wouldn't you want to scale your programs up to make more money rather than just inviting more people to share in the grift?
Colleges make more money anyway, and the additional bloat does support larger programs, just not very efficiently. With all the free money floating around, I suppose they aren't very economically pressured to be efficient. They surely need large administrative departments dedicated to making sure students have an easy time securing more loans.
The article nails the cause of more administrators--the schools have more money to spend and need to spend it--but completely misses the reason schools are able to charge so much more these days.
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