« Higher College Costs and its Consequences- Becker | Main | Equality of Opportunity-Posner »

10/13/2013

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"But another important cause,paradoxically, is the increased cost of college education, which tilts the student body toward richer kids—and rich kids and their parents expect superior amenities in the way of housing, food, athletic facilities, and police protection. Such students expected to be treated as consumers, rather than as kids with no rights or representation (the situation of students at Yale in the 1950s; there was no student government, and no appeal from expulsion)."

But wasn't Ivy League elite education more the preserve of the rich and privileged in the past? There was no affirmative action, and elite colleges didn't have 'diversity' programs.
I think a greater percentage of students in the 50s came from upper class backgrounds.

The real difference is that the culture of the rich has changed. The rich in the past tended to be less showy and believed in instilling work ethic and thrift in their young ones. Maybe this went back to the Protestant roots of America.

But the culture of the rich has become more demanding, narcissistic, brazen, and shameless since boomers became parents. In the 60s, boomers wanted to have all the fun and be young forever. As they grew up and made money, they wanted to have all the wealth and fun.
They raised their kids to be crass and materialistic than reserved and moderate. All races wanna strut around like Paris Hilton or millionaire rap stars.

Eric Rasmusen

There is probably a lot more price discrimination nowadays. If the average amount of tuition plus housing paid is half of the sticker price, then the real price of college education has merely doubled. In light of the increasing cost of skilled labor (professors) and the increased quantity of services(fancier gyms, single rooms, air conditioning, ethnic group counsellors, career service centers, grade appeals, psychological counselling) and regulation costs, maybe the surprise is that tuition is so low now. I bet Harvard, Yale, and Chicago could triple their tuition and still attract excellent students. That they do not might be explained by the diminishing return to budget size and their preference for even slightly more talented students.

Eunice Kim

One aspect that economists have tended to leave out of the debate is the devastating effect that student loan debt has on the ability of individuals to obtain credit. I am a University of Chicago grad with substantial student loan debt. I have a great career, earn enough income to obtain a mortgage (never missed a rent payment), however no bank would ever underwrite me for a mortgage with this student loan hanging over my head.

As you know, owning your own home has been, by far, the #1 way to accumulate wealth in this country and was one of the reasons why we had a 'strong middle class' in the 50's. This is no longer the case. This phenomenon leaves behind millions of educated, young people from acquiring wealth, whereby further exacerbating growing inequality in this country.

Neilehat

Why does College cost more today? Inflation is certainly one cause, given its compounding nature over the years. Yet, there is something else going on that impacts the Supply and Demand Curves and consequently price. I do believe that it can be traced back to fundamental changes that have taken place in the Economy and its impact on Primary and Secondary Education. Prior to today, the Nation was heavily Industrialized with a massive Manufacturing base that absorbed the majority of graduates from Secondary Institutions. Hence the gearing of the Educational system to the importance of the Industrial Arts and the fitting of students to this Economic reality. Over the years we have seen this portion of the Economy decline, for what ever reasons, leaving the Primary and Secondary Institutions with the task of simply educating their students to simply advance into the Post Secondary education realm. Case in point, almost all gruaduates from Secondary Institutions today are "Manually Illiterate" and can only move into the Post Secondary Realm.

With this increased influx of additional students into the Post Secondary Institutions the Laws of "Supply and Demand" kick in driving costs ever higher.

B Wilds

The government effects the cost of higher education in many ways. State governments subsidize the budgets of public colleges and universities and federal and state governments give money to students through programs like Pell Grants and the American Opportunity Tax Credit. A below-market interest rate for Stafford Loans is just another subsidy mechanism. Like the government programs involved in supplying people with paid healthcare making cheap government loans available for education encourages people to consume more than they otherwise would. While many would argue that this is a good thing when it comes to education the policy also causes some negative distortions in that it encourages students at the margin, to choose more expensive educational institutions than they otherwise would, and to finance more of their education with borrowing. These incentives leave students burdened with debt and also makes them less focused on price than they should be. More on the subject of student loans and the cost of education can be found in the post below.

http://brucewilds.blogspot.com/2013/07/interest-in-and-on-student-loans.html

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