CharonY Posted January 30, 2020 Share Posted January 30, 2020 In order to keep the various discussions on specific presidential candidate plans focused I would like to use this thread to allow for a broader and comparative discussion on college tuition. In this thread I would like to discuss the various models in circulation to make higher education more affordable, but also to discuss potential drivers of increasing college cost. For starters I would like to mention that a number of contributors have been identified, but studies are not entirely in agreement with each other. One issue that has been discussed is the so-called Baumol's cost disease. In traditional economics wage growth is related to productivity increase. However, in service jobs, such as college tuition, productivity typically does not increase but in order to attract faculty their salary increases despite the lack of productivity increase. Other factors include increase in student amenities to attract students, as well as the increasing ratio between administration and faculty. Another, rather obvious but seemingly not quite as often discussed factor is the decline in public funds for universities. In most cases, the support for students has been in decline. Student tuition have never paid fully for the education cost, but were always covered partially by public funds. Those have dropped dramatically over the last decade (fueled by the recession) and are still on average over 16% below pre-recession times. But even before the recession funds were declining resulting increasing costs being covered by tuition fees. Finally there is also the so-called Bennet effect which associates increasing availability of student loans with increasing tuition fees. However, this was only clearly shown in for-profit institutions. It should be noted that these really only apply to the US and to some extent the Canadian models, as in other countries, such as Germany, there is only a nominal administrative fee (a few hundred bucks per semester, which usually also provides free transit). We can also discuss that, if you'd like. Using these aspects as a starting point I would invite folks to discuss their thoughts on this matter, including the various takes from the US presidential candidates. Link to comment Share on other sites More sharing options...
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