I believe that's true for many well-endowed and non-state institutions; the wealthy who can afford the full $45k tuition help to subsidize the poorer students who can't, and I don't see too much wrong with that.
The problem is that that isn't the entire story. Yeah, federally subsidized loans mean more kids are attending school, but not everyone is eligible for subsidized loans. Many of my friends, and myself, were offered standard unsubsidized loans as generally middle-class students. So for your average middle-class student, going to a less-endowed private or out-of-state institution means either paying full price out of pocket or taking out unsubsidized loans. And as we know, unsubsidized loans are reaching absurd levels under unrealistic terms and they're giving us a generation saddled with debt that will be very difficult to pay off.
More students are going to college, but I seriously doubt the price of education is rising. Spending time on any college campus will tell you that they are spending recklessly because of the education bubble, and I'm not talking high professor salaries (they deserve every penny). Administrators these days make frankly irresponsible amounts of money, schools purchase expensive and unnecessary equipment to have a selling point for certain departments, and construction/renovation is everywhere. The sticker price isn't rising because costs are rising, the sticker price is rising because demand is inelastic (due to promise of better jobs and easy financing) and colleges are finding reckless ways to spend the rest of the money.
So the points are valid, but they don't speak to the entire situation. It sure smells like a bubble to me; student debt is ballooning because demand is inelastic and its easy to take out a loan, schools are spending the money irresponsibly, and I don't see any reasonable way that all of this debt is getting repaid in this economy, especially under the conditions the loans are given. I'd say there's likely to be an impending burst and credit crunch as my friends and I hit the workforce.
>unnecessary equipment to have a selling point for certain departments, and construction/renovation is everywhere.
Exactly. When I started college I remember how ridiculous it was that every damn monitor on campus was a flat panel (this was when flat panels where still a few hundred dollars more expensive than CRTs)
Now that I'm going back to school I'm shocked by the amount of construction going on. They've doubled tuition since I was last there in 2007 and there using it on to buy a multi million dollar skyscraper and build pretty fountains.
The problem is that that isn't the entire story. Yeah, federally subsidized loans mean more kids are attending school, but not everyone is eligible for subsidized loans. Many of my friends, and myself, were offered standard unsubsidized loans as generally middle-class students. So for your average middle-class student, going to a less-endowed private or out-of-state institution means either paying full price out of pocket or taking out unsubsidized loans. And as we know, unsubsidized loans are reaching absurd levels under unrealistic terms and they're giving us a generation saddled with debt that will be very difficult to pay off.
More students are going to college, but I seriously doubt the price of education is rising. Spending time on any college campus will tell you that they are spending recklessly because of the education bubble, and I'm not talking high professor salaries (they deserve every penny). Administrators these days make frankly irresponsible amounts of money, schools purchase expensive and unnecessary equipment to have a selling point for certain departments, and construction/renovation is everywhere. The sticker price isn't rising because costs are rising, the sticker price is rising because demand is inelastic (due to promise of better jobs and easy financing) and colleges are finding reckless ways to spend the rest of the money.
So the points are valid, but they don't speak to the entire situation. It sure smells like a bubble to me; student debt is ballooning because demand is inelastic and its easy to take out a loan, schools are spending the money irresponsibly, and I don't see any reasonable way that all of this debt is getting repaid in this economy, especially under the conditions the loans are given. I'd say there's likely to be an impending burst and credit crunch as my friends and I hit the workforce.