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There is a huge problem brewing in this country: student loan debt. Some 44,000,000 people have this kind of debt<\/a> (minimum, there are many accounting tricks to make this number appear lower than it is), and for many it\u2019s so large that they\u2019ll never be able to pay it back. They can\u2019t get rid of it through bankruptcy, either.<\/p>\n This is a huge subset of the population, basically the whole next generation. This problem has been growing and growing, but most people are, at best, only dimly aware. Some porn star has sex with some politico, and it\u2019s big news even though it affects less than half a dozen people, but this devastating problem for tens of millions of people just doesn\u2019t make the mainstream media much.<\/p>\n A recent article demonstrates just how dimly this country seems to be aware of the situation\u2026and I\u2019m in the mood to pick on the rag:<\/p>\n Why Is College So Expensive?<\/a><\/strong><\/em><\/p>\n Before chuckling at The Atlantic\u2019s laughably insipid musings on the matter, I feel the need to highlight a basic economic principle: if you increase demand of a commodity, the price will rise. Now, yes, there\u2019s always been a demand for education, but this country has an excellent library system. The government\u2019s student loan system didn\u2019t increase demand for education, but it did increase demand for an education at an accredited school<\/em>.<\/p>\n If you don\u2019t care about accreditation, you can hire a tutor for $50 an hour to come and talk to you about fairly advanced subjects\u2014a typical college professor doesn\u2019t make this much, and a typical course charges about $150 an hour for the student to sit in a huge classroom and listen\u2026honest, it\u2019d be better for both student and teacher if we didn\u2019t have the huge education bureaucracy in the way.<\/p>\n Anyway, college is expensive because of this basic economic principle: the massive student loan programs are fueling a huge demand for accredited education. What does The Atlantic have to say?<\/p>\n \u201cSpending per student is exorbitant, and it has virtually no relationship to the value that students could possibly get in exchange.\u201d<\/em><\/p>\n Yes; as I\u2019ve documented extensively, accreditation is a fraud and has no relationship to education quality. So, about the question?<\/p>\n \u201c\u2026I wanted to blame the curdled indulgences of campus life: fancy dormitories, climbing walls, lazy rivers<\/a>, dining halls with open-fire-pit grills<\/a>. And most of all\u2014college sports. Certainly sports deserved blame.\u201d<\/em><\/p>\n What confusion of ideas is necessary to view the above as anything but symptoms of spending out of control? If the above were the real problem, then a \u201ccheap\u201d school could skip the above.<\/p>\n It turns out that the vast majority of American college spending goes to routine educational operations\u2014like paying staff and faculty\u2014not to dining halls. These costs add up to about $23,000 per student a year\u2014more than twice what Finland, Sweden, or Germany spends on core services.<\/em><\/p>\n Yes. So, how about answering the question?<\/p>\n And college is a service delivered mostly by workers with college degrees\u2014whose salaries have risen more dramatically than those of low-skilled service workers over the past several decades.<\/em><\/p>\n Uh, nope. Faculty pay and faculty numbers have been essentially flat<\/a>, actually lower when you consider most faculty are sub-minimum wage adjuncts who don\u2019t even count into pay considerations. And it is faculty who deliver the services here. But even if we were paid a lot, it\u2019s still not answering the question, because class sizes have swollen to huge proportions.<\/p>\n \u201cThe villain, as much as there is one, is economic growth itself,\u201d they write.<\/em><\/p>\n Um\u2026no. If economic growth were the issue, then everything else would increase in price by a huge margin as well. We\u2019d see this in other countries with economic growth if this statement were true. We do not.<\/p>\n America\u2019s higher-education system is that it is actually three different systems masquerading as one: There is one system of public colleges; another of private, nonprofit institutions; and one made up of for-profit colleges.<\/em><\/p>\n Finally, the Atlantic says something correct\u2026but interprets it wrong. All those systems would increase competition, and yet another economic principle is competition drives prices down. It\u2019s a shame economics is such an obscure topic that our mainstream rags don\u2019t even have a rudimentary understanding of it.<\/p>\n The Atlantic submits page after page of complete confusion, for example:<\/p>\n All that said, it\u2019s also true that state budget cuts were uneven across the country. Today, in-state tuition in Wyoming is about a third of the cost of Vermont, for example. In places where higher education has not been gutted and the cost of living is low, an American college degree can still be a bargain\u2014especially for students who don\u2019t mind living at home and are poor enough to qualify for federal aid.<\/em><\/p>\n Wait\u2026Federal aid? You know, Federal aid in housing drove real estate prices up, and Federal involvement in health care drove prices up. The Atlantic doesn\u2019t know these things, and so misses the cue here, with no ability to guess what Federal aid in education would do.<\/p>\n \u201cUniversities extract money from students because they can\u2026It\u2019s the inevitable outcome of an unregulated fee structure.\u201d<\/p>\n No, it\u2019s not the unregulated fee structure. Bottled water doesn\u2019t have a regulated fee structure, after all, and yet we still don\u2019t see bottles of water going for $20,000 apiece. More government interference, more regulation, is not the answer.<\/p>\n Over a lifetime, people with bachelor\u2019s degrees earn more than half a million dollars more than people with no college degree in the U.S.<\/em><\/p>\n Hey, remember when the line was \u201cover a million dollars\u201d? I sure do. Now it\u2019s only half a million? This still isn\u2019t answering the question, though.<\/p>\n After fumbling forever, the author never gets around to answering the question, but offers up this hysterical chestnut:<\/p>\n This convoluted, complicated, inconsistent system continues to exist, and continues to be so expensive because college in America is still worth the price. At certain colleges, for certain people. Especially if they finish. But it doesn\u2019t have to be this way, and almost everywhere else, it isn\u2019t.<\/em><\/p>\n Still worth the price? I have my doubts. We now have close to three times as many people with student loan debt than we have college students, but the debts are quite inescapable for many of them. Continuing to screech about how college is worth it \u201cat any price\u201d is just suckering more people into the death spiral of college debt, and The Atlantic does the public a grave disservice by saying the above. They merely add insult to injury by at no point considering how the huge student loan scam has been a factor in skyrocketing tuition here.<\/p>\n www.professorconfess.blogspot.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"