Why has college gotten so expensive in the last 30 years? A blank check in 1993 - <AUTHOR> https://medium.com/@andrewghobrial/why-has-college-gotten-so-expensive-in-the-last-30-years-3505af9aded8 <comment><USER3> "The question then becomes a matter of how we fix this without diminishing access to a college education."

This is the crux of it that everyone needs to get over. Universality, High Quality, Low Cost. Pick two. By letting the government meddle you have guaranteed no one can afford college and will be long in debt to a loan they cannot discharge in bankruptcy. I'd rather have cheap college then universal access for every single person who wants a English Literature or Anthropology degree with low ROI. Colleges are now awash in money and they pump it into newer and fancier campuses to attract more of that government backed debt from all the masses, driving up cost significantly.

Or how about breaking the degree monopoly with something like equivalent certification programs and let private companies fill the gap. Similar to what Google is doing with its certificate program they are rolling out. 4 years for a piece of paper that includes 2 years of general education classes for "well roundness" is starting to look more and more ridiculous considering the cost of that "well roundness" is years of non-dis chargeable debt weighing you down during your best decades.

<comment><USER4> Universities in Europe are generally high quality and low cost. It does have it's problems but it is not one or the other.

You do not need a degree 30 years ago to do lots of jobs that now require one. Higher education for a lot of organizations is just an easy way to cut the application stack down

<comment><USER5> Are Universities in Europe really that high quality? Certainly some are, but as a parent researching schools I have been really surprised by how many European colleges are a bit mediocre by the criteria I was evaluating. For example, Spain and Italy have some of the oldest colleges in the world. But in many ways there are four or five colleges in California that are better, four or five colleges in Texas, and across the US many many colleges than any college in those countries.

I know a lot of people will disagree because there are so many ways to compare colleges. But what I look for is the strength of the top faculty (not necessarily the teachers but who you might work with as you get more advanced), the facilities, the quality of the research that comes out of that University. The US really has an impressive number of schools that attract top faculty from around the world and produce world class research in many fields.

A lot of European colleges seem to give you a good education. But if you really wanted to be an expert in something, or just get the experience of working with top people, it is amazing how relatively strong US colleges are.

I know I am making a lot of generalizations, perhaps unfairly. So if you disagree or see it a different way please correct me. This is something I am really trying to learn about.

<comment><USER6> My issue with the rankings is how they emphasise research. Why would it matter to an undergraduate how highly decorated his prof is? We used to joke that the more titles a guy had, the worse he was at teaching. I think this is true because the guys with the titles have moved on to managing research and finding funding, rather than having daily tasks to do with the research.

I went to a very well known university that's known for giving tutorials with just a couple of students, and this always seemed to be the case. Top prof = doesn't have time or motivation to teach.

If you look at it, everything you do in undergrad is fairly well known anyway. There's no reason why a course at one uni would be much different from another, the fields have decided long ago what is and isn't important.

What might affect your kid is what peers they end up with. If you go to a top uni, people are used to doing well and tend to come from backgrounds that allow them to succeed.

<comment><USER7> Well, a few things:

1\. Research is part of the pedagogy. Getting involved in a research lab as an undergraduate is a great way to land in the top 5-10 percentile.

2\. I think what you're saying is roughly correct, but would warn that you _can_ very easily go _way_ too far in the other direction. For example, check out some of the smaller colleges and state branch campuses launching data science departments staffed entirely by non-stats/non-CS faculty who have 0 days of work experience. Mostly because their math courses are under- subscribed and they've gotta do something with those bodies. The quality of these programs is about what you'd expect. So, you don't need top-tier faculty. However, you do need faculty who have at least a relevant terminal degree and/or significant work experience. Otherwise, it's the blind leading the blind.

3\. Curriculum _does_ vary radically between universities! C.f., Stanford and a random branch campus of a state school.

4\. As you noted, cohorts can also vary even more radically.

<comment><USER8> > Research is part of the pedagogy. Getting involved in a research lab as an > undergraduate is a great way to land in the top 5-10 percentile.

I just want to point out for any newer undergrads that might be reading that research is really one of the best things you can do during your time at school. Even if you don't plan on going into academia, it looks great on a resume and professors are often have industry connections that can get you an internship easily.

<comment><USER9> A few caveats to be aware of: more scrutinizing employers will recognize that undergraduate research at the same university you attend is usually a gimme. And at my large state school was often used for cheap labor that grad students didn't want to do.

<comment><USER7> It's the project output, the faculty connection, and conference attendance. The line on the resume doesn't matter.

<comment><USER10> For the large amount of students who don't go on to get PhDs, why would that matter?

<comment><USER7> A good rec from a strong researcher carries weight. Likely lots of execs, managers, and senior engineers in the ranks of their academic siblings, old grad school friends, collaborators, former students, etc.

It'll add a band or at least max out comp in the existing one if the right person gives the right rec.

And that's assuming the undergrad research project was totally irrelevant to the position. New grads who can contribute to cutting edge stuff are super hard to find and super cheap relatively speaking. Usually your options are super expensive engineers or the few phds who decide to go into engineering instead of research.

I've seen undergrads sign in the 3s and 4s when their research aligns perfectly with the advertised position, cause the alternative is often buying the kid out of his startup a year later.

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER11> _> the feds should handle student loans the same way they handle medicaid/medicare reimbursement._

I'm not sure how anyone looks at our health care reimbursement system and the decides that's the approach to apply to fix anything else?

Personally, I'd like to see:

* Employers are allowed to test students to see what they can do, but not evaluate them based on whether they went to school or where.

* Make student loan debt dischargeable in bankruptcy. Lenders will be much less willing to pay high tuitions in cases where students are unlikely to be able to pay it back, and if the lender guesses wrong and it does come to bankruptcy then the student is no longer encumbered.

(I wrote more along these lines: [https://www.jefftk.com/p/fixing-student- loans](https://www.jefftk.com/p/fixing-student-loans))

<comment><USER12> _Employers are allowed to test students to see what they can do, but not evaluate them based on whether they went to school or where._

For those who are unaware, these tests are considered a violation of the Civil Rights Act because they result in hiring blacks at a much lower rate than whites.

A big underlying cause of that is that schools with lots of blacks are underfunded relative to schools with lots of whites.

 _Make student loan debt dischargeable in bankruptcy._

I support this. I thought that the 2005 change to the law that made it not dischargeable was a bad idea then, and we are seeing the predictable consequences now.

<comment><USER11> _> For those who are unaware, these tests are considered a violation of the Civil Rights Act because they result in hiring blacks at a much lower rate than whites._

Work sample tests are legal; otherwise we wouldn't see tech companies giving whiteboard interviews.

More general tests are not legal ([https://en.wikipedia.org/wiki/Griggs_v._Duke_Power_Co.](https://en.wikipedia.org/wiki/Griggs_v._Duke_Power_Co.)) unless you can demonstrate that they "bear a demonstrable relationship to successful performance of the jobs for which it was used". On the other hand, they held that "neither the high school completion requirement nor the general intelligence test is shown to bear a demonstrable relationship to successful performance of the jobs for which it was used" so I think there's a decent chance that the widespread use of college degrees as a filter is also already illegal. (Not a lawyer)

<comment><USER13> IQ tests aren't blanket-banned; they just have additional hurdles. For instance, the Wonderlic test is routinely used in hiring contexts and is even part of the NFL scouting combine.

<comment><USER14> While the Wonderlic published, is it even used as a factor? Does a coach say "no linebackers who scored less than 18?"

<comment><USER15> Often it is used as a red flag when a prospect scores particularly low on the test. NFL playbooks are complex and there is a lot to learn and then apply in real time on the field compared to in college. Players who cannot process all of this added complexity rapidly and then apply it are at risk of not being able to keep up on the field, even if they are incredible athletes. This holds the most weight with quarterbacks who have the most to juggle mentally throughout a game, so you most often hear conversations about the wonderlic when talking about the quarterback position.

</comment></comment></comment></comment></comment></comment><comment><USER16> The central claim in TFA is that when the government gives out loans directly, instead of guaranteeing loans made by banks, it's easier for students to get student loans, and therefore college prices go up.

a) Zero evidence is provided in TFA that it is in fact easier for students to get loans under the government program. I could make an equally compelling argument and say, when the private sector provides loans guaranteed by the government, private sector has a monetary incentive to seek out students and pile them high with loans that they can't afford. The loans are guaranteed by the government, so more loaning is direct upside.

In contrast, the government has no incentive to partake of predatory lending! Its incentives are aligned -- and not just on the monetary angle, but also, the government does not succeed if students are stuck in debt forever. Therefore when government gives the loans, incentives are aligned and lending goes down.

I've provided just as much evidence as Andrew. I'm not saying I'm right, but how do we know he is, either?

b) Andrew who?

c) TFA neglects to mention that you can take out up to $5500-7500 in government loans per year as an undergrad. [https://studentaid.gov/understand- aid/types/loans/subsidized...](https://studentaid.gov/understand- aid/types/loans/subsidized-unsubsidized) If they had, you might have doubted their claim that this is the reason that college costs $50+k/yr.

We are already under this dude's system of "government offers a small, fixed amount in loans and students have to figure it out". Prices are still high and increasing.

It turns out that the high cost of college doesn't have a simple explanation or solution. Who knew.

<comment><USER17> > the government does not succeed if students are stuck in debt forever. > Therefore when government gives the loans, incentives are aligned and > lending goes down.

That's a double edged sword. Yeah, the government doesn't have the profit motive that predatory lenders do, but they also lack the incentive to say no to students who are borrowing money to study things that won't do much to help them pay it back. Politicians don't get re-elected on a platform of "let's reduce student loan amounts" or "let's give less money to students who are studying subjects that won't help them earn much". And the bureaucrats running the program don't have the power or the incentive to impose discipline here either.

<comment><USER18> In a system of loans directly from the government, there is still some mild disincentive against lending to people that won't pay it back, even if it is tempered against some other incentives. What's more, a government body certainly can and surely would limit total loan amounts for affordability reasons.

More to the point, the comparison here is against regular private lenders, but instead against private lenders with government guarantees. Those have no disincentive whatsoever to avoid people who can't pay money back or to limit the loan amount. In fact they have a very strong positive incentive: there's a guaranteed profit on every loan and it's proportional to loan amount. What's more, if you cap the loan amount then the "customer" might use a competitor with a higher cap, so you lose the whole of the loan.

<comment><USER19> I believe private lenders require cosigners or else proof of income. I don't see how they can win here. You'd have them discriminate in giving loans based on some kind of lifetime prediction of someone's earnings? I'm sure that would go over well.

Schools need to be the adults in the room, since they getting most of the money after all. And that will only be motivated by having them take the financial hit if students default.

</comment></comment></comment></comment><comment><USER20> How did this hit the front page of HN? There's literally no analysis in a piece on a topic that has been analyzed to death.

The hypothesis is that increased availability of loans in 1993 is responsible for the rise in tuition between 2010 and 2020. Just stated as a fact, with nothing to back it up. Okay.

The most obvious answer that is cited by _literally everyone_ that looks at this topic is that it's partially caused by cuts in state funding. Nope, let's just dismiss that, it was the one-time change in the availability of loans.

I don't see anything wrong with having a discussion, but there's not even anything to discuss, because it's just a statement that a change 27 years ago explains everything. HN can do better.

<comment><USER21> Cuts in state funding don't explain the rapid tuition increases at private universities.

<comment><USER7> I know first-hand that this is not how pricing decisions work at regional private colleges/universities. The process regional private colleges go through is as follows:

1\. List a set of "peer institutions", usually with the primary input coming from admissions. Here, "peer" means "competes for the same set of students we're after". Almost always the region's public colleges and universities will be on this list.

2\. Set prices relative to these "peer institutions".

If Local State College charges $X, then most (read: non-elite) regional private colleges can get away with charging after-discount-factor $(X+Y) for some relatively modest Y < X.

Increasing $X also increases $(X+Y).

Cutting state subsidies will lead to higher prices and private institutions. 100% probability. I've seen the exact process by which it happens.

<comment><USER22> Yes, this is a great summary, and exactly what is going on.

Interestingly, it hasn't seemed to have much change on the spending side. Colleges are charging more to the median student, but are using a lot of it to subsidize less well-off students. It's not showing up in huge increases in faculty salaries, or administrative costs.

<comment><USER7> _> It's not showing up in huge increases in faculty salaries, or administrative costs._

Not in faculty salaries, but often in faculty headcount. Lots of colleges and universities have added a lot of faculty while keeping student headcount constant. Mostly because they can't fire their tenured humanities faculty but need to hire people who can prepare students for something other than the Barista life.

IMO: tenure should be used very sparingly and should be viewed as part of a competitive compensation package. E.g., if the CS PhDs you want to recruit all have $300K offers in industry and the best you can do is $70K-$80K even with salary inversion, then you absolutely do need to offer tenure. It's part of the comp package and you simply will not recruit good people without offsetting such significant pay gaps.

But tenure for humanities borders on fiduciary irresponsibility. The job market for humanities PhDs is such that you can hire truly top-tier candidates without committing to having another head in the Philosophy or English department 40+ years. The $50K three-year contract is a competitive offer in the humanities. No need for tenure.

 _> Colleges are charging more to the median student, but are using a lot of it to subsidize less well-off students._

Certainly some of that too. I expect this will be the leading cause through 2030.

<comment><USER22> > Not in faculty salaries, but often in faculty headcount. Lots of colleges > and universities have added a lot of faculty while keeping student headcount > constant.

Do you have a citation for that? The message in the industry is that colleges have been reducing faculty headcounts, and relying on adjuncts to cover class loads, not that there are too many faculty.

> tenure should be used very sparingly and should be viewed as part of a > competitive compensation package.

I don't think you're going to get very far with this argument in most universities, where faculty see themselves as part of the governance of the university. There's quite a bit of collective action between faculty, and I think even if you could get faculty in some departments without tenure, the STEM faculty would not want to create a two tiered system.

<comment><USER7> Reductions in faculty headcount are recent. As in, pretty much only this past year. I'm talking about the last 10 or 20 years. Replacing tenured with ad juncts or instructors is not a headcount reduction.

There already is a two-tiered system. Ad juncts and instructors are treated and paid horribly. Stripping tenure but otherwise leaving positions unchanged is downright humane by comparison.

Tbh, faculty governance is pretty dead at most places.

</comment></comment></comment></comment></comment></comment></comment><comment><USER23> Is this surprising to anyone? Colleges battle each other to provide amenities, loans are easy to come by, and the colleges have nothing to lose when the students default.

I remember my first day of college (in 1993!) and remember part of registering was signing all of these forms where my options were a) take out loans and go to school or b) don't take out loans and don't go to school. I had no idea what it meant to carry debt. As it turns out, I was fortunate to only have $30k of debt and interest rates that eventually went down to 2%. Between then and now, the "all-in" cost of attending my college has increased 200%.

<comment><USER24> > Is this surprising to anyone?

Yes. Most people here who actually post in US college cost discussions seem to think the federal government is still only in the business of guaranteeing loans. As this article indicates, when the federal government is making these loans and owning them from start to finish it changes the dynamics considerably.

> I remember my first day of college (in 1993!) ... I was fortunate to only > have $30k of debt

Where did you go? The on-campus sticker price on my state universities (Florida International and Florida Atlantic) was only about $35k (all-in) for the period of 1998-2002 (I didn't have to pay any of it).

<comment><USER23> Private Engineering-focused college in the Northeast. All-in annual cost was listed at $24k for tuition, room, board, fees, etc.

<comment><USER24> That's about what Rose-Hulman quoted me before aid. I would have had to borrow or work for about $12k/year if I had gone there.

<comment><USER23> Ironically, my state's University ended up being my most expensive option since it was the only school I was accepted to that offered zero scholarships.

</comment></comment></comment></comment></comment><comment><USER25> It is difficult to overstate how mistaken this article is. College has mostly gotten more expensive because state support for public universities has dramatically decreased, from over 80% in the 1970's to less than 20% now. Since the taxpayer no longer pays for public higher education, the student does.

The logic of this made some sense at the time; very high tuition subsidies were a gift to the upper middle and upper class -- few poor students went to college back when subsidies were high. Ideally, states would have continued to fund higher education, and the increased tuition would be used to support lower income students. But the states took the money away from their universities in bad times, and did not replace it -- in my state (Virginia) it went to prisons and medicaid.

There are lots of other problems with student loan statistics -- it is true that the current student loan program has been a tremendous boon to for profit colleges and trade schools, which is where most of the default occurs. And the media likes to publicize the outliers; the average debt at public universities is about $26K, at private non-profits $31K.

But the overall cost of higher education has only slightly beaten the cost of living (and has certainly increased less than health costs); the price has gone up because students are responsible for more of the cost.

<comment><USER26> > the price has gone up because students are responsible for more of the cost.

That is not how prices work, the prices can't go up if the only buyers have no money.

The price went up because they got access to credit. To government mandated credit.

<comment><USER25> I suppose this seems to make sense if you believe that higher education costs are a true market that has found some kind of equilibrium. But it's not.

College graduate parents are going to try very hard to send their kids to college, and today, the vast majority of students at 4 year colleges come from families with college graduate parents. When tuitions were low, this did not require much sacrifice for those parents. When prices went up, those parents continued to send their kids to college, making greater sacrifices, but often without taking out a loan (at least for public universities). Today, 42% of undergraduates at public universities have no debt.[0]

No doubt loans also had an effect -- among other things, they made it easier for state politicians to reduce support for public universities. But since 40% of students at public universities have no debt, and costs increased more than 5 fold, it is hard to argue that loans were the major factor driving up the cost. To support the loan driving argument, it would be useful to see relationship between the fraction of students with loans and college costs. Simply saying that costs went up when loans became more available ignores many other changes in education finance.

[0] [https://www.aplu.org/projects-and-initiatives/college- costs-...](https://www.aplu.org/projects-and-initiatives/college-costs- tuition-and-financial-aid/publicuvalues/student-debt.html)

<comment><USER26> We are not arguing about the cost of education because students can't pay the tuition; they pay the tuition every year with no problem even though it keeps rising. The argument is because after they graduate they have a mountain of student debt. Students have a debt problem not a tuition problem. Colleges will keep raising prices as long as the students keep paying them because that is how markets work.

Loans have enabled all those "changes in education finance", all of them. You don't need to have 100% reach to influence a market, you don't even need to be technically in the same market to influence another one (see smartphones and taxis).

</comment></comment></comment></comment><comment><USER27> No, the real reason was that country wasn't producing enough jobs for the expanding labor force so we artificially created a new requirement to keep young people out of the job market for an additional 4+ years. Credentialism is a tool governments/businesses use keep control of the labor situation.

The college tuition fiasco is a private/public creation. Now who wears the pants in the private/public relationship, that's up to you to decide. Did businesses decide to require college degrees for entry level positions and the government react to that? Or did the government decide to get people into colleges and the businesses react to that?

If businesses stop requiring college degrees, then college enrollment will drop significantly. If government stops guaranteeing student loans, college enrollment will drop significantly.

Who truly runs this country?

<comment><USER28> I don't know that there's any groups deciding on something but rather individuals acting in their best interest, getting a degree, that ruins it for everybody else. An arms race among individuals.

<comment><USER29> > I don't know that there's any groups deciding on something

Credentialism is exactly that. If in the pre-covid era you went to Washington, DC, you will see huge illuminated ads in the metro stations for companies, for example "graduate school" (literally the name of one company I saw) which offer super sketchy master's degrees. This is because if you have a master's degree, you get a mandated pay bump in your salary as a civil servant.

<comment><USER30> That sounds like bad regulations and bureaucracy more than credential-ism, but I agree that is horrifying.

A blanket pay bump for "Master's" degrees written into the code? Clearly that's going to be gamed.

If any auditing actually went into the source and value of the credentials then they could be appropriately valued or ignored, depending on the case.

<comment><USER31> > If any auditing actually went into the source and value of the credentials

Except that already is case. You need a degree by an accredited institution. The Department of Education regulates the accreditors, which audit the universities.

So we could have better or more aggressive regulation here, either at the DoE or the accreditors. Or even have the department accredit directly, but I suspect these institutions will still likely game the system.

Usually the bargin-basement universities do actually have worthwhile material, the poor ones just don't provide you with the full support to succeed, and often overstate the value of their program relative to alternatives (or cost). I mean, you could just buy textbooks on Amazon and do self-study. And for some folks, that might even be a good program! Good universities provide a lot more than just the lectures and textbooks, but I suspect setting standards to assess those properties is difficult. Even going to a well-respected state school, I had a few classes that were very poorly run. In one case, my dorm- mates and I created a study-group and basically taught ourselves the material. But I shudder to think of a whole university consisting of classes like that, though I suspect they would meet baseline audits of the curriculum. An alternative approach would be to assess the outcomes of students, but looking at the can worms that raises in primary eduction, I don't think that is a good approach either.

</comment></comment></comment></comment></comment><comment><USER32> For undergrad I used Army money and was poor enough for Pell grants after that ran out. I got out with $12K in loans.

Much later in law school I was shocked how my first financial aid award letter (I can't remember if it was for one semester or one year) offered $80,000 in loans even though I had an $18000 tuition grant/waiver.

I met younger students who had close to $200,000 debt before starting law school. It is too easy to take the loans, it is no wonder that so many kids or their families get buried in debt.

I got out of LS with $27K or so in debt from interest deferred federal loans that charged around 2% interest.

Now, 14 years later, that same Tier 2/3 school charges more than double what I paid. I would not have gone at that price.

<comment><USER33> At least lawyers and doctors are smart enough to keep their rates high enough so they can repay their loans. A while ago I was looking for a lawyer and it was surprising that there were no freelance lawyers that changed maybe 80 dollars per hour. They all wanted 250 and more.

<comment><USER32> Maybe true for MDs. But many lawyers, especially solo firms struggle to get by.

I did some low-fee legal for awhile part-time because I was still programming after I got my JD. I think I charged $250/hr or flat fees but I did a lot of free/contingency cases too. As a solo you rarely bill 8-hours a day. Between running around to meet clients or driving to different courts in the area some days you are lucky to bill a few hours.

One guy got angry at me because I wanted $250 (or something like that) "just to read" his DIY complaint before he filed it. "Just to make sure everything looked okay..." He didn't realize that he would be establishing an attorney client relationship with me that would obligate me to give competent legal advice that put my license on the line. That is way beyond just reading his complaint. The same goes for reviewing contracts, non-competes, etc. I eventually read the complaint he had prepared since he sent it to me earlier, boy I dodged a bullet on that one. It would have taken a ton of work to get it even close to ready for filing.

I did some low-fee family law stuff too -- one client thought I was taking the side of her ex, because I didn't raise her legally irrelevant complaints in court. I still got her more money than any other family lawyer would have done for the small fee she paid. I think I charged her a flat $1100.

In a low stakes employment discrimination case, my client had been rejected by multiple attorneys before she ran into dumb me. I took the case and got the client a six figure settlement. Client promptly took me to arbitration because she thought my share to was too high even though it was well below industry standard.

Eventually I got tired of this crap and sold out and went corporate.

</comment></comment></comment><comment><USER34> I found [https://www.mercatus.org/system/files/helland- tabarrok_why-a...](https://www.mercatus.org/system/files/helland-tabarrok_why- are-the-prices-so-damn-high_v1.pdf) enlightening. (Not an economist, just a person who wonders why college costs so much compared to cars.) I am a prof in a SLAC and I can assure you that I am not floating in money, nor is the college.

<comment><USER35> I was pleased to read about his paper. He's a somewhat libertarian leaning economist, and came into his research with some notions about what was driving costs. What he found did not match his earlier ideas. He wrote about what he did find. That's how things ought to be.

</comment></comment><comment><USER12> The problem with the government regulation solution is that the universities will be motivated to get their people into the position of being regulators, so that they can have the government guarantee them as much money as possible.

A much simpler solution is to say that every year the most expensive 10% of schools are denied federal loans, with a sliding cap on loans over the next 30% down to unlimited loans to 60% of schools. Students will have access to loans based on the status of the school when the student started. And let students know what that status will be before the school is chosen.

Create a market incentive to deliver school more cheaply than its competitors, and see how long it takes them to figure out what a doable price point is.

<comment><USER36> The reality is people will take out more private loans to attend these institutions.

</comment></comment><comment><USER37> There was a video on social media of a former student with 80 k$ in debt. After 10 years of payments, amounting to ... (forgot exact number, but way over 10 k$, vaguely recall it being over 50k), she still owed 76 k$. Probably so "low" due to her downpaying 6k last year - that is, she seriously believed it would have been higher otherwise.

I am absolutely convinced you could attend most universities in Northwestern Europe & live there for less than what this student has already paid + currently still owes. Including interest on a loan - as long as you don't get it from the US loan sharks involved in college loans.

</comment><comment><USER38> Actual data showing that nothing significant happened to the tuition trendline on/around 1993: [https://usafacts.org/articles/college-tuition-has- increased-...](https://usafacts.org/articles/college-tuition-has-increased- but-whats-the-actual-cost/)

Usafacts.org is a trove of data that is useful to have discussion around - <USER2> (and folks in this thread ;) ) don't need to rely on their gut feelings.

In addition to 1993 being boring, the majority of expenses are far and away instruction related versus student services (the luxury college memes folks are taking about isn't strictly true).

I think the most interesting point is that over the past 40 years, all types of expenses continue to grow at the same rate. (Inflation adjusted of course) There doesn't seem to be any ceiling in sight or any meaningful changes in what colleges will spend money on. Naturally tuition costs are on similar upward trend to balance this - and folks still somehow find the finances to pay for it.

This doesn't seem sustainable but it also doesn't seem to be stopping any time soon. Too many students trying to do 'the right thing' are being sucked into this meat grinder.

<comment><USER39> > I think the most interesting point is that over the past 40 years, all types > of expenses continue to grow at the same rate. (Inflation adjusted of > course) There doesn't seem to be any ceiling in sight or any meaningful > changes in what colleges will spend money on. Naturally tuition costs are on > similar upward trend to balance this - and folks still somehow find the > finances to pay for it.

I think you have it backwards: the increasing ability to extract tuition is driving total spending up, because once you have the money, you are going to spend it, not expenses going up an dragging tuition with it.

<comment><USER38> How do you demonstrate that one is causing the other?

Based on my baised observation of the local UC system I just don't see the types of personalities working there thinking about how to extract the last dime from students. What I do see though is very lax fiscal discipline and the inability to make even easy cost management choices. In this environment everyone just expects budgets to increase by x% each year. Then each year they realize - omg we have to increase tuition why does this keep happening?

I can not rely prove my idea - can you prove yours?

</comment></comment></comment><comment><USER40> I'll grant that some people overpay for some types of education because of loans that shouldn't be available. But it could be simpler still. Contrary to the typical contrarian viewpoint, a college education costs a lot because it is very valuable. American schools are filled with excellent foreign students that pay the premium rate, and receive no state support. Why? Because it's a great value.

Technology has created a two tier economy, hollowed out in the middle. If you don't get a good degree, you'll just free fall down to whatever happens to be left in your region, and you'll still be biting your nails every day waiting for technology to make your skills obsolete.

I think @pmarca's admonition to build, build and build some more is part of the solution. We have to find technological applications besides building a monopoly and taking over an industry. There's really a lack of imagination on our part.

<comment><USER41> How much of that value is entry into the world's most powerful country?

</comment></comment><comment><USER42> My view is fairly simple - the median school leaving age has simply moved from 18 to 21.

My father left school at 14, and many of my friends left at 16, and around only 1/4 of us went on to university.

Today 1/2 pupils will attend university - to all intents and purposes their full time education continues from 5-21.

</comment><comment><USER43> Lending with interest (Usury) creates systemic instability, in a similar way that Dollar Auction scheme does. There's no way to have stable financial system in the presence of wide-spread usury. This fact has been known to ancient cultures, which routinely banned usury or counter-acted by having an universal debt-jubilees.

[https://en.wikipedia.org/wiki/Usury](https://en.wikipedia.org/wiki/Usury) [https://en.wikipedia.org/wiki/Dollar_auction](https://en.wikipedia.org/wiki/Dollar_auction) [https://en.wikipedia.org/wiki/Debt_jubilee](https://en.wikipedia.org/wiki/Debt_jubilee)

</comment><comment><USER44> The government gives away money for food, no repayment necessary. If government intervention were an explanation by itself you'd have trouble reconciling that. Food prices don't outgrow inflation because of a very competitive market for commodities where one apple is about as good as another apple. Car makers, furniture sellers, etc. often offer zero interest loans with little effect on price growth. If one university or community college diploma was as good as any other you'd see low prices caused by competition. But everyone wants to go to the best university that will accept them, price be damned. And the data likely shows it's the right move. More respected universities lead to higher incomes that exceed the tuition costs.

</comment><comment><USER45> I've got some news for the author of this article. University cost inflation started well before 1993. The chart here ([https://www.edvisors.com/plan-for- college/saving-for-college...](https://www.edvisors.com/plan-for- college/saving-for-college/tuition-inflation/)) shows that the divergence in university cost inflation and the greater economy's inflation started in the early 1980s. I know that my university education went up 4x in the 5 years (yes, 400% in 5 years, which equates to 32% CAGR) that I attended college, and that predates this 1993 date in the article.

<comment><USER46> A number of things have lead to this.

* Student loans detaching cost from time of service, similar to insurance and medicine

* Diminishing support for public colleges. In California UC and CSU schools were essentially free to Cal redidents until mid 60s.

* Metastatic administrations, partly for compliance and partly because the money is there. It sure isn't going to faculty.

<comment><USER45> Take a look at overhead costs as a percentage of the total budget for universities. You'll see that administrative costs have ballooned, while the size of faculty and student bodies have remained relatively constant. That certainly was the case at my university. Here's another article about the issue: [https://www.forbes.com/sites/carolinesimon/2017/09/05/bureau...](https://www.forbes.com/sites/carolinesimon/2017/09/05/bureaucrats- and-buildings-the-case-for-why-college-is-so-expensive/#5b2adc04456a)

</comment></comment></comment><comment><USER47> I've heard several hypotheses at this point:

1\. gov loans

2\. administration

3\. Baumol effect (skilled labor $ goes up fast)

4\. reduced public funding

5\. demand inelasticity (cultural expectations to follow your passion and find your crowd, etc)

6\. labor oversupply & elite overproduction (see Turchin)

How would you all rank these? Any others you would add?

</comment><comment><USER48> The Student Loan Reform Act of 1993 was under Clinton and sponsored by Democrat Robert E. Andrews of NJ. The gist was to smooth the delivery of funds to the colleges, but per the article it failed since colleges then raised their tuition to get more from the government, and students then started owing larger amounts directly to the government as a lender. This is another example of good intentions that allow for playing the market instead of leaving it alone. That's my read on it, but I would like to hear others opinions on this statement.

</comment><comment><USER49> This is not the only reason. There are at least 4 other major reasons:

1) Future debt is irrelevant: The US has a culture of "having the college experience". Easy loans facilitates this, but they would never be made without families ignoring their future debt in favor what has become less about education and more about a right of passage. For many, economics is not part of the fundamental decision making process.

2) Demand. High demand means there's little need to compete on price. Enrollment spiked up during the Great Recession as people went to retool for job changes, and while it's come down since then, it's still at historic highs compared to pre-recession enrollment. This might change over the next decade as the %of HS grads entering college has been relatively flat the past few years, and # of total graduating seniors is on a slight downward trend, projected to continue for the next decade.

3) Reduced State Funding: Many states have been systematically reducing their funding to public colleges & universities for a few decades. Right after the Great Recession, higher ed was low hanging fruit for cash-strapped state budget cuts, and dropped another 17%

4) Institutional Debt: With high demand eliminating much need to compete on price, institutions have to compete on amenities & facilities. Beautiful new dining halls, recreation facilities, dorms, academic buildings. Universities borrow, build, and bill the students.

</comment><comment><USER50> I was in college when this was enacted. I noticed immediately that college tuition increased and matched exactly the maximum standard amount you'd get in student loans.

</comment><comment><USER51> I'm puzzled by the basic premise here. Having a bank as an intermediary or not doesn't seem relevant to the incentives. It was still the student picking which university they wanted to attend.

The reason for eliminating the banks as middle men was just to save money. They weren't taking on any of the risk, or doing anything particularly useful for the government.

I'd agree with the more general premise that easily obtainable loans should push prices upward.

</comment><comment><USER52> I feel like when you make an argument about how a thing that happened on a specific date in 1993 is the dominant reason for why a value that was low in the past is now high, you are more or less obliged to include a graph of average college cost over time and include a big marker for when your proposed change occurred. Not including that graph is suspicious because if it would have helped your case, you would have included it.

</comment><comment><USER53> What the article proposes (the government setting the maximum level of loan it will provide for a course) is essentially the Australian system.

The other aspects in the Australian system, though, are a "Commonwealth contribution" (part that the student does not have to pay back), an institutional maximum on how much the government will fund / underwrite that's dependent on institutional performance metrics (e.g. student employment rate on graduation), and that they alter how much students can be charged and how much the government will contribute depending on the subject area.

It gets very political and there are perverse incentives hidden in the detail.

(There's a couple of controversies in Aus higher ed at the moment. One is a lot of downsizing due to Covid affecting the international market. The other is proposed changes to the fee structure for particular courses and universities from the government.)

However, it does get universities to respond to government strategy, so I expect the people in government who run it are probably very happy.

Within government, I think they see university funding as also being one of the levers the government has to influence economic growth. For example, directing student places to a particular institution brings university jobs, students, and the students' living expenses into that university's town to grow it. By giving incentives for particular courses, they can feed particular industries with graduates, etc.

So you'll hear universities and government talk about "creating job ready graduates" (they've always talked about this), but also "creating graduate ready jobs" (universities as a mechanism for growing parts of the economy in an area)

</comment><comment><USER54> The blank check is ultimately the problem. I say remove the blank check and then let colleges figure out the rest.

I look to the UK as an example. The government only guarantees $10,000 in student loans so most programs coincidentally cost less than $10,000. Are there exceptions? Yes, but for the most part this holds true.

Not a complete solution but does significantly help to address the blank check issue.

</comment><comment><USER55> Not to be another commenter claiming to know the _real_ reason college costs so much but...

The _real_ reason college costs so much is that the price of all services provided by people with doctorate Or professional degrees has risen. The cost of higher education has risen at the same rate as the cost of dentist services and legal services. See: [https://image.slidesharecdn.com/disruptiveinnovationinhigher...](https://image.slidesharecdn.com/disruptiveinnovationinhighereducationudemyv5-160129191225/95/disruptive- innovation-in-higher-education-full-course-slides-25-638.jpg?cb=1454095471) Archibald and Feldman, 2010

The reason the cost of all services provided by people with doctorate or professional degrees has risen is complicated and could arise from many factors. For instance, it could be that there's more industry demand for highly educated labor.

The rise in college costs relates primarily to overall changes in labor costs, not to anything wrong with the education system in particular.

<comment><USER56> One other factor is the cost of educating the work force has increased. This might not be due to an increase in the education requirements of the job market. If degrees are common place they get used as a proxy metric for who is capable and who is not (while this is often not the case).

This means it's hard to measure the effectiveness of the current student load system. Is the investment increasing productivity? Or just creating another hurdle for people to jump over to get a good job?

</comment></comment><comment><USER28> Isn't there some self-incentive for the federal government to increase loan sizes as well? I forget what it was but remember seeing some flowchart about it.

I'd say we let the private market handle school loans. Certainly wouldn't be a perfect system in regards to access, but I feel it'd be better than current state because there'd be somebody involved deciding if a college loan is worthwhile.

</comment><comment><USER57> I don't understand this argument here:

> Up until 1993, the federal government merely guaranteed/backed student loans > that private lenders gave. This meant that only in the case of someone > defaulting on their loan would the government be on the hook, stepping in > and paying the college what's owed.

> This amendment completely overhauled that system, making it so that for the > vast majority of student loans, the federal government directly made the > loans to students. More specifically, the federal government pays the > universities/colleges up front, and the student then owes the government > that money.

What's the difference between the federal government directly making a loan and a private lender making a loan and immediately pawning off all the risk on the federal government? Either way the lender does not care if the borrower will be able to pay it back. It sounds like the problem predates the Student Loan Reform Act of 1993.

<comment><USER58> I had the same thought. My hunch is that the difference is friction. In both cases, there's money going from the Feds to the University (100% probability) and money going from the student to the Feds (<100% prob).

<1993: there's a bank in the middle. If the student cannot pay, the bank has to do the paperwork to get paid by the Feds. Note that the profit for the bank is limited.

>1993: no bank in the middle. University gets paid right away. Zero risk for them

<comment><USER59> Yes, presumably Uncle Sam cares less about making a sound loan in the first place. It is also able to create money out of thin air—in other words, (symbolically) infinite resources.

Getting paid upfront, instead of years later after tons of paperwork, can only accelerate the process.

</comment></comment></comment><comment><USER60> Why not move from a pre-paid to a post-paid system? The government stops writing blank cheques. The students enroll for free, signing a 30-year mortgage like contract, that would say pledge 1% of your post tax earnings to the school/university you went to. Universities will then have incentives to remove the programs that don't have as much of a use in the modern day and age, and add the ones that are needed. The government can then use all that money saved to fund programs that don't bring as much revenue to the university but are necessary for the country.

I mean imagine graduating debt free and instead, just paying a small extra tax. People would be able to focus on creating more wealth instead of being underemployed so that they can pay their bills.

<comment><USER61> Wouldn't all colleges just become trade schools at that point?

<comment><USER60> And what's wrong with that? I mean what values do colleges bring?

</comment></comment></comment><comment><USER62> The roi was also high during that period.

The price of services relative to goods has also trended strongly upwards during that period due to increased trade.

Urbanization and increased cost of living in some areas could be pushing up averages in costs.

Nobody pays the sticker price. A lot of colleges are subsidized by a small slice of wealthy and/or foreign students, so to maximize differential pricing, universities raise prices, and simultaneously offer larger tuition grants for need or merit.

There are a dozen reasons. Student aid is probably one of them too, absolutely.

I just worry about someone saying 'x' is the reason for some complex social or economic changes decades in the making. The interesting question to me is how to weight all these influences.

</comment><comment><USER63> It's expensive because people can pay for it and we know they can because they do.

All this talk about debt is mostly a non issue in real life but generates a lot of heat online. American jobs pay vastly more than any other country on the planet and paying back the debt is quite easy. Otherwise people wouldn't keep enrolling. From a European point of view, US taxes are low, salaries for professionals are sky high, utilities (gas, electricity) are cheap, consumer goods are cheap.

Of course, you'll have difficulties if you majored in art history or archeology, but that's also true everywhere.

<comment><USER64> I have a friend in France who is getting an art education for free. Is she going to be in debt for her whole life? I don't think so. Yes, some jobs pay very well in the US, but not all of them. Average job often pays enough for rent and living expenses plus a little bit. Student debt has interest and people end up paying that interest for many many years.

I'm writing in the declarative, affirmative tone, but it is only my understanding.

<comment><USER65> > I have a friend in France who is getting an art education for free.

Unpopular to admit: we need doctors / engineers / farmers more than we need another art major.

As a US taxpayer, I wouldn't want to subsidize just anyone's education. I'd rather incentivize and subsidize engineering / STEM / agricultural science.

You don't get to just get a free education regardless of what you want to study - different work/study has different value to society.

<comment><USER63> Even in free-tuition countries, there are caps on the number of students admitted to various study programs under state subsidy. The government can incentivize more productive degrees by allocating more spaces to them.

</comment></comment></comment></comment><comment><USER66> I'd blame it more on giving colleges a blank check without tying payback to income outcomes - using an ISA (income share agreement) type of structure would better align costs with real returns.

</comment><comment><USER67> It is not the case that free universities are necessarily 2nd tier. QS World Univerity rankings puts ETH Zurich, a free university, as #6 overall. Times Higher Education world ranking lists ETH Zurich as #13 overall.

The other Swiss flagship university, EPFL, which is also free, is ranked #14 overall in the QS world ranking.

[https://www.topuniversities.com/university-rankings/world- un...](https://www.topuniversities.com/university-rankings/world-university- rankings/2021)

<comment><USER68> What is this ranking site (QS world)? Not to dismiss it outright, I'm just _usually_ suspicious of any rankings aggregator of universities at this point.

</comment></comment><comment><USER69> Colleges already make the large majority of their money from international students. I'm not sure closing the door on low income students is the way to go. There are literally thousands of universities in the U.S. The Federal system was (pre-trump) getting pretty aggressive about cutting loans to bottom of the barrel universities. This needs to keep happening, and there needs to be guarantees of credit transfer. That would make a much bigger difference and allow competition to keep costs under control.

<comment><USER70> I believe you've been misled about "large majority of their money from international students" and am curious where you got this information from. From the data I've looked at, the net revenue a vast majority of colleges make are under 2% from international students. For R1 universities (the national ones you've heard of), it's still under 10% , and finally even if you look at undergraduate tuition only (ignoring graduate students, ignoring other sources of revenue), it's still not the majority.

<comment><USER7> Look at the bottom line, not the top line.

PhD students are _incredibly_ cheap and do a lot of the revenue-generating work; namely, classroom teaching and research. PhD students earn between $20K/yr and $30K/yr in stipend. For the university, that is damn close to the ALL-IN cost! The university pays no FICA taxes and does not contribute to retirement for these employees.

For this reason, in high-demand fields like Computer Science, 60+% of PhD students are foreign nationals. And the domestic students are often over- represented at top-tier universities. So there are lots of CS departments where the majority of the revenue-generating employees are foreign nationals making $20K/yr _all-in_.

A PhD student instructing or leading recitations for university courses makes less than 1/2 of what a first year high school teacher makes.

A PhD student doing research is bringing in typically $100K - $200K in grant money but only receiving about $30K of that. Also, again, the "2x multiplier" used to calculate the total cost of a normal employee doesn't apply here because the university does not pay FICA taxes, doesn't contribute to retirement, and often gets great tax breaks and gifts to cover things like real estate (=office space). For universities the "total cost of a PhD student" multiple is more like 1.2x salary.

Professors are managers. Deans and so on are executives. PhD students are the "bread-and-butter" employees of the university. They are the ones who do the bench work/coding and the vast majority of face-to-face teaching. Without international PhD students, universities' total cost of operation would skyrocket.

</comment></comment></comment><comment><USER71> The Clinton administration made a change in 1998 that cut back on student debt relief, incentivizes high university bills and has driven student debt to over $1T. That might explain the "why" part.

[https://thehill.com/blogs/congress-blog/economy- budget/28362...](https://thehill.com/blogs/congress-blog/economy- budget/283625-how-the-clinton-administration-made-it-harder-on-student)

</comment><comment><USER72> I'm hard-pressed to see why you would attend a private college these days without ambitions of entering politics or some other power-hungry career.

<comment> kube-system The sticker prices might be high, but there also a lot of scholarship and grant money out there for those who can get it.

</comment></comment><comment><USER73> I don't think this explains _everything_ about why college tuition in America has increased.

And what It did explain could have done a little bit better job.

</comment><comment><USER74> Maybe I'm missing something here: the bill he linked to in the article ([https://www.congress.gov/bill/103rd-congress/house- bill/2055](https://www.congress.gov/bill/103rd-congress/house-bill/2055)) doesn't show as passed. How did a bill that didn't pass end up impacting things?

</comment><comment><USER75> Rising college tuition is clear evidence of runaway fiat currency inflation. As soon as the US severed the peg to gold, prices have done nothing but inflate. I think colleges have figured out people are willing to take on increasing amounts of debt. The cost of loaning / creating money to pay for college is zero, so the tuition price ceiling is effectively infinite.

<comment><USER76> The inflation is also of course simultaneously blatant in healthcare, many prominent commodities, housing, vehicles, and so on.

We could easily restrain the cost increases - which has far exceeded the rate of fiat destruction - by changing wildly irresponsible Federal loan backing. It wouldn't take much to begin tipping the cost inflation backwards, we could roll it back gently and it'd make a big difference over time versus continuing the upward climb. We could flatten it and let inflation chew it up over time in real terms. We don't have any politicians that are intelligent (wise?) enough or brave enough to do it.

Most politicians are cowards. Good luck finding one willing to step in front of the higher education train (everyone must get a four year degree in their Cracker Jack box). Suddenly all the headlines would be that Joe Politician doesn't want little Johnny to go to college, Joe Politician is depriving our children of access to college, Joe Politician is stealing our children's futures! And so on. The triggered propaganda flood would instantly drown anyone that dared to go near it.

The US only has two primary political types on this topic: those that ignore the problem, not wanting to go near it for the political consequences; or those that are only capable of arguing in favor of a lot more spending as a solution (as though the US can afford that, especially when the problem is that costs are already far out of line with peers around the world).

</comment></comment><comment><USER77> "Unsurprisingly, this decision lead to exactly what the Bennett Hypothesis predicted in 1987, that "colleges will raise tuition when financial aid is increased" in order to capture as much of that government money as possible. In essence, the feds handed colleges a blank check, and the result is just as expected for a decision like that."

That's a feature, not a bug.

</comment><comment><USER78> Various tax breaks introduced in the past 30 years contributed. Direct tax breaks like cost and loan credits. Plus indirect breaks like tax-advantaged savings plans like 529.

A similar thing has happened in housing. Various tax breaks introduced in the past 30 years allow people buy a much higher list price of house (in terms of annual salary multiples) than 30 years ago.

</comment><comment><USER79> The claim in the article is unfounded. Prices have increased due to states cutting way back on funding, because of easy of getting loans (just one prong of the problem), need to have a college degree just to get your foot in the door (demand), and mismanagement by school management to build facilities students can't afford.

</comment><comment><USER80> This is what we do in Australia. Government supported places in courses have a price cap, loans are CPI indexed and paying back the loan is scaled to your pre-tax income. If you earn more then you're required to pay back your loan faster. If you earn less than $40K, you're not required to pay back any of the loan.

</comment><comment><USER81> Look at Perdue University - no change in tuition in 9 years. What are they doing right?

[https://www.purdue.edu/newsroom/releases/2020/Q1/purdue- anno...](https://www.purdue.edu/newsroom/releases/2020/Q1/purdue- announces-9th-consecutive-tuition-freeze.html)

<comment><USER82> You'll enjoy this [https://www.theatlantic.com/magazine/archive/2020/04/mitch-d...](https://www.theatlantic.com/magazine/archive/2020/04/mitch- daniels-purdue/606772/)

</comment></comment><comment><USER83> It is IMHO completely insane that we limit a virtual good of zero marginal cost like knowledge in a physical way. People could be educated/manipulated in a way to appreciate knowledge over materialistic thing, which would have an ecological impact of almost zero. And that is just one advantage.

</comment><comment><USER41> This is an incredibly straightforward identification of the problem and a beautifully elegant solution.

</comment><comment><USER84> An analysis in Time Magazine in 2001: [http://content.time.com/time/magazine/article/0,9171,137412,...](http://content.time.com/time/magazine/article/0,9171,137412,00.html)

</comment><comment><USER85> The same happened with home prices.

</comment><comment><USER86> I remember basic tuition cost increase 3x from 500-1500 between 1990 and 1994, while I went to University of California. Didn't understand why at that time, but this would explain it.

</comment><comment><USER87> We need to immediately stop Government-back student loans that can't be discharged in a bankruptcy. Then tuition will drop like a rock.

I would never support student loan forgiveness until the Government stopped the loans!

</comment><comment><USER88> In pricing solar installations, it was obvious that prices rose as vendors attempted to capture virtually all of federal and state subsidies.

</comment><comment><USER89> Am I misreading the govtrack link? It looks like this particular bill somewhat promptly died in congress.

</comment><comment><USER90> Yeah, as many others have pointed out this analysis is facile verging on just wrong.

Do universities not compete for students? Why have costs gone up so much faster than inflation? It's not just a question of there being a huge pool of money, you can buy a car with loans and car prices haven't skyrocketed.

The answer is that education is a weird "good" that's probably a Veblen good, among a lot of other reasons.

<comment><USER91> >It's not just a question of there being a huge pool of money, you can buy a car with loans and car prices haven't skyrocketed.

The obvious difference is that car loans are not Federally issued and defaults are possible. Hence creditors have to issue loans in a prudent manner or else they will incur a loss. Not everyone is able to acquire a car loan, and interest rates can be very high.

These incentives do not exist in the student loan market and thereby subsidizing demand. Students become price inelastic.

</comment></comment><comment><USER92> cost about same here in Europe, it was zero 30 years ago, it is zero in 2020

you should better ask, why students have to pay for education in developed country

</comment><comment><USER93> Because education is a lucrative business.

</comment><comment><USER94> yep demand side subsidies do not have good outcomes

supply side are a bit better

wrt cost disease

see how milk has remained the same price for decades

</comment><comment><USER95> So, Universal Basic Income....

<comment><USER96> Why? Keeping afloat a system that siphons all the fruits of progress to the 0,01% by throwing just enough trickles to the bottom so they don't revolt?

<comment><USER97> The top 0.01% earns 5% of all income. The top 1% (which includes many Facebook engineers, doctors, etc.) earns 20%. The vast majority of the "fruits" of the system go to normal people.

<comment><USER73> Citation needed. I recall the top 1% earning 50% of all income.

<comment><USER97> [https://www.cbpp.org/distribution-of-income-before-and- after...](https://www.cbpp.org/distribution-of-income-before-and-after- federal-transfers-and-taxes-2016)

</comment></comment></comment></comment></comment><comment><USER98> It's a factor, but I disagree that it's the root cause. _That_ distinction goes to the quiet destruction of aid by Ronald Reagan. The rapid shift towards loan-based support is directly linked to Reagan's targeted policies--and that shift led to a well-documented explosion in tuition costs.

And Reagan's legacy didn't just affect higher ed--it put public K-12 on the path to the financial and 'common core' shitshow that it is today.

<comment><USER98> I'm honestly baffled by the downvotes. Do readers not know that what I described is what _led to what the article claims as the cause_? To simplify: it wasn't _who_ guaranteed the loans that was the problem, it was the expansion of loans and their general replacement of grants that led to cost inflation and the resulting crippling debt.

Here's just one of hundreds of explanations of how Reagan fucked higher ed. It's not a theory--it's a very basic and well-documented fact.

[https://www.theatlantic.com/education/archive/2019/09/colleg...](https://www.theatlantic.com/education/archive/2019/09/college- cost-indebted-zaloom/597181/)

From that article: " _The shift began in the 1980s, in terms of a changing political philosophy. President Ronald Reagan's budget director, David Stockman, said in 1981, "If people want to go to college bad enough, then there is opportunity and responsibility on their part to finance their way through the best way they can." When those who argued that college is a private benefit framed it like that, it became logical to say that education should be paid for by the people that it benefits. And so in the 1990s, the vast expansion of loans for higher education began._ "

And you can track--with plentiful data--the rise of college costs in direct parallel to this shift, year over year.</comment></comment>


New T3 Instances – Burstable, Cost-Effective Performance - <AUTHOR> https://aws.amazon.com/blogs/aws/new-t3-instances-burstable-cost-effective-performance/ <comment><USER2> When I first read this headline I had a flashback to the late 90's / early 2000's. It was a time when the term "T3" unambiguously meant only one thing: a blazing fast, very expensive, dedicated network connection!

[https://en.wikipedia.org/wiki/T-carrier](https://en.wikipedia.org/wiki/T-carrier)

Then a few years later the even fatter optical pipes came along - OC1 and OC3 lines.

My, how times change! ..Well, some things do. If you want a T3 line, they're still available, and today will cost you in the neighborhood of $3,000USD/month (down from $10-15K/month around Y2K).

What a bargain :)

[https://www.google.com/search?q=how+much+does+a+t3+line+cost](https://www.google.com/search?q=how+much+does+a+t3+line+cost)

<comment><USER3> Wow, 45-90Mbps for $3k-$6k/mo.

<comment><USER4> When I started my IT career in South Africa the internet situation was pretty horrendous. ADSL/Broadband speeds were 384kbps and you had hard bandwidth caps of ~$7 per gigabyte of traffic on top of your line rental.

Companies and universities could, however, cough up for expensive alternatives, such as a diginet line which the ISP I worked for at the time offered. These guaranteed uptime (which was very appealing as ADSL outages were very common) but you paid a hell of a lot of money per 64kbps of uncapped bandwidth. You were looking at something like $400-$500 a month per 64k for the cheapest support package. And we weren't even the most expensive. There was a law firm that was paying something like $30k a month for their pimped out 2048kbps line.

Thank God things have improved dramatically there in the last decade (at least in terms of internet speeds).

<comment><USER3> Wow, so all this was happening circa 2006?

<comment><USER4> And before. Most people were still on dialup until I think maybe 2010-2012. Wireless ISPs became really popular during all of this because they could offer better service, better uptime, better speeds, and QOS for things like VOIP. Bandwidth and data usage management became so important that ISPs were also selling managed proxy servers and on-premise email servers to businesses because it was cheaper than having to pay for additional 1GB data caps.

The two primary causes for this situation was that the sole wireline telecomms company in SA and there were only 2 undersea data cables connecting SA (and I think Africa) to the rest of the world. Telkom was semi-private and state- owned so they had no incentive to improve things and also had to pay through the nose for access to the two undersea cables.

However, things started to improve when more undersea cables got laid down (lowering bandwidth prices and improving international bandwidth) and the government started lowering entry barriers so that Telkom stopped being such a monopoly.

</comment></comment></comment></comment></comment><comment><USER5> >If the instance runs at higher CPU utilization for a prolonged period, there will be an additional charge of $0.05 per vCPU-hour.

This seems to be the same as the T2 unlimited instances. Interesting that it's now the default and only (?) option.

<comment><USER6> I'm not sure I understand, they're basically selling you less than one continuous CPU thread and upcharging if you use a full core? So suppose the machine has 56 cores and they're putting 3 customers on each vCPU. What happens in the case that everyone needs to burst to the full performance of each thread they're paying for (56 * 3)? I imagine they'd price that as if you utilized 100% but give you degraded performance due to hardware limitations.

Please correct me if I'm wrong but this sounds like "unlimited shared hosting for people who can SSH" (except you pay extra instead of unlimited)

<comment><USER7> T2 and T3 use live migration to get around this, but it's not public knowledge.

<comment><USER8> Why doesn't ec2 support live migration for more instance types?

<comment><USER9> Why would they? None of the others are oversubscribed so it is guaranteed that the physical machine has the resources to provide everything that the virtual machine wants. Except network, but AWS doesn't guarantee anything about network speed.

In the case of hardware failure, say a malfunction or an error detected by ECC RAM, most people would prefer the machine to be turned off and they can restart it, rather than continue in a potentially corrupted state. As all the storage is network attached, it can immediately be restarted on another physical machine.

</comment></comment></comment></comment></comment><comment><USER10> Looking at 1yr reserved fully upfront pricing, the price cuts were ~9% across the board (except 10% for micro and 7% for nano).

This seems like a big improvement for nano, micro, and small which now have 2 vCPUs and the same credits and memory as before.

However, the larger instances are stuck with the same vCPUs and memory, but less than half the CPU credits!

<comment><USER11> The 9% decrease is only for Linux. For Windows, there is a significant price increase.

For example, for Windows (VPC), a t3.2xlarge reserved for 1 year is a 19.21% more expensive than a t2.2xlarge.

</comment></comment><comment> King-Aaron Did anyone listen to the 'Amazon Polly' audio that accompanied the article?

I haven't used any of Amazons text-to-speech apps before now, but I found it a little creepy with the way it "inhales" between sentences...

Also, it pronounces "Gigabyte" as "Gibabyte" and "Ji-be-bies" (2:55). This made me giggle.

</comment><comment><USER12> How does this compare price wise with t2 instances?

It specifies how cheap the t3s can be but not the difference between t2 and t3.

<comment><USER13> You can find pricing details at [https://aws.amazon.com/ec2/pricing/on- demand/](https://aws.amazon.com/ec2/pricing/on-demand/)

Pricing varies from region to region, on-demand vs. reserved instance, etc.

The general answer is they are cheaper than the same sized t2 version.

(Disclosure: I work at AWS, not posting in an official capacity)

<comment><USER14> Will these be available for RDS?

<comment><USER15> An RDS T2 is not an EC2 T2. Just named similar.

<comment><USER14> Except T3 would imply newer underlying hardware.

</comment></comment></comment></comment></comment><comment><USER16> So what would be the benefit of running a T3 nano instance over a T2 nano instance? The price is almost the same. Is T3 faster?

<comment><USER17> Newer more efficient hardware. Workloads finish faster.

</comment></comment><comment><USER18> Bursting can cost up to an extra $37.5/month per instance. Bettrer make sure you keep an eye on that CPU usage

<comment><USER19> You only start getting billed long after your instance would have been throttled in the Standard model (or if you terminate with a surplus balance)

If your CPUCreditBalance didn't normally get near zero before it's mostly just insurance against grey failures. It also makes the credit model radically easier to reason about.

</comment></comment><comment><USER20> I hope this gets Google Cloud to expand their burstable offering.

</comment><comment><USER21> Do these instances support AVX-512?

<comment><USER22> Yes, Amazon says so in the linked article

<comment><USER21> Thanks, I guess I failed the RTFA test.

I had assumed that this detail is normally hard to dig up, so it is nice to see Amazon being up front and clear about it.

</comment></comment></comment><comment><USER23> AWS nets $20+ million _a day_ in profit so these new machines will probably help us save like Amazon warehouse workers save on toilet breaks by pissing in bottles.</comment>


Show HN: Generate Project Logo with Google Fonts - <AUTHOR> https://picas.now.sh/ <comment><USER2> Nice idea. I think it would be nice to add more variables to the Feeling lucky button. Change color, size, letter-spacing etc. Or let a user set some boundaries and randomly click through.

Now it is only a color and random layer on top of Google Fonts.</comment>