Why College Tuition Is so Expensive | Jon Miltimore fee.org/articles/why-c… via @feeonline
Federal loans have made tuition far more expensive. Universities get paid up front—so whether students graduate, drop out, or default on the loan doesn’t matter. Departing students are easily replaced.
Departing students are easily replaced. Confident that students have access to cheap money (which can be expensive in the long run), colleges have no incentive to control or cut back the prices of housing, tuition, fees, and meals.
Instead of erasing student debt, we should address the twisted incentives that cause it. Students are beginning to recognize that four-year degrees don’t always pay off, and are opting for alternatives: apprenticeships, entrepreneurial programs, and coding camps.
If universities themselves offered loans, incentives would push them toward controlling costs and maximizing student success after graduation.
Not all student debt is equal. If borrowing $75,000 helps you graduate medical school, that debt measurably increases your earnings even after it’s paid off. But borrowing against a degree in social work, where median earnings are less than $50,000, is much riskier.
The best solution is to get the federal government out of the loan business altogether.
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