I wasn’t cherry picking anything. The source I had found only had those figures for those years.
That is true.
Yet somehow the thesis here is that if student loans are done away with then tuition will go down. Hard to see how thats gonna happen in reality.
It’s pretty obvious from a basic economics perspective that if student loans are done away with, tuition must go down. Supply and Demand. Demand is desire plus ability to pay. No more student loans means lower demand. Given the same supply, if demand is decreased, price goes down.
Economics 101.
Suppose we could pass a law to ban all mortgages. Anyone who wants a house has to pull the price, in full, in cash. No private mortgages allowed either. What happens to the housing market prices?
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No it isn’t obvious and thats not what must happen.
Again, student loans aren’t free money, its just a subsidized debt. People can find other places to borrow.
People won’t all just up and decide that college isn’t worth doing or spending money on if government loans aren’t available.
It will be harder for some to go to college and enrollment may go down but it doesn’t automatically follow that prices will actually drop in general.
No matter how much you want to lectured about econ 101 it doesn’t mean that government student loan availability is driving up college costs. WE can just disagree on this point.
I didn’t mean to imply that YOU cherry picked the numbers, just that they were cherry picked. I figured you got them from a source. I am just pointing out that the source you got them from likely chose those dates for a reason.
ok gotcha. I’d have to find the source, but it didn’t seem odd at the time that they ended at that year. I think it might have been an old article and/or just using the most recently available data at the time. I should have been posting links to stuff but I got lazy and didn’t give urls for everything.
Edit :
OK I found where I got the figures. It was in this article :
which is dated 2015 and they cited “the delta cost project, intgrated post secondary education data system” as the source which I found here:
https://nces.ed.gov/ipeds/deltacostproject/
That data set only goes up to 2012 and is dated 2015
So it was from 2015 and used a data set that covered 2012 at the time. they actually reer to it as 2011-12 which covers the school year.
It was just the latest data set at the time.
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Can you help me understand why I am wrong? You seem very sure of your point and it’s causing to wonder where my argument is failing. Can you please address each of my bullet points and tell me which of the tenants of my argument are not logical?
CHUNK 1 - Basic Economic Principles:
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Supply and Demand impact the price of a good.
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All else equal and held constant, if you raise supply, you decrease the price.
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All else equal and held constant you lower supply, you increase the price.
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All else equal and held constant, if you raise demand, you increase the price
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All else equal and held constant, if you decrease demand, you decrease the price.
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The definition of demand is a desire for a product or service, and the means to pay for it, at a certain market price.
CHUNK 2 - Application of Principles.
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There are prospective consumers of college education that cannot afford to pay for it in full, in cash.
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The existence of some type of loan structure enables people who lack full cash price of tuition to go to college.
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Without the available of some type of educational loan, some number of people who otherwise couldn’t afford to go to college in cash, will now be able to go to college.
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There exists both government loans and private loans for education.
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Different loans have different terms and regulations. (payback period, forgiveness, deferments, etc)\
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Depending on the favorability of terms, some number of people will decide to accept them and attend college.
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Depending on the unfavorability of terms (such as high interest rates), some people will decide to decline them and not attend college.
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Private loans require a credit check by the bank who is issuing the loan.
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Government-based student loans possess more favorable terms (in general) than private student loans. Government loans include forgiveness options, deferment options, forbearance options, and other terms not included in private loan structures.
CHUNK 3 - Extrapolation.
If all of the above points are true:
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If the government stopped issuing student loans, by definition, all that would remain is private loans.
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Private loan terms are less favorable than government loans, so some number of people (one or more persons) on the margin will decide not to attend college.
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If one or more persons decides not to attend college, this causes a shift in the demand curve, reducing demand.
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Supply of educational opportunities remains constant, at least at first, and so prices for college will drop due to drop in demand.
Please let me know which of my points contains logical fallacies or errors in understanding of economic theory? I’d much appreciate if you can change my mind and correct me if I am mistaken.
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College is at least partially inelastic.
All else is NOT equal and held constant.
The college market is not monolithic and is made of different sectors.
Enrollment in universities has dropped considerably in the past 7 years and prices have not gone down.
Your argument is based around the notion that if student loans are done away with then people won’t be able to afford college and therefore with lowered demand the universities will drop prices.
If student loans are abolished over night then many people will find other funding sources and we’ve seen that lowered demand in enrollment doesn’t equate to lowered tuition prices.
If student loans were abolished over night then I do believe the for profit universities would crumble. Good riddance.
Thats a sector of the market in college education that really does depend on student loan availability. They’ve got no real funding from government or other sources and most of the tuition dollars are funded by loans (and aid grants).
Some of the mediocre private schools would probably fold. They might try lowering prices to stay afloat for a time but I assume many would just go bankrupt.
For 2 year CC’s the impact on loan availability wouldn’t be as significant’ since they’re relatively cheap and heavily subsidized via grant money already.
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As I said above, the # of people attending college has dropped in the past 7 years. Prices have not dropped.
enrollment figures for colleges :
Peaked in 2011 at 18 million and was at 17m as of 2015 (most recent figures)
Thats a million fewer people in college.
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Pretty much. When you put it that way though, I’ve got a pretty cushy job I enjoy and can do in my pjs.
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Is it possible that during that time period, many For Profit Colleges went under, and therefore the supply also reduced concomitantly with demand? I don’t have the numbers, so I have no idea. I just remember around 2009/2010, there was a Congressional investigation into the Apollo group. I remember it because a big hedge fund investor had shorted Apollo group, immediately before bringing the issue up with Congress/Dept of Education, and he made a fortune shorting it when the investigation started. No idea if any of these schools closed down during that time period, but if they did, then that is both a supply and demand constraint, which wouldn’t cause downward pressure on prices.
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The link breaks down enrollment by institution type.
For profit enrollment did drop a lot. Down about 600k.
However public school enrollment also dropped in the period going down about 600k.
Private non profit was up ~200k OTOH.
If you look at just the public schools alone. Enrollment dropped ~600k. Supply did not change considerably (AFAIK).
Public school prices went up.
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Here’s a nice bit of information to consider :
delta cost project
“The financial position of community colleges showed significant improvement in 2013 as
enrollment continued to decline. Stretched thin by a rapid 25 percent rise in full-time equivalent (FTE)
enrollment from 2007 to 2011, community colleges saw a boost in average total revenues per FTE
student for the first time since 2008 (3 percent), thanks to a second consecutive year of enrollment
declines (–4 percent). E&R spending per FTE student rose substantially (5 percent) for the second
consecutive year”
fewer students = better financial position at the colleges
Why?
Net tuition doesn’t cover the cost of instruction for one.
I also expect that state, local, federal tax funding money isn’t necessarily tied to student counts directly.
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I wouldn’t concern myself with any details at this point. The bill is so far off the mark from a $$ sense…it’s not even worth debating. Maybe once they get serious about getting this thing in line with the Byrd rule we will see…but it’s gonna get real ugly.
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That is mostly due to the 2-year drop and the for-profit drop. The 4-year public and private non-profit school enrollment increased over that time. It’s also partly a demographic shift that most schools likely saw coming. But, one of the things that is happening is that people are wising up and realizing what sort of school they need to attend to justify the large expense - degrees from for-profit schools simply don’t offer the same value as the alternatives.
While your other point is correct (declining enrollment doesn’t automatically mean a decrease in tuition rates), it’s doesn’t mean you can dismiss the point that lots and lots of cheap government money has raised the cost of higher education much faster than it otherwise would have (much higher than inflation rates). Colleges and universities have had very little incentive to lower tuition, but plenty of incentive to raise it, especially through the boom in enrollment of the 2000s after the 80s and 90s enrollment was relatively flat by comparison. Schools have found that they were better off offering more things to more prospective students to attract more applicants rather than lowering tuition rates to attract more applicants. This is because so few people are paying for school directly out of their pockets and because the numbers are so large, a couple thousand bucks difference over a 4-5 year education that will cost $60k isn’t a huge decision factor. Americans have been conditioned that they will have to overpay for college. It is going to take a long term change in order for that viewpoint to reverse.
I think that the decline in for-profit enrollment is an optimistic stat that shows we are starting to look more deeply into the value of a degree than we were before. I think if a few well known, highly ranked, and prestigious schools start branding themselves as a great value proposition, we might start seeing a shift. Unfortunately, right now “Value” is just one of 50 rankings in US News, and no highly ranked school touts it themselves. Only the parents paying for their kids going to the school are the ones that talk about the value.
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It just keeps getting worse. The latest analysis of the GOP tax plan indicates that 46% of all taxpayers earning less than 100k will either get nothing, get a pittance, or have their taxes increase. Have they lost their minds? Why don’t they just have the Rich & Corporate back their Brinks trucks up to the U.S. Treasury and take what they want.
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From your link:
“This is a recurring — and, potentially fatal — problem for Republican tax writers: As soon as they come up with an idea for new revenue, they immediately remember a new tax they’d like to cut.”
As well as continued flip flopping between eliminating deductions/putting them back in. All the squawk about the potential for severely reducing the pretax 401K contributions and, so far as I’ve seen, it’s not happening. Plus, on a smaller scale, the elimination of the $250 deduction for educator expenses (which doesn’t affect me, but has been mentioned in the media) has now changed to a doubling of the deduction to $500 in the latest Senate markup.
They just cannot make up their minds, whether the issue is small or large.
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Rather than go by any analysis, it’s better to plug in the numbers yourself, according to your situation under the new rules. When I did, under both the House and Senate proposals, our tax liability would be around $2000 less than under current law.
But, I agree, it is getting worse. According to the latest Senate markup, all tax proposals affecting individuals would expire at the end of 2025 and revert to what we have now under current law. If their goal is to make tax planning impossible, I think they’re succeeding.
https://www.marketwatch.com/story/here-are-the-major-changes-to-the-senates-tax-bill-2017-11-15
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I’m starting to think the plan is to make sure the bill fails and then campaign next year on the fact that they need more R’s to bring a tax cut.
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[quote=“gwraigty, post:359, topic:1661, full:true”]
Rather than go by any analysis, it’s better to plug in the numbers yourself, according to your situation under the new rules. When I did, under both the House and Senate proposals, our tax liability would be around $2000 less than under current law.[/quote]
Hypothetically, let’s say I and (about) half the country’s taxpayers would get a tax cut. What’s the point, if it’s at the expense of (about) the other half of the country’s taxpayers, that would get zip or a tax increase ? That’s not a positive national economic model. Oh, and let’s not forget that of those that do get a tax cut, 80% of the benefits go to the top 1%, when we already have the largest concentration of wealth and income at the top since the Gilded Age.
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