Student Aid Makes College Expensive? (skill, degree, costs, high school)

[Motion]

Does anyone think that financial aid is actually contributing to college being more expensive? From what I've read it goes like this, student aid is making it easier for more kids to go to college,then in order to accomodate more students colleges have to expand their colleges with more buildings,parking space,dorms and other things related to having more students on campus.

If it is the case that too many people are going to college through student aid then maybe the focuse should be on reforming aid in some way and having fewer kids attending college and consider trade schools instead especially if their profession of interest doesn't really require a college degree?

[Motion]

Here's one article I read that touched on this.

Making College More Expensive: The Unintended Consequences of Federal Tuition Aid

[MittenDweller82]

Student financial aid does not make school more expensive, and if it wasn't a reality very few would actually go to college. What is happening, is that many students are finishing and being unable to find employment for long periods of time. They in turn must keep applying for deferments, forbearance, and other ways to hold off the payments. It doesn't matter what type of education whether trade school, or beauty school, the cost of everything rising is forcing more students to have aid. The students that graduated in the 90's were able to pay their loans, as jobs waited for them after graduation, now the number of students defaulting on loans is so great, that lenders have been forced to recoil money and tighten requirements. Too many people aren't going to college....to many people simply cannot find work.

[toobusytoday]

I think the problem lies with our mentality as a society in looking down on tradespeople. Kids are pretty much told that to get anywhere they need a college degree but from what I've read there is a real need for plumbers, electricians, etc. If neither parent works with their hands I think it's pretty common to dissuade the kids from going into a "blue collar" field, even if the kid has an aptitude for it. In my area we have some wonderful tech schools for high school students but often the ones that go there are not the brightest students. The reason is that there is no provision for the tech kids to take the honors or AP classes. It's pretty much a given that if you're going to the tech school then you are not one of the smart kids and that's pretty powerful peer pressure to stop those kids from thinking about it while they are in HS and even afterwards when making career decisions.

[fierce_flawless]

Besides, at least where I live the pathway to skilled trades is still Jr. College. Yes there are trade schools that are a BIT shorter in length but a LOT more expensive than a 2 year program (or a certificate program) at a community college and the community college option is often looked upon more favorably by employers, even for things like AC/heating technician, aircraft mechanic, electrician, etc.

[FarNorthDallas]

I think people tend not to be very cost conscious when they are borrowing money than when they are paying cash, so in that respect I think student loans are contributing to the run up of the cost of college. People don't give the loan amount a second thought when they are signing the papers.

When I was in college in the 1980s you had to actual qualify for student loans. They didn't just hand loans out to anyone willing to sign. But if you waited tables a couple extra shifts during the summer, you could raise the $600 a semester you needed to pay for tuition for 12 hours worth of classes fairly easily. Course now, $600 doesn't even pay for one 3 hour class, yet the amount a waitress makes in the same restaurant hasn't changed much since then.

[Humanoid]

Student financial aid does not make school more expensive, and if it wasn't a reality very few would actually go to college.

And hence college would be less expensive refuting your claim that financial aid does not make school more expensive.

Anyhow, this is really about supply and demand. Its not about the schools having to build more buildings to deal with more students. The easy availability of student loans both on federally and privately increases the demand for college educations as a result the price of the education goes up. Suppose you sell widgets for $10, you have 100 of them. But you find that there are 100 buyers out there willing to spend $15. What would you do? Raise the price to $15.

The student loan situation is likely to partially correct itself during the current collapse in the credit markets. There is very little investor interest for private student loans, so these things may become a thing of the past. Investors are also less interested in federally backed student loans too which is going to make the loans harder to get. I hope this forces them to change their policies dramatically, it makes little sense to loan kids money regardless of what they major in etc. Loaning a English major $40k is much more risky than loaning a Physics major of equal standing the same amount. When risk isn't correctly priced bad things happen.

Course now, $600 doesn't even pay for one 3 hour class, yet the amount a waitress makes in the same restaurant hasn't changed much since then.

Actually, at least in California your tuition for the entire year at a Community college is around $600. You can then transfer to a cal-state (the lower tier public university system) and its around $1,800/semester for tuition. So, at least here you can get by with fairly minimal debt if you either work on the side or live with family.

[Motion]

Originally Posted by Humanoid

Anyhow, this is really about supply and demand. Its not about the schools having to build more buildings to deal with more students.

I'am not too familair with college budgets but how is the cost of new buildings and parking space raised or covered by most colleges? The college in my town over the years has had an increase in enrollment and they are having to increase parking space and on campus housing.

[Motion]

Originally Posted by FarNorthDallas

I think people tend not to be very cost conscious when they are borrowing money than when they are paying cash, so in that respect I think student loans are contributing to the run up of the cost of college....

This article seems to touch on that point some.

As weve seen with the health-care system, if people arent feeling the real cost of their purchases, they have less incentive to change their behavior. If youre paying the full tab and Elite University jacks up its rates 10%, you might opt for Just Fine State. If enough others followed your lead, Elite might rethink its pricing...


The real reasons college costs so much - MSN Money

[Humanoid]

I'am not too familair with college budgets but how is the cost of new buildings and parking space raised or covered by most colleges?

Buildings are usually at least partially donated, hence why most buildings are named after some person or company. The difference is funded just like a normal business would fund an expansion - getting a loan. If student enrollment is up then they can pay off the loan with the increase in revenue. But there is a big difference in building a new structure that is truly needed and building one to try to increase the prestige of the university. A lot of the money does go into buildings though, just not buildings that actually increase the quality of education. The universities do a lot of "keeping up with the Joneses" and will gladly eat (like any business) any free money you throw at them.