Comments on: U.S. student debt on scary trajectory http://blogs.reuters.com/breakingviews/2012/07/18/u-s-student-debt-on-scary-trajectory/ Mon, 26 Sep 2016 03:26:00 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Adam_S http://blogs.reuters.com/breakingviews/2012/07/18/u-s-student-debt-on-scary-trajectory/comment-page-1/#comment-10455 Thu, 19 Jul 2012 22:12:50 +0000 http://blogs.reuters.com/breakingviews/?p=13037#comment-10455 This is akin to the healthcare problem, b/c like healthcare, higher education is a truly unique economic good, in that it’s viewed as ‘essential,’ meaning people will pay pretty much whatever the going rate is, and many will pay more for what they perceive as a ‘better’ version, regardless of whether that actually is true or not.

Because of this, higher ed institutions are more or less in a monopoly context, not in that there is only one school to choose from, but there is only one industry to choose from, and as the upper end of that industry (Ivy League, UChicago, Northwestern, Stanford) raises prices due to its huge demand for a tiny supply of slots, others do the same, in order to compete for students and retain faculty.

Until there is an across the board drive by higher education institutions to not only control costs but control them to a point of inflation or less, this problem will never end, and until the idea that “a good university education = success in the labor market” is roundly disproven (it won’t be), this problem will mostly likely never end.

I do not regret the buckets of money I spent getting my two year grad degree, because I was fortunate enough to get into a truly upper tier school, where the money will come back to me. But, it’s truly frightening to see non upper end private schools, whose graduates have not nearly the chances of success, paying literally the same amount of money.

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