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Ex-professor debunks the myth that student loans are the main factor behind rising college costs.(r/bestof)

>If federally guaranteed loans are causing a spike in available funds to colleges, why didn’t we see a spike in administrators back in the 1950s and 1960s, when these Federally guaranteed loans first became widely used? Why did this trend start in the late 90s, when the student loan infrastructure was pretty much the same as it ever was?

Because college wasn’t an economic necessity in the 1960’s. People (i.e. men) could get a high school diploma and that was enough for a job that supported their family. This has changed in the 1980’s and 1990’s, where the cultural and economic environment has changed completely. For instance, women have since entered the workforce, which essentially doubled the supply of labor. That has necessitated increased competition in the labor market. Colleges were seen primarily as a public good, academic institutions that advanced our collective understanding of a subject. College degrees are now seen as a private good, something that primarily benefits the student, rather than society as a whole. This is apparent everywhere. People deride liberal arts degrees and esteem engineering and computer science degrees. You see this on Reddit a lot. Our President urges young people to get a college education and stresses its importance how? By saying education increases their lifetime earnings and is a mechanism for upward social mobility. Thus, students are expected to and more willing to pay for their own education as governments withdraw funding from public education. It’s a game of financial chicken, and the current political and cultural landscape has created bargaining asymmetries that work against students. Bargaining asymmetries that did not exist thirty, forty years ago. If we continue to justify education as something the student benefits from economically, that is the kind of education students will end up with; the student becomes a customer buying a private good to increase his earning power, and colleges becomes merely a business that provide degrees with the highest ROI, i.e. increase to one’s competitiveness in the workforce.

The professor emeritus is correct. It is too complex and there are too many covariates to isolate a single reason behind rising college costs. Why are college costs increasing? You could say administrators, taxpayers’ reluctance to pay for something they see doesn’t benefit them, supply and demand, withdrawal of government support, the availability of student loans. There are many possible answers, and they aren’t mutually exclusive. It’s important to understand the relative importance of each answer. While the professor raises insightful points, saying that his/her points “debunk the myth” about student loans being the main factor being college costs is going too far. It makes for a stronger narrative to blame a single factor for college costs, but complex social issues require nuance.

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