Are you talking about room, board, and books? Or are you talking about time until loan repayment as some sort of additional amortized cost? Please clarify.

 

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That's a pretty good explanation. Although again it's a little more complicated because in real terms tuition costs arn't up all that much either for 4 year private colleges. A large part of the tuition increase has been to cover the cost of providing financial aid to poorer students. Sticker price may be up hugely but hardly anyone pays sticker price any more.


Tuition costs are definitely up drastically for state schools. About 50% of that increase is from less state funding. 30% is from increased financial aid to offset the blow from the reduced funding on the poorer students. Only about 20% is actually real increased costs.

It doesn't really matter if you want to talk about "sticker price" vs. "subsidized" price, the bottom line is that debt per graduate is STILL rising, with earnings prospects DECREASING.

 

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If college doesn't cost more then why are student loans up so much?

 

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I understand the situation precisely because I am pretty freshly out of college.


Where did you two go to college? The same school? Was it a state school?


I have a lot of student debt too. Boalt's tuition cost has tripled in the past 20 years. But 80% of that increase is not from costs actually going up but from funding being cut and sticker price being inflated to pay for financial aid.

Why didn't you get financial aid then instead of taking out loans?

 

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Uh we just spent several posts going over this. Try reading first.


Here is the tl:dr version, since you apparently didn't:


Average debt is up because people can now choose to go to college by taking out loans, where before they didn't have that option. Average debt is also up because state schools have drastically cut funding, meaning the individual student now has to pay a larger portion of the cost.


Real education costs are up, but the increase is rather modest compared to the other metrics.

Professional schools are different Paul. There is not a whole lot of need-based aid available from the outset. Instead, they focus on debt forgiveness. For example, although I have significant student loans, Boalt is currently paying 90% of my monthly student loan bill, and will continue to do so as long as I work in public interest or public sector jobs and make under a certain income threshhold. Instead of subsidizing me up front, Boalt subsidizes me after graduation.


At Boalt sticker price goes up to subsidize paying off my loans for me. At the undergrad level sticker price goes up to lower the cost of attendence on the front end.

Whether it's increased costs or decreased funding, the end result is pretty much the same.

 

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A somewhat different paradigm is the one in the world of graduate school for science.

20 years ago the rule used to be that you didn't get an advanced degree in the STEM fields unless you were accepted as a stipended student (tuition paid with a (very) modest salary paid to you in return for being a TA or lab slave while taking coursework) or unless your company paid for it for you...

If you were in a Ph.D. program and paying for it yourself, you were kind of a laughing stock and in general, I don't think too many graduate schools even admitted you if they couldn't justify a stipend for you - I could be wrong about that but I never even considered non-stipended graduate programs myself... Now if you were going to medical school, it was just like Yuki says for Law School - you took out a boatload of loans and there were opportunities to get your loans forgiven or paid by places like indian reservations or whatnot, in return for going there to practice for X number of years - there was a TV show "Northern Exposure" that featured a Dr. doing this I believe...


Anyway... I wonder now, how many people are out there in the STEM fields getting graduate degrees which are putting them into debt. Generally speaking, 20 years ago, the only advanced degrees that you paid for were in the humanities or MBA/JD/MD/DO degrees... not sure how much of this has changed now.

 

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