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Post 24 Aug 2018, 2:37 pm

Ray Jay wrote: financial aid formulas have enabled universities to determine the wealth and income of all of their customers and price their product accordingly in cahoots with other universities and colleges who use the same formulas. Yet it is not considered price fixing.


Yeah, this is so true. You place too much blame on the government though. It's a complicated story, and while I think the government has a hand in this, they are not primarily to blame. If you really want to get into it: Read "Antitrust and Financial Aid in Higher Education" starting on page 12:

https://ticas.org/sites/default/files/pub_files/antitrust.pdf
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Post 24 Aug 2018, 4:08 pm

Amen and Amen...
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Post 25 Aug 2018, 12:11 pm

rayjay
I realize that higher education is a complicated market; but let's at least acknowledge that it is not the free market that has created this mess. Government has had a large and clumsy thumb on the scales.

You are talking about the US only.
University education is not a mess in countries that don't run Universities as a market. Its not nearly so complicated in France or Denmark or Germany.

The "thumbs on the scales" in the US include:
- The financial institutions that profit from student loans . Student loan debt is the second highest category of debt in the US. Who is going to be lobbying against things like free tuition, grants, etc?
Financial institutions take the place of insurers when looking at the cost of health care in the US.
- University administrations that are awarded higher compensation for increasing revenues. An offshoot of this is that Football coaches are often the highest paid staff members on universities.
-Another offshoot is that the student athletes are not truly compensated for their contributions to the revenue they generate, and often end up with life long health issues due to their sport. (football)
- For profit institutions...also drive cost and demand.

So although its not a free market, lets also acknowledge that there is an inelastic demand for higher education, Free markets really only function properly if there exists both inelastic demand and competition.
Like health care, Secondary education is not a truly optional choice.
- If a person wants to move ahead, they need that degree.
- If industry is going to continue to be competitive it needs the people coming out of universities with the required skills and knowledge and honed talents.

Like health care, education gets a lot less complicated if government gets a lot more involved, not less involved. Because the thumbs on the scale are just one and not several. And several pushing all in the same direction of adding cost to the student.