The Republic of Letters

Tuition Rates Increased Because of Excessive Spending, Not Loss of State Funding

Want of state funding is not the cause of increased tuition rates at our public universities; profligate spending is. In fact, if, per capita, universities spent on students what they spent on them in 2000, tuition rates could be cut, on average, by $1200 per year even without any increases in state funding. Shockingly, even after adjusting for inflation and despite budget cuts, colleges spend more on each student now, during our era of the Great Recession, than they did over a decade ago.  See this post from Yglesias and the underlying study on which it is based.

So on what have colleges been spending? Administrative bloat. Yglesias writes:

Top administrators get paid more than they used to and there are more of them. Schools have invested a lot in information technology, but that’s generally been layered on top of other pieces of infrastructure rather than replacing anything. Schools compete to attract the applicants with the highest SAT/ACT scores so they try to make nicer buildings.

Bottom line:

In the face of budget cuts, prestigious public colleges and universities have started spending more money in pursuit of fairly hazy goals.

This really gets under my craw and should get under yours too. For, by doing this, colleges are doing nothing but erecting barriers against strivers who want nothing more than what is quintessentially American, to move on up.

High Student Debt In Sweden, Even Though College Is Free

Even though college is totally free in Sweden, “…85% of Swedish students graduate with debt versus only 50% in the US.” Wait–what? Read on.

And the stats get even worse. Philips writes:

…new Swedish graduates have the highest debt-to-income ratios of any group of students in the developed world (according to estimates of what they’re expected to earn once they get out of school)—somewhere in the neighborhood of 80%. The US, where we’re constantly being told that student debt is hitting crisis proportions, the average is more like 60%.

So, what gives? According to Philips, Swedes take on massive amounts of debt to pay for rent and other living expenses, which are staggeringly high, since hardly any of them stay at their parental home.  Driving home this point–chuckle; did you get it: parental home and driving home? Yea, it’s dumb, I know, but that’s why I said “chuckle.” And for the record, it wasn’t even intended. Anyway.– Philips relates this interesting factoid:

Swedes, like other Nordic Europeans, have an independent streak. They leave their parental homes earlier than almost all their southern neighbors.

One study found that just 2% of Swedish men lived with their parents after the age of 30. In Spain, a quarter of 30-year-old men still are shacking up with mom and dad; in Italy it was around 32%.

Interesting, no? Well, read the whole thing.

(HT: Tyler Cowen)