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Old 07-25-2017, 12:28 AM   #1
Act of God
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SHOCKER: Colleges Stop Exorbitant Price Increases After Congress Caps Student Loans

ECON101

http://dailycaller.com/2017/07/24/sh...tudent******s/
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America’s colleges and universities have finally stopped their practice of annually gouging students with price increases for tuition, fees and room and board — to the accumulated tune of a growth rate of 400 percent in the last three decades.

Labor Department statistics collected by The Wall Street Journal show that aggregate tuition increases in 2017 rose 1.9 percent in 2017. This figure accords with the overall rate of U.S. inflation.

From 1990 to 2016, college tuition costs had increased at an average rate of 6 percent annually, which was more than twice the overall inflation rate for the same period.

This year’s steep decline in college cost increases has many causes.

One cause of the decline is the decision by Congress to stop raising the maximum amount of federally-subsidized student loans which college students can borrow to finance their educations. Congress has not increased this maximum amount since 2008, the Journal notes.
Other factors noted, but I've always concluded that student loans were THE driving force in the tuition bubble. I can't even imagine what it will cost when my kids are ready to go to college (my alma mater is $66k for 2016-2017).
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Old 07-25-2017, 01:05 AM   #2
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Gotta give Obama the credit for this one for holding the line.
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Old 07-25-2017, 01:08 AM   #3
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My only question is, if we stopped increasing the amount in 2008 why did it take until 2017 to see results? Seems like the rate of 6% kept chugging along without a hitch fro 2008-2016. Something doesn't add up.
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Old 07-25-2017, 01:10 AM   #4
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Originally Posted by Act of God View Post
My only question is, if we stopped increasing the amount in 2008 why did it take until 2017 to see results? Seems like the rate of 6% kept chugging along without a hitch fro 2008-2016. Something doesn't add up.
It could be that there was still plenty of cushion in the loan limits and so the schools kept chugging along until it was all used up. Perhaps they figured that even the rapacious education system could only raise prices at a certain rate year-over-year before people would freak out.
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Old 07-25-2017, 08:43 AM   #5
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ECON101

http://dailycaller.com/2017/07/24/sh...tudent******s/


Other factors noted, but I've always concluded that student loans were THE driving force in the tuition bubble. I can't even imagine what it will cost when my kids are ready to go to college (my alma mater is $66k for 2016-2017).
Now imagine what would happen to college prices if the government did not offer or secure student loans at all. I wonder what other areas of our economy would benefit from less government help (sic)?
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Old 07-25-2017, 09:14 AM   #6
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Now imagine what would happen to college prices if the government did not offer or secure student loans at all. I wonder what other areas of our economy would benefit from less government help (sic)?
That has always been my contention, make kids pay for college and colleges will have no choice but to charge what they can afford (or close their doors). At the very least, they'd have to go and get a traditional bank loan.

If an average student can afford $10,000 a year, that's the price point. If the government gives them $5,000 in loans/grants, then they can afford $15,000...which becomes the new price point.

The entire notion of these loans and grants is silly, it needs to stop before a year at college costs 100k.
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Old 07-25-2017, 09:48 AM   #7
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My only question is, if we stopped increasing the amount in 2008 why did it take until 2017 to see results? Seems like the rate of 6% kept chugging along without a hitch fro 2008-2016. Something doesn't add up.
A major component in the slow down of the tuition inflation rate has to do with a demographic slump that started a few years back, and continues through the early 2020's, if I recall correctly. There are fewer teenage/college age people for that time period which causes a slump in demand.
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