Why is college tuition so high? Why are so many students in so much debt? Is it the fault of colleges, the government, or both? And can anything be done? Get the answers in this short video
This video is part of a collaborative business and economics project with Job Creators Network and Information Station. To learn more, visit informationstation.org
College can be pretty great whether it’s the football games, learning about business, history, marine biology, or thousands of other topics… or pizza at four o’clock in the morning.
But why has college gotten so expensive? In 1980, a year of college cost $3,400. Today, the average cost is more than $23,000. What’s going on? A great deal of blame lies with the government.
Government tries to help students by providing loans and financial aid. That is a great intention but when government helps pay for things, people tend to forget how much these things cost in the first place… things like college tuition.
Whether it’s from the students or the government, colleges get their money. And when the schools know that students have more money to spend (even if it’s the government’s money), they can raise the cost of admission.
Think about that college town pizza place. If the government provided subsidies to buy $5 pizzas, we would all cheer right? And we’d want to buy more pizza for a short time. But before long, the higher demand fueled by these artificially low prices would encourage the pizza place owner to charge more for pizza… knowing that many people were getting government pizza assistance. And this says nothing of the taxpayers stuck paying for the pizza subsidies.
So the next time people complain about the high cost of college… explain how government policy that tries to “help” students afford college now actually hurts future students down the road.
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Course: Why is College So Expensive?