Tuesday, August 23, 2016

Forget Healthcare Inflation. College Costs are Double That!

One of the people I most enjoy reading is Mark J. Perry who writes some very interesting articles for the American Enterprise Institute (AEI).  Mark is a professor of economics and finance for the University of Michigan at Flint.

In one of his latest offerings, he put together this amazing graph which shows selected costs and how they have risen, and fallen, over the last 20 years:

Not only are college costs double that of healthcare, they are nearly 4 times higher than the Consumer Price Index (CPI), which represents a market basket of items that a normal consumer would buy on a regular basis.

In my opinion, this shows why student loan debt is so high and why the defaults on that debt are rising.  As I have said before, as long as colleges and universities stay in the position where they can continue to turn away applicants, they can keep raising tuition; unabated.  We need to get to a point where the demand for college entrance falls.  Perhaps this will finally happen when it becomes so expensive that no one can afford to attend.  But, with proposals from Hillary Clinton to make college "free" by putting the costs on the taxpayer, that "affordability test" will be taken out of the hands of the people, who should be paying the bills, and who could actually change the direction of the rising rate of college tuition.


Source of Graph: http://www.aei.org/publication/do-you-hear-that-it-might-be-the-growing-sounds-of-pocketbooks-snapping-shut-and-the-chickens-coming-home/

Making college debt-free and taking on student debt | Hillary for America: https://www.hillaryclinton.com/issues/college/

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