Texas Governor and former Presidential candidate Rick Perry is pushing for Texas Universities to make a $10,000 college degree a real option for students. As mentioned in this article the way this could potentially be done is through use of community colleges, students living at home with their parents, and utilization of online classes.
I think this is kind of a joke and misses the entire reason that college degrees are expensive: government subsidization of education.
The WSJ commented on this in an op-ed in reference to the Massachusetts Senate debate last week between Scott Brown and Elizabeth Warren:
The fun began when Democratic challenger Elizabeth Warren, a law professor at Harvard, attacked Mr. Brown for voting against the umpteenth Senate bill to expand student-loan subsidies. According to the New York Times, Mr. Brown responded that “she makes $350,000 to teach one course” and received a no-interest loan from Harvard. This, he added, is “one of the driving forces behind the high costs of education.”
Rising federal subsidies have allowed colleges to raise their prices, pocketing the increased aid that is allegedly intended to help students. According to the College Board, average tuition and fees in the last decade at private schools like Harvard surged a full 2.6% per year faster than the general rate of inflation. Price hikes at public universities have been worse—rising almost 6% per year faster than the consumer price index.
I’ve said this before and I’ll say this again: If someone wants loans to fund a college education, they will always be able to get them. The funding from the government transfers into higher salaries for professors and increased spending. There is no sign that this will change anytime in the near-future, as politicians appear “anti-Education” if they vote against or make public their opposition to education subsidies.
A $10,000 degree may be possible, but I’m not holding my breath. The only way I see this happening is if the state and federal governments increase the degree to which they subsidize tuition, and shift from subsidizing loans to directly subsidizing tuition. The problem is, if you agree with me that subsidized higher ed is fueling the increasing costs of a college degree, the problem would only be exacerbated by this policy and government would have to either go further into debt and/or increase taxes to fund higher subsidization of tuition.
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Photo by Ed Schipul
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I got a $0 degree :) While a $10K degree sounds nice, if it means you have to take your classes online, from your parents’ house, and not experience college, it is not very appealing. My best friends are from college, and it was a fabulous opportunity to network and exchange ideas with different people. I don’t know what ratios of GDP is invested by the government in colleges, but raising that subsidy like you said would make degrees more affordable while keeping the college experience.
@RFIndependence This assumes that people have parent’s houses that they can stay for free. For some this is not an option.
I think it is possible, but only to the extent you’re willing to make sacrifices and be frugal. I went to a jco for my first two years in order to keep costs down. My wife also lived at home for her four years and was able to come out at jst under $10K. But, like you said, I think a shift into how subsidies are going is needed to make it possible for a greater number of students and not just for a handful. I think the powers that be have turned higher ed into too much of a business where it’s about making a profit and not necessarily providing a quality, affordable education.
@FrugalRules The proposed program is not a degree that would only cost $10k in loans when it’s all said and done, they are proposing a $10k degree with all tuition and books included! It’s not feasible, and even if it was, it would be highly subsidized and therefore misleading to call it a $10k degree.
I was not meaning that it would be $10K in loans, but $10k total. I think it’s possible, but not probable at all. I think major sacrifices would be needed and even then would be a challenge. Like Sean said maybe subsidizing from an endowment or something like that.
As FrugalRules said, I think it’s possible as well, but things will have to be cut. Maybe sports, less tenured professors, etc.
@SenseofCents I agree, but can anyone honestly see colleges making these sorts of cuts? I can’t.
It would certainly be nice….I think that some colleges could probably accomplish this by cutting away all of the extracurriculars and fancy campus buildings, etc. $10K for college would be so easy to pay back fairly quickly at almost any income level.
@Holly at ClubThrifty Definitely! $2,500/year for four years? It would be easy to pay as you go. Even if some college made it work, it would have to be highly subsidized, though, so I just don’t see it as a reality today.
Some schools endowment funds are so big that they are starting to use them to subsidize tuition.
@OneSmartDollar That’s something I could get behind.
My school cost me around $11,000. It’s not a great school, nor did it give me an awesome degree, but that degree did help land 2 jobs and that’s all I care about. To manage the low tuition, I went to community college for the first 2 years and transferred thereafter. I worked all throughout the community college years and paid for tuition myself. Part of the first year of the 4-year program I paid some tuition as well while living with my mom. The rest I had to borrow student loans.
The $10,000 degree is possible. It may not be a great one, but it’ll get people by much better than a high school diploma. Unless you’re going to become a doctor or a lawyer, hardly anyone pays attention to where you went to school. I know of several people who have high paying tech jobs who went to state schools. Their employers didn’t care where they went to school, as long as they had a degree and had the experience that’s all that mattered.
I should add that you have to be pretty lucky to be able to live with your parents and find work to support your first 2 years of community college. This isn’t always easy!
@Veronica @ Pelican on Money I should say that they are not talking about leaving school with only $11k of debt, they mean $10k total price tag for four years of school including the costs of books and materials. I don’t see this as feasible. I do see your plan as feasible, though, where you leave with very little debt by going to community college and then finish up elsewhere.
And yes, not everybody is in a stable situation where they can live with their parents after high school.
I expect to spend 10 times that amount for each of my kids.. which is frightening.. but realistic..
Personally, I think that subsidizing college is one of the very best uses of our tax dollars
It just amazes me how expensive getting a college degree has become. Even years ago there was a college in our city called DeVry and it was a known fact that most of the graduates ended up declaring bankruptcy because even when they got great jobs they couldn’t afford to repay their HUGE student loans. Today, in Canada you can no longer declare bankruptcy on student loans either.
Amen, said the choir. Well stated argument against government intervention. It seems that colleges are unable to stop themselves from spending every dime they get. Of course, part of this is that we seem to have an insatiable appetite for education, so it’s easy to just keep jacking up rates when there’s unlimited demand.
I think the four year degree idea needs to be changed. If you know what you want to do, you should be able to work toward that track instead of taking electives if you don’t want. In COLLEGE, I took aerobics, music appreciation, history of western civilization, and tons more that have nothing to do with what I do now just because they were requirements. I also went into college with 9 hours of AP English credit but still had to take English 101 because it was “required”. I get the well rounded person idea, but with tuition so expensive, I think we could streamline, get more people educated in relevant fields, and get them into the work force without astronomical debt. If you want to take all the other classes and can pay for it, great, but don’t subject everyone to that.
It is possible if you get a lot of scholarships but would still be difficult. I got some scholarships but probably could have gotten more if I put a lot of work into it.
@Money Life and More they are talking a $10k college degree BEFORE scholarships!