http://www.realclearpolitics.com/video/2012/02/06/biden_admits_government_subsidies_have_increased_college_tuition.html

Vice President Joe Biden admits that the government intervening with the free market and providing subsidies for students to attend college have contributed to the increase in college tuition.

"By the way, government subsidies have impacted upon rising tuition costs. It's a conundrum here," Biden said to a student who asked about the government's intervention in the free market system.

Biden was talking about the importance of tackling rising college costs at Florida State University in Tallahassee Monday morning.

Student: Good morning Mr. Vice President. I was wondering how do you feel about the idea that government subsidies and interference with the free market, for example, by artificially increasing availability of student loans is at least partially responsible for rising tuition costs. And now we're facing a possible student loan bubble and subsequent collapse just as we're coming out of the housing crisis.

Vice President Joe Biden: Well, say the first part of your question again about how we're artificially creating what?

Student: By manipulating variables in the free market and giving out government subsidies that maybe is partially responsible for rising tuition costs.

Biden: By the way, government subsidies have impacted upon rising tuition costs. It's a conundrum here. But if we went the rate your view of the free market route what we would have done is we would have not of done that. We would not have increased pell grants, for example. And there would be 9 million fewer students in college today.

And there would be hundreds of thousands and millions of students who would not be in college who don't get Pell grants because there was no ability for them to borrow money through Perkins loans and/or have the tax deduction.

So you are right, in a pure free-market the college tuition would have to be lower because there would be fewer people going to school, they wouldn't have as much coming in. But the end result is we would probably have -- we go for the better part, half a generation, of going 16th in the world maybe down to 20th in the world.

Couple years ago I think it was UC Davis tuition went up 30% if I remember right. Right after my wife was done there. She got lucky. College is ridiculously expensive. These people are criminal.

 

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That's because the gubmint drastically cut funding. It must be awesome to be so totally clueless.

The UC system gets 40% less per student from the state than it did 20 years ago.

edit: Look at the 4th chart here. It plots state funding vs cost increases:

http://ucpay.globl.org/funding_vs_fees.php

They didn't cut funding. They just fund it differently.

They increased funding. That's the whole point here.

 

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It's quite likely that government aid increased tuition. But that doesn't mean that it is the only or even the main reason tuition has gone up.

I just read that Harvard had 10 applicants for every spot. In a true free market economy, that certainly implies that tuition at Harvard would be much higher in a free market economy.

 

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In a free market economy they would have used those supposedly superior brains to do common business forecasts and figured out that they needed to expand to accommodate the market.

Unless, of course, they rely on their exclusive branding to draw the applicants. Being in such high demand probably ensures their survival for the next 100-500 years.

Besides, why expand when you can just charge the students more and more to make up that lost revenue?

 

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Who needs college when you have the intraweb for $19 a month?

 

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I think you can even get free lessons on the wonders of keynesianism on this board from some of the resident economists.


haha.. I quoted myself.

 

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REALLY???

 

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