Why have college prices skyrocketed?

Money sucked into wormhole


In 1901 , colleges that now cost upwards to 48,000$ /year only cost 100$ per year. We know that much like the famous 5 cent coke bottles of the time , and 5 penny per gallon gas, the prices were due to lack of inflation of the American bank note. We actually wrote about why American money has fallen in value here "American Money Value Drop".

Even though on the global field , the US dollar has dropped in value over 95% (and falling) in the past century , this would logically mean that  University prices should not exceed 1000$/year , right?

Well, to our dismay , it appears that the lack of value in association with the U.S dollar has nothing to do with the made-up prices of colleges these days. You see, back in the day all of our colleges were well-funded by large corporations , this included GM and GE. The reason for this explicit funding was the "trickle down" concept.

SEOs of the day didn't exactly have the power or status they have today, but regardless, they saw that "investing in public higher education would create more educated people, then these educated people would be hired by companies like GM and GE , and these companies would then have competent, and well earning employees.

This concept is still strong in countries that surround us , like Mexico and Canada. Then it comes as no surprise that we are the only country in the world where nobody below a certain "wealth" line can rationally  afford higher education. Books alone for a single semester in a five class schedule add up to 1000$, and are not covered by federal loans --this means they are all out of pocket expenses.

Just imagine a family where the father is a construction worker and the mother is a schoolteacher. Under such circumstances, the combined total income of the family is usually below 70,000$ /year. A child in such a family can't possibly dream of attending Harvard law school , 58,000$/ year is an irrational sum to pay for 7 years.

And how did Harvard go from 100$/year to well over 58,000?

We already mentioned the key components of the business model , and why schools that are run for personal profit are ruining this country here: "Why does the American schooling system suck so bad?" . We discussed how federal tax money is used to fund private "business type" universities.

Now to add on to this. The main contributer to the inflation of prices is the lack of support from large corporations. You see , companies like Apple, Microsoft, Google and even Verizon no longer need Americans to work for them.

Aside from management and micro-management, large corporations have realized that the 300 million people of the united states are just a small dot on the global market , as we see with China and India , which both house populations in the Billions.

As a result of trying to get cheap labor, the Chinese and Indian higher education systems are now getting backed by American "large corporations". In return , their education systems are training more and more professionals. Then these "professionals" work for far less than an American of the same status would. I guess you can call this an effect of the failures of the "laissez faire" model.  

The best part about their lack of funding here , and the fact that they no longer rely on us is that they are not paying taxes here anymore. This is another huge hit against higher education. At times like this , it is only possible to assume that higher education without corporate backing will only continue to inflate , while the quality of education will continue to drop.

Statistically speaking, in the year 2012 , General Motors created 15 times more cars in China than they did in the United States. Also, they sold 12 times more cars in China than they did here , for relatively the same price values.

Verizon has more employees as of 2012 in India than they do in the United States (so that's why all service techs are Indian huh?).

Although it is ideal to say "this needs to be changed" , nobody can possibly listen. At a time when corporations are stronger than world governments , it might take more than just a few people to try to reverse this "globalization". After all, don't we want to keep American money in America?