Approximated 7000 college students from around the state of California protested against a proposal that would increase tuition by 44%. Governor Schwarzenegger outlined this proposal do the overwhelming debt that California has witnessed in the last four years. After the increase, the cost of tuition would still be greatly subsidized by the state. States have increased their tuition far higher then the rate of inflation in the last 15 years, and enrollment hasn’t subsided. The demand for higher education has accelerated right along with price keeping a steadily increasing equilibreum. A competitive job market is making the demand for schooling increase. Students don't want to pay higher prices for school but the alternative is not a viable option. No degree makes the individual in many circumstances less marketable. The guestimation is that although students will kick and scream and protest, in the end you will find them in the classroom.
2 comments:
-1 for two spelling errors in StevenPadilla2's post.
What is described here is a fundamental problem of third party payer systems (in this case, the government pays part of the costs of your education to SUU).
By making the out of pocket costs of education low, the third party payer system pushes us down to the low end of demand (with high Q and low P).
But, by guaranteeing everyone the right to an education at that price, the third party is implicitly saying that it will pay suppliers as much as they need to educate these people. This means that the high Q coming from demand is matched by supply - but moving to the right along supply means increasing prices.
The result of all this is that third party payer systems lead to increases in both the quantity of goods consumed, and the price of them. And, everything they do that makes it easier for potential buyers to turn into real ones will raise both P and Q further. The only way to combat that is to make the out-of-pocket price for demanders higher. But that isn't popular.
Is guestimation a real word?
Although tuition hikes are painful I think that it is a rather small price to pay in many cases for a piece of paper that will guarantee higher earnings than one would receive otherwise. The biggest problem with the price of a higher education is skyrocketing student fees (i.e. for activities, socials, and athletics). These charges are quite beneficial for single 20 year old students who ae in need of a social life, but student fees are of no use and painful for students who may be supporting a family while trying to earn their ticket to a better financial future.
If people are going to protest anything, protest that all students are required to subsidize student activities for snot-nosed kids who are having their first taste of independence.Let those who are in college for education pay for education, and let those who are in college for other reasons pay for it.
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