Daily Aid 108: A Twitter Discussion on Reducing the Cost of College

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Daily Aid 108: A Twitter Discussion on Reducing the Cost of College

6 April 2009 1 views One Comment

Daily Aid 108: A Twitter Discussion on Reducing the Cost of College

I recently asked on Twitter:

“How would YOU reduce the cost of college?”

Here’s a selection of thoughts.

Financial Aid

KinZ6: Cut all types of education loan rates in half.

KinZ6: Another idea – Pell eligible includes EFCs up to 15K.

davidgallant: With the effects of today’s society, colleges are providing poorer services at greater costs. The government should subsidize .edu

carlalynnehall: I’d have universities remove the unnecessary BS classes that they use to pad their graduation requirements, and make more money.

carlalynnehall: And when I suggest removing BS college classes, I’m referring to the bull**** “required” intro/elective classes. Fluff classes=waste

carlalynnehall: I think colleges need to rethink the whole four year concept of college. Two well-planned years would have done it for me.

carlalynnehall: Even in liberal arts, students usually have subjects they want to take, but tons more that the school requires them to take.

carlalynnehall: In my opinion, electives are padding for the university’s benefit, and often a waste of time for the student.

carlalynnehall: To be fair, I’m clear on what I want to learn, and not all liberal arts students are. I hate being forced to take unwanted classes.

carlalynnehall: In my opinion, the biggest lesson of those 4 years of college happen outside of classes. It’s about becoming self-sufficient.

carlalynnehall: I never had the opportunity to test out of a class when I was an undergrad. I would have jumped at it.

Price Controls/Tuition and Fees

jack_daniel: wouldn’t make more afforable, but: being more open about real costs. Tuition is only a part of cost, the fees are out of control.

Steve_Sanderson: I believe that college ed. Should be available to all, I think mandatory min aid should be born by both fed state & county to mi …

jruckman: stop charging for it

jruckman: while much of college is effective, a TON is wasteful, the model is unsustainable; also money is dying

davidgallant: I would start with restructuring university spending limits. I saw some budget concepts at my uni that made no sense…

Textbooks

_cc: make most of the resources virtual, and reference’s to open-source knowledge sources, e.g: wikipedia.

barbaranixon: The price students have to pay for textbooks is outrageous. As a professor, I work hard to find the best reasonably priced books.

barbaranixon: I could use online (peer-reviewed journals, etc.) with some significant legwork on my end. Working toward that. Hard.

caffination: push for ebook versions of textbooks that cost less and can be updated without a whole new version

AllenHarkleroad: Get rid of the overrpiced textbooks and ban the publishers that market them.

andymci: As a college student, I say start cutting costs by reducing textbooks and moving learning material to online/digital format.

Meezyy: decrease the cost of text books and/or stop making unnecessary new editions

davidgallant: and I would require uni’s to use opensource materials instead of expensive books, and to publish class video on the web

Other Ideas

josiahsprague: Working on campus. Practical and convenient way to pay for school.

SurveySpot: Pop ups and talking flash ads on every campus PC srsly- allow businesses to hire a class to fill a biz need. $ + RL exp. FTW

RickWolff: Some economists say tuitions are high as a result of so much aid. Want to raise something’s price? Subsidize it.

268Sharon: Colleges & Universities could get rid of extra things to save costs, like computerlabs since everyone already comes with a computer

268Sharon: Yes, even low- income students. But the money from the labs can buy laptops for those who don’t have & the colleges would still save

268Sharon: I heard about univ. of Virginia closing computer labs on the this week in tech podcast.

268Sharon: Also, I was charged 3-4 different fees each semester often for services I never used- cutting those fees would save a lot.

chelpixie: Cut the requirements for a 4 year degree down, lower tuition and promote the use of online classes more. Not a replacement but…

chuckgose: To make college more affordable, I think every dollar spent on tuition should be tax deductible.

MidwivesGallery: college affodability:divert corn prod. subsidies 2 edu. subsidies. 2 birds,1 stone:healthier food (no corn syrup), smarter people.

Commentary

I think there’s something to Rick Wolff’s commentary that goes along with the ideas of increasing aid or reducing interest rates on loans – the idea that when something is subsidized, there’s less incentive for the producer to control costs. When the government changed the unsubsidized Stafford loan limits a year or two ago to increase them, there was a free market response to increase tuition by the same amount since students had that much more money theoretically available to them.

The way to control the cost of college isn’t by offering more financial aid, as that offers no incentive for colleges to control costs at all. If you ran a business that sold widgets and knew that the government was giving every citizen a $10 widget loan, why would you ever offer to sell a widget for less than $10?

What was also surprising in this very informal, completely unscientific survey was the emphasis on controlling the costs of textbooks. There has to be a measured response here as well, focusing on free markets. Professor Barbara Nixon does a good job finding reasonably priced books, but increasing the scope of books to non-textbooks would probably do even more to control costs, as well as using open source, publicly available texts in electronic format.

What will help here is the mindset shift for colleges to be filters, certifiers of information, rather than dispensers of it. The education system we currently use predates the Internet by decades, in terms of structure. The education system still functions as though citizens do not have ready access to the bulk of humanity’s public knowledge through online sources. Rather than attempt to be the gatekeepers of knowledge, educational institutions need to refocus on being the certifiers of knowledge, the verifiers, the ones who help teach students how to gather information and assess its validity.

Ultimately, the solution to reducing student debt is to lower tuition. The solution to lower tuition we discussed last week and follows basic market principles of supply and demand.

I want to thank all the folks on Twitter who responded to the question, and encourage you to check them out and see what else they have to offer.

Scholarship Update

The April 2009 StudentPlatinum.com scholarship is now open – enter via Scholarship Points to win $2,500.

Details here.

Mail Bag

Shawn asked:

Should I withdraw from my 401k to pay off a credit card in full? Is it worth the penalty? I’m paying 12.99 % APR on the CC.

Absolutely not in this case. You’re going to lose the time value of the investment as already held. If you’re not anywhere close to retirement, your best bet is to balance your 401k’s investments and hold tight for the 20-40 years ahead of you. Continue to make your payments on your credit card, but don’t lose that nest egg and the time invested in it so far. Do make sure it’s diversified and balanced.

Disclosure: I am not a certified financial planner or investment advisor. I do recommend you consult with someone who is certified for more in depth information about how to save for the future.

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