Some colleges will soon charge $100k a year – how did this happen?

Original Article ↗ Hacker News Discussion ↗

Elite U.S. colleges edging toward $100,000 per year in advertised costs are seen as the product of easy, government-backed student lending, non‑dischargeable debt, and intense demand for prestige degrees that function as labor‑market signals. Commenters point to administrative bloat, luxury campus amenities, cartel‑like price discrimination through “need‑based” aid, and declining public funding as drivers, while noting that most students pay less than the sticker price and public universities remain relatively affordable. Proposed remedies range from making student loans dischargeable or capping federally aided tuition to sharply increasing public funding for state schools or redesigning credentials so employers rely less on expensive four‑year degrees.

Government policy & student loans

  • Many argue federally backed, hard-to-discharge loans “broke the market” by making demand near price-inelastic: schools can raise prices knowing money is available and repayment is heavily enforced.
  • Non‑dischargeability in bankruptcy is seen as removing lender risk, encouraging over-lending and enabling weak programs to survive.
  • Some note federal loan caps for undergrads are relatively low per year, so can’t fully explain $100k prices; private loans also play a role.
  • Others stress decades of state defunding of public universities pushed up tuition even without elite‑school dynamics.

Market dynamics, prestige, and signaling

  • Degrees—especially from elite schools—are framed as signaling devices and class filters more than pure education.
  • Prestige, networking, and perceived lifetime earnings justify very high prices for wealthy families; “freemium” model where full‑pay students subsidize aid recipients.
  • Some see elite schools behaving like a cartel via shared admissions/aid mechanisms and Early Decision, limiting true price competition.

Cost structure: admin bloat & amenities

  • Repeated claims of administrative bloat and “resort-like” campuses (luxury dorms, gyms, lazy rivers) absorbing tuition increases, while direct teaching is a minority of spend.
  • Others counter that universities are complex organizations with real needs: compliance, labs, IT, facilities, health insurance, etc., though many still think staffing has overshot.

Public vs. private & international comparisons

  • Most U.S. students attend public institutions, which are still relatively affordable but have seen steep hikes as state subsidies fall.
  • Comparisons to Europe/Japan: foreign systems often cheaper but offer fewer amenities and less individualized support; U.S. schools are seen as a different, more expensive “bundle.”

Equity, class, and price discrimination

  • Need‑based aid and “merit scholarships” are described as near-perfect price discrimination: schools ask for full financials, then charge almost exactly what each family can bear.
  • Upper‑middle‑income families feel squeezed—treated like the ultra‑rich for aid purposes while facing high living costs.
  • Income-based aid and other means-tested benefits are criticized for creating “welfare cliffs” and complex bureaucracy.

Alternatives & shifting demand

  • Growing interest in trades, apprenticeships, bootcamps, community college, and skipping college entirely as costs rise and AI/internet erode the monopoly on knowledge.
  • Some predict peak tuition and eventual enrollment decline; others think as long as employers prefer degrees, elite schools remain safe.

Proposed reforms (no consensus)

  • Make student loans dischargeable in bankruptcy or cap/removal of federal guarantees.
  • Put schools financially on the hook for bad loan outcomes or take equity‑style shares of graduates’ income.
  • Hard tuition caps tied to eligibility for federal funds.
  • Decouple certification from instruction (open exams for degrees).
  • Increase public funding for state universities to force private competition.

Is it truly a crisis?

  • Some insist the college wage premium still exceeds costs, so the system remains rational if unequal.
  • Others argue even if the ROI is positive, charging $400k for what is largely signaling and lifestyle is socially destructive and misallocates resources.