The Higher Education Crisis in the U.S.

From a comment in the comment section of Naked Capitalism:

State university tuition has gone up for two basic reasons. First and foremost, the states reduced tax-based funding in order to pay for more prisons and tax cuts for the wealthy.

Second, university education remains largely handwork and therefore necessarily expensive. Like all handwork, its price must go up faster than inflation, since productivity increases will always be below average.

However, the most important reason it has become unaffordable for the middle class has nothing at all to do with the educational system. The main problem is that the middle class hasn’t gotten a pay increase in a generation — all the productivity increases since Reagan have gone to the upper, and lately the upper upper, income brackets while we have simultaneously shifted taxation from the wealthy to the middle class, using social security taxes, for example, to finance tax cuts for the rich, and refusing to pay state taxes necessary to finance education and other services that can only be provided by government.

Struggling to cope with the massive cut-backs in state funding, universities and their students have looked for any salvation possible, and they found the same solution that the middle class has found in every sphere — borrowing.

The borrowing solution is nearing its end. Our educational system is in serious crisis. To be sure, we can squeeze it a little longer, as one can always cut R&D a little more. But in the end, if we continue to refuse to fund it through government, we will have an educational system in as good shape as our railroad system — i.e., nonexistent — or our medical care system — excellent for the rich and disastrous for the nation.

And then we’ll be able to complain even more about government failure as our economy collapses around us.

http://www.nakedcapitalism.com/2010/11/is-student-debt-the-next-front-in-the-consumer-debt-crisis.html