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Cost of College and other fun things

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Cost of College and other fun things

Postby Blue&White » Fri Jan 10, 2014 9:51 am

We talk about economic things enough, and not just the "too big to fail" variety, thath I thought it was worth its own thread. Anyway, I stumbled upon a really good article while eating breakfast and thought I'd share. It may not be of interest to everyone, but for those of us who will soon have kids in college it's worth a read.

How college pricing is just like holiday retail sales

As a side note, I find the stuff about retail pricing extremely interesting. When Joseph a. Banks runs these crazy sales, I've always wondered how they can do that and at some point concluded that their real expected price was the sale price and that you were paying massive premiums the rest of the time. They present it as the complete opposite, obviously, and it's brilliant marketing. Anyway, nice to have my suspicions confirmed! I love personal validation.
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Re: Cost of College and other fun things

Postby psu_dad » Fri Jan 10, 2014 12:35 pm

I don't think that goes on at the high-end colleges. I've had (multiple) co-workers over the years who sent their kids to schools like MIT and Stanford and they paid big bucks.

I do know it goes on at some private schools, though. I have a close friend who sent his son to Sarah Lawrence (he wanted to be the next Steven Spielberg). The official tuition is around 50K, but my friend told me that most candidates that are at least half-bright are offered a "half-scholarship".
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Re: Cost of College and other fun things

Postby Carl Spackler » Fri Jan 10, 2014 2:30 pm

Blue&White wrote:We talk about economic things enough, and not just the "too big to fail" variety, thath I thought it was worth its own thread. Anyway, I stumbled upon a really good article while eating breakfast and thought I'd share. It may not be of interest to everyone, but for those of us who will soon have kids in college it's worth a read.

How college pricing is just like holiday retail sales

As a side note, I find the stuff about retail pricing extremely interesting. When Joseph a. Banks runs these crazy sales, I've always wondered how they can do that and at some point concluded that their real expected price was the sale price and that you were paying massive premiums the rest of the time. They present it as the complete opposite, obviously, and it's brilliant marketing. Anyway, nice to have my suspicions confirmed! I love personal validation.



And what one man calls brilliant marketing, another calls deception. The time I spent in marketing and sales churned my stomach as I saw outright and/or shrouded deception too often. J A Banks certainly does make it work though. My son is in wholesales sales across the nation and the price points he tells me have to include massive markups. He sells status items to the wealthy. They destroy merchandise instead of allowing it to go to charity, etc. to protect their brand and image. So much waste with so many who could use some of the items dearly. It is a shame.
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Re: Cost of College and other fun things

Postby psu_dad » Fri Jan 10, 2014 3:49 pm

And what one man calls brilliant marketing, another calls deception.


Dudley Moore did a movie (Crazy People) where he plays an advertisng exec who has a nervous breakdown and designs a series of ads in which he does the unthinkable. He tells the naked truth. The ads get published accidentally, he gets fired, and the company wants him back when the ads become a huge hit.

Here's one.

Not a great movie, but some of the ads are a hoot.
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Re: Cost of College and other fun things

Postby SouthernLion » Fri Jan 10, 2014 3:50 pm

Shades of 'Liar, Liar,' one of my all time favorite flicks.
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Re: Cost of College and other fun things

Postby Blue&White » Fri Jan 10, 2014 4:23 pm

Carl Spackler wrote:And what one man calls brilliant marketing, another calls deception.


Free enterprise and the American way. That's capitalism at its finest, I guess. I have a good friend in advertising and he used to work on liquor adds, and specifically trying to target that 21 - 25 age group market, which he privately concedes is really the 15 - 25 age group market. He used to see he had to check is morals at the door every Monday morning. He's moved on to other things since then and no longer hawks booze. I kid him about some of the stuff he helps pitch, but the reality is we are all morally compromised somehow. I certainly am.
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Re: Cost of College and other fun things

Postby Blue&White » Sat Jan 11, 2014 10:40 am

Should Colleges Be On the Hook When Students Can't Repay Their Loans?

I have mixed feelings on this one. I think they are focusing on the right problem but I worry bout the unintended consequences of this particular solution. In the case of for-profit schools, I am ok with this but for regular universities?

I think what happens as a result is it becomes a lot harder to get into school. Ideally what should happen is that schools should be more discriminating into the quality of students they let in but I think what will happen is they will focus more on their ability to pay back and how much funding they need. A brilliants kid who needs to cover his education through 100% loans is goign to be less attractive than an average kid who's parents can come up with 50% of the cost. I don't see how that doesn't happen, actually. I just think this will drive the wrong behavior.

Starting to starve the beast has to happen. I'm not sure how you do that, though. If you cut funding, then they just raise tuition. Maybe if you made them accountable for students who didn't graduate? The other problem with this is how do you hold universities responsible for the lousy job market? That's not their fault.

I appreciate the effort here, but I'm not sold on the solution.
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Re: Cost of College and other fun things

Postby psu_dad » Sat Jan 11, 2014 11:07 am

Starting to starve the beast has to happen. I'm not sure how you do that, though. If you cut funding, then they just raise tuition.


They can't raise tuition if you cut funding. You can't charge more than the market will bear.

I am 1000% convinced that the meteoric rise in college tuition is tied to federal funding. There's a reason my college couldn't charge me the 1970s equivalent of 30-50k a year when I went to college. I didn't have access to that kind of money. Few did. They could either charge what people could afford or they could close their doors. Several years ago, when my youngest needed a couple of stitches while at college, the bill I received from the hospital in Phoenix (which my insurance company eventually paid) was in excess of $1000. Old Doc Rosenberg couldn't charge my father that kind of money for my stitches, because there was no insurance for routine medical procedures and no one in my town had access to that kind of money.

Anything a third party (either insurance companies or Uncle Sam) pours money into escalates in price. I'm even seeing it now with my vet bills, which have skyrocketed over the last decade or so thanks to pet insurance. (No, I'm not making that up).
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Re: Cost of College and other fun things

Postby Blue&White » Sat Jan 11, 2014 11:27 am

I've seen the same thing with vet bills and I reached the same conclusion as to why.

As for college, there is a difference between funding and student loans.you would also need to turn off the federal cheap loan flow.
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Re: Cost of College and other fun things

Postby psu_dad » Sat Jan 11, 2014 12:16 pm

I was vague when I used the words "federal funding". I was actually referring to the federal student loan programs.

And I'm not optimistic that we can fix this. Trying to roll back the costs of higher education would be like putting the toothpaste back in the tube. It will probably require a bubble bursting (like the housing bubble) before it gets corrected.
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