4

More specifically, by the year, why do we keep getting more expensive:

(1) MBAs (2) law schools (3) med schools

Is there a major reason for this, or is there a combination of equally-reasonable factors? Or does it all just come down to economic inflation? Is the trend going to continue into the perceivable future?

All things taken into account, would you encourage your kids to follow in one of these paths?

4

I think that the reason is the same one that is driving the costs of undergraduate degrees. There is no incentive to provide competitive costs because

  1. Economic inflation is pushing this up just like everything else.
  2. Anyone that wants that degree or doctorate needs to go to an accredited school (same for undergrad).
  3. Financial aid and private loans (even at horrible rates) are widely available and are not given out with proper credit risk analysis.

I will admit that I'm from the school of thought that financial aid is partially to blame because it subsidizes the true costs and alters the supply and demand that is at work in all markets. I think that if the costs were allowed to reflect the supply and demand without subsidization through heavy financial aid, they would push demand down and stabilize the costs. I also think that eventually the costs would begin to fall to reflect the loss in revenue from people not going to school, and then the system would balance itself.

That's the beauty of a true free market, whether you believe that the actual supply or actual demand is ethically right, it does reflect the true costs.

  • 1
    +1 If all you are looking at is the average income of an MBA, Lawyer, or doctor then there is incentive to earn this degree. The problem is the average is skewed by some ultra high earners. Entry level lawyers, MBA's, and MD's are often barely able to cover the cost of their loans. The ones making it big often come from money so they start off not having to scrape by and are able to take some risks and accumulate wealth to build on earlier. – user4127 Nov 28 '11 at 14:39
  • @Chad Great points! Maybe make it an answer instead of a comment... – Seth Rogers Nov 28 '11 at 18:59
  • @SethRogers I think Matt hits the nail on the head for the primary problems. My point was more of an attributing factor to the demand for the Higher education not the reason why the prices are going up. But feel free to build on it for an answer if you feel it is warranted. – user4127 Nov 28 '11 at 19:04
  • 1
    I think the sentiment about financial aid is also true of student loans. The availability of easy access to borrowed money is doing the same thing to education prices that it did to housing prices. – JohnFx Nov 28 '11 at 21:05

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.