I am curious, in what ways has the state driven the price of education up (specifically, college/university tuition prices)? I know that by offering students cheap, easy credit and subsidized loans, it creates an incentive for educational facilities to raise their prices, but what is that known as, economically speaking?
I hope the question is clear enough. [:S]
It’s a subsidy. Or an externality.
Also, the state certifies what is an “education,” so the education bureaucracy loads up the concept with student-teacher ratios, facilities requirements, etc. until it costs $10K/yr per student and employs thousands of people and the student spends two decades of his life being “educated.”
It’s known as an increase in demand, which often drives prices up if the supply does not increase along with it.
I’m sure there are lots of things the government has done to make education more expensive. For one thing, they require universities to jump through hoops in order for them to qualify for certain subsidies. This takes a lot of time. In England, we only have one private university. Because it does not accept government subsidies, you are able to get a degree that would take three years in government subsidised universities, in just two years.
In addition, labor regulations prevent private employers from offering long-term internships where students would earn money to learn instead of paying it out.