question: How has the cost of living/schooling and economy in general inflated to such a degree? Is there a way that we can fix it or will it simply become worse?
comment: Instead of charging a reasonable amount for services, employees, etc., universities compare costs with other universities. Thus what should a math teacher be paid? Well what do math teachers at other universities get paid? Using an untethered closed loop can only make prices go higher, because everyone gives their permission for prices to rise.
passages: The inflation has been at really low levels in US in past 4 years and there are no explainable reasons why Cost of Masters / Graduation is rising higher than inflation
   An alternate explanation posits that tuition increases simply reflect the increasing costs of producing higher education due to its high dependence upon skilled labor. According to the theory of the Baumol effect, a general economic trend is that productivity in service industries has lagged that in goods-producing industries, and the increase in higher education costs is simply a reflection of this phenomenon.
   Paying for college can hurt retirement outcomes for parents of college students. In a Barron's article titled "How Your Kids Can Ruin Your Retirement — and How to Make Sure They Don't", Reshma Kapadia offers advice to parents on how they can ensure that higher education for their children does not result in diminished retirement quality.
  
  According to a 2019 Fed survey, "two-thirds of graduates with a bachelor's degree or more believed that their educational investment had paid off financially, but only 3 in 10 of those who started but did not complete a degree shared this view."
   Section::::Cost.
  
  In many countries, students are required to pay tuition fees.
  
  Many students look to get 'student grants' to cover the cost of university. In 2016, the average outstanding student loan balance per borrower in the United States was US$30,000. In many U.S. states, costs are anticipated to rise for students as a result of decreased state funding given to public universities.
   Dhuey's work has contributed to discussions on the economics of education across a number of print and digital media publications.
   In 2018, the National Center for Education Statistics projected stagnant enrollment patterns until at least 2027. Demographer Nathan Grawe projected that lower birth rates following the Great Recession of 2008 would result in a 15 percent enrollment loss, beginning in 2026.
   BULLET::::- "The US Department of Education should study the relationship between increases in average EFC (Expected Family Contribution) figures and average tuition rates. In addition, it would be worthwhile to examine how historical average EFC figures have changed relative to family income when measured on a current and constant dollar basis for each income quartile."
  
  Section::::Growth of college tuition.
  
  "Disproportional inflation" refers to inflation in a particular economic sector that is substantially greater than inflation in general costs of living.
   To get around this problem, the returns to human capital are generally inferred from differences in wages among people with different levels of education. Hall and Jones have calculated from international data that on average that the returns on education are 13.4% per year for first four years of schooling (grades 1–4), 10.1% per year for the next four years (grades 5–8) and 6.8% for each year beyond eight years. Thus someone with 12 years of schooling can be expected to earn, on average, 1.134 × 1.101 × 1.068 = 3.161 times as much as someone with no schooling at all.
   Research from the Center for Household Financial Stability, Federal Reserve Bank of St. Louis, presented in 2018, predicts a declining but still positive income premium for completing college, but a declining wealth premium that is almost indistinguishable from zero for the most recent cohort.
   Increasing student loans have also been blamed for driving tuition costs up. As Cato Institute economist Neal McCluskey explained in an April 2012 article for U.S. World & News Report:
  
  "The basic problem is simple: Give everyone $100 to pay for higher education and colleges will raise their prices by $100, negating the value of the aid. And inflation-adjusted aid--most of it federal--has certainly gone up, ballooning from $4,602 per undergraduate in 1990-91 to $12,455 in 2010-11." However, most peer-reviewed studies by economists do not support this claim.
   Investments in human capital entail an investment cost, just as any investment does. Typically in European countries most education expenditure takes the form of government consumption, although some costs are also borne by individuals. These investments can be rather costly. EU governments spent between 3% and 8% of GDP on education in 2005, the average being 5%. However, measuring the spending this way alone greatly underestimates the costs because a more subtle form of costs is completely overlooked: the opportunity cost of forgone wages as students cannot work while they study. It has been estimated that the total costs, including opportunity costs, of education are as much as double the direct costs.
   The long-term consequences of a decline in state funding for public colleges and universities are fewer low-income students, more non-residents of the state (non-resident tuition is typically three times resident tuition), and higher tuition.
   In the United States, much of college is funded by students and their families through loans, although public institutions are funded in part through state and local taxes, and both private and public institutions through Pell grants and, especially with older schools, gifts from donors and alumni, and investment earnings. Some believe this substantially increases intergenerational correlations in income (having two generations of a family have similar earning ability), although other factors, including genetics, have been estimated to play a larger combined role. 
   As discussed below, the "higher education bubble" is controversial and has been rejected by some economists. Indeed, many Americans still believe in the value of a college education, although they are unsure about its quality and affordability. Data shows that the wage premium the difference between what those with a four-year college degree earn and what those with only a high school education earn has increased dramatically since the 1970s, but so has the 'debt load' incurred by students due to the tuition inflation.
   The conservative Friedman Foundation noted that, although from 1950 to 2009 the total staffing at US public schools grew four times faster than the increase in students, scholastic achievement did not increase. While the number of teachers increased two and a half times faster, the number of administrators, teaching assistants and other staff grew seven times faster than the increase in students - i.e., almost three times as fast as the increase in teachers. To solve this problem, the Foundation proposed a more market-oriented approach, with more financial incentives and penalties. In 2018, the average student loan debt for US college graduates stood at $39,400 per graduate, up six percent from the previous year. Some 44 million Americans at that time owed $1.48 trillion+ in student loan debt, the bulk of which cannot be discharged through declaring bankruptcy.
   Section::::Effects, symptoms, and remediation.
  
  Employers may react to cost increases in any number of ways including:
  
  BULLET::::- Decrease quantity/supply
  
  BULLET::::- Decrease quality
  
  BULLET::::- Decrease profit margins, dividends, or investment
  
  BULLET::::- Increase price
  
  BULLET::::- Increase non-monetary compensation or employ volunteers
  
  BULLET::::- Increase total factor productivity
  
  In the case of education, the Baumol effect has been used as at least partial justification for the fact that, in recent decades, the price of college tuition has risen faster than the general rate of inflation.
   If student debt had been rising with inflation since 1992, then graduates would not be facing this immense debt pressure. From 2015 to 2017, the student loan debt in United States saw a steady ascension, where New Hampshire carried the highest average debt per student, at $27,167. Newer data, as of 2018, reflects an even larger crisis and cumulative level of student debt.
   “This just really infuriates me because apparently I was one of the extreme few that actually cherished my scholarship and went to get the education that everybody else had to pay for. I scream at the top of my lungs every day when some of these guys are screaming for more money, more money, more money. I think it’s absolutely ridiculous, but once again, I think it’s kind of the way our country has gone. We want more, but we want to do less. I think it’s terrible."
   Economics distinguishes in addition to physical capital another form of capital that is no less critical as a means of production – human capital. With investments in human capital, such as education, three major economic effects can be expected:
  
  BULLET::::- "increased expenses" as the accumulation of human capital requires investments just as physical capital does,
  
  BULLET::::- "increased productivity" as people gain characteristics that enable them to produce more output and hence
  
  BULLET::::- "return on investment" in the form of higher incomes.
  
  Section::::Education as an investment.:Investment costs.
   According to the Center on Budget and Policy Priorities, "years of cuts in state funding for public colleges and universities" have made college less affordable and less accountable for students. As a result, public colleges and universities must close campuses, retain fewer professors and staff, and drive up tuition costs. The decline in funding for these public institutions since the Great Recession is nearly "$9 billion below its 2008 level, after adjusting for inflation."
   The current system of loans has been seen as unviable because they require an expensive public subsidy to universities. David Willets has described how a rise in tuition fees would increase public spending: "It is in such delicate equilibrium that shifting any single element requires us to shift everything else. If fees were to go up, the government would have to lend people the money to pay for them - and that would push up public spending...It's not just that students don't want to pay higher fees: the Treasury can't afford them. So the arrangements we have now are clearly unable to respond to the current economic climate."
   Recent scholarship suggests that in the United States of America, the federal government effectively taxes investments in higher education more heavily than it subsidizes higher education, thereby contributing to a shortage of skilled workers and unusually high differences in pre-tax earnings between highly educated and less-educated workers.
  
  Taxes can even have effects on labour supply: we can consider a model in which the consumer chooses the number of hours spent working and the amount spent on consumption. Let us suppose that only one good exists and no income is saved.
   Section::::Research.:Economics of education and training.
   US college students come from three major sources: the US K-12 pipeline, adult or non-traditional students, and foreign students. Projections about future enrollment patterns are based on demographic projections about these groups.
  
  Section::::Educational pipeline.:K–12 education.
  
  The US ranks third from the bottom among OECD nations, in terms of is poverty gap and 4th from the bottom in terms of poverty rate Jonathan Kozol has described these inequalities in K-12 education in Savage Inequalities and The Shame of the Nation: The Restoration of Apartheid Schooling
  
  in America.
   To meet the requirement, post-secondary institutions may choose between a basic template developed by the U.S. Department of Education or an alternative net price calculator that offers at least the minimum elements the law requires. A recent report issued by the Institute for College Access and Success, "“Adding it all up 2012: are net price calculators easy to find, use and compare?”, found key issues with the implementation of the net price calculator requirement. In “Adding it all up,” the authors state, “this report takes a more in-depth look at the net price calculators from 50 randomly selected colleges. While we found some positive practices that were not evident at the time of our previous report, net price calculators are still not reliably easy for prospective college students and their families to find, use, and compare”.
  