The Case for Tuition Increases at Public Universities-Becker

 

 

The fiscal crisis in many states of the United States has led these states to cut their funding of public colleges and universities. The newly elected governor of California, Jerry Brown, has proposed to significantly cut state funding to California public colleges and universities, the most extensive and prestigious public system of higher education in the United States. To compensate at least in part for the cuts in public funding, tuition at American public institutions of higher learning is increasing significantly.

Something similar is going on in countries where cash-strapped central governments finance most university expenses. The newly elected British coalition government of Conservatives and Liberal Democrats last month approved a contentious bill that allows universities beginning in the fall of 2012 to raise tuition to a maximum of more than $14,000 a year compared to present levels of about $5000. Note that the average tuition and fees at American four-year public institutions was about $7,500 for in-state students, and it was over $12,000 for out-of–state students. Students at different British universities opposed the proposal to raise tuition by occupying university buildings, picketing the British Parliament building, and engaging in various acts of violence, but the bill passed anyway (by a close vote).

Tuition and other fees at public colleges and universities generally are much less than the cost of providing the education. To be sure, tuition and fees at private nonprofit institutions are also generally considerably less than education costs. The crucial difference, however, between public and private institutions is that the gap between costs and tuition revenue of private schools is mainly covered through voluntary contributions from alumni, private foundations, and others, whereas a sizable fraction of the gap at state-run schools is paid out of taxes imposed on state residents.

The case for higher tuition for students at state-run institutions of higher learning is powerful. A compelling reason to raise tuition at the present time is that many states have serious fiscal problems because their overall spending increased during the past decade at unsustainable rates. They are searching for various ways to cut their spending, and there is little reason why public spending on universities should be exempt from this fiscal pressure.

The average college graduate earns much more than the average individual who does not go to college. As a result, college graduates earn a lot more on average than does the typical taxpayer. It is a questionable system of regressive taxation when taxes are spent on subsidizing individuals who will earn more than those paying the taxes.

To be sure, without offsetting subsidies, high tuition discourages poorer students from attending college. These students should not be priced out of higher education, but it is not sensible to insure that these students can attend by charging low tuition to everyone, including students from higher income backgrounds. Rather, poor students alone should be directly subsidized with grants, and/or extensive loan programs could enable all students to borrow to finance their education. They would then repay any loans from their higher earnings after they finish school. Perhaps individuals who earn less would have to repay a smaller fraction of their loans. The British bill that raised tuition does not require students to pay any tuition upfront since they could borrow all their tuition from the government, and then pay back gradually after they finish school. The US federal government also has an extensive program that makes loans to students at both private and public colleges and universities.

Another argument commonly made against further increases in tuition is that tuition already rose substantially during the past decades, even after adjusting for increases in the price level. For example, tuition and fees at the University of Illinois, Urbana increased from $4770 in the academic year 2000 to $13, 508 in the 2011 academic year. However, the growth in tuition was mainly a response to the large increase in the earnings of college graduates compared to individuals who never went to college. Salaries and other benefits paid to professors are the main cost of providing a college education, and these benefits went up by a lot because earnings of college graduates increased by so much since 1980. The growth in earnings of college graduates, and of persons with a post-graduate education, made a college education a very good deal, despite the increases in tuition, because the gains from going to college increased by much more than the costs of going.

A quite different argument often made in support of subsidizing students is that individuals with higher education produce large benefits to others in their country or region (positive “externalities”) as well as to themselves. Yet while individuals with advanced degrees who do research and development work sometimes produce important innovations that confer benefits on society as a whole, the US and many other governments already subsidize R&D spending. Similarly, governments subsidize college-educated (and other) individuals who make films, write books, and produce artwork.

Perhaps these subsidies should be increased, but that is distinct from subsidizing all college students with low tuition. For if society benefits from having college-educated persons engaged in particular activities, such as research, it is better directly to subsidize spending on these activities (perhaps more generously than at present) than to subsidize all college students, including, for example, salesmen, bankers, and lawyers.

Comments

[Buy Jewelry Online]

My guess is that the politicians will sieze on that next, like health care, and subsidize more rather than less in exchange for more control .

[MBT Sale]

Thanks for the cool badgees! When do we find out who the Petties nominees are???

[sell old cell]

I think govt. have to make some criteria for fees or otherwise they have to give some subsidy to school and colleges or educational institutions...

[mbt trainers]

I just realized I'll still be typing next week if I keep talking about the great stuff we've gotten, so I'm going to list it!

[Discount Herve Leger]

Do you think that paying primary care physicians more will get better ones or do you agree with your recent WSJ article that paying judges more will not get better judges? After all, human nature is human nature.

[jordan cool grey]

Thanks for sharing. This website is to I too have to help. Very good.

[günstige ugg]

Steve Positionen in der Lage, auf über acht Jahre, die ein seltenes Modell von Bauchspeicheldrüsenkrebs Tumor, hat Live- [url=http://www.uggkaufen.net/damen-stiefel-wholesale-34.html]Damen Stiefel[/url] , entwickelt diese weit mehr Bit für Bit im Vergleich zu der beliebten Sorte. Doch seine Abhängigkeit von einem neuen mageres Fleisch Transplantation 2 Jahre in der Vergangenheit nachlässig Hinweis darauf, dass seine / ihre Probleme mit der Erkrankung an Sicherheit grenzender Wahrscheinlichkeit nicht übernommen worden. Das der Firma Apple Initiator erweitert beibehalten Fakten mit seiner Erkrankung führen eine Art von Firewall und nicht anders Angaben zustande gekommen umgehend unmittelbar nach seinem Sterben., [url=http://www.uggkaufen.net/]ugg stiefel[/url] , jedoch gesundheitliche Branchenexperten unverbunden neben seiner Behandlung erklären Arbeitsmöglichkeiten in aller Wahrscheinlichkeit erforderlich, dass Transplantationspatienten, nur weil seine oder ihre Melanom zurück sowie auf pass.

[crystal ceiling light]

Of course, this only applied to dignified rifle-hunting of stags and boars.

[crystal ceiling lamps]

It's funny to look at what we decide to ban and what we consider basic freedoms.

[crystal chandelier china]

This is such a horribly sad story, but I love the way you told it. Thanks for not dragging us into a guns-or-no-guns debate and just allowing us to enjoy your wonderful writing.

[crystal ashtrays]

Wonderful tribute to your friend, Matt, and heartbreaking. I'm sorry you lost him.

[Dan Feder]

Nice to know the this government has an extensive program that makes loans to students at both private and public colleges and universities.

[Exmouth fishing]

Its a dipressing story...In my opinion govt. should to make some criteria for fees or otherwise they should give some subsidy to school and colleges or educational institutions...

[air freshener]

Ningbo BST products company is a privately-owned manufacturer specialized in hand sanitizers,air freshners,electic perfumes,pet spray,pet shampoo and some other daily use chemicals.

[Sandra]

Thank God someone is filalny realizing that students are not able to advance when they aren't able to afford the crazy expensive programs that schools are offering. The whole country preaches about education and how important it is, yet the opportunities are not always within grasp. More schools need to have programs like this!

[Nelly]

scholarships and have the credit and fiicnanal backing to receive private loans. You are correct that these organizations are gouging the college graduates, but when you look at the salary difference of those who go to college versus those who don't, we should be able to pay back those loans, especially with the many options we do have. From deferment and forbearances to graduated payments, extended loan length, and income based payments they have made repaying loans quite easy.What we need to shut down is how easy it is to receive private loans. They are so easy that people can rack up huge debt through these companies and none of it going to school. There should be more accountability of where the funds are going, because lets face it 18-22 yr old adults are not the most fiicnanally responsible.In the end Education is a commodity that is in demand. As long as the demand is high, the price will be high. There needs to be some accountability to the system, but we can not expect higher education to be free. (Look at the public school system and the problems with the level of education because of the poor funding)

[Ginevra]

For a college stnudet you want to get as much as possible. I'm going to assume that you are going to run programs. internet, and stnudet applications all at the same time. You want to have at least a dual core processor running at at least 2.5 Ghz. You also want at least 2 Gbs of ram memory. Graphics card should be at least 256 mb and you should try to get 250 Gbs of hardrive memory. Alienware and Digitalstormonline make really good laptops, built to top specs. But, if I were you, I would get a desktop because they are cheaper, more efficient, and much more powerfull. A good laptop can be around $1500 and up. A good desktop can be as low as $500 and up. but you choose. Laptops are extremely convenient.Was this answer helpful?

[Salmita]

budget cuts, colleges have eeaimnitld classes, increased enrollments and increased tuition fees.Top 30 State Universities That Love Out-of-State StudentsTop 25 Universities for International StudentsPublic Universities with Highest Tuition

[Naniki]

Posted on Salam, Mas Habibie AfsyahSaya pendatang baru ke web nya, Mas.Pertama ngcaipun selamat atas dukungan damai pemilu 2009 dan menang di kontes.Kedua, kalau boleh sharing ilmu di bisnis onlinenya, bisa email ke saya thanks..

[Mehmet]

Loans, financial aid, all make colelge more achievable for a larger part of society. The complication of this is that demand for education is rising faster than ever. When demand goes up.. costs go up..To continue to increase demand while preventing increases in or even lowering costs, the simplest answer is to expand the supply. Currently, the best growth in education supply is in public state and local universities and community colelge. Private elite colelges' set insane prices, but so long as students continue to fight over seats at those schools, prices will continue to rise. If more students enroll in public schools and more citizens demand their state and local governments expand these public schools, prices will hold steady.

[Menekse]

Rarely do we think of having fun while we're at work or budiilng our business all day. Being happy goes a long way towards harmony in our work and personal life attending play classes sounds like a great way to bring fun into our day.Thanks for letting us know they are as close as Owens Community College!