Friday, May 02, 2008

USA Today says College Students are Spending More--without getting more

Yesterday's story is based on this report. The change is particularly pronounced at public universities, in part because cuts in state funding have required sharp increases in tuition.

I am personally conflicted about how much to subsidize students at State U. One of the things I loved about the University of Wisconsin when I taught there was that it provided access to a great education to anyone in Wisconsin who qualified academically. (when I began on the faculty in 1990, tuition was very inexpensive at about $2,000). Now in-state tuition there is about $7,000 per year. At this price, it is still a bargain, in the sense that it provides extraordinary value per dollar spent, but it has become sufficiently expensive that it turns some students away because of financial considerations. And this is a shame.

On the other hand, the life-time income of UW grads is, on average, much higher than the life-time income of Wisconsin taxpayers. It is reasonable to ask whether lower income people should be subsidizing higher income people. But on the other hand (again) the spillover benefits of having college graduates is large (see Ed Glaeser and others on this point). As I said, I am conflicted...

3 comments:

Anonymous said...

A case could be made that tuition is so expensive because of the subsidies for some people. Eliminate all subsidies, and universities would be forced to bring down the cost through a more efficient business model.

As it is now, constant change is not being forced upon universities by competition/economics, the way it is forced upon most private businesses. Universities can operate with a business model right out of the middle ages.

Jess said...

It can't get any better than this.

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