- Reason Awakes -

Support for Higher Education

 

Higher Education is rivaled only by medical care for the rate of real cost increases over the last few decades. While it can be argued that the quality of medical care has risen dramatically along with its costs, the same cannot be said for the quality of a modern college education.

The Pricing of a College Education


Most colleges have adopted a form of price discrimination in which they charge extremely high list prices and then discount those prices either based on ability to pay or merit or both. This price discrimination, like that practiced by the airlines, allows colleges to extract the maximum possible amount for their services.

This pricing method has also had the effect of pricing private colleges beyond the reach of many middle and upper middle income families.

The public colleges have also followed a similar path, but remain a relative bargain because of the subsidies provided by state governments.

Bringing Colleges into the 21st Century

State legislatures need to pressure their educational institutions to find ways of lowering the cost to taxpayers of providing this service. Higher education is one of the few areas of economic activity where quality is judged by a low level of productivity (student/faculty ratio). We believe that, as in most other areas, state universities could improve their efficiency by better use of technology. Some state legislatures are putting pressure on their university systems to develop cheaper and more efficient ways to provide the equivalent of a college degree by more aggressive use of online courses. We support these efforts.

We believe that all colleges and universities should adopt 21st century technology to lower the cost and improve the quality of post secondary education. Our focus is on public universities because that is where political action can have the greatest impact. We believe that once state universities use these technologies to significantly lower the price of a college education, private universities will have to follow suit.

Separation of Certification from Education

Colleges and universities serve two distinctly different functions: education and the certification of competence through granting degrees. In the long run, the best way of introducing competition into higher education and driving down prices is to separate the certification function from the education function. We would support state legislatures directing their universities to establish separate certification functions. Colleges and universities can then focus their educational attention on preparing students to apply for that certification. If others, including for profit institutions, also want to offer that preparation, for a price, it will force the introduction of cost saving technologies into higher education.

The Role of the Federal Government In Inflating the Cost of a College Education


As far as private education is concerned, we believe that federally subsidized student loans tend to sustain the continued increase in tuition, so we favor raising the interest rates on these loans to market rates.

We believe that students, who are taking on loans, should be provided with estimates, based on data from prior graduates at their institutions, of the likely incomes they will be able to expect, by major, and the life time cost of repaying their student loans.

Recognizing that increasing interest rates on student loans to market rates will pose a hardship for the very poor, we favor expanding the Pell Grant program to compensate for the impact of the higher interest rates.

College Admission and Social Mobility
 
One form of self sustaining privilege in our society is the "legacy" advantage in college admissions to highly selective colleges and universities. We believe that all institutions of higher learning that accept federal funds (which includes virtually all of them) should be required to abandon this practice. This seems especially important, from an ethical point of view, if we are to ban race based affirmative action admissions policies.

 


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