13.1.09

FROM THE TRENCHES. The Pope Center's Jane Shaw takes on the efficiency and equity issues in state-subsidized tuitions.

Low tuition is not always as fair as people think—or even always beneficial for students. Keep in mind that low tuition is not the same as “low cost.” Students pay less in North Carolina because taxpayers are footing a large portion of the bill. According to UNC system president Erskine Bowles, throughout the system about 70 per cent of the expenses for a student’s instruction are covered by state appropriations. Tuition covers only about 30 per cent, on average. At Chapel Hill, which has enthusiastic alumni and large private donors, state support of student instruction is somewhat less, about 60 per cent.

Many students from wealthy families pay $16,370 to live and study at UNC-Chapel Hill. This compares to $40,000 or more at private schools such as Wake Forest, Duke, and Vanderbilt. We have to ask, should wealthy families really be paying only 40 percent of the cost of their children’s education?

There's material for several articles in this paragraph alone. In a world where the prestige universities award merit scholarships and other inducements to raise their academic profile, we cannot conclude that wealthy families necessarily pay more than 40 percent of the cost of their children's education.

The taxpayer is paying the remaining 60 percent. Yet only about one-fourth of North Carolina’s adults have college degrees. That means that construction workers, sales clerks, and short-order cooks are contributing to the education of affluent students who will themselves go on to make large amounts of money, thanks in part to their Carolina degrees.

So fairness is not an open-and-shut case.

Public policy is full of regressive transfers (keep scrolling). Fairness is one public policy goal. Allocative efficiency is another. Where the government subsidizes the activity, expense-preference behavior by the government is a possibility. That's the main focus of the article.

Additionally, while low tuition is attractive to students, it often results in a variety of problems that can prolong the amount of time it takes to earn a degree. Most colleges and universities routinely pay lip service to how well they serve their students’ needs, but the reality doesn’t always match their promotional literature.

Schools cut corners. At large institutions such as N.C. State, for example, it’s often hard to get into the classes you want, either because they are full or because they are not offered very often (or both). If you don’t select your major soon enough, you may have to wait for additional semesters to go by, delaying your graduation. It’s standard practice in some of our leading universities to seat students before often-unprepared graduate assistants in giant lecture rooms .

Our spring semester started this week. I once again had the rush of people looking to add my sections. As part of the first-day rituals, I explain the game the university is playing with the legislature, using the students as pawns. It works like this: the university authorizes fewer sections, the departments suggest that the students make their schedule-completion difficulties known to the deans, the deans suggest that the students and their parents make their schedule-completion difficulties known to the legislators, the legislators haven't figured out how to sell seats in classes yet.

In my view, one reason why students get slighted is that the universities inevitably pay more attention to the people who provide the big bucks—the legislature—than to those who provide fewer bucks—the students.\

There’s an expression, “Who pays the piper calls the tune.” If you are providing the money, you can expect your interests to be satisfied. If students (and their parents) were paying the full cost of their tuition bill, they would demand more and would probably get it.

It's not a problem for the land-grants and public comprehensives only. Charlie Sykes once reported that Harvard history majors had t-shirts made up reading [History], protesting the propensity of that department to [not offer] sections.
What we often see instead is compromise. With tuition low (and loans available), many students take a few courses, stop and work awhile, then go back, puttering along. They are “in school” but they aren’t focused on getting that degree; they lack the motivation that they would have if they (or their families) were paying larger amounts of money. Many do not graduate. And the low price attracts people who would be better off seeking other options than a college degree to waste their time in college. Ironically, low tuition may help explain the low graduation rates that plague many of our public universities in North Carolina.
That conclusion should come as no surprise to regular readers.

But pinning all the responsibility for the abdication of the academic mission on legislators misleads.

In contrast, legislators are paying most of the academic piper’s wages, and they often have goals other than making university education the best it can be. For example, legislators like to support on-campus centers of research, advocacy, and business incubation, even K-12 education.

Thus we have scores of centers and institutes ranging in mission from the UNC Environmental Finance Center to the Western Carolina Public Policy Institute. They may have merit, but they are not focused on student education. To the extent that the taxpayers fund them (and that extent varies), college students are being shortchanged.

On one hand, the article might be referring to expense-preference behavior by university administrators, possibly abetted by legislators, possibly offered under the rubric of access-assessment-remediation-retention and other dubious practices.

On the other, universities do compete for faculty. A state university that doesn't offer its faculty the opportunity to compete with faculty in the highly-regarded privates for grants and journal space doesn't get as good a faculty. I'm not persuaded that all the big questions are answered, and a quality college education is simply the use of somebody else's canned curriculum in the Phoenix mode. It took research to get e.g. Marx and Freud and Keynes de-emphasized in the curriculum.

With excess demand for the so-called prestige degrees (again, keep scrolling), Ms Shaw might want to be careful about turning the North Carolina public universities into institutions not competitive in that market.

The argument generalizes to other states, in case the primitives of Illinois and Wisconsin are reading this.

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