Winter/Spring
2002
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Winter/Spring
2002
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By Richard Ekman 
An
age-old question of cost-benefit in public policy is to look at who pays
and who benefits. In higher education, the newspaper headline surely catches
our eye when it reads "Tuition at State University to Increase 20
Percent," and it takes closer reading to understand that the increase
is $600 on a base tuition of $3,000. After reading the article, we may
still not know whether to regard this increase as alarming or not. Surely,
we say, most people—even people of extremely limited financial means—can
afford $600. And if the full cost of a year of college is closer to $13,000,
isn’t a price of $3,000 or even $3,600 an extraordinary bargain?The response is often that in a democratic society, especially one that is knowledge-based, the state has an obligation to provide a college education for a large percentage of its citizens. Over the past 30 years in the United States, that percentage has increased from 50 percent of high school graduates who attend college to today’s almost 70 percent. Some believe that the goal ought to be 100 percent and, to that end, argue that it is the responsibility of the state to eliminate all barriers to access, including financial barriers. If $600 is regarded as burdensome, the state should eliminate the burden. How much of the cost of college is it reasonable to expect students or their families to bear? How much should be covered by the state through tax revenues that all citizens of the state bear, whether or not they attend college? These questions are answered differently in each of the 50 states for their state universities, and they are answered differently by every college and university, public or private, as it crafts the details of a financial aid package for each student. One student believes that a degree from College X is going to be so valuable throughout his or her life that it is worth going into debt up to a level of $6,000 by graduation, while another student believes that a degree from College Y is worth incurring $60,000 of debt. Michael McPherson of Macalester College tells us that lifetime earnings of those with a college degree are approximately twice the lifetime earnings of those who do not attend college. Most Americans are willing to pay taxes to support services of government that would be difficult to provide without central coordination and where a clear public good is being served—for example, defense, highways, education of children, and care of the elderly and the poor. Higher education serves both private benefit, such as increased earning capacity, and public purposes, such as heightened civic participation. Most also believe that government has a role in ensuring access to higher education for qualified students who lack adequate financial resources. But how is "qualified" defined? And what about "adequate?" Here, too, each state has its own approach to support for its state universities, and each college has its own approach in the distribution of financial aid, but the connections are rarely explicit between the details of the formulas for public funding and the twin goals of serving the public good and enhancing opportunities for private benefit. We would all learn something from a fresh airing of the arguments over the public good that is intended to be served by higher education, and especially on such questions as who pays and who benefits. A recent study by a national foundation noted that average debt for American college graduates is about $5,000 per year, or $20,000 by graduation, and expressed the view that this level is unacceptably high. It is difficult to put this sum into perspective. I am inclined to believe that investment in a college education is a very sound long-term proposition and, at $20,000, a better debt to shoulder than financing, say, a similarly priced automobile. Pat Callan has recently reminded us that there is no public policy question on which expert opinion differs so much from general public opinion as the question of the worthiness of paying a substantial amount—relative to one’s perceived ability to pay—for college. We need to encourage the public to understand both the economics and the social values on which these comparisons are based. We also need to examine the ways in which remarkably generous state governments use tax dollars to support higher education. If our goal is—to follow the precepts of Thomas Jefferson—a citizenry that is well enough educated to use the fragile institutions of democracy and civic participation wisely, are we succeeding in the present system? In particular, should independent colleges and universities be assisted by state governments to a much greater extent than is the case now? There is some evidence that the graduates of independent colleges exhibit greater civic involvement, vote more often, and donate more to charity than public university graduates; does this entitle private colleges to claim that they are serving the public good more effectively than other institutions and therefore deserve greater public financial support? Such questions of public policy are broad, while their more concrete derivatives—such as the appropriateness of a $600 tuition increase—confront us every day. Independent |
