Who should pay for whose college, and how?

Years and years ago, David Mundel used to provoke my interest in public policy as an object of analysis (rather than an occasion to opine) by suggesting out-of-the-box things like: the way to deal with affirmative action and discrimination in college admissions is to require colleges to admit by lottery and have done with it.  This appears flatly nuts until you realize that under such a scheme, applicants would have a strong interest in choosing schools whose academic demands matched their abilities, because there’s no point in getting into a place you will just flunk out of as a freshman, and colleges would have an interest in providing the information with which applicants could choose intelligently, because there’s no point in admitting someone who can’t cut it. I’m still not ready to completely sign on to this idea, but it has a lot going for it. It certainly beats the uninformed grasping for prestige that college application season has turned into.

David, IIRC, also favored charging full costs in tuition with an extensive loan program, because all college students are pretty rich on a lifetime income basis no matter what income their families have, and not being able to afford college is simply a capital market failure that should be fixed directly. Tuition subsidy at the University of California, on this model, is a Hood Robin transfer from everyone to the upper third of the income distribution.

This question is not just dinner-table conversation stuff: a lot of my students and colleagues are off to Sacramento Monday to demand that the state fund education, including higher education, sufficiently not only to put an end to the petty and wasteful “economies” we are being subjected to but to reverse the hockey-stick increase in tuition at public colleges and universities.  That California is abusing its young people by trashing their educations in K-12 and underproviding it at the college level is my view in spades; I’m torn between rage and despair.  This spring I clicker-polled my class and found that the parents of 17% of them had no degrees above high school, and my heart leapt; these are the students I especially get up in the morning and go to work for.

The amount of debt they graduate with, though, even with our current program of no undergraduate tuition for family incomes below $80,000, is really sobering, especially for those who want to go to graduate school.  The number of hours a week they work instead of studying is a terrible waste, and so are the extra years many take to graduate.  Maybe that’s their own fault for making bad choices and not understanding what a good investment those loans are just from a business perspective, but if they’re not getting everything they should out of the unique college opportunity, it’s little comfort to prove it’s their fault. In any case, it seems pretty lame to operate a system for our best and brightest high school grads that they can’t manage properly.

The larger problem with the  “investment in future earnings” model of college costs is its pressure to displace the liberal education version of college with careerism and employability.  I think the American idea of liberal education with distribution requirements, a major, opportunities to explore, and the chance to take some risks, not to mention playing a musical instrument or painting or playing a sport, is one of the glories of civilization, and its benefits do not all, maybe even not mostly, accrue to the student. I believe there are big external economies rippling out from everyone who gets a good college education.  And not all graduates should go into work that pays the most money.  Saddling graduates with a small-mortgage-sized debt has all the wrong incentives.

The diffuse social benefits of an educated (not just job-trained) population convince me that tuition should be heavily subsidized for everyone.  As to the rest, that may or may not pay off depending on whether alums follow only market signals of value measured in money pay.   I think the Brits have the right idea: tuition should be very low, even for rich kids (and let’s use the income tax to do whatever redistribution is appropriate for their families), but it should entail an extra income tax for three decades after graduation, so the LA plastic surgeons will give back a lot and the community organizers and homeless shelter managers will give back less.   I know, this probably can’t work at the state level through an income tax, and there will be leakage even from a national plan when the commodity trader goes off to do his stuff in London. But it’s the best I can come up with.  Until we get there, my conscience is OK lobbying for education funding that doesn’t make me ashamed of my fellow-citizens.

Author: Michael O'Hare

Professor of Public Policy at the Goldman School of Public Policy, University of California, Berkeley, Michael O'Hare was raised in New York City and trained at Harvard as an architect and structural engineer. Diverted from an honest career designing buildings by the offer of a job in which he could think about anything he wanted to and spend his time with very smart and curious young people, he fell among economists and such like, and continues to benefit from their generosity with on-the-job social science training. He has followed the process and principles of design into "nonphysical environments" such as production processes in organizations, regulation, and information management and published a variety of research in environmental policy, government policy towards the arts, and management, with special interests in energy, facility siting, information and perceptions in public choice and work environments, and policy design. His current research is focused on transportation biofuels and their effects on global land use, food security, and international trade; regulatory policy in the face of scientific uncertainty; and, after a three-decade hiatus, on NIMBY conflicts afflicting high speed rail right-of-way and nuclear waste disposal sites. He is also a regular writer on pedagogy, especially teaching in professional education, and co-edited the "Curriculum and Case Notes" section of the Journal of Policy Analysis and Management. Between faculty appointments at the MIT Department of Urban Studies and Planning and the John F. Kennedy School of Government at Harvard, he was director of policy analysis at the Massachusetts Executive Office of Environmental Affairs. He has had visiting appointments at Università Bocconi in Milan and the National University of Singapore and teaches regularly in the Goldman School's executive (mid-career) programs. At GSPP, O'Hare has taught a studio course in Program and Policy Design, Arts and Cultural Policy, Public Management, the pedagogy course for graduate student instructors, Quantitative Methods, Environmental Policy, and the introduction to public policy for its undergraduate minor, which he supervises. Generally, he considers himself the school's resident expert in any subject in which there is no such thing as real expertise (a recent project concerned the governance and design of California county fairs), but is secure in the distinction of being the only faculty member with a metal lathe in his basement and a 4×5 Ebony view camera. At the moment, he would rather be making something with his hands than writing this blurb.

30 thoughts on “Who should pay for whose college, and how?”

  1. I came to the same conclusion after seeing how law schools and medical schools contort themselves wildly to maintain affirmative action for the least qualified (children and grandchildren of alums, who were admitted in eras of outright racist segregation, etc.) by fabricating nonsense about the “need” to allow admissions officers to “sculpt” the classes to ensure well-rounded ness, which, remarkably enough, always translates to lots of kids from the best zip codes.

    The purpose of affirmative action is to allow the massive system of wealth privilege to continue with a few tiny offerings to guilt by allowing kids who, except for great tans, look and act exactly like the white kids, into the schools.

  2. “David, IIRC, also favored charging full costs in tuition with an extensive loan program, because all college students are pretty rich on a lifetime income basis no matter what income their families have, and not being able to afford college is simply a capital market failure that should be fixed directly. Tuition subsidy at the University of California, on this model, is a Hood Robin transfer from everyone to the upper third of the income distribution.”

    We have something sorta (very sorta) like that. What we see is skyrocketing tuition, with students locked into severe debt. The universities/colleges/Kaplan swine have no concern about the students’ ability to pay the debt, once the tuition loan checks have cashed. And the students find that their lives are controlled and restricted by this debt.

  3. I think we can summarize Michael’s column in the following manner: Raise taxes on rich people and businesses, and offer low college or university tuition to increase economic opportunity.

    The older I get, the more I understand what the sociologist Christopher Jencks was saying 40 years ago, that the older he got, the more he realized the re-distribution of wealth is the key issue in our society.

    One thing I will say to Michael’s friend is that loans are chains. I see lawyers in their mid-30s who are still trying to pay off loans that still exceed $100,000. Yet, they are earning around $100,000 a year, and therefore find themselves with the near equivalent of a house payment every month. I have convinced my son, who is a high school senior awaiting decisions from colleges, that we must look carefully at the aid packages from the private schools and compare them to the UCs. I love the UCs ever so much. But with 20% increases coming in my son’s very first and upcoming year, and more increases to follow, the more concern that our family income will be completely unable to help him, and he will be forced to fasten loan chains to himself. And I have been amazed at the outstanding academic offerings of the private liberal arts colleges to which he has applied…

    As was said before, increase taxes on the rich, offer low tuition to increase opportunity. It seemed to work in the 1960s and 1970s, and there is no reason other than political will why it should not work again. But political will is the key procedural issue, and that will continue to be lacking, particularly when this current president of ours is simply telling the UC to tighten its belt, as if the UC is not already the most efficient human organization in our fair State already. Obama and Duncan continue to listen more to bankers than anyone else.

  4. We’re seeing with post-secondary education a middle-or-a little-better-class version of an old policy bind.

    If you craft a social provision so that it becomes a program just for poor people, or means-test an existing universal one hard enough, it’s reduced to ‘welfare’ and bang goes its political constituency.

    There’s no necessary reason why if you craft a social provision so that it becomes a program just for middle-or-a-little-better-class people, it won’t suffer the same fate.

    Especially if those folks who see themselves as paying for it, can persuade those who aren’t participating it to use their votes to stop the state from funding it.

    This is what an intelligent version of Santorum (as opposed to the actually-existing one) would be groping towards with attacks on college for all — a coalition composed of those who can afford to pay retail for it, and those who can’t even get in the store. Neither group has a reason to subsidize the purchase.

  5. The deterioration of the state funding situation at the UCs is a tragedy. I am in the midst of making a graduate school decision, and as much as I’d love five years out there in what is unarguably a great program, I sometimes find myself wondering if my funding guarantee is worth the paper it is printed on.

  6. The thing is, those loans are not a good investment from a business perspective, for the individual. The investment is a good social policy, because it has good returns to the society as a whole. But, the ability of the individual to capture the returns is dubious, at best, and the struggle to escape the debt peonage that results will hobble the performance of the economy, as well cause considerable suffering.

    In a competitive market economy, the benefits of general education diffuse out, away from the student. And, the benefits would be diminished, if they did not diffuse; . . . just as intellectual property restrictions tend to inhibit the diffusion of innovation. Various kinds of licensing and status credentials (going to a “good” school, so that you can be recruited into the corporate “fast” track, for example) only limit that competitive tendency in exceptional cases. (Landlords in urban areas end up with a large part of the incremental productivity; that’s why property taxes were thought a sensible way to finance public education, by people informed by Henry George and the Classical economists.)

    I think one could argue, also, that the privatization of education, which loan finance encourages, is also not a good way to organize the “supply side”. The history of for-profit education is a history of corruption and scandal, for good reason.

    1. I very much agree that it is the society that benefits most from the provision of education, higher and otherwise, and that individuals should not be on the hook for huge loan repayments. Loans can be a good investment, but it is very much a “luck of the draw” kind of thing, and we presently put all the burden on the students to forecast what kind of education will stand them in good stead in an economy 4 to 10 years out-a HUGE risk borne by the individual’s entire economic future.

      Even worse though, is how much the known burden of loan repayments perverts a student’s choice of study field: someone with a gift for K-12 teaching is likely to choose a more remunerative major, given the financial realities they face and the impossibility of receiving an adequate return on investment to repay large loans before they reach retirement age. When everyone’s choices are entirely driven by such financial realities, fewer can afford to apply their efforts in the direction of their talents.

      In my own life as a high-performing “returning” student (in my mid-30s), I looked at the financial realities and chose to abandon pursuit of a graduate degree in biology, because I understood all too well that loan repayments would turn me into a serf-for-life (even with the fellowship I won), and that I would probably never be able to retire. I love the field of biology, but not enough to make that kind of sacrifice.

      The choice I made had a real cost, that was borne more by society than by me (although I do recognize its cost to me too). I could have finished my degree and become a teacher or professor or biomedical researcher, but that would have earned me far less than what I ended up earning with just the bachelor’s, while being on the hook for even more loans. Forcing people to gamble with their own futures in this manner-shouldering all the risk-inevitably means the loss of talented people who could have used their talents for society’s benefit.

  7. There must be some formula that gets it right in balancing the correct proportions of government support, student skin in the game, and cost control in higher education. And all are certainly necessary in a system that is virtually open to all, at one level or another. The European systems that used to be entirely government supported were also highly selective and served a much smaller proportion of their youth than ours does; I don’t think we want to emulate that, but I also don’t see US taxpayers being happy to pay for the somewhat aimless stabs at college attendance that characterizes a fair proportion of our current student body.

    1. I don’t think there has to be such a “formula”, a clearly “optimal” solution “balancing” this against that.

      It’s a dynamic problem, and a very complex one, embedded in the way the whole society is organized.

      I think the finance problem may be masking a general need to completely re-organize education, in response to advancing communications and computing technologies, globalization, etc. The rising administrative costs in higher education have been a persistent signal that something has been going wrong, for some time. But, whether debt peonage is a sensible way to organize a society goes way beyond how to organize administer a college or high school, and has more to do with the relation of the very rich to everyone else, more than it does abstract ideas about generational transfer.

      That said, it might be useful, in thinking about education finance, to imaginatively construct an ideal consumer, whose demands might shape the efforts of supply-side educational entrepreneurs, optimally. If the student, in her private and individual capacity, is neither the sole owner/possessor of her educational capital nor an ideal judge of its quality, who is buying education and for what purpose? What is this educated person, or educated society, we are buying? Why is it desirable, and desired? Then, we might think about quality control.

  8. “The diffuse social benefits of an educated (not just job-trained) population convince me that tuition should be heavily subsidized for everyone” - The other part of providing that benefit is the number of people that can experience it. We’ve been maneuvered into a situation where we talk about how much education costs for a fixed number of people, and we’ve lost any vestige of discussion of how to increase the number of people who receive it. UC (and I think) CSU is falling behind on the fraction of the college-age population who can get that education not just because of tuition and aid, but more directly in terms of seats: We’re turning people away. In my mind, that’s a bigger long term problem. Despite all the problems with costs, loans, bad conditions, etc, there are still more people who want to get a UC education than we can accommodate. How to fix that?

    1. Um, Bob, when I come upon something that’s a really good deal compared to how I’m spending my money at the moment, my instinct is to buy a lot of it and less of something else! Leaving the particular constraints on the California public sector aside, I think your point is that California as a whole should be buying more of what we (UC profs) sell for more of our young people, and less of, say, highways, or incarceration of non-violent offenders, or housing, or miles driven in big cars alone. I agree (recognizing that everyone should be careful that we aren’t biased or just self-serving). Unfortunately, we have tied ourselves in a Gordian knot of term limits, mendacious political discourse, tax limitations, budgeting by initiative and fear that we may not be able to free ourselves from.
      Bummer.

  9. There are times when the holistic, lifelong learning, approach isn’t just the idealistic but the politically sensible one. The great strength of the old Californian HE system was that is was a fine attempt at universality: from community colleges to the UC research campuses. These was something in if for most peoples’ children.

    The idea that people should get as much education as they want is still sound. What happened to it? Partly for sure the artificial competition for “good” credentials, a market failure if ever there was one, since their market value is in good part the payoff from preselection and labelling, another part the payoff from enabled networking, and only in small part the effect of the different teaching: hence the corrosive part-truth of Hood Robin (or should it not be the Sheriff of Nottingham?)

    Blogs like this one are perhaps harbingers of the utopian free college of the future.

    1. LOL, talk about self aggrandizing. This is hardly free college. If you really want free college get a library card and iTunes U. To quote Thoreau:

      My residence was more favorable, not only to thought, but to serious reading, than a university; and though I was beyond the range of the ordinary circulating library, I had more than ever come within the influence of those books which circulate round the world, whose sentences were first written on bark, and are now merely copied from time to time on to linen paper.

  10. I think the debt-financing model of higher education, even if it were a good idea *on average* is a terrible model in a world of variable outcomes and uncertainty. So my preferred approach has always been reasonably low tuition at least in government-supported institutions, considerable financial aid in private institutions, and a progressive (and comperhensive) income tax. The progressive income tax could be confined to the federal income tax easily enough simply by increasing federal government support for higher education…an idea that is certain to play well with certain components of the body politic…

  11. Dear EB:

    “The European systems that used to be entirely government supported were also highly selective ..”

    Nope. With the exception of the English system (an excellent protector of class privilege and leaving aside the question of whether the Brits are European) the European systems I am familiar with were pretty much open admission-including the Sorbonne where I studied for a bit. They had and have their problems but highly selective they were and are, not. They are, however, dirt cheap.

    As for claims that students must have “skin in the game.” First, kinda odd to use a gambling (or, perhaps, per Safire, a prostitution term, http://www.nytimes.com/2006/09/17/opinion/17iht-edsafire.2839605.html) when talking about education.

    Second, but more importantly, students have a vast investment in their higher education through putting-in time, foregone income, living costs. IMHO, students at Cal or UCLA work just as hard or harder than those at much higher priced schools and obtain the same or better results.

    I note that when I went to Cal many years ago it was effectively free. I don’t recall thinking that I would study harder if I were paying a whole lot more. Indeed, I probably would have had to drop out for financial reasons.

    1. The European systems may have been open admission for students who had tested into an academic-track secondary school. They certainly were not open admission for all kids who had finished secondary school, and as you know in Europe many kids (often well over half) were finished at age 15 or 16.

      1. That is true. However, consider that attending university means something entirely different in most continental European countries.

        Until the Bologna Process, these countries generally did not have something that was the equivalent of a Bachelor’s degree. If you went to college, then you essentially aimed for the equivalent of a Master’s degree. For vocational training, they had (and have) vocational schools. Some countries also have intermediate options. That reduces the need to attend college.

        The secondary school situation is an entirely different problem. Consider Germany, which probably has the worst implementation of it. There are three tiers for secondary schools [1], and students are assigned to one after fourth grade [2] (and can keep changing to an extent until after sixth grade). I’m not exaggerating when I’m saying that it is roughly class-based, sorting kids into future blue-collar workers, white-collar workers, and academics. They’re currently trying to reform this; I have no idea where it will take them. I’ve always found the system to be pretty awful (even though I benefited from it during the five years my family lived in Germany), so just about anything should be an improvement.

        That said, qualifying for a university is a pretty open process other than the early selection. If you’ve completed your Abitur, then, congratulations, you can attend college [3]. And given that what you’re learning for the Abitur during grade 12/13 is very similar to what you’re learning during your first year at an American university, if you can’t manage that, you’d wash out in America, too.

        [1] There are also integrated schools that combine all tiers and let you graduate after 9, 10, or 12-13 years depending on what you can handle. But they’re still a minority, as far as I know.
        [2] “Assigned to” still leaves the choice of type of school to the parents; teachers can make recommendations, but it’s the parents’ decision in the end, and that can cause a child a lot of pain if they end up in a type of school that’s too hard or too easy for them.
        [3] Medicine and related subjects are generally the only ones with any real restrictions on admissions.

  12. I think that I think that you are right that “the American idea of liberal education with distribution requirements, a major, opportunities to explore, and the chance to take some risks, not to mention playing a musical instrument or painting or playing a sport, is one of the glories of civilization, and its benefits do not all, maybe even not mostly, accrue to the student. I believe there are big external economies rippling out from everyone who gets a good college education.” However, I have a bad spirit inside me that says all that stuff does is to spend other people’s money on directing the anxious conformism of 90% of 18-22 year olds into an unstable globalized consumerism, robbing America of being a really cool place with organic diversity and lots of black-velvet portraits (even in that bad mood, I still think k-12 education and then technical education at a higher level are valuable). In the bad mood, the answer to affordability is to give lenders a claim against the university when a student defaults on her or his loans. That could encourage the universities to cut down on their costs and to cut down on liberal education in general. If I am in a good mood about liberal education, then I would favor tuition that is heavily subsidized for all students.

    I would put some limits on the idea of admission by lottery, just in case there are actual benefits to a concentration of the more focused students together other than “grasping for prestige.” Maybe there could be a few tiers, no more than four, that would have their own minimum standards for admission and then a lottery within those tiers.

  13. Some reasons for the high cost of tuition at UC campuses:

    […]
    Not only have diversity sinecures been protected from budget cuts, their numbers are actually growing. The University of California at San Diego, for example, is creating a new full-time “vice chancellor for equity, diversity, and inclusion.” This position would augment UC San Diego’s already massive diversity apparatus, which includes the Chancellor’s Diversity Office, the associate vice chancellor for faculty equity, the assistant vice chancellor for diversity, the faculty equity advisors, the graduate diversity coordinators, the staff diversity liaison, the undergraduate student diversity liaison, the graduate student diversity liaison, the chief diversity officer, the director of development for diversity initiatives, the Office of Academic Diversity and Equal Opportunity, the Committee on Gender Identity and Sexual Orientation Issues, the Committee on the Status of Women, the Campus Council on Climate, Culture and Inclusion, the Diversity Council, and the directors of the Cross-Cultural Center, the Lesbian Gay Bisexual Transgender Resource Center, and the Women’s Center.
    […]

    Less Academics, More Narcissism: The University of California is cutting back on many things, but not useless diversity programs.

  14. Lottery admission is an interesting idea - couple things to think about. One is the extraction aspect of current admissions: alumni parents in particular throw a lot of money to the school in the run-up to little Roscoe’s campaign for admission. If a lottery, parents don’t think they can buy their way in, so they will give less. Bad for the treasury.
    Another is bragging rights: if you assume that the kid who gets into UCLA actually outcompeted the kid who went to Riverside at admission time, you have some reason to hire him. If you think it was luck of the draw, not so much.

    I certainly buy the idea that there are benefits to society as a whole from broadly educated individuals.

  15. The problem is, universities are not interchangeable. A university’s reputation is what brings it the most promising students, whose after-college success adds to their reputation, and what allows it to attract the best professors, who can also add to their reputation. If all entry is by lottery, students may well shoot for schools which are too hard for them, hoping that luck and hard work (or gut courses) would allow them to graduate and reap the benefits of their alma mater’s prestige.

    You could modify the lottery by limiting it to students with certain qualifications, such as minimum SAT / ACT scores. Colleges would have an incentive to set their cutoffs to the appropriate level. Too low, and they could well get a lot of students trying to get in because of the reputation, but who are likely to perform poorly. Too high, and they would lose to schools with better reputations.

    A friend of mine from the Netherlands told me once that they use something like this - students take a test which places them in a certain ranking, and any school whose ranking matches must accept them (presumably with a lottery if they oversubscribed). It would certainly simplify the application process - no need to write essays for 10 different schools.

  16. “One thing I will say to Michael’s friend is that loans are chains. I see lawyers in their mid-30s who are still trying to pay off loans that still exceed $100,000. Yet, they are earning around $100,000 a year, and therefore find themselves with the near equivalent of a house payment every month.”

    This isn’t really a fair appraisal of the problem. A vast majority of similarly placed (in terms of debt) graduates ARE NOT making in excess of $100,000 per year. The mode of lawyers makes around 60 something a year. That means that 50% of graduates earns that amount OR LESS. The loans are worse than chains for such people, they are more like a noose.

    1. I don’t know about law school loans, but $100k loans aren’t a relevant case for UC.

      The most recent data is here: http://www.ucop.edu/sas/sfs/docs/regents_0910.pdf particularly pages 16, 23, 36 and 37 for undergrads. Average UC undergrad loans at graduation are less than $20k, not $100k. Page 37 shows that only a small fraction, less than 3%, of UC graduates find themselves with even a half of “the near equivalent of a house payment every month.”

      1. It’s very hard to live in Berkeley, even with roommates, on $25K per year, and as unemployment is high in CA, especially for people without college degrees, summer jobs are hard to find. So even with no tuition or fees, it takes $100K just to live through four years of college here, more when students can’t get into the courses they need and take longer to graduate, and those whose families can’t provide any meaningful help have to find it somewhere. The regents’ report shows average debt of $32K at graduation (4 yrs x 8K) for the lowest family income group; the rest is being taken out of their education by working instead of studying (there are only 16 waking hrs in a day, and I want my students using them for learning, not waiting on tables), and by living in degrading and pointless penury.

        1. “It’s very hard to live in Berkeley, even with roommates, on $25K per year” - as a post-school adult, perhaps. But that’s not what students report as their own experience. Every other year, the financial aid office does a survey of students, with response rates typically over 50%. (The UCUES survey also asks about cost of living and gets consistent results, though only of seniors) The results go into the “typical students budget” that’s used for the financial aid calculation. See e.g.

          http://students.berkeley.edu/finaid/home/cost.htm

          They find that off-campus average total cost of living is around $16K, not $25K and over. That’s full cost, with books, health insurance, trips home, etc. Even living in dorms (which gives a well defined cost, though it costs more than than it should, perhaps a conversation for a different day) is $20K per year,and that’s definitely not a “hard to live” situation.

          In the report I linked earlier, figure 1-27 on page 36 shows cumulative debt at graduation for those with loans. For the lowest income bucket, it’s around $17K, not $32K, and it’s been stable for years. The fraction of students with loans is clearly trending down.

          Page 30 starts the discussion about working hours per week. See in particular figure 1-23 on page 32 which shows the fraction of students not working has risen, not fallen; and that the number of students working the larger number of hours decreased over the last interval covered. Figure 1-22 covers more recent data, but uses multiple measures; it seems to show the same trend, though it’s always questionable to compare multiple sources of data like this.

          I agree that students should spend time as students instead of working. My point is that to argue doom & disaster for current student finances is to mislead ourselves about where the real problem lies. A focus on “the students who are here now cannot afford it” distracts from other questions like “Are we educating enough students?”, “Can we educate more students?” and the hardest one “What’s the right balance of cost and quantity for UC education?” (I think that’s what your earlier point about “when I come upon something that’s a really good deal compared to how I’m spending my money at the moment, my instinct is to buy a lot of it”, but I’m not really sure)

          1. This too complicated, and too interesting with Bob’s injection of data, for a comment thread. I’ll try to have a post up this week to continue.

  17. Michael: I think the Brits have the right idea: tuition should be very low, even for rich kids (and let’s use the income tax to do whatever redistribution is appropriate for their families), but it should entail an extra income tax for three decades after graduation, so the LA plastic surgeons will give back a lot and the community organizers and homeless shelter managers will give back less.

    Careful. England is not Great Britain. 🙂 In Scotland, education is a devolved power, and the Scottish parliament decided a few years ago to make university education entirely free when it passed the Graduate Endowment Abolition (Scotland) Act 2008. It most likely will remain free for the foreseeable future, too, given that the two major parties in the Scottish Parliament (Labour and the SNP) have made it pretty clear where they stand. Alex Salmond, in particular, said last year: “The rocks will melt with the sun before I allow tuition fees to be imposed on Scottish students — upfront or backdoor.”

    Interestingly enough, Scottish universities do “import” quite a few American students these days. While tuition fees for non-EU foreigners can be pretty steep (by European standards), it’s often still less expensive than at a comparable American university, and the admission process is much more straightforward and predictable.

  18. If you are really serious about this issue and not simply looking to wring your bread from the sweat of other men’s faces, I suggest you start with the always prescient Noah Smith at Modeled Behavior: http://modeledbehavior.com/2012/03/05/noah-smith-on-the-great-stagnation/

    Money quote: “I will note that if you tax the wealthy to pay for the skill accumulation of the masses then this will look like you earn a good living by going to college and studying hard but underneath it all its just an income transfer. You only earn a good living because taxes on the rich are making college cheaper than it would otherwise be.”

    Do read the whole thing before making any assumptions about Noah’s political ideology from that quote, by the way.

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