Who should pay for higher education?


Details might change, but the really big question in higher education funding is always the same: public funding versus private funding. I’m not breaking any new ground here and I’m certainly not advocating anything radical, but it’s on my mind today with “debt-free college” very much in the discussion on the first day of the Democratic National Convention. Every so often I like to refresh my memory on the fundamentals and reaffirm why, on balance, I favor the availability of ambitious, quality, zero-tuition higher education.

On one hand we have the private funding model. This means out-of-pocket expenses and borrowing to pay tuition. There might also be scholarships, grants, or cross-transfers according to ability to pay, but the underlying message is the same: the student being educated is the person who pays.

An argument in favor of the “student pays” model is that higher education is correlated with higher lifetime earnings, and so it is fair that the person who will see that benefit be the one to pay for it. An argument against the student pays model is that the value of higher education extends beyond what is monetized by the market.

On the other hand we have the public funding model. There are many ways to envision public funding, so I’ll think of it as there being at least some institutions of a high quality that have relatively permissive admissions standards but charge zero tuition. Of course, this is really not that far away from the model of large state schools in the United States. The underlying message here is that society pays for the student to be educated.

An argument in favor of the “society pays” model is that anyone who is willing and able to engage in higher education should be able to do so with as little personal financial burden as possible. An argument against is that the student enjoys great personal benefit that others must pay for.

Which is more fair? The crucial sticking point in the debate—I think it is fair to say the main argument against generous public funding—is inequality of opportunity. Since the population of people who go to college skews towards those with high incomes, the risk is that the society pays model is regressive, with tax receipts from those with low incomes being used to educate those who are already advantaged with higher incomes. This is particularly true since we have good evidence that differences in attainment between advantaged and disadvantaged children are baked in before kindergarten age.

I favor a “social contract” motivation for the society pays model, despite the real concern over lingering regressiveness. I think it is a Good Thing that a society with an abundance of wealth can promise higher education without financial burden to anyone: we promise that this path will be there for you if you walk down it.

Families and communities with chronically low income may be less equipped to weather the risks and short-term costs of sending a young person to college. The question is not a simple accounting of lifetime wealth and casually taking on debt. There are more pressing and material concerns. And so there is a chicken-and-egg aspect to the inequality of opportunity objection that can be addressed structurally in the social contract model: if you fund it, they will come. Aspiration and opportunity are not divisible, but intertwined. As long as we keep our eyes open to inequality of opportunity and fight against it, I think the value of the promise is valuable enough to reach for. Inequality of opportunity is not only an argument against public funding, but can also be an argument for it.

I realize that there are difficult questions of scale and scope in making this kind of promise in the social contract. What standard of achievement should be required for someone to qualify for further study at public expense? What programs of study should qualify to be publicly funded? Higher education becomes subject to the priorities and preferences of politicians. The question of what constitutes a “valuable” field of study is already hopelessly skewed in favor of what is presently most rewarded by high salaries; we do not need to go further down that road. (I swear, the next person who says STEM…)

And yet to me, these are secondary questions. I care about the answers, but I would not want to lose the war over these battles. I’m less concerned about how we answer these questions than about affirming in general that some version of the promise should be made.

They are, though, questions that I think can also be informed by our focus on equality of opportunity. Let’s pretend for a second we’ve somehow solved equality of opportunity for every factor from birth to adulthood (hurray! We did it guys!). Even then we’re not home free. We’re subject to a Rawlsian natural lottery argument, that the benefits flow to those who were lucky enough to hit the genetic jackpot. Public funding is once again regressive, not in income but in “inherent smarts”, if there is such a thing. Is this unfair? Your mileage may vary.

My preference, then, would be to be permissive about what we are going to count as “proper” higher education. Even better would be to include in the social contract other forms of education, training, or service for those who prefer not to go on to more classroom learning after school is over. This is all starting to sound pretty expensive, but it’s not something for nothing. It’s a public investment in both individuals and communities.

In sum, then, what? No new ideas here, and no new realities either. Higher education is a big tent that covers all manner of institutions, funding models, and ideas, but big public universities have long played an important role in the U.S. system. Nevertheless, the trends are not heartening. Perhaps the most prominent example is the University of California system, a remarkable success story that has felt the winds of change. From a 2011 L.A. Times report:

For the first time, the total amount that University of California students pay in tuition this year will surpass the funding the prestigious public university receives from the state. It is a historic shift for the UC system and part of a national trend that is changing the nature of public higher education.

Propelled by budget crises in California and elsewhere, the burden of paying for education at a public college or university, once heavily subsidized by taxpayers, is shifting to students and their families…

Some say the university must choose among facets of its long-standing public mission — to offer a widely accessible, moderately priced and high-quality education to California’s young people — as it supports itself increasingly through tuition, private fundraising and growing numbers of out-of-state students.

I don’t believe that the student pays model whose chief characteristic is personal debt is an innocuous replacement for public funding, simply shifting the burden of payment. The shift creates real barriers, both practical and psychological, that can dissuade young people from both the decision to go to college, and the belief that society has a path for them. I want to live in a society that stands by an ideal of quality higher education available to all people. Surely we can afford that.

3 thoughts on “Who should pay for higher education?

  1. Pingback: More on higher ed funding | Jim Campbell

  2. Lifetime education accounts? Do we have to handle the cost side if we are going to pay colleges? Or would public universities lose out to private universities who can gouge students? Why doesn’t Higher Education function like a normal market (Yale doesn’t see x1000 applications if Harvard raises tuition). What also of the larger problem of private debt as a drag on the economy? We might see the minimising or elimination of private debt for 22 year olds as a good way to bring demand back into the economy where it is needed. Steve Keen and others are pretty convincing on the lack of proper accounting of the role of private debt, as well as Godley’s sectoral balances model for how we need to conceive of how to start solving it…
    (Sorry that thoughts largely garbled…)


  3. Pingback: Thoughts on the NLRB grad student unionization ruling | Jim Campbell

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