Missing the Point of the Higher Education Problem

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The American Interest attempts to split the political difference in addressing why bureaucratic bloat and costs in higher education constitute a very difficult problem to address:

One reason this problem is hard to tackle is that the Left and Right disagree on the ultimate cause of the bloat. Many progressives see it as a product of the free market: If students and parents select colleges based on the quality of student spas and diversity centers and other amenities, then of course colleges will tailor their offerings to meet that demand. The real question is how to make access to college even more universal. Conservatives, meanwhile, are more likely to point to overweening government, including unnecessary regulations, which require more staff to implement, and to federal student loan programs, which pay the salaries of well-organized bureaucrats and end up funding superfluous services that colleges might otherwise forego.

To the extent that the post accurately characterizes two perspectives on the problem, both of them and the writer’s additional proposal (to expand the variety of institutions) miss the fundamental economic point.  If we let the actual price of college be correctly valued with respect to its benefits, then nobody would be willing to pay for a four-year spa or, for that matter, tolerate a budget-busting regulatory regime.

Allowing accurate pricing means reducing the broad-based subsidies (both direct and indirect, through subsidized loans) and thereby forcing colleges and universities to sell to people who can afford what’s on offer.  That certainly doesn’t preclude scholarships or even some sort of government assistance for specific people for specific reasons, but it does mean an end to this feel-good campaign slogan that nobody should miss out on college for financial reasons.

Financial reasons are for families to decide.  When families are deciding based on an artificially low price, of course they’ll opt for amenities and accept a lot of bureaucratic foolishness.



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