I was in a setting recently when a speaker asked the assembled crowd: “Who here thinks that tuition isn’t already too high?” The assumption was that everyone would agree that tuition was over priced. I was the exception.
First, it’s important for me to say that I believe in universal access to higher education. Your ability to pay should not be a barrier to a university degree or college diploma. However, I do think it is a good means by which to set tuition rates. More on that later.
What is tuition? Generally, the number is based on the following arithmetic:
Actual cost of the education + Opportunity Premium – Value to Society = Tuition Fee
What does that mean? Let me attempt to break it down:
Actual Cost – this is the sum of expenses a university incurs to educate students divided on a per capita basis. This might sound like a simple number to arrive at, but it is incredibly challenging to know with certainty. Among the difficulties: Is a professor’s salary 100% dedicated to the education of students? If one agrees with the unity of teaching and research, than all research conducted by faculty contributes to student learning. However, this is not always the case. Also, how do you calculate classroom spaces? Not all spaces are created equally. Some take more time to clean? Some have extensive technology; some not.
Opportunity Premium – students who successfully complete higher education are afforded higher salaries. Consistently, university and college graduates earn significantly more than high school graduates. This is a benefit afforded to the individual. Therefore, there is a general understanding that the individual should financially contribute to their education as they are the primary beneficiaries.
Value to Society – in the knowledge economy, a well-educated society helps to ensure the economic success of the state. A well-trained workforce will attract well-paying jobs (that begets higher tax rates, etc.). Therefore the state has an interest in ensuring the education of their citizens. Therefore, as encouragement (or rather, an investment in future returns), the state will discount the cost of higher education.
The debate is not about this arithmetic, but the weight afforded to the different variables. Some argue that the Opportunity Premium should be weighted higher than the Value to Society. Some argue the opposite.
I believe that tuition should be set to the absolute value of the actual costs. It should then be discounted based on one’s ability to pay. This is where society finds its greatest value – creating opportunities for those least able to create them by themselves. To those who find that the cost is too high, I ask them to count that against their opportunity cost; is the added income earned as a result of higher education equal to (or less than) the cost of tuition? When the answer is no, tuition must be lowered. But as the answer is yes in every context, tuition has room to rise.
Part of the solution is education. Those who need support must also know that debt is an acceptable investment. The money that can be earned with a degree is worth far more than the cost of the degree. It must also be based on a real calculation of the ability to pay. Too much emphasis is placed on parental savings, which may not exist. If tuition should be based upon individual merit, than we can’t assume massive savings account accumulated by parents. Greater nuance in financial aid is necessary.
However, tuition freezes or tuition reductions amount to nothing more than disproportionate discounts for the upper and upper-middle classes. It does little to support lower income brackets who already find tuition too high. For those who can afford more, tuition freezes or reductions spare them the full cost of their education.
There is a crass saying: Shoot them all, and let god sort them out. When it comes to tuition, I think we should charge them all what it costs and let financial aid sort them out.
