Going Broke by Degree
Mises Institute adjunct scholar Richard Vedder was interviewed this morning on NPR's Morning Edition about his new book, Going Broke by Degree: Why College Costs Too Much. Listen here.
Sounds like a great book. From the interview:
[College costs increase] because growing government financial aid, especially student loans, has made students relatively insensitive to the price of college. The universities can raise their tuitions a lot because the kids can get the money to pay for charges. [Also] universities have relatively few incentives to cut costs, but actually have quite a few incentives to increase spending and costs compared with what, say, the case would be in the private sector....The U.S. News and World report rankings of universities tend to give emphasis to what universities spend rather than to what universities turn out in terms of the output of the students and what they're learning, so there are ... growing tendencies for universities to try to have ever more luxurious facilities to attract students. It is an attraction and students obviously want to go to school in style, but one might ask, from a public policy point of view, whether the government ought to be assisting in paying for these things.
Comments (3)
Speaking of college tuition, be sure to look over the report published by the Report of the National Commission on the Cost of Higher Education: Straight Talk About College Costs and Prices
In particular, look at Table 1: as of Fall 2004, enrollment in a State-funded four-year college included over 5.8 million students as compared to their private counterparts at 2.8 mil. Not that all of the 5.8 million would not be attending a university if it was entirely privatized, but the subsidized nature of the enterprise inflates the market with what can arguably be considered sub-standard graduates.
Not that I can talk from a higher ground...
Published: February 15, 2005 5:24 PM
While we are on the subject, the US is not the only country suffering from an oversupply of college graduates. In Mexico, state college education can be obtained for free - yes, that is right, for free. The main university in Mexico City costs the average student pennies a day while a middle-of-the-road private intitution can go as high as 3000 dls per year, and a high-en university can charge you as much as Harvard or MIT. Of course, the quality of graduates from these state universities is so low, the market value for them is almost the same as that of a technician with 2 years of technical school. Some companies will not even hire any graduates from these state universities, pushing the market value even lower, creating a whole class of underpaid professionals doing measly tasks.
Not even a Master's degree will give you now much leverage, since these same state universities are ofering low cost (albeit NOT free) master courses. I think I will have to get myself a PhD just to be able to get a decent management position :p
Unintended consecuences, indeed!
Published: February 15, 2005 6:05 PM
A Mises Institute scholar advocating government education grants in the form of vouchers? What's next? Instead of direct subsidies to farmers, will the Mises Institute be advocating food stamps for everyone?
Published: February 16, 2005 2:25 PM