Monday, October 11, 2004

EDUCATION COSTS SPIRAL BECAUSE THEY ARE SUBSIDIZED

Excerpts:

It's an annual ritual. With a sense of dread tinged with resignation, college students, or their parents, wait to discover how much this year's tuition will rise. Unlike their experience with new computers, they entertain no expectation that rates for their education will decrease. The upward spiral in prices appears inexorable. Yet is that the way it must be?

For a student in college between 1997 and 2001, average total costs will be nearly $46,000 at government institutions, reports Investor's Business Daily (December 8, 1998). For those in private schools, the news is even bleaker. Students face expenses approaching $97,000. Twenty years from now, graduates may well be staggered by costs of $157,000 and $327,000, respectively.

In the past four decades, the total yearly spending on higher education increased from $7 billion to $170 billion a year. Financial aid at both the state and federal levels reached $60 billion in 1998, with guaranteed student loans comprising nearly 60 percent of that aid, a six percent increase from 1997. Many people would contend that such a bump in financial aid is justified given the price hikes in tuition and other costs. Not only would they adamantly resist any attempt to lower that aid, they actively lobby for more.

Unfortunately, the first or most obvious answer to a problem is not necessarily the correct one. The reality is that government subsidies not only lead to ever greater educational costs, but also threaten the very existence of private institutions of higher learning....

State and federal grants, guaranteed student loans, and direct subsidies to public colleges and universities lower the apparent price of obtaining a college education. This leads to a higher demand. College administrators then feel justified in increasing tuition and fees, realizing that many if not most students are subsidized in one form or another. The cycle is born: raise tuition; give out more aid; raise tuition again.

A side effect of this policy is that it attracts more poorly qualified and less motivated students who value higher education less than others who are willing to pay the full price. Colleges have to devote more resources to remedial programs, and students in these programs have a greater dropout rate.

Another problem is that since public administrators do not have to show a profit to stay in business, they are less concerned with the satisfaction of their customers. (Remember the last time you had to wait in an interminable line at the post office or department of motor vehicles?) Administrators also have incentives to increase their budgets needlessly. After all, increased "costs" translate (through a kind of self-fulfilling prophecy) into increased subsidies.

According to the Heritage Foundation, in the 30 years since its inception in 1965, the federally guaranteed student loan program subsidized 74 million students to the tune of $180 billion. By artificially lowering interest rates and insuring banks against defaults, this program has actually raised the total cost of a college education in the long term for all students-whether they receive guaranteed loans or not.

While the short-term direct costs of subsidized loans are less than for loans obtained in a free market, the long-term result is to reinforce a cost spiral that outpaces the general price rise (as outlined above). With less attention paid to restraining spending-by administrators and students-waste and unnecessary expenses tend to increase more than they would in a market-based environment.

When combined with direct subsidies to government-owned colleges and universities, the loan program makes such institutions more attractive to students than they might otherwise be. Private colleges find it difficult to compete against public institutions whose price is lowered by taxpayers' money.

At the beginning of this century, 80 percent of students enrolled in private schools. Now that same percentage of students enters government-owned colleges. In the past 30 years, over 300 private institutions closed....."




MATHEMATICS FOR "SOCIAL JUSTICE"?

From Dave Huber:

"I just received my quarterly edition of the National Association of Scholars journal Academic Questions. In it, there's a listing of a course offered at Northeastern University titled "Teaching Mathematics for Social Justice."

Wha-a-a-a-a ...?

Here's the course description:

This introductory course explores principles of social justice in education as a lens in rethinking school mathematics. The course will provide participants with a) an opportunity to expand their knowledge and awareness of issues of social justice in the context of mathematics education; b) an opportunity to develop a pedagogical model for teaching for social change; c) a process to critically examine the content of school mathematics curriculum and instructional practices from the perspective of social justice; d) an opportunity to contemplate on the role of the teacher as an agent of change and “transformative intellectual

....... "

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For greatest efficiency, lowest cost and maximum choice, ALL schools should be privately owned and run -- with government-paid vouchers for the poor and minimal regulation.

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