This time of year of produces great success and disappointment. Every year at this time millions of college applicants find out whether or not they got into the college of their dreams. College has become a major part of the American fabric. What was once only a institution for the rich is now the expected for many of middle and lower class Americans. And as the cost of college rises, how will the millions of college students pay for its ever rising cost? Loans, loans, and more loans.
By the time I am done with graduate school, I will be about $43,000 in debt. What I am paying is a modest amount compared to most. College has always been a private venture in the United States except for a few states and the federal government helping those below the poverty line. But if you are not lucky enough to live in one of those states or poor enough to get federal aid, then you are stuck bearing incredible costs. It can be very difficult for middle class families to pay for college, often causing some to forego it.
It is time the federal government start looking at college as an investment for the nation. An educated population is essential for a democracy to survive. The success of a democracy is based on the educated decisions of its citizens. When you have a dumb population, you have a failed democracy. And I fear that is where America is headed. The early success of the United States is in part due to its public education system. So why not extend public education to the college level?
I am not proposing a model that now dominates the current K-12 public education system. I am however proposing a system where the federal government rewards students with GPAs over 3.2 in high school with a free ride to any college they want to attend. However, if they drop out or if they fail to achieve a GPA above 3.0 by graduation, then they must pay back at least half of the money. This would encourage students to achieve good grades and produce a more educated population during a time when the United States faces many difficult choices. Of course, the federal government would have no say in what is being taught in colleges because if they did, they would ruin college.
A lot more could be written about this but that could be discussed a later time.
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Like any good or service, education can't be free because people don't work for nothing. Even in the government subsidizes a good or service it is still not free; capital is merely reallocated from one part of the economy to another. As is with all subsides, there are two reasons why this policy shouldn't be adopted.
ReplyDeleteFirst is the moral reason of any system of distribution. If a system of 100% subsidization of students with grade point averages above 3.2 were adopted, was does that say about our society? Are we to pay for the "elite" while the "sub par" must live with higher then market value school costs due to the subsidization? What do we say to parents of the hard working "C" student that now have to pay for their child *and* the rest of society? How do we come to terms with the student who maintains a 3.19 grade point average?
The second, and even more important argument against subsidization, is that of economy practicality and unintended economic consequences. Unfortunately educational services are like any service a limited resource. Any subsidization will make the cost go up. I can attest for this as my school costs are about two and a half times what they were when I started 9 years ago. This, like any other subsidization, is what chases families out of college.
These issues combined create an environment where the responsible student who works hard to achieve their goals is economically penalized while the luke warm student who is disinterested in their education gets a free ride. I didn't attend an expensive school like you. However, from my experience, there is a pretty high percent of students on a free ride that don't put the time into a class and drop classes because they don't care enough to do the work. The work is worth it to the person who pays the cost because their want is worth more to them then the cost. Marginal utility is how an economy gives the greatest benefit to the most people; it allocates the value to those who are willing to sacrifice that value. Any interaction with this will cause a scarcity. This is how wealth is created via any good or service.
http://en.wikipedia.org/wiki/Marginal_utility
The reality is, educational services are a scare resource. The reality is, school costs weren't "for the rich" when people worked to pay their way through school. The reality is, state governments and the federal government have already been pouring money into college subsidization for a long time and it is making school costs explode.
It is a noble gesture to want for no person to go without. However, substituting the price discovering capabilities of a free market can never be replaced by central planning. It is dangerous to assume that the currently high prices of education are due to the free market. Do a bit of searching on state and federal budgets and chart the course of college credits over the last 40 years and you will easily find that subsidization is the culprit for the high price of schooling.
I agree that nothing is for free because somebody is always fronting the cost. For example, the water we drink is not as cheap as it should be. Water does not actually cost cents on the gallon to collect, treat, and distribute. However, we as a society have decided to subsidize it so everyone can benefit from clean, healthy water that increases the standard of living.
ReplyDeleteAnd just like water, education is necessary in a democracy. Both in fostering a greater society and a higher standard of living. Yes, there are unintended consequences but with careful planning those consequences can be minimal. One must ask his/herself also if the cost we as a society paying is creating a benefit that is greater than that cost. I personally believe that the benefits of public education greatly outweighs the costs.
Going back to unintended consequences, there are unintended consequences of not providing education to people. This include disenfranchising the poor, reducing social mobility, and fostering a society of people who do not understand our country's problems.
I am sure your education at CCBC is subsidized by the county, state, and federal governments. Do you object to that? If so, could you afford the true cost of education? I don't know what that cost is but it would be interesting to find out.
The State of Georgia currently has a program like the one I am proposing. To go to the University of Georgia, an in-state resident pays about $16,000 a year. Students with good academic standing go for free. University of Maryland costs about $21,000. Both colleges are about the same size and have similar standing. So students who don't receive the scholarship are not in that bad condition.
Which brings me to social mobility. Ask yourself who was the first in your family to go to college? Parents? Grand-parents? Great-Parents? For me it was my father because before him my family could not afford college. Since my dad could afford to go to college, he got a chance to climb the ladder and increase not only his standard of living, but also mine, my sister's, and my mother.
When the government doesn't support people who can't afford college, those people are often left behind with minimal chances to get ahead.
I am sure the reason why college has increased is due to somewhat to government interference. But until I see a complete link between the two, I can't endorse that idea. I agree with you on many points. I believe that a free market economy has been a great benefit to the United States. I believe the government needs to stop subsidizing the vast majority of businesses. However, the benefits created by public education far outweigh the costs. Free-markets are never perfect (Every notable economists agrees with this). And when they fail as in education, the government needs to step in to solve the malfunction.
Just a correction, our father couldn't afford college. In fact when he started attending college there was a lien on our house and we barely had money for food. Our father was able to go to college because he answered an add in the paper from 1st National Bank saying they would pay for college if people learned computer programming, luckily for our family he got the job. Prior to that Shoe Repairman was his occupation.
ReplyDeleteThere is no perfect market. However, that has nothing to do with the encapsulating trade environment. Aside from the market for air, there will never be a "perfect" market as air is the only good that is practically unlimited and readily available. You cannot claim that free markets "malfunction" when they fail to meet a goal that is unattainable.
ReplyDeleteA small bit of study on subsides will show how they cause market irregularities in the wrong direction. If that were true, would you still support educational subsides? Isn't it worth the time to research it?
The free market isn't perfect. But, it is the best market there is. It can provide opportunity to people who are willing to work for it, like your father's case. It cannot be everything to everyone. History has showed that pretty clearly.
When I say a perfect market, I mean in the classical sense. Not in the superlative sense.
ReplyDeleteA perfect market has no transaction costs, market players are reaching a utility's maximization, no barriers to entry, perfect knowledge amongst market players, and normal profits.
Find that market for me, otherwise markets are skewed and create problems for society at a greater cost than if they were regulated somewhat.
I meant to add that a perfect market will reach equilibrium on its own. An imperfect has prices out of whack.
ReplyDeleteI keep thinking of things to say. Subsidies can indeed throw markets further into irregularities but they can also fix irregularities to bring the market back to equilibrium. Same goes for taxes.
ReplyDeleteI think its important to realize we are discussing theory and that economic theory is extremely hard to prove. There are many variables in markets that are hard to control in reality so when we test these theories, we can only estimate results.
Not that my dad didn't work hard through school, but coming across that schooling opportunity is random chance. He could have just as easily not read the paper that day or been too sick to read the paper, etc. It's very similar to how our careers have panned out 1/2 chance 1/2 hard work. Had you not dated Jess in high school and her mom not dated a Comcast tech, do you think we would all really work at Comcast? And if we didn't it's possible we could be working for a place that doesn't pay for school. I know my pre-Comcast job at the Rue 21 didn't pay for school.
ReplyDeleteA lot of life is being at the right place at the right time.
Actually, when I started dating Jessica, her mothers boyfriend was an unemployed lump, living off of the child support checks her father was cutting. He applied well after my first 90 days were over. He wasn't even there a year when he quit because he got some chick in Missouri preggers.
ReplyDeleteThere is definitely something to be said about being in the right place at the right time, but I made the decision to come to Comcast. I can go on and on about that but really it isn't the point. Even if I weren't working for a company that paid for school, I would pay myself, which I did when I was at Worthington.
Anyway, save the newspapers!
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003954802