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The real cost of college
It’s the time of year when students pick where they want to go to college, and where parents pick which organs to sell to make that happen. Thomas Sowell says more and more, we’re seeing a glut of “human interest” stories in the media that pretend to show the true hurt of rising college costs. He’s got a problem with this, though.
The general thrust of human interest stories about people with economic problems, whether they are college students or people faced with mortgage foreclosures, is that the government ought to come to their rescue, presumably because the government has so much money and these individuals have so little.
Sowell then offers a gentle lesson in the beauty of competition and the free market: “Prices force people to economize. Subsidizing prices enables people to take more resources away from other uses without having to weigh the real cost.” In other words, when people have to pay for something out of their own pockets and check the receipt at the end of the transaction, then those people are going to use more efficiently and waste less.
That was the basic reason why Soviet industries used more electricity than American industries to produce a smaller output than American industries produced. That is why they used more steel and cement to produce less than Japan or Germany produced when making things that required steel and cement.
So, what does this have to do with the cost of college?
[W]hen paying their own money, there would probably not be nearly as many people parting with hard cash to study feel-good subjects with rap sessions instead of serious study. There would probably be fewer people lingering on campus for the social scene or as a refuge from adult responsibilities in the real world.
There’s a value to “lingering,” if for no other reason than to afford a bit of mental freedom to take part in the Great Conversation. But that’s not quite what Sowell is saying here.
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I went to state universities because my family made them the option that allowed me to get through without a student debt load (had we been more sophisticated about the financing/grant games of the fancy Ivies and their ilk, I might have swung that). My wife went to a state university too – and with her Social Security benefits (from her father’s early death), she got through, and paid for her first car, without any debt load. We both slogged through in 3 years by taking heavy course loads (once you’re full time, the extra hours are no extra charge).
There is a lot to be said for getting out of school without a pile of money owed (it made living on a starting teacher’s pay while I went post grad much more practical).
This is also a hint to mind in looking at the various universal health care proposals. Once it is fully free, the demand for services will skyrocket.
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Sowell may be assuming something like perfect knowledge here. If we know what we’re going to be, then college choice (and college classes) would be rational. He seems to be suggesting something close to this (frivolous classes represent a taking away from overall economic output). The difficulty is that one does not know exactly how the college class will add to the GNP, or for that matter what the alternatives are.
This ignorance, then, is the flaw in his argument. Since we do not know the outcome, whether this is a good investment or not, then we cannot determine that some one has paid too much (or for that matter, too little).
And it is rather comical about Sowell’s line, when paying their own money, there would probably not be nearly as many people parting with hard cash to study feel-good subjects with rap sessions instead of serious study. If it’s my own money, wouldn’t I rather get the easy A? Wouldn’t I act to diminish my risk?
Of course, Sowell’s entire argument also assumes that Demand exceeds Supply. But were it reversed, with more space in college than students, there sure would be a drive to subsidize the tuition, to use price and discount as a competitive advantage (see the Ivies for case in point).
As always, Sowell is certainly interesting. But wrong.
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Reading that made me think of this first:
Ron Paul for President!
And this next:
Amen. It’s sad how we’ve developed a sense of entitlement in our country.
I know these are simplistic thoughts. Sometimes the problems aren’t so complicated, though.
I will conclude with:
Ron Paul for President!
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#2 “And it is rather comical about Sowell’s line, when paying their own money, there would probably not be nearly as many people parting with hard cash to study feel-good subjects with rap sessions instead of serious study. If it’s my own money, wouldn’t I rather get the easy A? Wouldn’t I act to diminish my risk?”
Harris,
If we did assume perfect knowledge – as you say Sowell’s argument requires – then students would know that in the long run it is not the grades, but the knowledge and improved ability to think well, that is the desired end product that makes paying tuition money a worthwhile investment. Taking an easy course that teaches little would not increase, not diminish, the risk of getting a low rate of return on their college investment.
I don’t remember any employer ever asking about my GPA. They care about what I know and how well I can do my job. Though I don’t know how much my college studies contributed to either…
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Harris–
I think what we’re talking about in frivolous classes are the ones like “Shakesqueer” and the “Pop Culture” and “Death 101,” which have little bearing on either an academic major or practical life.
Definitely I’d agree that taking a variety of classes and exploring interest is not “frivolous,” but the government–and parents!–don’t deserve to pay for junk classes and party time.
Let’s all go study Paradise Lost some more.
… that I may assert eternal Providence and justify the ways of God to men.
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I think this is true. In my experience, I could usually tell what students had mom and dad footing their college bills, and which ones paid their own way. The ones with no payments to worry about spent more time partying, less time working or studying. Why bother if you can slack off, have some fun, and your parents will just pay for another year?
As an aside, my husband is applying for a new job. He had to submit his college transcripts, as he always does. It’s odd, though. No one has EVER asked for my college transcripts – even right out of college! He’s a teacher, and he has to submit them with every application he sends in. My question is this – WHO CARES what he did in college, now that he has been out for 7 years?! Shouldn’t they be more interested in his teaching style, references and other relevant factors when considering whether or not to hire him? Is it only teachers that have to submit transcripts, or is that will all government jobs?
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Pauline,
I know people who never went to more than a semester of college and have successful careers. The real lie is that you need to go through a four year college to be successful; that college is the principle factor in why some people get paid more than others. Instead, I’d argue if you have the inclination and intelligence to do so, you can do quite well for yourself without ever stepping foot in college.
You can also be poor and have a college degree.
I think this may be more the case now than ever before. Unfortunately, cultural momentum may take a while to reverse. People would rather pay for rolling well manicured landscaping, impressive new educational facilities, and well-funded sports programs; none of which are required for the gaining of knowledge.
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We certainly wouldn’t want to have people taking classes of ANY kind that might encourage independent thought or incitements to challenge existing paradigms like “the beauty of free markets”! Or for that matter learning that there are lots of gods and they can’t all be holding up the firmament.
Such specialized intellectual knowledge must be reserved for the most powerful and most devout among us, and for those who are their heirs, right?
The man is full of it.
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The real problem is probably not that of tuition, but of matching student outcomes with society’s needs. Those involved in the conversation on regional economic growth point out the necessity of an educated workforce — those with undergraduate, graduate and post-graduate degrees.
This is all the more important with the decline of manufacturing. Twenty years ago, the tool die designer pulled down serious money, but in many places that industrial sector has shrunk significantly, taking opportunity with it.
But for our student — how does he or she know what society wants? The community helps (your mentorship of a high schooler can be critical here), so too does the prospective salary. And sometimes it is the school itself, with the odd transfixing, transforming course that opens a window to what one can be. Price is not the only marker, here.
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One of the problems that we have currently is that there is a core of courses that are required to graduate. Included in these courses are requirements for “diversity” courses, as well as some art appreciation types. I forget all of the necessary courses, but they certainly add to the amount of time it takes my son to get out and consequently, the money. As he is majoring in Mechanical Engineering, he is already practically required to take 5 years. He did go in with 21 hours, has not had to retake any courses, and yet is taking 17 hours this semester and almost the same in the fall.
For his diversity course, he chose “Business Behavior of the Pacific Rim Countries.” It was taught by a Chinese national who spent lots of time extolling the virtues of the socialist system. Of course, said professor is living in the United States and has brought his family and doesn’t seem to want to go back to China. Hmmm. My son had to work hard to get through the course, and at the end wished he had taken the course on minorities and health care – or something like that. He said that in order to get an A in that course, you just have to agree with the professor that only white males get the good things in life.
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Spoken like a good little hard left socialist Arcadia. Thanks.
Agreed, price isn’t or shouldn’t be the marker. The amount of useful knowledge imparted to the student and the practical value to society of that knowledge—per public dollar spent—should be the only consideration for government support of education in any form.
But if the Arcadias continue to get their way, the taxpayer will eventually fund the entire process, including all the worthless studies and those who create/encourage/facilitate/teach them while enjoying lifelong employment free from concern of ever losing a job. If a student is so enamored with this drivel of no value, let them pay the entire cost of the course, and the professor’s salary, at a college specializing in such education. If this education is so badly needed by society, surely there is enough support to enable such a school “full of it” to survive in the marketplace without government assistance.
If a “student” is incapable of an independent thought causing personal incitement—which, when indoctrinated by a college professor, is not independent nor spectacularly inciting, much to the chagrin of the professor—then that individual has little need of a college education and should consider a career of something other than thinking. Perhaps a hands-on job serving mankind in a more practical and needed manner would be more fulfilling to the individual. It would certainly be more useful to society. As stated above, not everyone is a cerebral athlete capable of playing varsity thus needing/benefitting from a college education—especially one consisting of mostly junk social science.
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neo-cons and their economic friends are reluctant to offer anything for free for fear that someone may overuse or hoard the free items. Their opinion reflects their own morals rather than economic reality.
An offer of free goods which can not be hoarded, taken or overused is not an offer which can be abused. If the good is beneficial to society it should then be offered. Free health care is a good which cannot be taken and hoarded nor can it be overused. A healthy person would not be using health care – a rational actor would only use health care when needed. I’m not lining up at the surgeon’s office to take my appendix out just because its a free offer.
Education is similar. A rational economic actor would not overstay his/her stay in college/university just because tuition is subsidized. By hoarding or overusing education, s/he would lose economic advancement opportunities which occur for his/her peers as they leave school at an “ordinary” time. The state benefits from an educated workforce with greater employment, innovation and an ability to use complex systems.
As for the argument that “bird” or “fluff” courses would disappear once students were forced to make rational decisions based on their own dollars, the author assumes students enter university for the sake of learning not entry to professional schools. Although some people learn for the sake of learning and will take difficult intellectually stimulating courses others need high marks for law school or med school and will thus take course such as Sex and Love 200 or Evil 201 (philosophy courses I didn’t take while studying Hegel, Marx, Hobbes, Rousseau etc)
Finally, the state has an interest in a healthy and educated citizenry. They also have an interest in maintaining the viability of such a system. “Gate keeping” is common practice in both education and health care. Spots in university and professional schools are limited according to both available funds and the level of need for a particular profession. To prevent the perennial student syndrome, some countries simply set limits or expectations. In the Netherlands you have 5 years to finish a 4 year programme; any longer and you pay full costs. In Poland male students failing their first year are conscripted into the army.
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College campuses in my area are mostly populated with foreign students. Master programs are almost completely foreign.
Where are foreigners, many from third world countries, getting all this money to go to college?
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Not all third world people are poor. The ruling classes, who are wealthier than the average American, traditionally send their children to the West for higher education. A few may receive scholarships from various foundations but they are far and few between.
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Sowell is right more often than wrong. Somewhere someone has tracked the yearly upward movemt of college fees and tuition. Is it no longer true that tuition/fees etc have risen at a higher rate than has inflation?
A better “truth in tuition” approach might be advisable. Ea university or college would have to post financial statemts revealing where their costs are and by how much they’ve risen.
It is undeniable that there is little if any incentive for university presidents to hold down costs if they know their students will be attending on taxpayer-provided or subsidized loans.
Higher education is a money racket, and no one looking at the institutions honestly could deny that.
As for Sowell’s remarks about lingering.. has he been to any county community colleges?? I began my first two years of post high-school at Dallas County Community College District. DCCCD schools featured at that time PhDs actually teaching in the classroom ( most freshmen at UT or Tx A&M have most of their courses taught by Teaching Assistants) But more importantly the DCCCD schools were great for SOTAs (students older than avg): veterans at long last using GI Bill, working adults, moms finally returning to school after their kids had grown up etc. Yes, there were and are aimless lingerers then and now. But even the aimless lingerers often were paying a big chunk of their bill via part time jobs.
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#12 HRW
“neo-cons and their economic friends are reluctant to offer anything for free for fear that someone may overuse or hoard the free items.”
“There Ain’t No Such Thing As A Free Lunch,” Robert Heinlein
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HRW states “Free health care is a good which cannot be taken and hoarded nor can it be overused. A healthy person would not be using health care – a rational actor would only use health care when needed. I’m not lining up at the surgeon’s office to take my appendix out just because its a free offer.”
HRW, I thought you were smarter than that. This is just economic and social ignorance on your part. Plus it’s simplistic, idealistic, and wrong.
You state that if something is beneficial to society, than it should be free. So, you believe politics should run economies. You believe that the elite few should be able to determine what provides for the well-being of the ignorant masses. You believe that there is such a thing as a “Free Lunch.” You believe that if something is good for society, then it is society’s right to have despite the fact that scarcity does exist. You believe that government can produce from nothing, as a god among men, services and products based on its moral assessment of the good of society.
You’re living in a fantasy.
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you believe politics should run economies. You believe that the elite few should be able to determine what provides for the well-being of the ignorant masses.
I don’t believe, I know it. Observing any society whatever the political and economic structure and you will observe political considerations running economics (cutting sales tax instead of income tax is a populist move by wrong economically) and you will observe the elite determine what benefits the masses. The political question is which elites and whose political considerations?
When health care policies are written by insurance and drug companies and not unions, poverty groups and health care professionals; the former elite has the politcal advantage over the latter group. Naivte and fantasy land is to think the present economic structure (whatever the commodity) is run by “natural” forces.
You believe that government can produce from nothing, as a god among men, services and products based on its moral assessment of the good of society.
Actually I’m quite realistic — I beleive in good fiscal management. When Tommy C Dounglas, Saskatchewan’s first socialist premier, was elected he stated his first aim was to eliminate the influence of bankers by eliminating the debt. Once debt was eliminated he then instituted medicare and other social benefits which were then copied by other provinces.
IF you look at the fiscal record of many neo-cons, they too seem to believe gov’t can produce from nothing as they give away money to contractors as if money grew on trees.
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