HESA

Higher Education Strategy Associates

Setting Tuition

Some interesting news out of Florida last week: Governor Rick Scott (or rather, a task force he created) wants to set tuition in so as to encourage enrolments in the sciences and engineering; so, basically, he’s proposing that tuition in those disciplines remain frozen for a number of years while at the same time allowing it to rise in disciplines deemed less “worthy” (arts, business, etc.).

There are some fairly obvious drawbacks to this idea: not everyone is equally skilled at these subjects and so cannot equally take advantage of the incentive, there are fairly large windfall gains to people already inclined to those disciplines, and – my favourite – if there’s really a need for those kind of skills, surely it’s the labour market’s job to adjust through rising wages, not the government’s to adjust through tweaking tuition.

Nevertheless, it raises a useful question: what’s the right way to set tuition? It basically comes down to just a few options:

Make it Free: A bad idea for a whole bunch of reasons, but it has the benefit of being consistent.
Equal Fees Across All Disciplines. Ditto. Simple to understand and implement.

Let the Market Rip: Also probably a bad idea (for first degree programs at any rate), but there’s an intellectual purity to it.

Differential Fees Based on Private Returns: Doctors pay more, social workers pay less. This is the Canadian model, to the extent institutions are allowed to get away with it (which is to say, with second-entry programs); otherwise we’re closer to the “equal fees” model.

Differential Fees Based on “Social Need” or Labour Force Planning: This is essentially the Florida proposal (Estonia has a version of it too, and some Canadian provinces use student aid to accomplish the same thing through the back door). Basic problems include working out what future needs (social or otherwise) really are and why public funds should be used to set market signals on employers’ behalf.

Differential Fees Based on Cost of Provision: This would have some of the same winners and losers as fees based on private returns, but not all. Law would be cheaper, fine arts a lot more expensive.

It would be nice if, once in a while at least, we could actually discuss these models and make conscious choices between them. It could get a bit confrontational, of course, but presumably grown-up societies can handle a bit of that. Sadly, being Canadian, we shy away from this and make tuition policy the way we always do (i.e. “whatever it cost last year, plus a couple of percentage points”). Score nil, again, for rational policy-making.

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One Response to Setting Tuition

  1. Pingback: Non-solutions in search of a problem | HESA

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