January 29, 2012 6 Comments
I’m glad that President Obama is turning some attention to the cost of higher education. Among the reforms I hope he’ll consider will be to add a little capitalism to university tuition.
Would you buy a set of furniture or a car if all the salesman would tell you about the price was how much the first of four annual payments would be, with the sizes of the other payments to be determined later? Not if you’re smart. But that’s what college students are required to do when they put down their (or their parents’ or the government’s) money for a college education.
One reason colleges get away with jacking up tuition each year is that they have a large number of trapped consumers. A student who has invested one-to-four years worth of time and tuition has to pay whatever is asked or lose a lot of the value of what’s already been invested.
Why doesn’t the government require colleges to tell students the cost of a degree’s worth of tuition before the student makes the purchase? Why not, in other words, require schools to honor each student’s tuition price for at least four years? Schools could charge incoming freshman as much as they wanted, but those freshmen, once enrolled, would have four years to complete their educations at the same annual cost. Schools and programs at which four years aren’t sufficient to earn degrees would be required to honor the rate until the students had been there long enough to have a reasonable chance of graduating.
The smart universities would go beyond the federal requirement and honor incoming students’ rates for as long as those students stayed continuously enrolled. This would encourage students to stick around to earn second and third degrees at the “discount” price. Schools that jacked up the price, as allowed, after four years of study, would find a return to the old-fashioned pattern of leaving school after four years–a good development for students, but maybe not for schools.