The Cost of Higher Education

The Denver Post's Perspectives section this morning runs three articles about the cost of higher education. Larry Edward Penley, the President of CSU, basically argues for higher tuition as a way of covering costs while not raising taxes. He's fair-minded about the other infrastructure costs that a Red State (which tends to attract people) will incur. Of course, people like Cruz Bustamente use this argument in reverse when they're in Blue States: since fewer people are around to maintain the roads, we need to raise taxes. Then they use the argument in 4th gear when they're in Red States: we have so many more people moving in, we need to build new roads, which means higher taxes. Penley used to head up Arizona State's business school, so you'd think he'd know better.

Ray Baker and Tim Foster of the Colorado Commission on Higher Education show what a crock all this is. Colleges, like high schools, resist actually measuring how well they're educating their students. There doesn't seem to be any measurable link between actual costs and tuition, nor do colleges accurately measure increases in real costs. It's really simple supply-and-demand economics. People don't buy an "education," they buy the things and education will get them - prestige, respect, a better-paying job, and so on. At some level, all of this is a confidence game. Undergradtuate educations are largely the same everywhere, once you reach a certain level, but Harvard's reputation, and the connections it brings a graduate, are worth a fortune. So that's what Harvard charges.

Since college is now seen as the indispensible key to a better life, people will pay all out of proportion to the actual educational benefit they receive. As long as employers think that four years of listening to Cornell West is actually beneficial rather than destructive, they'll pay those Princeton grads more, too. And since colleges don't seem to understand fiscal responsibility any better than governments do, they'll spend it all as it comes. in. relying on students' willingness to take on debt to pay whatever freight they think they can charge. (There's no question that low-cost government loans, available to all regardless of income, have contributed to the Deep Pockets Syndrome that's feeding this cycle. And yes, I'm taking advantage of these loans, myself.)

Sooner or later, this bubble has got to burst, like all market bubbles devoid of underlying value. The sooner, the better, but I think it'll be a while, yet.