Saturday, March 24, 2012

Why University Tuition Should (and Can) be Free!

Montreal students are protesting proprosed tuition hikes in Quebec. Last fall UK students protested similar tuition hikes in England.

Many people have been critical of these protests, not because of violence (there was none at the Motreal protests and only 17 injured in the UK protests), because we have been led to believe that it is "unsustainable" to keep tuition fees low. This is a lie. It is desirable and completely possible to have free university education.

A flawed model

The reason people believe it is impossible to have free university education is because of exponential growth. Economist love exponential growth models. Essentially if you assume the rate of growth of anything is constant for ever you get exponential growth which leads to ridiculously large numbers in a short period of time. eg. if the cost of something grows at a rate of 10% per year if it starts at year 1 with a cost of £100 in 50 years it will cost £12,000, which looks pretty unsustainable. If we assume just a constant rate of inflation or a constant rate of increase in enrollment university costs will grow exponentially and look nice and "unsustainable".

However, if we really want to consider whether those costs are sustainable or not we have to consider the growth in gov't revenue as well. As long as the rate of increase in gov't revenue is equal to the rate of growth of university costs then those costs are always sustainable even if they are growing exponentially. Do we expect this to be the case? if gov't get revenue from VAT or sales taxes then this revenue will grow with inflation and university cost increases related to inflation will be sustainable. University education increases the earnings of graduates so revenue from income taxes will match enrollment cost increases as long of the income tax rate is high enough. If the economy is growing on top of this, exponentially growing university costs can be sustainble even at lower tax rates. So just because something is growing exponentially doesn't make in unsustainable. It is only unsustainable if the resources to support it are not growing exponentially.

Tuition vs Enrollment

Another argument politicians love to make is that gov't revenue is not keeping up with costs because of the recession so we have not choice but to raise tuition fees. Wrong again! Remember university costs depend on the number of students enrolled. If revenue is not growing fast enough to balance university costs then a simple fix is to freeze or decrease enrollment rather than raise tuition. This does not violate the philosophy of accessibility of higher education, because no-one believes it is necessary or desirable for everyone to go to university. Accessibility means everyone has equal opportunity to go to university regardless of socio-economic status not that everyone who wants to go to university gets to go to university. If right now the country is subsidizing university costs by 80% for 1million students then they could easily have free tuition (100% subsidy) for 800 thousand students without adding a penny to their total expenditure.

Lowering university enrollment is not necessarily a bad thing. Already we are seeing education requirements which are way over the top for what the job actually requires. There is no reason why a sales representative or a post-worker needs a BA in English Literature or Classics. The only reason these requirements have appeared is because of "over-enrollment" (yes I'm trademarking that phrase) for the past several years. Gov't policies have pushed more and more students to go to university but jobs requiring (really requiring it) a university education have not kept up, so employers start filtering the large number of applicants for entry-level jobs based on degree qualifications just to reduce the number of people they interview regardless of whether the job actually requires the knowledge provided by a university education.

Tuition vs Targetted Support

The newest critique of free/low tuition is that is that everyone benefits equally from the policy. Students from rich families are subsidized just as much as students from poor families, and wouldn't it be more efficient to target subsidizes to students from poor families? Wrong again! This argument is all about framing the situation in such a way to mislead people. The key point left out in this analysis is where the money used to subsidize the university education comes from. Gov't money used to pay for university education comes from taxes which in developped countries are progressive so rich families pay more in tax than poor families. Which means, of course, that when the gov't pays for education it really means rich families are paying for education more than poor families. So students from rich families are subsidized less than students from poor families (and in the case of the very rich they are paying full price and then some) through taxes.

The benefit of free tuition over targetted support is that students don't need to worry about being able to afford a university education before they even apply. Often students base the courses they take in highschool (and many other decisions) on whether they think they will go to university, long before they know whether they will recieve targetted funding or not. In addition targetted support is less efficient because large bureaucracies have to be built and maintained to distribute the funding to the most needy students. Also any method of determining who is "in need" will be flawed so that students who really do need funding will be missed and those that don't need funding will be able to get it (ask enough students at any university and you will get stories of this).

There is absolutely no need charge tuition to university students. High tuition perverts the student-teacher relationship into one of consumer-product. Students see themselves as purchasing a degree from a university as a neccessary step before entering the workforce; and universities see students as a source of income to exploit to improve their bottom line. The inevitable result is a drop in education quality, a drop in student performance, and qualification inflation. This hurts academics as they deal with the stress of modivating increasingly self-centred, disinterested students. This hurts students as they deal with the stress of finding a good paying job immediately upon graduation to pay off huge student debts. This hurts society as we lose the last refuge of careful consideration, deep thinking, and increased awareness universities have traditionally provided.

I urge all students to get out there on the streets and protect the kind of education and society we want, but don't realize is at risk of disappearing.