Higher education and how it is financed is a central theme of the upcoming presidential election, and a major issue for current college students and their parents. As college costs have been rising, (also here and here), students have demanded more financial aid and this has pushed much of the burden of paying for higher education on federal and state governments. Rising student loan debt has been met with calls for debt forgiveness, and is part of the Biden presidential campaign platform.
The COVID-19 crisis has created a new set of burdens for already struggling universities. Universities are facing a “demographic cliff” in the next few years which means declining enrollment and budgets. Adding to that, foreign students are now less likely to travel to the U.S. to study. Part of the reason for this is the newly hostile environment for foreigners studying in the U.S., who may no longer be able to stay here to work after their graduation. One prominent senator even suggested foreign students be limited in what they can study in U.S. colleges. Our most innovative companies have roundly criticized the H1B visa ban, with Google’s CEO Sundar Pichai noting, ““Immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today.”
State governments have cut spending on community and state colleges since the 2008 recession began, “for profit” schools had been on the rise. However, due to the fact that more “for profit” students were going into default (more recent examples include Everest College and other Corinthian schools). these schools have been under increasing pressure regarding their costs and standards. PBS Frontline released an episode called “College Inc.” which looked at “for profit” schools in detail.
There are new “free” education opportunities being pioneered by universities like MIT (their intro macro), which has helped start edX, and Coursera (and here) which has recently added courses from institutions like UVa. Also, the Khan Academy was created by former investment banker Sal Khan to provide free education to the masses in the U.S. and elsewhere. The problem with the “free” model right now, is that there are few degree opportunities attached to these courses. However, this has changed a lot as many universities now consider online education as fundamental to their success. The online programs that now exist are largely expensive, partially because they are supported by technology that is not free to come by. So, even the public university system is rising in cost of providing online courses because they rely on private companies to provide their programs.
Furthermore, you have always been free to borrow the textbook that we use for this course from a local library, where you can read it, take notes on it, and attempt the problems. The same is true for essentially every other course you take in college. So why is it so expensive? What are you paying for? Are you just in college to collect some credential? As an economics student, you can probably understand at this point that the entire education package benefits the average student at least as much as the cost that you, your parents, and the government is paying for it. That does not mean it is the best deal around. Should there be fewer college students in general and should we make a bigger push for vocational training at an earlier age?
There has also been an increased emphasis on the STEM (science, technology, engineering, and math) majors in college which has led to declining interests in the humanities. How does a rising cost of education and/or the online movement of education impact the humanities? Are they going to face further declines in the number of students interested in their programs? Or are the humanities important to students graduating into today’s economy.
Questions you might want to answer:
I would like you to think about the rising costs of education, and how they might be contained. How do we get students to further internalize these costs, leading them to maybe make better decisions. DO NOT try to answer all of these questions, just focus on one topic. Also, try to think about your comment from different angles. To write a brief comment, read the previous comments, compose your thought in a Word document, and paste it in the comment box below. The more original and factually supported your comment, the better your grade will be. Finally, your comment will appear ONLY AFTER IT IS APPROVED. Please don’t email me asking where it is, it often takes a while for me to get to it.
- Do you believe that state schools (community colleges or otherwise) are helpful in containing college costs?
- Why do so many students pay so much more to attend certain non-profit private universities?
- Do you believe that the “free” education system can be adopted to a model where students are willing to pay money to attend online courses? Or do you believe that universities like UVA will be happy to provide these courses and their instructors for free? Why has MIT adopted their OpenCourseware model, and how do edX and Coursera anticipate making money in the future (if they do?).
- Do you believe that the “for profit” education system is worthwhile, or do you think that their students have been duped somehow? Surely some students must have had decent experiences at these schools, otherwise they would likely be out of business. Look for supporting or contrasting evidence.
- What evidence is there that education, especially higher education, affects macroeconomic outcomes. Do increases to education levels lead to higher expected GDP levels and growth rates?