‘School without limits’ | Confessions of a Community College Dean
Hats off to Carlo Salerno for tweeting this one. This is a thought experiment by Martin Skladany, who is a law professor at Penn State. It’s a call for what he calls a “no tuition limit” approach to college pricing.
It is a variant of progressive taxation, but at the level of a single institution. The idea is that with financial aid, tuition fees are progressive—that is, they increase with perceived ability to pay—until the advertised price, in which case they become fixed. This uniformity benefits the very wealthy by allowing them to pay a much lower percentage of their income than everyone else. That hardly seems fair. Instead, suggests Skladany, “the only reform that can end this disparity is for universities to stop advertising a predefined upper limit for tuition fees.” If you have to charge someone a million dollars a year, so be it.
I think the term for that is reductio ad absurdum. It takes a recognizable principle and extends it to stupidity. Honestly, at first I thought it was a parody.
Think about it from the perspective of a student’s family and from the perspective of the institution.
To a student’s family, he says, “Trust us. We will charge as appropriate. The only industry that consistently pulls it off is healthcare, which I wouldn’t consider a shining example of cost control or reasonable pricing, at least in the United States. At least the healthcare providers have the excuse that they don’t always know what’s wrong until they get in there. And even if our health insurance system is not ideal, at least it exists; nothing comparable exists for higher education. There is no reason for this to happen; a college should have a pretty good idea of the services it will be offering.
Families with significant means can simply shop for college with a listed price. If enough of them do this, the cachet that attaches to some institutions will shift to others. (“Harvard is then five minutes ago. “) If I was rich enough for that to apply to me, and had the choice of sending my kids to Snooty U with an $80,000 sticker price or Other Snooty U who would charge whatever would please him. , I would avoid the risk of OSU. For a single institution, it would be a suicide mission.
From an institutional point of view, budgeting would become infinitely more difficult. This is already difficult in many expensive places due to high discount rates. (That’s a problem community colleges are largely spared.) But at least they know what they’re getting off track. When the sky is the limit, then presumably a few highly paid students come to wield disproportionate power. If you think they won’t use this power, you live in a wonderful world.
I don’t even know how financial aid would work without sticker prices. Most colleges don’t meet all of their financial needs now, so I don’t imagine they would suddenly start. If the EFC isn’t binding and there’s no sticker price, that’s a lot of gray area.
Price transparency is a virtue. People of a certain age might remember a few decades ago when banks started charging ATM fees, but wouldn’t say what they were; you’ll find out later, when you get your statement. The public didn’t have it, and Congress passed a law requiring ATMs to disclose their service fees before charging them. It was more than a few dollars. People have learned the hard way that it pays to know the price in advance.
But what about the alleged benefit to low-income students of cross-subsidies paid by high-income students? Community colleges tend to serve proportionately more low-income students and families. Working with students, I and many others have discovered the intimidating effect of posted prices. Even with confident claims that many people don’t pay the posted price, students who don’t know the rules of the game find the high prices intimidating and simply walk away. That’s why the “free community college” got the traction it did. Now imagine replacing “free”, or even a fixed sticker price, with “trust us”. No. They don’t, they won’t and I don’t blame them.
It is true that the disproportionately rich come out of it more easily than the others. The simplest and most effective way to achieve this is to use progressive taxation which finances operating aid. You can’t compare taxes that easily, and states could use the revenue to provide operating assistance to public colleges and universities (like Penn State) to reduce costs and improve quality. This would create significant competition for the private and for-profit college sectors, so they would have to provide something significantly different to justify their higher costs.
Yes, wild income and wealth disparities are problematic. These are political problems that require large-scale political solutions. With unlimited tuition, the wealthy would simply enroll elsewhere, and the few who didn’t would have too much power on campus. Low-income students would also stay away, out of justified fear. Difficult pass, thank you.