Friday, June 13, 2014

"Prices" /= "Costs"

I was 99% sure what I was going to find when I clicked the WaPo Blogs headline in my email just now: Best state in America: Maryland, for keeping college costs relatively stable. And I shouldn't have even entertained that one little sliver of doubt.

"[I]n Maryland," writes Reid Wilson, "public university tuition has risen at a slower rate than in any other state."

He then goes on to explain how:

A big part of Maryland’s success comes from a four-year tuition freeze, which Gov. Martin O'Malley (D) implemented in 2007. Every year since, the legislature has capped tuition hikes at just 3 percent a year. Between his first budget, in fiscal year 2008, and his latest, for 2015, the governor also increased higher-education funding by 34 percent, to $1.4 billion, O'Malley spokeswoman Nina Smith said, easing financial pressure on state schools. The extra money came from other parts of the budget and from higher taxes.

So it wasn't "college costs" that remained stable. It was "college prices -- for the retail customers" (the students). There's a difference.

Back in the early 1990s I lived near (and my then-fiancee attended, which meant I spent a certain amount of time on campus) one of Missouri's larger universities. One day I found myself walking through the middle of a campus demonstration against a proposed tuition increase.

I decided to research the subject, which was not really that easy back in those days before most people (including me) had easy access to the World Wide Web. It involved reading newspaper articles, going to libraries to dig through government documents, etc. Here's what I found:

  • An undergraduate student at one of Missouri's "public" universities paid (IIRC) about 32% of the cost of delivering the services that student consumed. That's if said student received no scholarships, Pell Grants, GI Bill benefits or other financial aid. If the student paid the entire price listed for credit hours, student fees and so forth, the taxpayer covered about 68% of the real cost.
  • If the tuition increase passed, the same student would end up paying (again IIRRC) a little more than 33% of the cost of providing that student with a college education and the taxpayer would "only" pick up 66.x% of the check.
Maryland's government isn't controlling "costs" -- it's controlling one set of "prices" (tuition for students) by raising another set of "prices" (taxes for taxpayers).

"Public" college/university education is a welfare program for the American middle class (and, to a lesser degree, for America's poor). Saying that might make some people mad, but it's the truth, and discussing it as if it were anything else is dishonest.

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