In Brief

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

RICHARD VEDDER
Going Broke by Degree: Why College Costs Too Much


It’s no news, certainly to this 20-yearold Yalie, that college is expensive and that most students need their tuition to be subsidized in some way. But, according to Ohio University economist Richard Vedder, this need not be so. In his thorough examination of the financial difficulties that beset institutions of higher education, “Going Broke by Degree: Why College Costs Too Much” (AEI Press, 257 pages, $25), Mr. Vedder argues that costs are skyrocketing due to unique inefficiencies in the market (or rather the lack of one) in which colleges and universities operate.


If there’s one theme that motivates Mr. Vedder’s arguments, it’s “accountability.” Universities are, by and large, non-profit entities that do not operate in competitive atmospheres. Moreover, they receive a great deal of their funding from third-party sources, not the students themselves. Colleges lack “market-imposed discipline to economize and innovate,” Mr. Vedder writes. Attempts by states to make college more affordable often backfire. Public universities often use increased funding not to lower the costs of teaching, but to fatten the salaries of the faculty or add administrative positions. It is, Mr. Vedder writes, a “vicious circle.”


Mr. Vedder is uncompromisingly unsentimental. He has little regard for the pleasures of a liberal arts education, and sees the issues at hand, for the most part, through the chiseled eyes of a research economist. He heaps praise upon – college deans, cover your ears – for-profit universities like the University of Phoenix, which enrolls over 200,000 students, many of them online, and whose CEO holds stock in the company worth $28.8 million. Such educational options, he argues, offer a highly specialized education, usually in the information technology or management fields, that consumers find worth the price.


Dealing with this country’s looming higher-education catastrophe will require innovative and ruthless solutions, and Mr. Vedder provides several. To bring universities closer to a free-market system in which they must compete over students, he advocates what is essentially a voucher system. State funding should be diverted from institutions into the hands of students in the form of scholarships. Colleges might then force professors to take on larger teaching responsibilities and thus make the university more attractive. They might even, he suggests, transform tenure into a fringe benefit that professors could opt into in exchange for giving up benefits like life insurance or health care – an interesting proposal, to say the least.


Mr. Vedder’s admitted goal is the complete privatization of public universities, for he believes universities have no “positive externalities” (that is, economic or societal benefits) on their local communities. This is the one part of his argument that is hard to swallow: What would New Haven be without Yale, Cambridge without Harvard, or Ann Arbor without the University of Michigan?


“Going Broke by Degree” is not some conservative screed against the academy. Mr. Vedder values our nation’s system of higher education; he just wants to make it more accessible and more responsive to our demands. His admittedly radical solutions may not be the cure, but his dire diagnosis is certainly compelling.


The New York Sun

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