To lower college costs, eliminate tax-funded tuition subsidies

Last week Governor Ritter signed a bill that allows Colorado’s tax-funded universities to raise their tuition.  In response, “some Colorado students will see increased financial aid to offset the higher tuition, ” InDenverTimes reports.

Surely some parents are rightly concerned with fast-rising tuition costs.  But Capping college tuition would either degrade a school’s quality or reduce scholarships students receive. For lower tuition prices, eliminate tax-funded tuition subsidies and financial aid. Employers and prospective students would benefit.

Government-subsidized student loans and grants increase tuition prices. When government subsidizes the cost of education, students pay less, so more people want to buy what colleges sell. Colleges respond by increasing tuition and fees. This isn’t just theory.  Economist Gary Wolfram’s research documents empirical evidence that backs it up.

College subsidies hurt both students and employers. College isn’t for everyone, but tuition subsidies create the illusion that it is. As career counselor Marty Nemko summarizes, “College students with weak high school records usually drop out, having learned little, and with devastated self-esteem, a mountain of debt, and a job they could have obtained without college.” Employers hurt because these students could have spent their college years gaining valuable skills through, for example, an apprenticeship program or on-the-job training.

Absent harmful tax-funded college subsidies, private alternatives would replace them. These would include the familiar student loans and scholarships. An intriguing alternative would be “human capital contracts,” where in exchange for investors’ paying their college expenses, students repay them a percentage of their future earnings over a specified time.

Whatever the alternatives, it’s immoral for politicians to confiscate our earnings to distort the labor market and meddle in people’s lives. Young adults have the right to pursue their dreams and careers according to their own judgment, rather than the schemes of politicians.

A version of this article was published on-line in the Daily Camera on June 12, 2010.

No (Tenured) Teacher Left Behind

From the Wall Street Journal:

School reformers generally agree that the most important education resource is the teacher. But one of the biggest obstacles to putting a good instructor in every classroom is a tenure system that forces principals to hire and retain teachers based on seniority instead of performance.

California grants tenure to teachers after merely two years in the classroom. New York, like most other states, makes teachers wait a grand total of three years before giving them a job for life. In most cases tenure is granted automatically unless administrators object, which is rare.

A recent report in the Los Angeles Times revealed that the LA school district, the nation’s second-largest after New York City’s, “routinely grants tenure to new teachers after cursory reviews—and sometimes none at all.” According to the Times, “the district’s evaluation of teachers does not take into account whether students are learning. Principals are not required to consider testing data, student work or grades.”

Read the rest: No (Tenured) Teacher Left Behind.

For suggestion on more choice, quality, and competition in education, see the Cato Institute’s school choice page.  This includes James Tooley‘s research on how parents in impoverished countries are forgoing “free” government-run education for schools that charge $1 per week.  John Stossel reports:

See the rest of John Stossel’s recent show on education.

Here’s a longer video about private schools in slums around the world out-performing government-run schools:

http://www.cato.org/jwmediaplayer44/player.swf

School choice makes teacher pay a non-issue

In response to the Daily Camera‘s question on salaries for Boulder Valley School District teachers:

Why is teacher pay even an issue?  Typically one’s salary is a private matter between an employer and an employee.  Not so with tax-funded schools.  A private matter becomes a public one, as we’re all forced to fund government-run schools, especially through property taxes or increased rents.

Such forced charity is the root of the teacher pay issue. So let’s eliminate or at least mitigate this coercion.  One way is to phase out tax-funded schools. Surely this is too radical for most Camera readers, so here’s an alternative: education tax credits.  If you donate, say, $1000 to a local school or scholarship fund, you pay $1000 less in taxes, and the local government school loses that tax revenue.  Education tax credits would allow taxpayers choose what school they fund.

Such tax credits promote tolerance and diversity.  No one would be forced to fund a school that paid teachers too much or too little.  The teacher pay issue would dissolve, as would hot-button curriculum issues such as evolution and creationism.

Of course, donors and parents would probably choose schools based on educational quality, and view teacher salaries as one component of promoting it. Schools would compete for donations and figure out the best way to utilize their resources to create the best product.  For example, a school unhampered by union rules might try to attract great teachers by paying them more than average ones. Paraphrasing Lending Tree, when schools compete, kids win.

This was published in the Daily Camera (Boulder, CO) on August 22, 2009.

Obama: School choice for me, but not for thee

The Daily Camera published my comments on Obama’s school choice hypocrisy couple weeks ago:

“We need to focus on fixing and improving our public schools; not throwing our hands up and walking away from them,” said President-elect Barack Obama to a teachers’ union convention. But when it comes to his own daughter’s education, he and Michelle Obama have walked away.

Obama’s daughters will attend the Sidwell Friends School, which the Washington Post describes as “a rigorous school where many of Washington’s most prominent and moneyed families have sent their children.” “The Obamas selected the school that was the best fit for what their daughters need right now,” said Michelle Obama’s spokeswoman.

But when ABC News asked him about giving inner-city parents a similar choice to opt out of government-run schools, Obama said “it would be overall bad for most kids.” Most kids, but not his own daughters, of course.

Instead, Obama wants to “foster competition within the public school system.” That is, he wants to maintain what is effectively a government monopoly on schools. If this would be good, then why not do the same for, say, cars? As Neal McCluskey, the author of Feds in the Classroom suggests: “While we’re at it, let’s not allow multiple auto producers; let’s just foster competition within General Motors and see how that works.”

[print version (pdf)]

(Thanks to the Advocates for Self Government for the post title.)

Support tax-funded schools? Then donate your own money.

The Rocky Mountain News published my letter to the editor last week:

Amendment 59 backers should send refunds to schools

Let the “begathon” begin! That’s what educators would need to raise school funding because Amendment 59 failed, said Colorado Association of School Boards director Jane Urschel (“Despite defeat, Ritter aims for budget fix,” Nov. 6).

But fundraising should be easy – if 59′s supporters simply put their money where their vote is. Since 59 failed, taxpayers will receive a refund when the state collects excess taxes. Why not donate it to schools?

Amendment 59 would have sent about $50 million in annual tax surpluses to government schools. Since almost a million Coloradans voted for it, that’s a $50 donation each. As a tax-deductible donation, it’s even less. Just forgo dinner and a movie one weekend.

Surely voters who want government to spend their own tax refund – and everyone else’s – on government schools would donate voluntarily, right? Or would they prefer to support a school of their choice, a scholarship fund, or other causes they deem worthwhile?

In a previous essay I addressed a common argument against the above point of view:

Another common argument in support of [taxing people to pay for schools] is that “we all benefit from it.”… In any case, just because you benefit from something does not mean you must pay for it.  We benefit if others have food, shelter, clothing, and good hygiene, but this doesn’t mean government should force us to buy food, shelter, clothing, and soap for others.

(What does this have to do with Barbara Streisand?  She supports tax-funded schools. (Photo credit.))

BBC comedy sketch on government schools

If only…

(Via the Texas Public Policy Foundation)

Subsidize consumers, not producers (if you must subsidize)

People who think government has a role in making sure everyone has access to health care or education often conclude the the only way to do this is to force taxpayers to fund government-controlled insurance (Medicare, Medicaid, SCHIP) and government schools.  But this does not follow from their stated concern.

It only follows if, say, the person either

• wants government to define what education and health care are,
• wants to make sure friends of politicians get government jobs managing the programs that control health care and education.
• wants to empower teachers unions that contract with government schools and donate to the political party that generally opposes school choice measures.  (For example, see here.)

But it does not follow if you care about children getting educated and people having access to health care.

What follows is to subsidize consumers rather than producers, and hence maintain a competitive marketplace for the production of the good.  Food is also important, but government doesn’t run grocery stores.  It taxes people to pay for food vouchers, or food stamps.

As Milton Friedman said:

If you want to subsidize the production of a product, there are two ways you can do it. You can subsidize the producer or you can subsidize the consumer. In education, we subsidize the producer—the school. If you subsidize the student instead—the consumer—you will have competition. The student could choose the school he attends and that would force schools to improve and to meet the demands of their students.

…education ought to be a parental matter. The responsibility for educating children is with parents. But in order to make it a parental matter, we must have a situation in which parents are Free to Choose the schools their children attend. They aren’t free to do that now. Today the schools pick the children. Children are assigned to schools by geography—by where they live. By contrast, I would argue that if the government is going to spend money on education, the money ought to travel with the children. The objective of such an expenditure ought to be educate children, not beautiful buildings. The way to accomplish this is to have a universal voucher.

The only point I’d disagree with him on is that a tax credit would be better.   With a voucher, there are strings attached to the government check, which will empower government to controls schools.