Subsidizing Education Tuition

Introduction

Any discussion of educating funding is not a simple one, as the complex context of how and why money moves in education is not well organized or understood. Many conflicting interests, sources of funding, the movements of demand, and the competitive nature of education all compete with the best efforts to see students have access to the opportunities America needs to remain strong in the global work force. One of the propositions to increase jobs in growing industries is to reduce tuition for those majors, and the question of the value of this approach is hotly debated. 

The Need for STEM

Jobs in Science, Technology, Engineering, and Math (STEM) are the most in demand in the growing globalized market. America’s past inability to keep up with the demand of these sectors have forced these industries to rely upon importing skilled labor. Now, in response to the need and desire to compete and dominate in these sectors legislatures are making proposals that will help American students get ahead in these fields. In Florida, politician Rick Scott has proposed:

To nudge students toward job-friendly degrees, the governor’s task force on higher education suggested recently that university tuition rates be frozen for three years for majors in ‘strategic areas,’ which would vary depending on supply and demand. An undergraduate student would pay less for a degree in engineering or biotechnology-whose classes are among the most expensive for universities-than for a degree in history of psychology. State financing, which has dropped drastically in the past five years, would be expected to make up the tuition gap. (Alvarez)

STEM degrees are so in demand that students have high rates of securing job placement, as shown in the graph below:

(Figure omitted for preview. Available via download).

The rates of college tuition growth has been increasing to unsustainable rates, and many reform efforts are underway to address this issue. In support of this initiative, at the same time, Mr. Scott want the state’s 28 colleges (formerly called community colleges) to offer some of their four-year degrees for $10,000. That amount is $3,000 or so less than the typical cost. So far, several colleges are planning to take him up on the challenge, which would attract new students and encourage people to complete their degrees. (Alvarez). However, there are five key reasons advocates believe that college tuition should not be subsidized:

1. There is no link between higher education subsidies and economic growth, and none between college degrees and job creation.

2. More subsidies equals more waste.

3. When comparing earning power between college graduates and non-graduates, correlation is not causation, and the actual cost of college matters.

4. Ensuring that everyone has college schooling would not enhance the labor market — it would dilute a university degree.

5. Higher education may be the next bubble to burst. (Skorup)

One problem with making STEM jobs more accessible is ensuring that the right types of students are attracted to the major. STEM jobs are very demanding on many levels, and require the most advanced students. Therefore, some in the industry are worried that making STEM education more affordable may dilute the talent pool, which could damage their industry. STEM jobs are some of the most expensive to educate and train for due to the evolutions of technologies which go into the fields, and the specialized educators required for the transmission of knowledge. For instance, “At New York's state colleges, to give one real-world example, advanced engineering or hard science courses cost more than five times as much to teach than low-level psychology classes” (Weissmann). Making this change would mean the government via taxpayers would have a large load to shoulder if these majors were made more affordable (O’Donnell). 

From a financial perspective it may be more reasonable to charge more for STEM education rather than colleges charging the same per credit no matter what is being studied or what the cost of education is. It is such disconnects as this that is part of the large quagmire of college funding and costs.

(Figure omitted for preview. Available via download).

After all, as shown above STEM occupations are some of the better paying jobs, which offer more support for paying off student loans. Many find the idea of making these degrees more affordable the wrong way to go about the need to strengthen America’s presence in these industries. However, some protest out of a different perspective. In the case of the University of Florida,

a group of history professors criticized the recommendation for tiered tuition and organized a protest petition. Liberal arts devotees across the state are signing it. The professors said the move would inevitably reduce the number of students who take humanities classes, which would further diminish financing for those departments. (Alvarez)

While that concern may be true, professors in these domains must begin to accept that current demand for jobs in the liberal arts and humanities are greatly diminished. Students graduating with degrees in these areas are finding it difficult to be employed and fulfilled. Understanding that tuitions should reflect the cost of education, many colleges have,

(Figure omitted for preview. Available via download).

begun to allow their tuitions to change to reflect this. However, the cost of this has been felt in attendance, as, in the case of engineering, raising the price of a degree by 14.5 percent was associated with a 7 percent point drop in the share of degrees schools awarded in the field. Meanwhile, a 19 percent increase in the price of a nursing degree led to an 18 percent rise in degree share* -- though, for reasons having to do with the statistical calculations, the true jump might well have been smaller. (Weissmann)

However, the same tuition hikes were seen in the field of nursing with no diminishment in attendance, which may reflect the power of altruism. The contradictions in the research on the issue of subsidizing tuition emphasize the need to better understand what motivates the real cost of education.

Conclusion

It is unclear if subsidizing college tuition for degrees in science, technology, engineering, and math would adequately supply the right talent pool for this demanding industry. The imbalance such subsidy would bring to other industries impact may not be felt until it is too late to right. A better approach may be to address some of the root causes of why college tuition continues to grow so exponentially. No matter what industries are experiencing growth, the freedom and quality should remain open for all topics of study.

Notes

1: Chart retrieved from: http://www.businessinsider.com/the-real-truth-about-the-stem-shortage-that-americans-dont-want-to-hear-2013-5

2: Chart retrieved from: https://mn.gov/deed/newscenter/publications/trends/december-2014/stem-educatiion.jsp

3: Chart retrieved from: http://www.theatlantic.com/business/archive/2013/07/should-colleges-charge-engineers-more-than-english-majors/277516/

Works Cited

Alvarez, Lizette. “Florida May Reduce Tuition for Select Majors.” The New York Times, 9 Dec. 2012. Retrieved from: http://www.nytimes.com/2012/12/10/education/florida-may-reduce-tuition-for-select-majors.html

O’Donnell, Noreen. “Subsidizing College Majors.” The Financialist, 7 Feb. 2013. Retrieved from: https://www.thefinancialist.com/subsidizing-college-majors/

Skorup, Jarrett. “Five Reasons The Government Shouldn’t Subsidize Higher Education.” Michigancapitalconfidential.com, 13 Feb. 2013. Retrieved from: http://www.michigancapitolconfidential.com/18279

Weissmann, Jordan. “Should Colleges Charge Engineers More Than English Majors?” The Atlantic, 3 Jul. 2013. Retrieved from: http://www.theatlantic.com/business/archive/2013/07/should-colleges-charge-engineers-more-than-english-majors/277516/