There's no such thing as free education
OTTAWA (CUP) — Education is a right,
according to a recent campaign launched by
the Canadian Federation of Students.
With the intention of lowering tuition fees across Canada, this campaign seeks to increase access to post-secondary education by decreasing the associated costs — costs perceived to be detrimental to enrollment rates.
The broke-ass student side of me wants to support this campaign; believe me, I have double the debt possessed by the average university student in Canada. But I've also spent the last four years pursuing a degree in economics, and the economist in me cringes every time I read, "Education is a right!"
In my first lecture, on my first day of university, a wise professor stood before the class and proclaimed, "There is no such thing as a free lunch!" It is one of the basic principles of economics. Whenever one individual or group receives something at no cost, the commodity is not free; another actor in the economy inevitably pays for it. In the case of education, lower tuition fees relieve the economic burden faced by students but the cost is transferred to other individuals — taxpayers.
Another important economic lesson is that intended actions have unintended consequences. While an actor in the economy may intervene in order to achieve a particular result, this action can adversely impact other parts of the economy — including the problem area it meant to remedy.
Too many students, not enough staff
The price for anything is determined by good ol' supply and demand. Without intervention from any other actor in the economy, the price of education should be the result of how those that demand education (students) perceive its value and how those who provide education (universities) respond to that demand.
A government subsidy lowering the cost of education causes tuition fees to be below the price they would be as determined by a free market. At a lower cost, an increased number of students will choose to enrol, one of the CFS's campaign mandates is fulfilled, and we all live happily ever after, right? Wrong.
Government resources are scarce and its ability to subsidize universities is limited over time. This is a main reason why funding for education from the federal government has declined in recent years. When an increased demand for education, due to lower tuition fees, cannot meet this weakened supply, due to a subsequent reduction in government funding, two things happen: Overcrowding and rationing.
Think your classes of 400 are too full? The ratio of students to on-campus resources — housing, athletic facilities, administrative staff — is lower than ideal according to many students, and this can be directly attributed to a lack of resources. This reality forces universities to be more selective of who they let in. Ultimately, lower tuition fees cause overcrowded campuses, which creates the need to limit the number of students accepted into university — an unintended consequence directly opposed to the CFS's campaign's mandate.
Investment, please!
While universities struggle to provide students with the resources they need as funding from the government declines, the continuation of reduced tuition fees serves as a barrier to investment from other actors — most notably, the student. No student loves paying tuition, but many would readily pay more than the current fees if they thought a degree would pay off in the form of higher wages in the future.
Requiring an individual to pay less than they are willing to pay crowds out private investment, capital that is seriously needed as universities struggle to meet the increased demand for their services. The result? Poor ratings in the notorious student-based surveys conducted by The Globe and Mail and Maclean's.
Why should I care if you get a degree?
Have you ever wondered what the point of getting your degree is, other than to get a high-paying job in the future? You aren't the only one. Economists too have considered the real effects of higher education for the economy.
In fact, the idea that degrees are nothing more than a piece of paper that assures a potential employer you are a competent employee was first thrown around by Michael Spence in 1973. In his seminal paper "Job Market Signaling," Spence argues that employers and employees possess different information about a worker's skills. One way to side-step this discrepancy is the creation of a signal that allows a boss to differentiate between good and bad workers — i.e. a university degree.
The thing is, while studies may show that more years of education increase an individual's wage, that same increase in education does not imply higher levels of gross domestic product, meaning education has very little impact on the productivity of our economy as a whole. This forces us to question how much public spending higher education deserves. If the private return to the individual exceeds that to the economy as a whole, shouldn't the individual be forced to invest more in his or her education, as opposed to having it paid for by society?
So, who's paying for lunch?
Government subsidies to education come from taxes, which involves taking money from one group of people and transferring it to another that believes they deserve it. That's obvious. What isn't so obvious is who comprises these groups — the winners and the losers.
A report published by Statistics Canada in 2001 reveals students from low-income families are less than half as likely to attended university than those from high-income families. The result is that low-income families are being taxed to fund institutions of higher learning that are more likely to be attended by children from middle- to high-income families due to more favourable socio-economic factors.
While it is evident that some groups within society are more likely to obtain a university degree than others, the way to remedy these inequalities is not necessarily through lowering tuition fees. The intended consequences of these actions create short-term solutions to problems that will, ultimately, bar those from our institutions of higher learning that they were instated to aid.
Sure, we'd all appreciate a little extra lunch money in our pockets, but it's time to start asking who's paying for lunch.
Editorial opinions or comments expressed in this online edition of Interrobang newspaper reflect the views of the writer and are not those of the Interrobang or the Fanshawe Student Union. The Interrobang is published weekly by the Fanshawe Student Union at 1001 Fanshawe College Blvd., P.O. Box 7005, London, Ontario, N5Y 5R6 and distributed through the Fanshawe College community. Letters to the editor are welcome. All letters are subject to editing and should be emailed. All letters must be accompanied by contact information. Letters can also be submitted online by clicking here.
With the intention of lowering tuition fees across Canada, this campaign seeks to increase access to post-secondary education by decreasing the associated costs — costs perceived to be detrimental to enrollment rates.
The broke-ass student side of me wants to support this campaign; believe me, I have double the debt possessed by the average university student in Canada. But I've also spent the last four years pursuing a degree in economics, and the economist in me cringes every time I read, "Education is a right!"
In my first lecture, on my first day of university, a wise professor stood before the class and proclaimed, "There is no such thing as a free lunch!" It is one of the basic principles of economics. Whenever one individual or group receives something at no cost, the commodity is not free; another actor in the economy inevitably pays for it. In the case of education, lower tuition fees relieve the economic burden faced by students but the cost is transferred to other individuals — taxpayers.
Another important economic lesson is that intended actions have unintended consequences. While an actor in the economy may intervene in order to achieve a particular result, this action can adversely impact other parts of the economy — including the problem area it meant to remedy.
Too many students, not enough staff
The price for anything is determined by good ol' supply and demand. Without intervention from any other actor in the economy, the price of education should be the result of how those that demand education (students) perceive its value and how those who provide education (universities) respond to that demand.
A government subsidy lowering the cost of education causes tuition fees to be below the price they would be as determined by a free market. At a lower cost, an increased number of students will choose to enrol, one of the CFS's campaign mandates is fulfilled, and we all live happily ever after, right? Wrong.
Government resources are scarce and its ability to subsidize universities is limited over time. This is a main reason why funding for education from the federal government has declined in recent years. When an increased demand for education, due to lower tuition fees, cannot meet this weakened supply, due to a subsequent reduction in government funding, two things happen: Overcrowding and rationing.
Think your classes of 400 are too full? The ratio of students to on-campus resources — housing, athletic facilities, administrative staff — is lower than ideal according to many students, and this can be directly attributed to a lack of resources. This reality forces universities to be more selective of who they let in. Ultimately, lower tuition fees cause overcrowded campuses, which creates the need to limit the number of students accepted into university — an unintended consequence directly opposed to the CFS's campaign's mandate.
Investment, please!
While universities struggle to provide students with the resources they need as funding from the government declines, the continuation of reduced tuition fees serves as a barrier to investment from other actors — most notably, the student. No student loves paying tuition, but many would readily pay more than the current fees if they thought a degree would pay off in the form of higher wages in the future.
Requiring an individual to pay less than they are willing to pay crowds out private investment, capital that is seriously needed as universities struggle to meet the increased demand for their services. The result? Poor ratings in the notorious student-based surveys conducted by The Globe and Mail and Maclean's.
Why should I care if you get a degree?
Have you ever wondered what the point of getting your degree is, other than to get a high-paying job in the future? You aren't the only one. Economists too have considered the real effects of higher education for the economy.
In fact, the idea that degrees are nothing more than a piece of paper that assures a potential employer you are a competent employee was first thrown around by Michael Spence in 1973. In his seminal paper "Job Market Signaling," Spence argues that employers and employees possess different information about a worker's skills. One way to side-step this discrepancy is the creation of a signal that allows a boss to differentiate between good and bad workers — i.e. a university degree.
The thing is, while studies may show that more years of education increase an individual's wage, that same increase in education does not imply higher levels of gross domestic product, meaning education has very little impact on the productivity of our economy as a whole. This forces us to question how much public spending higher education deserves. If the private return to the individual exceeds that to the economy as a whole, shouldn't the individual be forced to invest more in his or her education, as opposed to having it paid for by society?
So, who's paying for lunch?
Government subsidies to education come from taxes, which involves taking money from one group of people and transferring it to another that believes they deserve it. That's obvious. What isn't so obvious is who comprises these groups — the winners and the losers.
A report published by Statistics Canada in 2001 reveals students from low-income families are less than half as likely to attended university than those from high-income families. The result is that low-income families are being taxed to fund institutions of higher learning that are more likely to be attended by children from middle- to high-income families due to more favourable socio-economic factors.
While it is evident that some groups within society are more likely to obtain a university degree than others, the way to remedy these inequalities is not necessarily through lowering tuition fees. The intended consequences of these actions create short-term solutions to problems that will, ultimately, bar those from our institutions of higher learning that they were instated to aid.
Sure, we'd all appreciate a little extra lunch money in our pockets, but it's time to start asking who's paying for lunch.
Editorial opinions or comments expressed in this online edition of Interrobang newspaper reflect the views of the writer and are not those of the Interrobang or the Fanshawe Student Union. The Interrobang is published weekly by the Fanshawe Student Union at 1001 Fanshawe College Blvd., P.O. Box 7005, London, Ontario, N5Y 5R6 and distributed through the Fanshawe College community. Letters to the editor are welcome. All letters are subject to editing and should be emailed. All letters must be accompanied by contact information. Letters can also be submitted online by clicking here.
