Is Tuition by Major a Good Idea?

A Florida state task force on education has just released a recommendation to adjust tuition, by major.

“Tuition would be lower for students pursuing degrees most needed for Florida’s job market, including ones in science, technology, engineering and math, collectively known as the STEM fields,” writes Scott Travis of the South Florida Sun-Sentinel.  Students in other majors — psychology and the performing arts, for example — would pay more.  “The purpose would not be to exterminate programs or keep students from pursuing them. There will always be a need for them,” Dale Brill, the task force chair, told Travis. “But you better really want to do it, because you may have to pay more.”

Here‘s how Alex Taborrak (of Marginal Revolution) sees the plan:

The task force has the right idea but the right way to target subsidies is not to the job market per se (let alone Florida’s job market), wages already reflect job market needs. Subsidies instead should be targeted to fields where education has the greatest positive spillovers, benefits that spill over wages and flow to the public at large. Overall, this likely means subsidizing the STEM fields more than anthropology which is why the taskforce has the right idea. If the task force wants to explain the idea, however, they should make it clear that the goal is to focus subsidies on those fields where education most benefits the taxpayer.

Readers, what do you think?


M. Lapin

Yes, yes, yes. I think we need some significant education reform, and this is a good step in the right direction.

Chris S

The biggest problem I see is the time horizons involved, in two different ways.

First, the tuitions will likely have to be set based on past effects. But the time to turn tuition into taxpayer benefits is non-trivial. It could be decades, but even without that long run-out, it could easily be longer than the time needed to pay off student loans. If the benefits to the taxpayer of *my* subsidy (not the historical one), should I receive recompense, even though the education is behind me? Or - if the change swings the other way, do you come back asking for extra money because my degree is no longer matching up with the actuarial forecast of its value?

The other time horizon problem relates to attempting to accurately capture the long-term benefits of any decision. How far forward do we look? Try imagining if Shakespeare needed post-secondary education -- I'm sure that subsidy would be more than paid off by now, even allowing for future income discounting. This subsidy is almost certain to lean in the direction of over-valuing short-term benefits, if only because politicians need electing every four years or so.

Buried in this is a deeper question I've always wondered about. If economists provide a solution (such as this subsidy structure) that turns out to have unexpected costs, who should pay those unexpected costs? If the system doesn't work as expected, should the economist who made it be responsible for making up the shortfall?

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Mark

Yes, it is. If taxpayers are subsidizing the cost to a significant extent (i.e., not just lending money to students) then it's fair to price different majors according to their expected benefit to society. No one's dreams are needlessly stepped on by doing so, and it's a good way to send the message that it's time for American students to quit being afraid of math and science.

Daniel

This tuition varying idea was brought up on this posting a little while back:

http://suehpro.blogspot.com/2012/07/whats-your-major-governor.html

Erik

When I read the headline, I expected for it to read the other way. I was expecting to see tuition decided based on return. For example what if tuition was determined based on how much you could pay off in an 8 year period. Therefore everyone can pay for their education before they reach 30 and more than likely begin buying homes and having children. Performing arts, psychology, education would be less than business, science, math, technology. This way kids don't just choose whatever makes the most money or whatever is the least expensive they can choose what they are best at.

Tim

I don't think an education policy could be much worse than one that would further incentivize low value majors.

Enter your name...

"Low value in terms of future income" is not the same thing as "low value". Pre-school educators get paid poorly, but they provide a lot of value to society.

Erik

We need immediate education reform before this bubble pops. Tuition keeps rising and loans continue to be handed out no matter the cost. This trend can't go on forever.

Mike R

As someone who has an advanced degree from a very good engineering school, I fail to see why I would want more people to enter science and engineering. Doctors and lawyers have been very good at limiting access to their fields and until recently, were paid far more than engineers.

My point is that if we really want engineering to be attractive, it needs to have the professional respect of other difficult fields. I don't think a few thousand dollars in tuition will make much difference.

JonE

While I like the idea of this policy, won't it over-subsidize certain fields? Specifically, doesn't the job market already signal to students which jobs are most in demand by offering a higher wage?! Because the market for higher education and the job market are separate (though indirectly interconnected), the lowering of tuition on the front side would not move directly with the wage on the back side.

Maybe I'm misunderstanding it though.

James J.

Yeah, nothing like producing a bunch of poorly trained specialists lured by bargain tuition.

jamie saks

I recall hearing awhile back, back when Englanders were rioting in the streets, that UK universities were planning the same thing.

Michael Johnson

At most universities, the humanities are already subsidizing the sciences and engineering. The costs of educating students in the sciences is much higher than in the humanities (it roughly boils down to the costs of scientific equipment vs. costs of books). When tuition is the same across majors, departments/schools with lower costs have a net surplus. This surplus helps to pay for the higher costs of engineering and science departments.

Mike R

Actually that's not entirely true. Most research engineering departments give somewhere in the neighborhood of 50% of their grant money back to the university as "overhead." And these schools land some very large grants.

Drizzl

We're basically already doing this, but on the back end. The STEM degrees result in entering a better workforce market, compared to the others, that end up serving coffee.

Enter your name...

It will never fly. But the equivalent money on scholarships that offset tuition for STEM classes would.

Andy

As the proud father of two (female) math majors, I think this is a great idea! My personal interest aside, the reason this is needed at college tuition time is that entering college students are largely unaware of the financial desirability of certain majors compared to others. They are only advised to "follow your passion".

Jack

Any time the government tries to arbitrarily decide what career is more valuable to society, they're bound to get it wrong at some point, cause a cascade of unintended consequences, and debate for years before adjusting.

A better choice would be to let the market set tuition--if a certain major is popular (say, business or finance), raise the price, and vice versa.

Additionally, if the government insists on subsidizing certain careers, let it promise full or partial repayment of tuition/forgiveness of student loans *upon successful completion of a degree*, with the amount of repayment tied to level of performance. Agree with Alex that it should be based on taxpayer benefit though (so include education, fire science, in addition to STEM ). Maybe should have accelerated loan repayment for those STEM majors who agree to be public school science/math teachers for several years.