free tuition is an unstable equilibrium

What do the Cooper Union and the University of California have in common? They both promised no tuition and have abandoned that. This leads to an interesting idea about higher education. My hypothesis is that free tuition is an “unstable equilibrium.” Once you get it going, it can be sustainable, since people exert great pressure to keep it that way. But once you charge tuition, it’s impossible to go back. For the University of California, it was the freedom to charge a “registration fee.” Originally meant to cover bureaucratic costs, it very quickly became de facto tuition. It was even litigated and the courts openly admitted it was de facto tuition but needed. The same for the Cooper Union, which is now just another private school with a hefty tuition, after nearly a century of being tuition free.

In a world where college is a certification for the labor market, and entry is restricted, you invite monopoly pricing by producers. In that world, any excuse you can provide that allows you to start charging tuition is the first step in extracting huge amounts of money from students and parents. And that is very hard to resist.

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Written by fabiorojas

January 18, 2014 at 12:04 am

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