Last semester several CSU students went on a hunger strike in hopes of pressuring Chancellor Reed, one of the chief administrators of the California State University System, to adopt their proposals. The hunger strike ended with little incidence. Chancellor Reed himself formally resigned in late May, but the CSU administration has not met any of the protesters’ demands. Tuition continues to rise while and classes continue to be cut. Unless Proposition 30, a new tax hike, is passed education throughout the state of California will face further cuts. Even if Proposition 30 is passed there will be no increase in funding to schools, they will simply not have any cuts.
Students, teachers, and taxpayers alike are furious over the entire fiasco. Teachers want higher compensation. Students want lower (or free) tuition. Taxpayers don’t want to pay more in taxes. The interests of these groups do not align. In order to have lower tuition students require either taxpayers to pay more, or for teachers to agree to teach for free or lower wages. In order to have higher compensation teachers need higher tuition to be paid or for taxpayers to pay more. In order to keep their own money taxpayers need to convince the former two groups that thievery via the state is still thievery.
Will Reed’s successor move us forward and find a compromise all three groups can agree to? No, the problem is institutional and little will change regardless of who is selected as the new Chancellor. For the same reason it matters very little that CSUN has a new President.
One moderate method of reforming upper education in California is by changing the method in which taxpayer funding is channeled. Currently funding of schools is channeled through two ways, (a) schools receive direct funding from the state and (b) funding received by student tuition. Since many students receive financial aide in some manner (b) is in essence an indirect subsidy that the state gives to colleges. Reform should see funding from (a) be removed altogether and (b) to be modified. In a similar system to the Cal Grant system students would receive a fixed amount of money, ideally a lump sum for a four year education. This grant would be a larger than the current amount given in order to take into account the funding that is no longer given through (a) direct means. For example then;
Let us suppose that currently $25,000 dollars are funneled per student in the Californian university systems (CSU, UC, & CCC) per year. $20,000 of these dollars go to the systems at large directly to be appropriated between their different campuses. An additional $5,000 is funneled indirectly to the college that the student actually attends.
Under the proposed reform $25,000 dollars would be granted to students per year via grant. No money would be given to the Californian university systems. Only those campuses were the student attended would receive any of this grant indirectly via tuition. Ideally students would be allotted a full $100,000 for four years worth of schooling – or perhaps routine payments of $12,500 per semester for the first four semesters and a lump sump of $50,000 afterward for the last two years.
How would this reform be of benefit?
- It would shift who colleges perceive as their customers. Under the current system tuition contributions to college campuses are, while a pain to students, a fairly unimportant source of revenue. Direct funding from the state is much more important and, accordingly, the state is seen as the customer. This is one of the reason why so many administrators receive outrageous salaries and benefits. Hopefully the reform would see less funding going to administrators, and more funding going to opening more classes.
- Competition between colleges would increase as they sought to attract both the best teachers and as many students as they can. Colleges would no longer have a guaranteed source of revenue. They would have to act like private firms and actually strive to satisfy consumer demand!
- Students would have a higher incentive to shop around colleges to find the one what provided the best quality education for the lowest cost. Every dollar they saved would be a dollar that they would keep for themselves.
- By giving a lump sum of money students would be encouraged to finish as soon as possible. Contrary to complaints by students, there is a wealth of open classes every semester. They are however usually in the weekends, early morning, or late night. Since students can receive funding from a substantial amount of time, they don’t have a strong incentive to take these classes. By having a lump sum though students would be encouraged to finish quickly. The quicker they finished would mean less expenses overall, and more money that they would have left over. While this would not cut down on the amount of money spent by taxpayers per student, it would have the benefit of entering these students into the full-time workforce quicker. Other students would benefit from smaller than otherwise student populations. Since a significant portion of students drop out from college in the first few semesters it might be advisable to, instead of giving a complete lump sum, to only give partial payments per semester for the first two years and granting the lump sum only afterward.
- Colleges would have an incentive to restructure their finances. Needless to say, relying on tuition for semester by semester operations is not optimal. Colleges would have to structure their spending in such a way in order to encourage thriftiness in order to accumulate a warchest for rainy days. I know for a fact, for example, that a large disincentive exists in CSUN’s College of Business Administration & Economics regarding funding for departments. Any money that is left over after the end of a year is removed from a department’s financial account. This encourages departments to spend any remaining funds they have at the end of the year instead of saving them for future emergencies. Hopefully reform would see it that this policy would be changed in favor of allowing departments to roll over money left from the present year to the next year without penalty.
Note: Under an ideal world libertarians would wish that taxpayers didn’t have their money stolen and for colleges to be genuinely privatized. Sadly this ideal world is no yet feasible, and so the above moderate proposal for educational reform. The above should not be taken to endorse the current way that upper education is funded. It discusses only a way on how to improve on the current system, given that at the current moment it is politically unfeasible to do away with it altogether.
CSUN Libertarian Blog 