On Cost Cutting

In light of Education Secretary Arne Duncan’s challenge yesterday to American universities: cut costs, somehow, it’s time to consider options.

Since the challenge is so lofty that literally any idea might be welcome, let’s throw one around, just as a thought experiment.

Last week Bob Samuels wrote in a piece for the Huffington Post that all state universities should be tuition free.

The plan is vague, and not easily implemented, but it would acutally work at keeping costs down. He says:

Not only do we need to push our politicians to support free universal higher education, but we have to show the voting populace that a federal program would help to alleviate the incredible expense that postsecondary education now costs middle-class families.

He also recommends the federal government “set realistic caps on tuition increases.” That might not even be necessary.

If colleges were free for students, then all college costs would have to be met by the federal and state governments. That means that institutions would be beholden to the government whenever they wanted to buy more things. If colleges couldn’t easily raise money through tuition hikes, that would certainly keep them from spending it.

Granted, the consequences of this would be unfortunate for college budgets. Schools without devoted alumni or generous legislatures would defer campus maintenance, cut staff, offer fewer services, and generally become shabbier.

But isn’t that how state institutions generally operate?

As it is colleges can raise tuition if they need to spend more. This doesn’t mean that colleges are wasting money; it just means they’re behaving in an economically rational matter. If they can spend more without adverse consequences, why wouldn’t they do so? But if student tuition were entirely removed from the equation, you can bet that college costs wouldn’t increase nearly as rapidly.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer