Price Setting

One of the trends in public higher education people are discussing now has to do with the idea of charging students different prices based on their academic majors. Florida’s governor, Rick Scott, proposed such a plan back in back in October.

Now Vermont is apparently mulling something like that, too. According to an article by David Taube in the Rutland Herald:

Vermont State Colleges trustees have discussed the possibility of setting different tuition rates for different majors as part of an effort to remain competitive in a rapidly changing higher education marketplace.

“We all know some programs have more value to their graduates, and some have less,” Chancellor Timothy Donovan said at the meeting of the Facilities and Finance Committee of the board.

Donovan noted that virtually all program pricing at Castleton, Johnson and Lyndon state colleges is the same, regardless of factors like the cost of delivering the program or a graduate’s market value upon graduation.

Well duly noted, but the problem is how to address it. The trouble is that there’s charging people to recoup cost and then there’s charging people to encourage them to study certain things. Which one is more important? Is the goal to encourage people to choose higher market value degrees or is the goal to change people based on the cost of delivery?

While I find the whole notion of changing different tuition to people based on an academic major a little questionable (implying as it does that some majors are “better” than others) the real problem is the difference between the cost of administering the degree and the potential jobs available.

If you want people to major in things that lead to more lucrative processions (Science, Technology, Engineering, and Math, or STEM) it makes sense to charge them very little to obtain those degrees, and make the price of science and math majors cheap. But these are the classes that require laboratories and extensive materials. If, however, you want to merely reflect the cost of administering the courses, it makes sense to change people very little to major in things that lead to less lucrative professions (English, history, psychology). It doesn’t really make any sense to charge people more money to take classes that might lead to low earning professions, because those classes are actually much cheaper to teach.

It is, of course, possible to charge people more money to major in science and math, and less money people to major in the humanities and the social sciences. But this would, of course, cause more people to major in the cheaper majors, and less people to major in STEM fields. And that’s a policy outcome no one seems to want.

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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