There is a fundamental debate raging in the higher education world right now. The basic resolution reads: Is higher education a public or private good?
Without a doubt, this is an important question. If, in fact, it is a public good, the state's role in funding higher education is clearly established. The state would then have an obligation to ensure that students can access higher education since the result of that education benefits state and society alike. Meanwhile, if it is a private good, as proponents of this position explain, the costs of an education should fall entirely onto the recipient - the student - since it is the recipient who, more directly, enjoys the fruits of his education.
In economic terms, a public good is characterized by two prominent principles: non-excludability - that is, the impossibility of excluding non-payers from consuming the good - and non-rivalry - that is, the quality which allows more people than intended to consume the good without diminishing its ability to be used by others.
The classic example of a pure public good, amply demonstrating both of these principles, is national defense. National defense is non-excludable because it is not possible to exclude non-payers - free riders - from consuming the good. My neighbor, who fails to pay his taxes which fund our national defense, still benefits from that same system which I fund. Likewise, national defense is non-rivalrous since an increase in the population of our society is independent of our armed forces' ability to protect it.
Yet, as with most things in reality, very few things fit the mold perfectly. In other words, with the exception of national defense and a few other examples, nothing is a pure public good. Usually, a good may satisfy one criterion, but not the other.
Case in point: higher education.
In higher education, it is obvious that people who cannot pay, cannot attend. Thus, the good is excludable - it is possible to exclude non-payers from consuming the good. In contrast, the more people who receive a higher education degree does not diminish the good's value to society at-large. So, it is a non-rival good.
Society benefits when more people go to college. People with a college degree, for example, earn more than others. These same people are drivers of inventions and new modalities for production, cooperation and management. In sum, people with college degrees are better citizens. They add greater marginal value to society compared to a high school dropout or even graduate.
Therefore, if others, including the state and those without a higher education degree, stand to benefit from higher education, then it follows that the costs of such an education should be shared, too.
But according to Gov. Bob McDonnell's budget plan, now before the General Assembly, such is not the case. While his post-secondary schools budget does increase funding for higher education overall, the plan simultaneously puts a cap on the amount of revenue from in-state tuition and fees that can be used for financial aid. Put differently, McDonnell wants to limit the amount of money students, particularly low- and middle-income students, receive to pay for school.
Limiting the source of financial aid is dangerous and disastrous at a time when the student debt burden is continuing to rise; when the cost of school is becoming a larger factor in the decision to attend an institution of higher education; and when, according to the Richmond Times-Dispatch, Peter Blake, director of the State Council of Higher Education for Virginia, emphasized that "student need is on the rise largely because of the weak economy."
Not only does the cap on in-state contributions to financial aid prevent a more socioeconomically diverse set of students from attending and benefiting from our institutions, but it also puts a heavier burden on our schools to find sources for funding. Moreover, not mentioned in the plan is the cost this would impose upon society. If students cannot strive for higher education, a non-rival good, then society as a whole loses out.
The debate about whether higher education is a public or private good is part and parcel of our discussion about how we ought to fund our public institutions and how that funding is distributed.
Given that the state benefits, economically and socially, from more college graduates, there is an obvious reason to concomitantly invest more heavily in public higher education and ensure all students, from diverse backgrounds, can attend college. McDonnell's proposal to limit the percentage of in-state tuition and fees directed for financial aid ensures the opposite outcome. If anything, his view borders on characterizing public higher education as a private good, one in which each must pay for higher education on his own.
This view is fundamentally wrong and untenable. After all, we cannot have a strong commitment to our state without an even stronger commitment to our institutions of higher education.\n
Neal Modi is a fourth-year College student.
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