Lately I have been re-reading Thomas Sowellβs book, βBasic Economics.β The other day a campaign email from David Garcia appeared in my inbox. It was a fundraiser for his gubernatorial campaign, the pitch being that he will work to make Arizona colleges free of tuition for Arizona students. Synchronicity!
According to the United States Government Accountability Office, student tuition and fees account for about 25 percent of state schoolsβ budgets. State governments contribute 23 percent, local governments 7 percent and the federal government 18 percent. The other 27 percent comes from other sources. The University of Arizona mirrors these percentages.
Since Garcia is running for governor, we may assume that his source for the lost in-state tuition and fees will come from an increased expenditure by the state.
In his campaign email, he writes, βWe need to break down barriers to allow more Arizona students like me to succeed.β Apparently, he sees tuition and fees as a barrier to Arizonans who wish to attend an Arizona state school, but is that truly the case? In-state tuition is a bargain at around $11,000, and with 86 percent of students receiving financial-aid grants averaging around $8,000, itβs hard to imagine that anyone who really wants to attend is prevented from doing so due to the costs. Isnβt Garcia trying to solve a problem that does not exist?
The larger issue, of course, is not how do we get to zero tuition and fees, but what are the unintended consequences of eliminating the effects of price? In βBasic Economics,β Sowell provides a laundry list of programs designed to help people or industries that have resulted not only in failure, but in actually hurting those they were intended to help. Often these programs involved some sort of price fixing like urban rent controls, minimum wages, maximum oil prices and minimum produce prices.
Education is fundamentally no different than most other industries. If the schoolβs revenue came from the customer, known in this industry as the student, then resources (money) would flow to the schools that provide the best product at the lowest price. The successful models would expand and the unsuccessful would close, automatically redirecting resources to a better use. The market is much more capable of adjusting to changes in the industry than the Board of Regents or the Arizona Legislature.
In the ossified collegiate environment of today, colleges make no attempt to attract students by changing education for the better. The status quo earns the government money, so schools add window dressing, like the University of Arizonaβs gigantic student health club, to attract new students.
The Pima Community College Governing Board came under attack after restricting federal grants to incoming students who tested to a seventh-grade education level or higher.
It developed this plan after examining the unintended consequences of financing students who were incapable of succeeding at the college level. It found that the unprepared students would attend PCC, have trouble passing classes, get behind, and when the grants ran out, they would drop out with no degree, no certificate, no job and in debt. For this modification, the board was pilloried by much of the administration and outside advocacy groups β another example of politically popular policies that hurt those they intend to help. To quote Sowell, βEconomic policies need to be analyzed in terms of the incentives they create, rather than the hopes that inspire them.β
If Garcia wishes to make college more accessible, he should advocate for the vibrancy of markets rather than the stagnation of socialism.
