Monday, June 14, 2010

Dumbest Idea of the Month

By Richard Vedder

Eric Fingerhut is Chancellor of the Ohio Board of Regents. Fingerhut is very bright, often somewhat innovative (a rarity in Ohio), very liberal, and, I suspect, politically ambitious (he once was in Congress and I think has the itch to be a governor or senator).

Yet today's Columbus Dispatch reports that the Board of Regents is contemplating imposing a charge on students wanting to transfer schools within Ohio. The argument is that higher education is starving for funds (a bit of exaggeration in my judgment), and this is a way to raise revenues. It may be another of many imaginative ways to get around a tuition cap that was imposed by the legislature.

The idea is just plain dumb. It is the equivalent of a tariff, a burden on migration from one school to another. Interschool movement often is in the student's best interest and increases competition between schools. Students who made a mistake in selecting a school can right the mistake. Students who change majors, decide they need to stay at an university near home to save money, etc., often benefit by changing schools. The idea of taxing such movement is irresponsible. The straightforward thing to do is raise tuition fees if revenues are inadequate, but that is impossible given the existence of price controls.

I don't like the soaring tuition fees of recent years, but am increasingly convinced that tuition caps are not any sort of solution. The root problem is the perceived need of universities to engage in an academic arms race, funded in part by generous student loan and grant programs of the federal government. Underlying problems other than excessive third party payments are the non-profit nature of universities, their awkward and expensive form of shared governance, the lack of a well defined bottom line, etc., etc.

Aside from opposing the fee for moving between schools, I worry about excessive centralization of decision-making, the move towards the Soviet style planning and administrative apparatus that pervades public K-12 education --with predicitable results. Beware of excessively strong central cooordinating boards.


I have been absent from this space for awhile, mainly because of an accelerated work load and a brutal travel schedule. I hope to write more in coming weeks. In the meantime, a blog I did for the Chronicle of Higher Education appeared last week, and has led to a retort by fellow Chronicle columnists (on their Innovations blog site) Sandy Baum of the College Board and Mike McPherson of the Spencer Foundation. I will be replying to them shortly. My blogs should be available on the CCAP web site, albeit with a short lag.

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