Phi Beta Cons

Tuition Freeze in Ohio

I noticed this story by the Associated Press in the Cleveland Plain Dealer. The article outlines the backlash against Ohio’s new Democratic Governor Ted Strickland, who proposed freezing tuition increases for all public universities in his state.
The effects of Governor Strickland’s plan, however, may not be as well considered as its intentions. According to the story, some figures and universities in Ohio are feeling the squeeze of the proposal. Schools would be forced to cut millions from their budgets due to Strickland’s plan. This only exacerbates the tough financial situations many universities in Ohio are facing. Even though the plan promises a small increase in return for a tuition freeze, schools will still be left short of their budgetary needs.
No one is arguing that many large public universities couldn’t stand to trim some fat from their budgets. But the issue at hand, instead, is the Strickland administration’s imposition of what amounts to a price control on the price of higher education in the state of Ohio. As many of the economists at Ohio’s universities could tell you, the imposition of a price control below market value creates an excess of demand for a scarce supply. That is, there aren’t enough resources to meet the demands of increased numbers of students in Ohio’s universities.
Tuition should reflect the market value of education in the state of Ohio. Schools should be free to set tuition rates without having to kowtow to the demands of politicians. Indeed, it can even be prudent to raise tuition rates substantially—just look at Ohio’s up-and-coming Miami University. After raising its in-state tuition to match out-of-state tuition, the school’s academic standards for admitted students increased.
Among other points made their book Equity and Excellence in Higher Education, William Bowen, Martin Kurzweil, and Eugene Tobin demonstrate that there’s a trade-off to be had between meritocracy and excellence in universities (i.e., between affordable tuition rates and attracting the best students). Schools should be left to make the decision on the importance of that decision without having to worry about the Governor of Ohio’s interference.

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