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Should Governments Support Higher Education?

by Richard Vedder

 

As a professor who has spent over 90 percent of my half-century career in higher education at public universities, it was for decades a matter of faith with me that governments need to subsidize higher education. The two major reasons: higher education allegedly has positive “externalities” or “spillover effects” so that even non-college graduates benefit from college educations. Second, like most Americans I support the American Dream, the idea that anyone living in the U.S. can move from the humblest of circumstances to wealth and fame –in part by using education as a means to that end.

Yet there is no doubt in my mind today that governmental subsidies to higher education are excessive –our nation would be better off if we spent less. Indeed, I suspect no governmental spending commitment at all would be preferable to the situation today (although the optimum may be greater than zero). What led to the change in my position on this issue?

Consider the following:

  • Income inequality has increased in the past four decades of rapidly rising higher education, and the proportion of college students from low income groups is smaller today than four decades ago despite massive expansion
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