Thursday, January 04, 2007


On Wisconsin

I've read this six times, and I still can't be sure I'm getting it right. According to the Chronicle,

A state commission in Wisconsin is considering whether to recommend a plan that would provide free tuition to state residents who graduate from any campus of the University of Wisconsin and then agree to work in the state for at least 10 years, or who graduate from a community college in the state and make a similar commitment for at least five years.

To which I say, WOW, that's a terrible idea. It would take serious, focused effort to come up with an idea as bad as that. I shouldn't be surprised that it came from a committee.

Like many awful ideas, it has a patina of plausibility to it at first blush. Yes, it's good to have an educated workforce. (Would you expect a cc dean to take issue with that?) Yes, educated workforces draw employers – if tax burdens were the only issue, the Northeast would have self-destructed years ago. Yes, achieving a critical mass of educated young people in a given area makes it much likelier that innovative startups will develop there, as anybody who has read Richard Florida knows. And yes, it can be hard, at first, to explain why a state should subsidize the education of someone who will march out the door with the freshly-minted credential the day after graduation. All of that, granted.

But flip it around.

Assume we're talking about traditional-aged students. A four-year college grad will enter college around 18, and graduate somewhere around 22. This grad has to commit to staying in Wisconsin until at least 32?

Quick quiz for the comments section: how many of my over-32 readers still live in the same state they did at 19? I don't.

What happens between, say, 18 and 32?

For most people, those years involve finding multiple jobs, figuring out what you want to be when you grow up, seeking (and hopefully finding) a long-term mate or two, sometimes having children, enduring both an economic boom and an economic slump or two, maybe heading off to graduate school, maybe starting a business. The list goes on.

Suppose I'm some enterprising 27 year old who signed up for this plan at 18, went to UW-Madison, graduated, and duly found work in, say, Sheboygan. Now suppose I meet my sweetie. Suppose my sweetie gets a job offer she can't refuse in, say, Durham, NC. Now I have a lovely choice: ruefully tell my sweetie that peasants are tied to the land, or go with her and suddenly assume the burden of four years of tuition (plus interest? Tuition at current levels?) without eligibility for financial aid, thereby making it that much harder to, say, buy a house and get on with life.

The folks most likely to have get-up-and-go, the ones you most want to keep, will be the ones who won't do this. The ones who might do it, by and large, will be the ones who would have stayed anyway.

If I'm wrong, it's even worse. What if a starry-eyed 18 year old signs up for this, then decides to go to med school or law school? It's UW or nothing, pretty much. If the kid could have gone to Yale, he'd better be prepared to pony up four years' worth of tuition posthaste, without financial aid. The tax implications alone are staggering.

Large companies might not want to bother recruiting in Wisconsin, if they know that the sharp young grads they hire won't be eligible for out-of-state transfer for ten years. As economic development plans go, this isn't good. (Besides, isn't that a kind of barrier to interstate commerce? Doesn't the Constitution have something to say about that? Wisconsin can't put a tariff on goods from Pennsylvania. How is this different?)

Besides, the economy is far more volatile than a plan like this assumes. A kid from Michigan who decided in the mid-1990's to go work for Ford, when it was rolling in money from all those SUV's, is probably unemployed right now. A kid who went to grad school in the early 1990's to catch that “great wave of retirements” is, well, you know. And who foresaw VOIP fourteen years ago? You just can't be that sure.

(That's why a plan like this bothers me in a way that ROTC doesn't. At least with ROTC, if you complete the program successfully you're guaranteed a job. In the Wisconsin case, if there's a regional recession during your period of indentured servitude, well, sorry.)

What the Wisconsin plan utterly fails to grasp is the nature of the educated worker. If you want to attain a critical mass of young creative-class types, you won't do it by trapping them. You'll do it by attracting them, until they start attracting each other. Pour the money that would have gone into tracking down those miscreants who moved at age 28 for a spouse or a job into something actually useful, like maybe upgrading a second campus to Madison level or upgrading some Madison programs to the next level, or even strengthening the academic transfer core programs at Wisconsin cc's. Maybe refurbish some downtowns or improve some light-rail systems or slow the rate of tuition increases generally or cut somebody's taxes. But don't try to clip the wings of ambitious young people whose idea of the world stretches beyond the state line.

Politics is WI are pretty odd sometimes. They often come up with laws that won't do anything usefull. But they pay for everything with a very high tax rate, so I'm looking forward to leaving.
East Germany and Romania used to do this - I think Romania charged $40000 to let someone emigrate, on grounds that the state had invested in them. Sliding fee, depending on what education they had. 'Wisconsin - The Romania of the United States' what a gripping slogan.
Spectacularly bad, but just the sort of thing that legislators love.

Then we have Florida, where a high gpa in high school translates into a free university education, no matter where they go afterwards.
Ten years does seem an awfully long time for the young and ambitious. One could imagine it would attract the kind of people who weren't planning to leave the state anyways.
For the "comments" question:

While there's never been a time when I didn't officially live in Michigan, between school and the army I spent most of my 20s (and my 32nd year) elsewhere. Which is consistent with your point, I think.
Oh my gosh, yes, isn't that just the dumbest thing you've heard in a while? Is there an election going on or something because this sounds like just the gimmick to get votes.

On the radio I heard that something like 80% of WI college grads stay in state *anyway*. The state has been cutting the university system budgets for years. This plan would be one way to go about having the state fund public education but I don't think something that smacks of indentured servitude is good policy.
Oddly enough, I did live in the same state in which I went to college 10 years after graduating (and I live there now)...but hardly continuously.

This porposal is a spectacularly bad idea. Suppose every state did something similar. Then the mobility of labor within the US would be dramatically reduced, and the ability of firms to recruit the best & the brightest would be reduced. So productivity growth and output growth would fall. The worst of all possible worlds, says the economist in me...
perhaps a little restraint of your condemnation is in order. the details may be a little off, but the idea doesn't seem that spectacularly bad to me. the uw is an excellent system and i don't see any problem with enticing its graduates to stay.

perhaps a better way of looking at it is this. let's say a student takes out a loan to cover their higher education as is typical. then for every year spent working in wisconsin, the state pays off a percentage of your loan. is that really that outrageous?
It's a very interesting thread you have here. Countries such as Malaysia, Singapore, and Thailand have had government-sponsored scholarships for their students for a long time. In exchange for a fully sponsored education at a reputable university (often locally, or in the US or UK), students agree to work for the local government upon their return for a significant period of time, e.g. 5-10 years. Since they are guaranteed a job, that portion of your argument doesn't apply here; on the other hand, the opportunities in small countries are much fewer, and there is a clear sense of constriction in this sense.
Wisconsin's idea is workable if it went something like this...

Student finances educaiton by normal means, when they complete 10 years of continuous residency, the state refunds tuition. So, moving would have long-term impacts and thus would have to be worth leaving the state.

The problem you don't seem to see is what happens once the 10 years are up? I know I'd probably stay until I got my reverse tuition check and then use that money to leave... talk about creating a donut in the population...
Mm, anonymous, I see a big difference between "enticing grads to stay" and the action being proposed here. Something that would entice me to stay somewhere would be an incentive program, more like what you described (paying off loans for every year worked), rather than a program that seems to restrict movement in this way.

True, it seems to be phrased as an opt-in program (which I didn't catch on first reading; I thought it would be automatic, which would have been just awful), but it also seems very carrot-and-stick to me. There's the carrot of a free education now (which is great, and which would undoubtedly appeal to many who wouldn't ordinarily be able to afford college), but that's a whopping big stick to hold over someone's head for ten years.

I haven't yet reached my 32nd year, but if I were held to that same standard (ten years in the state I went to college), I'd've already broken it, and I just graduated in May. Granted, I also went to school out-of-state, and just moved home.

It is nice to see people thinking about these sort of things, though, even if they come up with spectacularly bad ideas occasionally. I know a number of people for whom this would be a great idea (mostly people in tightly-knit families from lower-income areas, who don't expect to ever leave the state or move far from their families, and would/will/are hav(e/ing) difficulty paying for college), but I know even more for whom this would be an enticing but awful trap (highly motivated people who have big plans, but who have fallen on unforseeably hard times paying for their college education, yet who are still seen as ineligible for financial aid to the degree that they actually need. This is unfortunately far more common than, well, common sense would dictate it should be).

And whatever the decision is, something ought be done about the structural barriers we have in place to educational attainment. I just wish there were more... mm, considered, proposals floating around.
"let's say a student takes out a loan to cover their higher education as is typical. then for every year spent working in wisconsin, the state pays off a percentage of your loan. is that really that outrageous?"

I think it is, unless person is providing services to the state of Wisconsin in exchange for the loan forgiveness.

Let's say that, thanks to the wonderful college education, the UofW grad is making 2x the average wage of other Wisconsin taxpayers. Why should those others chip in to help pay down his education debt, while he keeps all the benefits?

If the goal is to have an educated workforce in the state, why not allow a state income tax deduction--beter yet, a credit-- for all college tuition loan repayments, regardless of what school was attended (in-state or or out-of-state, public or private)?

I think DD's analysis of the impractical impact of the plan is spot on.

yes, 10 years does sound like a lot, but it seems consistent with other reward-now-pay-later educational programs, e.g., rotc. in fact, the chance of buyers remorse is much greater with rotc, where one stands a significant chance of dying, than with the wisconsin plan. and yet we've collectively decided that's acceptable. in wi, they just want the student to contribute something to the place that made him.

in addition, if the tuition burden is progressively lightened over the course of those years, it becomes less restrictive. by that time, the person is more likely to just stay where he is (presumably to wi's benefit).

usual suspect,
"Let's say that, thanks to the wonderful college education, the UofW grad is making 2x the average wage of other Wisconsin taxpayers. Why should those others chip in to help pay down his education debt, while he keeps all the benefits?"

i think you partially answered your own question. college educated folks tend to make more money --> more tax revenue. also, they're more likely to generate business and jobs for other people --> more tax revenue.

and in any event, paying the tuition of promising students is something every state already does to more or less extent (see ccphysicist's comment above).

disclaimer: i'm from wisconsin and unduly proud. ;)
Well, it is easy for me to simply condemn this as another plan from a renowned socialist state (Madison has been a hotbed of socialism--by US standards--for some time.) But that would be too easy, and perhaps a little too knee jerk.

I would like to explore a bit further the question posed by "doc" asking what if every state did this?

We would certainly see a shift of the burden of paying for a college education off the student, and onto the taxpayers of those states that have adopted such an approach. (Socialist, and hence not a surprise for WI). Why should a family seek to help their child pay for a college education if a) they are already paying for everyone else's child through taxes, and b) they could have the "state" pay for it. Ignoring of course that fact that the majority will see it simply as "free" education.

The other shift of funding is perhaps more interesting. If every state did this, then those it might limit mobility for are those who could not afford the education on their own. But another possible outcome could be that it shifts the burden of college reimbursement for those leaving the state (those most desired by corporations) to the corporations themselves who would build into any contract offer a "buy out" of the tuition bill.

Would that be a bad thing?
"I've read this six times." What did you read six times? The Chronicle article of the details of the plan? It seems to me before we can say that "DD's analysis of the impractical impact of the plan is spot on" we need to know the details. Many of your objections might be mitigated through thoughtful clauses and programs for renumeration. It could in fact be a very good thing. We just (or at least I) don't know the details yet.

DD, you need to be careful, you are starting to sound like those old guys you so often criticize who complain "but we've always done it this way." :-)
That should read "The Chronicle article OR the details of the plan?"
*sheepish grin*
I manage a team that is primarily people who seem to have been hired for their stability. They don't have the technical skills they need to do their jobs properly, but they wouldn't dream of moving on to another company where their skill level or lack thereof might be a better fit. This policy would appear to give WI a workforce much like my team--people utterly lacking in vision, initiative, unwilling to change. Not exactly the sort of population that would breed entrepreneurs or innovators.
One thing I missed the first time around was the key word, *tuition*. Even in Wisconsin, where tuition is maybe three times what it is in some southern states, living expenses (room, board, books) probably exceed tuition as a cost of going to college. They are not really offering a free education, unless "tuition" is being used loosely in the story (which I have not read).

PS - I had to laugh at the one comment that would generalize to an argument claiming Jeb Bush is a socialist for supporting various tuition waiver plans. Someone needs to study a bit of history regarding the difference between the Progressive Movement (still strong in the midwest, even among Republicans) and Socialism.
I have a friend who I met in college who got a scholarship from (IIRC) the Massachusetts state teachers association, a fairly substantial one for the snooty private school we went to.... On the condition that he return to MA and work as a teacher within some predetermined period.

He finished his BA -- before I knew him -- went off to Korea to teach for a year, then came back to start on his MA. Only he discovered that he really didn't want to teach.

So they converted his scholarship into a loan. The part I really don't remember was how they calculated interest. What I do remember was that it was a ginormous hunk of money.

He worked for a community theater for a while, then went to SF and got into tech, and now is quite well off. But he only managed to pay off the loan because of some random inheritance from an aunt? Something like that.

The whole thing struck me at the time as exceptionally weird, and so does this.
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