Tuesday, July 31, 2007


Pricing by Major, Revisited

I don't usually do back-to-back posts on the New York Times, but this Sunday's issue provided atypically fine fodder.

According to this article, more colleges and universities are setting different tuition levels for different majors.

I've weighed in on the subject before (here and here), so longtime readers know that I'm broadly supportive of differential pricing, as long as it's based on the actual cost of providing the service. I'm essentially endorsing taking the 'lab fees' model and using it to capture more of the true cost of certain areas, such as Nursing. My theory is that limiting the institutional losses on a given program will make it easier for the institution to provide enough seats in that program to meet (or almost meet) demand. (More subtly, the cost premium attending to Honors programs will allow those programs to continue, which is important to the extent that they bring in the offspring of the affluent. Without a meaningful connection to the elites, public institutions become typecast as institutionalized welfare, and suffer funding shortfalls accordingly. If we can attract Muffy and Skip with some premium programs, we can use that leverage with their parents to maintain or improve our quality levels for everybody else. It's the same logic behind sending Social Security checks to rich people.) The alternatives are waitlists, which strike me as far less desirable, and a continued hollowing-out of the liberal arts, which strikes me as both immoral and eventually self-defeating.

According to the article, though, two areas that are getting price hikes are business and journalism.

I'll admit being surprised at both, though more so at journalism. (And I'll admit that my perspective is informed by being at a two-year college, so my sense of what's needed in those fields reflects what's needed in the first two years.) Entry-level journalists don't make much at all, and it's an intensely competitive field, so the folks being asked to shoulder premium tuition will almost certainly be ill-equipped to pay it back. As one blogger aptly put it, nobody says “yeah, I make good money, but it's not newspaper money.” George Will's paycheck is impressive, but also unrepresentative.

(If I were king of the world, I'd require prospective journalists to get solid backgrounds in history, economics, political science, and sociology. Learn something about the world, so your sense of what's unusual enough to bear scrutiny will be grounded in something. Have some basis for independent judgment when The Powers That Be hand you their press releases. But that's another post altogether.)

At least with business, I could imagine an argument that the market will bear it, and that's the first lesson business students should learn. (The article says the premium is needed to pay six-figure salaries to assistant professors. I'll just say that's not my world and leave it at that.) The courses taught in the first two years have pretty low direct costs, but I'd guess the grads could be assumed to have a reasonable shot at higher salaries, so premium tuition would be an argument from prospective progressivity.

That argument strikes me as very slippery, though. At least with lab sciences and nursing clinicals and studio art workshops, it's fairly easy to point to what the student is getting now to justify paying extra now. (The same would be true of Honors programs with very small classes.) Whether the student goes on to succeed in the field or not, at least she's getting some value for the money upfront. It's not clear to me what the business major would be getting above and beyond what she gets now, at least at this level.

One of the officials interviewed in the article notes, correctly, that the shift to differential tuition is, in part, a recognition of the cultural shift from viewing higher ed as a public good to viewing it as a private good. If it's truly a private good, then it should be priced accordingly. (This does not bode well for public institutions generally.) We publics have our work cut out for us. If we act in acknowledgement of a cultural shift that has already occurred, we grease the skids. If we act as if nothing has happened, we hit progressively tougher funding limits every year.

Nobody said this would be easy.

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