Taking on tuition deregulation

[TexasTowelie]

In 2003, Texas passed a law deregulating tuition at the state’s public colleges and universities. By 2004, average tuition rates had started to climb; by 2013, they had roughly doubled. That being the case, the subject has been controversial for years, with Republicans and Democrats, including some who voted for the bill in the first place. And tuition deregulation is worth considering in light of the recent debate over in-state tuition for unauthorized immigrants. If next year’s Lege repeals a law that passed with nearly unanimous support in 2001, the spiraling costs of college are surely an important piece of context.

Kudos, then, to Charles Schwertner, the Republican state senator from Georgetown, whose op-ed against tuition deregulation, at TribTalk, is completely commendable:

At the time, supporters of the move argued that deregulation would drive students to consider which university offered the best educational value for their dollar and force schools to compete on the basis of quality and affordability. While the underlying concept of deregulation makes sense in more traditional free markets, proponents of the law in Texas failed to take a key factor into account: the explosion of readily accessible student loan debt.

In Schwertner’s analysis, rising tuition costs aren’t the only ill effect of tuition deregulation; also salient are rising debt burdens among student borrowers. The latter trend is salient, and deserves attention, because student debt is so often a burden for the borrower. And, as Schwertner argues, easy access to student loans helps explain why deregulation is a dangerous approach to higher education. In a traditional free market system, consumer decisions are driven by a number of factors, including prices. Heavily promoted (and sometimes subsidized) education loans distort those signals, especially when the borrowers are 18 year olds raised to believe that a college education is crucial to their success.

The op-ed avoids some of the more contentious arguments that have been marshalled against tuition deregulation. Conservatives have also argued that the market ethos doesn’t work well when applied to college tuition because, as Tony McDonald argued in 2009, university regents are still government bureaucrats, not accountable to consumers or voters. A different spin on that argument is that higher education, in Texas, is oligopolistic; the state’s top public universities could hike tuition to $50,000 a year and still fill their freshman classes twice. Further, by triggering a rise in tuition costs, the 2003 deregulation has arguably forestalled equity improvements; a new study finds that more Hispanic first-time college students would have enrolled between 2003 and 2007 if not for the swelling prices. And then there are the questions of what the university administrators are actually doing with the money: UT Austin may be twice as expensive as it was ten years ago, but is it twice as good?

Read more: http://www.texasmonthly.com/burka-blog/taking-tuition-deregulation