NCPA - National Center for Policy Analysis

Reforming Higher Education

March 24, 2011

There is a widespread feeling that university training is important for economic success at the individual level as well as to the nation, yet increasing evidence suggests American institutions of higher education are less efficient and decreasingly effective at creating the foundations for such success, according to Richard Vedder and Matthew Denhart, director and administrative director, respectively, of the Center for College Affordability and Productivity.

  • The cost of obtaining a four-year degree has more than doubled since 1975 in inflation-adjusted dollars.
  • Statistics from the 2003 National Assessment of Adult Literacy suggest college graduates have a lower level of reading comprehension than their counterparts of a decade ago.
  • The effort to have everyone obtain a college degree has led to many workers becoming over-trained for the low-skill jobs they take after graduation.

What can be done to reverse these trends?

  • Reduce third-party payments:Ending government subsidies to higher education and removing tax breaks for third-party subsidization would more directly align the costs of higher education to the benefits of those who attend.
  • Fund students, not institutions:Giving subsidies directly to students would create much needed competition among institutions, forcing them to be more conscious of student needs and budgets.
  • Do not push college on everyone: Traditional four-year degrees are not the best option for everyone; alternative postsecondary training programs may be suitable for many Americans.
  • Promote lower-cost alternatives: Traditional four-year institutions are expensive; students can obtain quality degrees at a lower cost by exploring alternatives.
  • Measure institutional success by student performance: Introducing market principles into higher education will provide the necessary incentives for faculty and administration to concentrate on making students' financial investment pay off.

Source: Richard Vedder and Matthew Denhart, "Ten Principles of Higher Education Reform," Heartland Institute, March 10, 2011.


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