NCPA - National Center for Policy Analysis


November 18, 2005

Primary and secondary schools could learn a lesson from universities, says Richard Vedder, economics professor at Ohio University. Making families pay tuition for public schools and allowing them to choose between schools could reverse the downward trend in school productivity.

American universities are viewed as being the best in the world, yet the perception of K-12 education fails miserably by comparison. Why? Because higher education, even public universities, tend to be more privately controlled than K-12. Indeed, higher education has more market involvement than K-12. For example:

  • Paying tuition to universities leads to different consumer behavior; parents of public school students complain about class sizes of 30 students, but would not do so at a university where the class size could be as high as 200, since smaller classes means higher tuitions.
  • Students are not limited to universities in their districts or states, as they are in K-12 schools, but rather, they have the freedom to choose from public and private universities nationwide; in fact one-fourth of college students are in private institutions, compared with only one-eighth of K-12 students.

However, public schools should avoid the pitfalls of universities since the productivity level of higher education has also fallen over the years:

  • Tuition costs at universities have risen an average of 26 percent over the past two years, compared to a 6 percent rise in overall prices.
  • Reasons include the increased demand for higher education due to subsidies, as well as the increase in the proportion of non-faculty employees at universities, which has doubled since 1970.

Public schools should avoid the generous student loans and scholarships that have contributed to universities' rising tuitions and distort supply and demand. If vouchers are offered to help pay public school tuition costs, they should be for a set amount.

Source: Richard Vedder, "Market-Based Education: What Can We Learn From Universities?" Cato Journal, Vol. 25, No. 2, Cato Institute, September 2, 2005.

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