what are options or solutions to this problem what can be done to make the probl
ID: 1131719 • Letter: W
Question
what are options or solutions to this problem what can be done to make the problem with the college and universities
In the face of stable (or declining) enrollments and increasing costs, many colleges and universities, both public and private, find themselves in progressively tighter financial dilemmas that require basic reexamination of the pricing schemes used by institutions of higher learning. One proposal advocated by the Committee for Economic Development (CED) and others has been the use of more nearly full-cost pricing of higher education, combined with the government provision of sufficient loan funds to students who would not otherwise have access to reasonable loan terms in private markets. Advocates of such proposals argue that the private rate of return to student investors is sufficiently high to stimulate socially optimal levels of demand for education, even with the higher tuition rates. Others argue against the existence of significant external benefits to higher education to warrant the current high levels of public support
Explanation / Answer
Education is a social good and if it is privatized entirely, the private players may not have any incentives to provide good quality education at affordable prices as their sole motive is to maximize profits. On the other hand, public provision of higher education may not be finanacilally viable for the government and may also be prone to rampant corruption if the institutions in the country are inefficient as is the case with many developing countries.
One solution to this dilemma is to promote private public partnership in provision of higher education. This will ensure that while private players invest in education, the government scrutinizes their performance and regulates any misconduct on part of them. However, the costs of education will rise and may not enable students from unprivileged backgrounds to enroll themselves in higher educational institutions. The governmnet can encourage poor students to enroll themselves in higher education by providing easy student loans at low rates of interest to these students.
Another important thing is to increase the returns on higher education by making the higher education curriculum and training more aligned with the requirement of skills in the job market. In many cases, the possession of a college or a higher education degree doesn't guarantee a job creating a pool of highly educated unemployed people. This can be avoided if there are jobs available in line with their educational qualifications and training.
So, it can be concluded that privatization of higher education may be crucial for improving the quality of education since government has a budget constraint. At the same time, it is crucial that government regulates these institutions to check their performance. Apart from this, provision of subsidized student loans and increasing the returns to education (as discussed above) can be solutions to the problem of investment in higher education.
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