Pricing Higher Education

We have, from time to time, given some passing thought to our daughter's post-high school education. We're hoping that she chooses to go to college for the practical reason that we believe her chances of being financially successful are greater if she does. We don't necessarily believe that she should go immediately after high school -- we've read enough to make us think that for some students, taking time off is a good idea. I didn't so much take time off as bolt entirely, going into the military for a stint. It was beneficial to me, because I needed to mature. Other students might have other reasons. Depending on what her reasons might be, we're prepared to fund a year or two off for her -- it's what we've referred to as the First Year Fund, intended to pay for her first year in any college (barring the absolutely most expensive), but more generally to let her feel that her options are open, based only on her skills and desires -- money shouldn't be one of them. So if what she really wants to do is to go to an expensive school, we'll help her pay for the first year, with the understanding that she'll need to pursue scholarships and loans afterward. And if she wants to take a year or so off and do something that we think is worthwhile, we'll fund it - though if her idea of worthwhile is watching reruns of Scooby-Doo, probably not.

I thought of these things while looking at this, in a general review of popular economics books in a column on the Chronicle of Higher Education's website, here. The article speaks of a book called The Economic Naturalist, by Robert Frank, an instructor at Cornell who has asked students to write short essays on some pattern or behavior that they've witnessed. The reviewer's favorite is this one:

Why don't top-ranked private universities charge higher tuitions than lower-ranked ones? Fox's answer is that capable students are both customers for and producers of college educations. A college with a higher-ranked student body will have more challenging classes attractive to high-ranked students. A college is selling not just the services of its faculty and library but the chance to interact with other smart, lively, and curious students. Were Yale to raise its tuition to a level at which it began losing significant numbers of students to cheaper Wesleyan, it would find that some of its appeal to top-ranked students had vanished. "The top-ranked school," Frank argues, "needs its most accomplished students every bit as much as they need it."

I've heard it said, and I believe, that the first year of college is pretty standard across all campuses, establishing a baseline of understanding for later paths. I've also heard it said, and I believe, that while the opportunity to meet and learn from reknowned instructors is much greater at Harvard, Stanford, and the like than from second-ranked schools, the benefits are only found if you actually do that -- ie, if you're in the classes that the Nobel winner teachers, in the symposia that the former Secretary of State teaches. Otherwise, no benefit. As to the idea that you might want to go to a school because the other students are more likely to be smart and lively -- I can see that as a tertiary, distinguishing characteristic -- but not as a reason to make the first or second cut. You're pacing yourself against them, true -- but not learning from them. I think that you first choose who's good, better, best in your fields of interest; then you look at which are practical for you to attend (I think you should reach, but not to extremes), and only then look for the other reasons to go or not to go.

Of course, I went to a commuter college five miles from my home, doing the program in two years so that I could get it done .... so I could be a little biased.