Taxpayers lose when colleges are too big to fail

  • Article by: Richard Vedder , Bloomberg News.
  • Updated: October 1, 2012 - 10:51 AM

If a school can manage to cover even only, say, 75 percent of its costs through tuition fees and other sources of revenue, it is likely that government will cover the rest.

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jtuder1Oct. 1, 1211:03 AM

Regarding Vedder's argument that more recent graduates are underemployed and his disingenuous question "is that not failure?" - whose failure? Is he blaming higher education for the Great Recession? That's just silly.

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pdxtranOct. 1, 1211:14 AM

There's a major difference between Chicago State and Harvard that the author seems to have glossed over. Of course Harvard has a higher graduation rate--many of its students come from families that can afford to shell out $50,000 a year or more for four years. Chicago State's students are mostly the first in their families to go to college, have low incomes, and have to work many hours per week (maybe even full time) to afford tuition. It may take them ten years to finish a degree, but given their circumstances, that's hard-won success, not failure.

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dalemanOct. 1, 1211:57 AM

Stop the madness, these schools know full well that the government(taxpayer)will step in and bail them out. Instead the government needs to stay out of this and force the schools to figure out a way to become solvent.

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pumiceOct. 1, 1212:11 PM

Re: "If a school can manage to cover even only, say, 75 percent of its costs through tuition fees and other sources of revenue, it is likely that government will cover the rest - through operating and federal research grants; indirectly through federal student financial aid ... or through [subsidized] private donations and investment income." That is a good thing, Richard Vedder. Accessibility to not-for-profit post-secondary education is essential in a global economy and benefits every US citizen. An educated and skilled workforce has never been more important. The US cannot retain its role as world leader without retaining its status as best-educated nation. The cost/benefit ratio of investing in post-secondary education is undeniably favorable.

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furguson11Oct. 1, 1212:13 PM

"Taxpayers lose when colleges are too big to fail" Now if taxpayers would actually support education... and I'm not counting loans.

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roymercerOct. 1, 1212:33 PM

The worst fear for most public institutions is self-sustainability.

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endothermOct. 1, 1212:33 PM

Most large universities were set up by state governments to educate the citizens, assist industry and agriculture, promote research and to just generally serve as an economic engine for the state. It has worked. Where would Minnesota be today without the millions of skilled undergraduates produced by the U of M and the billions of dollars of research money it has contributed to state development? It has given us new crops, new industries and new medical technologies, not to mention the next generation of leaders, teachers, doctors, artists and scientists. Comparing an important institution like this to a for-profit business is nonsense. It is actually the bedrock on which much of the state economy is built.

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Interested ObserverOct. 1, 12 1:03 PM

ferguson11 says " Now if taxpayers would actually support education.."................My neighbors and us always thought we were generously supporting education and give away $9,000 per student per year in K-12 state and local funding. At 25 students per classroom, that is $225,000 per classroom per year. At what amount per classroom per year would you consider us generous and supportive of education?

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pdxtranOct. 1, 12 1:12 PM

endotherm: You are so right. The Land Grant colleges existed even before the Midwestern states were states. Our ancestors recognized the importance of an educated and skilled populace.

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EleanoreOct. 1, 12 1:16 PM

Public educational institutions are not the same as for private, profit production or investment firms. Funding education is a public use and public responsibility. Ensuring private banking firms or car companies survive is not, and it's unlawful as well.

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