Re: The Heritage Foundation – Issues – Education – 1/26/2009 – “Ten Reasons Why the “Economic Stimulus” Should Not Include Education Spending” – Dan Lips

There are lots of different “stimulus” proposals. I’d like to address just one set, “Postsecondary Education Programs”, and explain why Lips is wrong about several of the “Top Ten Reasons Why this Education Spending Plan Is the Wrong Approach”.

Reason 1. “Increasing federal spending on education will not improve the economy” I find it hard to believe that Lips can believe that improving the intellectual skills of the labor pool by producing more college educated workers will not help the economy. Federal student scholarship support has been a major reason why the number of college educated citizens is as high as it is, especially among the lower economic classes. Whatever Lips’ personal beliefs are about the efficiency of private vs government spending, surely even Lips must admit that there is far less private scholarship aid than needed to meet demand, or that college managed federal scholarship support is any less efficient than privately funded scholarship support.

Reason 2. “A federal bailout for state governments is irresponsible” Lips says “shifting the burden from states and localities to federal taxpayers is irresponsible, since funding public education is primarily a state and local, rather than federal, responsibility”. While I would agree with this view for pre-college education, college education has always had more than a local focus, that even state colleges have significant numbers of out-of-state students, that graduates of state colleges often move to other states where their education enriches the skill levels of their new home state’s employment pool, and that academic research benefits all states, not just the ones where the research is performed. The federal government has always (at least in my academic lifetime stretching back to 1960) been a major supporter of state universities, and that support extends back in time to the Morrill Acts Of 1862 and 1890 that established the Land Grant colleges and universities, the Hatch Act of 1887 establishing agricultural experimental stations, and the Smith-Lever Act of 1914 that established co-operative extensions. Certainly when I left industry to teach at a Jesuit university in 1980, much of the student support money available was federal. If Lips yearns for the pre 1860’s level of federal support for higher education, I suppose he is entitled to his yearnings. But to call federal support “irresponsible” is just irresponsible.

Reason 5. “History shows that increasing college subsi¬dies have not solved the real problem of higher education affordability”.  History has shown that no single solution ever solved the problem of higher education affordability. The cost of higher education keeps rising faster than inflation for many reasons, among them: increasing demand for higher education and more slowly increasing supply (high cost of creating or expanding current facilities and difficulty attracting competent professors limits supply) results in higher free market prices; the technological needs that institutions of higher education face (library resources, computer facilities, scientific apparatus) are expensive; and finally, the scope of knowledge that higher education must support grows faster than the population, so provide study in all disciplines means increasing faculty faster than students. Quality has its costs, and if academic institutions are to provide high quality educational opportunities in all disciplines, per student costs are likely to increase faster than the general rate of inflation.