Exploited by Subsidies

On Monday, the CSUN Economics Association and the CSUN Associated Students (i.e., student government association) had a public debate on the subject of the recent tuition increase. Up until recently, CSU students had paid about $1500 per semester in tuition, but recently the tuition was hiked to about $2000 in light of the state’s budget troubles. Naturally, this angered a lot of students, and only students from the Econ Association were willing to defend it.

My intention here is not to disparage any of the participants, because all of them did a credible job of defending their positions, especially once you handicap them for their lack of experience (only one student was a seasoned debater). But when it came to the substance of the debate, I could hardly listen to the AS students without wincing at their raw sense of entitlement. As far as they – and apparently many students in the audience – were concerned, they were owed an education by the state, regardless of the cost. Both AS speakers threw out the word “exploitation” repeatedly as a description of the fee increase.

The CSU system costs more than $6000 per student per year to run. And that’s considering only variable costs for the present year; if you include capital costs, the figure rises to as much as $10,000 per student per year. During the Q&A period, I pointed out that taxpayers were giving CSU students a big fat present of at least $6000 a year, and I asked the lead AS speaker to explain by what logic that made her “exploited.” Her response was essentially, “I don’t think of it that way. I think exploitation is out there, and I’m just getting what I deserve back from the system.” (I’m paraphrasing, but that was definitely the gist.) When I asked how low the price would have to be in order for her not to be exploited, she and her partner said that $0 sounded reasonable to them. Much of the audience appeared to agree.

This attitude of entitlement is, I think, one of the best arguments against state subsidization of higher education or anything else. Once people start receiving handouts from the state, they begin to think of the handout as their property. If public university students were actually grateful for the gifts they receive, I would feel happier about the system. But if the attitudes expressed at Monday’s debate are any sign, they are not grateful – they are indignant that the gifts are not even more munificent. It was enough to make me shudder.

But I’ll give the AS students this much: at least they realize the state is spending money on them. Many students apparently do not. One department chair in the business school told me that many students try to justify dropping their classes by saying, “I paid for the class, why can’t I drop it?” The problem, of course, is that they didn’t pay for it; the taxpayers did. When students register for classes and drop them later, they waste resources and deprive other students of the opportunities they could have provided. And for every student who registers and then tries to drop, there are three others (a conservative estimate) who register but make no effort to gain anything from the course. They just show up (sometimes) and expect to get a grade, typically an A or B, whether or not they actually learn anything. And therein lies the problem: people often fail to appreciate what they don’t have to pay for.

(For more on the cost of higher education to taxpayers, read this op-ed by Neal McCluskey of Cato.)