talking point | the blog at LeeHudsonTeslik.com

Degree Pricing

Posted in Uncategorized by teslik on August 1, 2007

The New York Times examines sliding-scale degree pricing schemes and the Economist scoffs at the idea:

It seems that institutions of higher learning have begun to adopt differential tuition schemes in which more is charged to students majoring in business or engineering—degrees which tend to confer high salaries after college. . . . One of the main problems with this approach seems to be that it can hardly be efficient. By entering one of the fields subject to the increases, students are in all probability increasing their future wages, but the increase in tuition acts to reduce current income—hardly compatible with consumption smoothing.

Obviously, this is already happening among graduate programs. Nobody’s forking over $70k a year for a masters in art history. MBA programs are a different story.

This is all well and good, in theory. In an efficient world, students should be willing to borrow against future earnings to pay for the education that gets them those earnings.

My question is: What about the folks who would like to attend a specialized-degree program yet whose future earnings, even with the degree, aren’t looking so hot. Like, say, somebody who wants to learn about business management theory so they can write about it from an informed perspective. Where do they factor into this marketplace?

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