OPINION

The Economics of College: Part II

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Those who argue that the taxpayers should be forced to subsidize people who go to colleges and universities seldom bother to think beyond the notion that education is a Good Thing.

Some education is not only a good thing but a great thing. But, like most good things, there are limits to how much of it is good -- and how good compared to other uses of the resources required.

In other words, education is not a Good Thing categorically in unlimited amounts, for people of all levels of ability, interest and willingness to work.

Nor is there any obvious way to set an arbitrary limit. These are questions that no given individual can answer for a whole society.

The most we can do is confront individuals with the costs that their choices are imposing on others who want the same resources for other purposes, and are willing to pay for those resources.

Those who cannot bring themselves to face the tough choices that reality presents often seek escape to some kind of fairy godmother -- the government or, more realistically, the taxpayers.

When the idea of conscripting taxpayers to play the role of fairy godmother for some arbitrarily selected favorites of the intelligentsia, "the poor" are often used as human shields behind which to advance toward their goal.

What will happen to the poor if there are no government subsidies for college?

If this argument is meant seriously, rather than being simply a political talking point, then there can always be some means test used to decide who qualifies as poor and then subsidize just those people -- rather than the vastly larger number of other claimants for government largesse who advance toward the national treasury, using the poor as human shields.

Another option would be to allow students to sign enforceable contracts by which lenders would pay their college or university expenses in exchange for a given percentage of their future earnings.

That way, students would be issuing stocks to raise capital, the way corporations do, instead of being limited to borrowing money to be paid back in fixed amounts -- the latter being equivalent to issuing corporate bonds.

Not only would this get the conscripted taxpayers out of the picture, it would also make it unnecessary for parents to go into hock to put their children through college.

Still, the financially poorest student in the land could get money to go to college, with a good academic record and a promising career from which to pay dividends on the lender's investment.

More fundamentally, it would confront the prospective college student with the full costs of all the resources required for a college education.

Those who are not serious -- which includes a remarkably large number of students, even at good colleges -- would have to back off and go face the realities of the adult world in the job market. But not as many jobs would be able to require college degrees if such degrees were no longer so readily available at someone else's expense.

If individuals issuing stock in themselves sounds impossible, it has already been done. Boxers from poor families get trained and promoted at their managers' expense, in exchange for a share of their future earnings.

Even some college students have already gotten money to pay for college in exchange for a share of their future earnings. However, in the current atmosphere, where college is seen as a "right," there has been resentment at having to pay back more than was lent when the recipient's degree brings in large paychecks.

What is truly repugnant to some people about college students issuing stocks as well as bonds is that this not only takes the government out of the picture, it takes the intelligentsia out of the picture as prescribers of how other people ought to behave.

Reality can be hard to adjust to. The most we can do is see that the adjustments are made by those who get the benefits, instead of making the taxpayer the one who has to do all the adjusting.