Public Financing for Universities is stupid.
I'm not talking about grade/high school. I'm talking about colleges and universities. A few months ago I read a brilliant piece on this by someone from Miami University. The idea really resonates with me. I believe a market-based approach is the way to go in financing college. Remove all direct aid from the state and particularly the federal government.
Give all the aid directly to the students as grants that they can take to any university they choose. Perhaps federal grants could be used anywhere (I think including overseas), while states might want to restrict grants to universities in their state. This would have several effects. For instance students could know exactly how much aid they would qualify for before they decided on which schools to apply for. It would also allow for more transparency in educational costs. Beyond that it would allow aid to go only to the students that needed as opposed to subsidizing every student at a university. If done right it would reduce tuition costs for the most needy students. Finally, it would force universities to compete on a more level playing field and this should force the universities to be more efficient.
I should clarify that I don't include research grant aid in this. Research grants are a whole different ball of wax and universities already compete for them based on their merit.
The more I think about this, the more I like it. What are your thoughts? You can comment below.
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