اثر سیاست های کلیدی دولتی بر کالج ها و دانشگاه های خصوصی: حفظ ظرفیت بخش خصوصی در برابر چالش دسترسی آموزش بالاتر

The relationship between key state policy variables — (1) relative (private–public) tuition prices, (2) state student-aid funding, and (3) public institution density — and the competitive position of private colleges and universities is examined. Elite private schools are found to be nearly impervious to state policy. Large and moderately selective private institutions are adversely affected by public institution density and low public prices. Such prices divert students who would otherwise prefer these private institutions to similar public schools. State student aid funding most affects the enrollment market shares of the small, low-selectivity private colleges enrolling the greatest proportions of minority and modest-income students. The findings suggest state policies in this era of strong demand for higher education and constrained public sector capacity should use price signals (student aid and public institution pricing) to encourage students to consider seriously whether private higher education might serve their needs as well as or better than public institutions.

The conventional wisdom in economics is that the pattern of state support of higher education is often both inequitable and inefficient. W. Lee Hansen and Burton Weisbrod (Hansen & Weisbrod, 1969 and Hansen, 1972; see also Baum & Sjogren, 1996) adumbrated the inequity argument. They argued that the beneficiaries of low public tuition prices will on average earn higher incomes than the taxpayers subsidizing their education; that the majority of students attending low-tuition public institutions are from high-income families and would have gone to college anyway; and that direct subsidies are highest on a per-student basis at selective public colleges and universities enrolling the lowest percentages of students from low- and moderate-income families.1 The efficiency argument comes originally from Sam Peltzman (1973)2 who argued that government subsidization of higher education by means of low tuition at public institutions could actually reduce total consumption of higher education services. The best evidence on this point is provided by Ganderton (1992) (see also Kroncke & Ressler, 1993). Ganderton found that students substitute substantially lower quality public colleges for the schools they would have chosen in the private sector, which tends to confirm Peltzman's speculations about the possible effect of in-kind subsidies on student demand. This finding was based on extensive individual and college data and “a switching regression model that corrected for the joint decisions to apply to college and to choose the public or private sector” (Ganderton, 1992, p. 269). Regardless of the validity of this specific finding, it is reasonable to presume that in-kind subsidies lead some students to substitute public college or university attendance for a private college or university education they would have preferred had they faced the true (unsubsidized) costs of their decisions. Recognition of this logic led Blaydon (1978) to propose a federal-state student-aid program to increase interstate student-aid portability so that students' choices would be less distorted by state-imposed constraints on their access to subsidies. This proposal has been endorsed by the Education Commission of the States (1990), among others, but faces political obstacles. Economists and policy analysts have generally endorsed more even-handed state policies toward public and private colleges and universities — either by treating private institutions more like public institutions or by treating public institutions more like those in the private sector (Hansen & Weisbrod, 1969, Hansen, 1972, Spence & Weathersby, 1981 and Zumeta, 1996). This would mean gradually raising tuition prices at public institutions to approach those of their private counterparts, increasing portable3 student aid to help financially needy students bridge the remaining tuition-price gap, and, subject to a ceiling, replacing loans with grants for students from low- and moderate-income circumstances. The evidence is that states with more even-handed policies — relatively high tuition at public institutions, greater reliance on need-based student aid, etc. — have higher rates of student participation and more graduates. And, they achieve these desirable outcomes at a lower cost to taxpayers than states giving more single-minded support to public institutions (Porter, 1990, Zumeta, 1992 and Zumeta, 1996). Zumeta, 1992 and Zumeta, 1996 also observed that more even-handed state policies were associated with a strong private sector, whether measured in terms of market share or enrollment growth, or expenditures on state relations. What he could not determine was whether even-handed polices produced strong private institutions or a strong private sector led to more even-handed policies. The direction of causation is important. If causation runs from private-sector strength to even-handed policies rather than vice versa, it is unlikely that increases in public sector tuition rates will result in commensurate, complementary increases in portable state aid in jurisdictions with weak private institutions. Instead, higher tuition would merely shift more of the burden of support for public higher education from taxpayers to students and their families. The predictable result of such a shift would be decreased access, especially for students from low- and moderate-income families. Indeed, several scholars have observed that access and choice have already been impaired by the failure of need-based aid programs, especially grants, to keep pace with real increases in tuition during the last two decades (Wetzel et al., 1998, McPherson & Schapiro, 1991a, McPherson & Schapiro, 1991b, McPherson & Schapiro, 1997, Kane, 1994 and Savoca, 1991). This seems to be especially true for students from low-income families (McPherson & Schapiro, 1991b). Blacks and low-income whites are more likely to delay college entry in high-tuition states (Kane, 1996) and minority access by some measures actually diminished during the late 1970s and the 1980s as real tuition climbed (Paul, 1990). It has also been argued that higher tuition at public institutions, greater state reliance on need-based student aid, and reduced expansion of the public higher education sector would not, in fact, cause private colleges and universities to accommodate substantially larger numbers of students. This assertion rests on the presumption that private colleges and universities are part of a complex competitive ecology whose history has forced each school to position itself toward a unique market segment or niche — a strategy imposed by the need to overcome rugged competition from tax-supported institutions (Birnbaum, 1983 and Zumeta, 1999a). Carried to its ultimate conclusion, this line of reasoning implies that only those institutions that have successfully differentiated their products from those of their public counterparts — so that each now exploits an inelastic residual demand schedule (see Appendix B) — have survived. In this view, more even-handed policies would merely rotate the survivors' demand schedules up and to the right. Consequently, instead of accommodating substantially more students, the privates would respond to higher tuition at public institutions and increased state student aid by raising their prices even faster than would otherwise be the case and shifting a greater portion of their financial aid burden to the public fisc (McGuire, 1976 and Clotfelter, 1996).4 These issues have important policy implications in the current context. Many states face sharp increases in demand for places in higher education due to population and demographic pressures — the maturing of the “baby boom echo” generation (Western Interstate Commission on Higher Education, 1998) — and to the incentives created by recent gains in the college wage premium (Marshall & Tucker, 1992). Yet, at the same time they also confront pressures for tax cuts and hard-to-control, caseload-driven spending demands in elementary/secondary education, health and long-term care, and criminal justice (Hovey, 1999). If states can divert significant numbers of students to private colleges and universities by means of public sector tuition increases and adjustments in need-based aid that make private institutions relatively more attractive, costly pressures to expand public higher education capacity could be reduced or averted. Thus it is crucial to know whether such policies are likely to be effective or not and which groups of private institutions are likely to be most responsive in terms of enrollment. In this paper, we offer a theoretical framework and empirical analysis designed to assess the effects of the types of state policies described.

America's mixed system of competitive independent and public institutions is generally seen around the world as exemplary. Private (nonprofit) colleges and universities enroll about 30 percent of all baccalaureate students in the US and graduate their students at a higher rate than public institutions. Their capacity should be especially valuable during the coming decade when, in most states, the number of students graduating from high school will continue to increase (Western Interstate Commission on Higher Education, 1998). In many of those states, public systems are nearly full and it would be costly to expand them. Moreover, investments in the expansion of public systems could not be easily — let alone, costlessly — undone were new technology to render much of current higher education delivery systems obsolete. Despite the benefits of relying more heavily on private colleges and universities, some public policies continue to threaten their health: large private–public tuition-price differentials and the low level of public funding for student aid in many states. The results reported here suggest that these policies could reduce enrollments in private colleges and universities at the same time that this capacity is most needed. The basic policy idea underlying this paper is that, facing an era when demands for higher education are likely to strain public sector capacity and create pressures for costly expansion thereof, it is desirable for policymakers to have access to empirical analysis that sheds light on the relationship between state policies and enrollments in private higher education. Private-sector capacity might be employed as a partial substitute for costly additional public-sector capacity if it could be shown that private institutions respond discernibly and desirably to state policies. For example, as our empirical analysis suggests, states might seek purposively to redirect some enrollment demand from the public to the private sector by simultaneously increasing public institution prices (tuition) substantially while also expanding need-based student aid. The former step could generate additional revenue to help fund the latter one and, if additional aid were need-based and sufficient, students of modest incomes could theoretically be “held harmless”.16 Table 4 in particular shows that private enrollments at the institution level did respond in predictable ways and at significant levels to plausible state policy variables in analyses using well-specified models of the enrollment market in higher education during a relatively recent period. This argues that the approach merits at least further state-specific study in jurisdictions with both strong growth in demand for higher education and an ample private academic sector.