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attending colleges and universities.3 One of the main reasons for their growth was their relative cheapness; most state and municipal colleges and universities charge much lower tuition fees than private universities can afford to charge. Private universities have in consequence had serious financial problems, and have quite properly complained of ''unfair" competition. They have wanted to maintain their independence from government, yet at the same time have felt driven by financial pressure to seek government aid. |
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The preceding analysis suggests the lines along which a satisfactory solution can be sought. Public expenditures on higher schooling can be justified as a means of training youngsters for citizenship and for community leadershipthough I hasten to add that the large fraction of current expenditure that goes for strictly vocational training cannot be justified in this way, or indeed, as we shall see, in any other. Restricting the subsidy to schooling obtained at a state-administered institution cannot be justified on any grounds. Any subsidy should be granted to individuals to be spent at institutions of their own choosing, provided only that the schooling is of a kind that it is desired to subsidize. Any government schools that are retained should charge fees covering educational costs and so compete on an equal level with non-government-supported schools.4 The resulting system would follow in its broad outlines the arrangements adopted in the United States after World War II for financing the education of veterans, except that the funds would presumably come from the states rather than the federal government. |
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The adoption of such arrangements would make for more effective competition among various types of schools and for a more efficient utilization of their resources. It would eliminate the pressure for direct government assistance to private colleges and universities and thus preserve their full independence and diversity at the same time as it enabled them to grow |
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3 See George J. Stigler, Employment and Compensation in Education ("Occasional Paper" No. 33, [New York: National Bureau of Economic Research, 1950]), p. 33. |
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4 I am abstracting from expenditures on basic research. I have interpreted schooling narrowly so as to exclude considerations that would open up an unduly wide field. |
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