State Universities vs. Vouchers
The fifty states use a variety of methods to subsidize higher education, but the most popular seems to be a subsidy for in-state students to attend specific public institutions. Bridget Terry Long compares this approach with a voucher program.
up to 24 percent of first-year students would no longer choose a public, four-year school if given the money as a voucher that could be applied to any in-state college (the decrease is smaller if the voucher were twice as large for four-year colleges). As a result, the number that would choose to enroll in private four-year would increase 20 to 29 percent. Given enrollment rates in 1992, this suggests that an additional 80,000 to 120,000 freshman would prefer to attend a private four-year college each year.
Tyler Cowen believes that private universities offer higher salaries to better faculty. He writes,
I expect that over time, for better or worse, many state universities will in effect become privatized. They will remain under nominal state control, but their finances will rely increasingly on private sources of support.
A voucher system would have the effect of removing the state control while allowing for combination of private and public support.
UPDATE: A reader sends in a link to an article describing South Carolina Governor Mark Sanford’s proposal that state colleges be allowed to privatize.
For Discussion. What are the pros and cons of using vouchers for higher education rather than direct subsidies to state institutions?