The cost of higher education in the United States has surged over the last generation. In 1995 the average cost of out of state tuition at a public university was $7000, today the average is $25000. That is an increase of 226% which outpaces the rise of inflation four times over (CollegeBoard). Employees with a college diploma earn 65% more than one who has only graduated high school (Weeden). This increase in economic advantage causes high school students to apply in larger numbers, requiring universities to expand the number of students they can house and teach. If the higher education system in the United States isn't systematically overhauled, the number of students financially capable to attend schools will continue to decrease turning college into an elite only system. Proposed plans, to change the way our education system is run, have major flaws that are the result of enforcing pricing on a pre-existing infrastructure. The downside to providing higher education in a German model is the entire education system would have to be reworked to the point where college would much more closely resemble a high school atmosphere. The reason colleges in America are so excellent, and why high schools are not when compared to other countries, is because colleges attract the best talent for staff and faculty. By stripping away the ability to attract talent, it strips away the benefit of our higher education system. The most effective way of providing higher education at a low cost to the most people is through reinstituting cost saving programs, increasing funding from states and through offering cost effective alternatives to four year public universities. How we view higher education is the essential question behind any sort of reform. There are two ends to the spectrum when it comes to defining goods and services. The first is a public good in which, is a good that is both nonrival, in other words, the use of a good by one individual does not affect the use by another individual, something which can never be used up, and nonexclusive a good that one individual cannot prevent another from using. Examples of modern day public goods are clean air, national security and public parks. Private goods are the exact opposite, they are both rival and exclusionary. Examples of private goods include cars, food and clothing. Those are all things which are individually beneficial and therefore ineffective to offer to an entire citizenry. Or in other words, it's not very effective to give everyone a free car because not everyone will want or need it. Another important definition is an externality, or a benefit to someone who did not pay for the good or service.  This all seems abstract, but just keep in mind that mixed market economies like ours decide whether a good will be provided by the government or by the individual citizen based on whether that good is public or private and how many positive externalities result. Higher education in the United States is a private good with positive externalities and should be treated as such. Because it is a private good, it is best provided by private enterprise but because it has positive externalities some intervention is needed to solve the debt issue. In order to increase accessibility to a higher education while maintaining quality one must firstly, understand why higher education is a private good, what the externalities that it provides are and how that effects possible government intervention. Secondly one must assess the current situation to understand the problem in order to better fix it. Lastly one must look at the proposed ideas for fixing the issue and address their feasibility.

 Firstly, education is a private good and this means the most efficient way of providing it is through the private enterprise and not public control. This is most efficient because the admittance policies of the universities make it exclusionary, and because each student in attendance increases the cost on the university, it is rivalrus. This all means that education is most efficient when provided privately. There are multiple externalities that come with education such as the higher incomes that come with more education lead to higher tax revenues, lower crime rates and higher voter turnout. These externalities are what make it so important for society to increase accessibility to higher education. This importance is backed by research which shows that education level is inversely related to likelihood of arrest (Lochner, Moretti) and an increase in education level increases tax revenue as shown by the (Carroll 1). All this means that our society should try to increase the number of students who have access to higher education while maintaining the quality of that education. This requires intervention but not complete control by the government, a transaction is inefficient unless all benefactors are paying their share of the cost. For education this comes into play when society benefits from an individual purchasing an education. Furthermore Society benefits from that purchase society encourages more people to do it but society does not pay for the benefits it receives and until that happens, the education market will be inefficient. To better understand why intervention is important, one must look at how the current system is failing.

Secondly, in order to best solve the education crisis in America one must understand how the system we have in place is failing and why. The higher education system in America is prohibitive both in cost but it is also ineffective. The cost of college tuition has tripled since 1980, skyrocketing from a reasonable $9500 a year to $27,300 (College Board). When compared to the consumer price index, it has long surpassed the inflation that comes with growing economies. This is detrimental for college age students who have no way of paying for their schooling without taking out substantial loans. This is made worse by an advancing white collar society which has very few jobs which can support a family without requiring a college education. What makes it even scarier is the system in place isn't providing a good education despite the exorbitant costs students pay. Only half of college students in a recent poll said they felt very or completely prepared for a job in their field of study. (Grasgreen 1). This is staggering as one could imagine that if students are paying more they should be getting an improved education when in reality our nation spends the most overall and as a percentage of GDP on education in the world but ranks third in overall bachelor's attainment (Hauptman 1). The major issue with our system as it stands today is how cost prohibitive it is, according to USA Today, "nearly half of adults are limiting their child's college choices based on price" (Malcolm 1). This is astonishing as the deciding factor of where to earn a degree should be the one that is the best investment and not just the cheapest. If a student has the intelligence and capability to go to a top tier school, they should be able to do so without having to settle for a lesser option because of cost. Something must be done to create  a more efficient and effective educational system than the one in place as it is simply failing to provide a quality education efficiently. 

Lastly by looking at possible  proposals and their effectiveness one can understand what the best options for change may be. The one major alternative to our current system is a model proposed by the socialist senator from Vermont, is the German model in which all public education is funded through taxes, the taxes would be 6% on businesses and 2% on individuals (Lane, 1). This increase in taxes when paired with the major failure of the current system, which is that over 50% of the class of 2011 either unemployed or drastically underemployed (Dept. of Edu.). Added taxes exacerbates the underemployment issue as more qualified individuals flood the market, reducing competition and wages with it additionally businesses have to cut costs to make up for an increase in taxes. Students who are paying, or have just paid for four years of college tuition don't deserve to be pushed out of the market by a new wave of graduates who can work for a significantly reduced price because they have no loans to pay off. Similarly, taxes have a great impact on the hiring practices of companies. Taking a 6% hit on revenue without cutting costs somewhere else is unsustainable and so companies would soon begin laying off their employees to recover the money. Another major issue with the German model is that the main goal is to increase access to an education, so that those with low incomes but who have the ability can receive a degree. The downside is that the German model requires a reduction in the number of students who attend public universities each year. Which in and of itself seems like an oxymoron, as an attempt to expand the availability of a higher education should not reduce the number of students receiving one. This is by definition the opposite of the objective and therefore the system is failing to reach its goal. We can see the decrease in the number of students when looking at Germany which has a tax system very similar to ours and a rate only slightly higher but yet has a significantly reduced number of students earning a degree each year. Germany also has a track system which decides whether the student has earned a spot in college as early as third grade creates a system in which students are selected out of a crowd based on their performance 8 or 10 years before they attend university (Jackson, 1). This system is what allows Germany to decide who "deserves" to go to school and who does not. This type of system does not agree with America's capitalist nature which allocates precious economic resources, such as an increased education level, based on an individual's willingness to pay for the resource. Now if as a nation we decide that another quality should allocate those resources, such as need, ability etc. than we should address that shift but as of now it is the willingness to pay that defines our system. Education is an investment in your individual future and the reward of that investment in majoritively personal. It is impossible to provide an education to the same or more students than the educational system we have now does, while lowering costs, maintaining quality and preventing further government intervention. These are the downsides to the german model and by bringing that model to america, we will simply be adopting their issues.

Other proposals which may work more effectively than the german model include, In America, throughout the 1940' and into the 50's, people could receive a free education for service in the military. During this time, more people attended college than had ever before. In our nation we have a monetary based system in which the most common measure of success is the objects we own. The increase in pay which allows greater buying power encourages people to go into the private sector, but if there was a financial benefit to working for the government there would be more talent in the government and we would have a better functioning democracy. The financial benefit could be provided through putting in place a version of the Federal Employee Education and Assistance fund which provides scholarships for federal employees who qualify. If the government were to provide a similar scholarship fund based on merit in which students could earn free tuition by working for the government for a certain number of years after graduation, it could provide a cost reducing option for students. The incredible thing is that the FEEA program got zero dollars last year in grants (Bauer 3). In another effective step President Obama has put in place a rating system for universities which allows the government to allocate taxpayers money more effectively while encouraging lower spending and better outcomes for students (US Dept. of Edu.). This is a step towards holding universities more accountable for the outcomes of their students whilst limiting exorbitant expenditures on new buildings that are in many cases unneeded. Without a rating system schools have been focused on expansion of both facilities and faculty all on the students dime, because there is no downside to charging more. If a university increases their price so that a portion of students who would go there cannot afford to, they just accept more kids to replace them. Another proposed way of increasing accessibility to higher education is to make community college free, this would be more effective than making all public universities free. Community college is already set up in a similar fashion to high school. The median distance from a student's home to the two year community college they are attending is only 8 miles (Staying at Home) this is similar to highschool in which a student attends the one closest to them in the majority of cases.  Community college is relatively inexpensive both to provide and to attend, but making it free would still offer an attractive alternative for fulfilling general education requirements at a 4year university. The  National Council for State Legislatures has released a proposal which they believe would help lower, or stabilize the cost of providing and paying for a higher education. The NCSL's proposal would be the negotiation of tuition freezes (Weeden), this is when a university stops the increase in tuition and in return the state legislature gives that school an increase in funding.  The cost of providing an education to one student is more expensive than the cost of tuition and for years this difference was made up through subsidies by the federal and state governments. But in recent years, as the government has cut back on spending as a result of the recession, one of the heaviest hit areas was higher education subsidies. Higher education is considered discretionary funding (The amount of funding to be given out is not a legally mandated number) in most states and therefore as a result of cutbacks during recessions, it is most often the first to be defunded (Weeden). This forces universities to place more of the cost directly on tuition prices and therefore the student instead of relying upon government money. If the trends of today stay the same, the subsidies that universities receive are only going to shrink further, which means schools should focus on limiting the cost per student in order to bring down tuition prices. Some ways of lowering university's cost per student without risking the accessibility and effectiveness of our system include, expanding accepted degrees to include online open courses and expand the number of students per class. Increasing the acceptability of online courses would allow thousands of people to take a class at very low cost for the student and also at an extremely low cost for the provider. This would allow the advantages that technology has brought to so many other sectors to transfer easily to higher education. This is not possible at the moment because of the extremely high talent needed to be a college professor and a relative resistance to innovation and innovation is what has driven costs down in other industries but has yet to do so in education. This would be an extremely effective way of expanding the number of students who can afford a higher education and wouldn't have a major effect on quality of classes.

There are downsides to every proposed action, but the bigger downsides come with inaction. Today families can get by, they can scrape up enough money to get their degree, and yes they graduate with mountains of debt but most pay it back, most make it worthwhile. If trends continue, fewer and fewer people each year will be able to get by, fewer people will make the decision to invest in themselves as to not risk their family's financial security. When it comes time for the students of today to pay for their children to attend school, they shouldn't have to say they can't afford it. Some increase in price is to be expected but when that increase is 200% more than inflation, it must be slowed otherwise it will outgrow consumers ability or willingness to pay it. Students shouldn't have to pick their school based on the cost but instead on the benefit it will have for their future. It is imperative that we as a nation restructure our education system to make the most of our talent rich population, but we must remember that government action sounds good but there are severe downsides to government overreach. Our capitalist economy relies on a system in which government interference only occurs when there is a market failure. If in some way, a particular market such as the education system, allows one party (the schools) more power over the transaction then there are some cases in which that should be remedied. As the land of opportunity it would behoove us to increase and not limit the opportunities for our citizens.
