La cuestión de los aranceles en la actual coyuntura
Mayo 28, 2020
 
May 25th, 2020 – Alex Usher
One of the most interesting things about the pandemic is the questions it raises about the price of education. Can institutions reasonably expect to charge what they normally charge, given that the quality of an online education is substandard compared to student expectations?
Let’s start with the quality arguments. There is an argument that the quality of an online experience can match a face-to-face one. And that’s true – provided instructors have the time, money and inclination to build online classes and that the students are really only focussed on mastering course-specific content. But most instructors and institutions don’t have time for more than a quickly assembled online courses between now and the fall, and the vast majority of students want a lot more than course content from their post-secondary experience. So, this is a nonstarter. Yes, online education works for some students, some of the time, but where undergraduate education and experience is concerned, it is a sub-optimal approach for most students, most of the time.
But where does that leave us with respect to pricing? There are two basic approaches to this. The first is a “just price theory”, embraced by most students and their parents. In effect: one should not charge regular prices for a substitute good, which is mostly inferior. The other is an “institutional solvency perspective”: institutional   costs at legacy universities aren’t reduced that much by going online, so giving students much of a break on tuition will tend to reduce ongoing quality and the ability to recover from the crisis.
(Some of you may question this, but it’s true: some maintenance costs get reduced, sure. Travel budgets go out the window. And some the costs of certain services (e.g. athletics) and goods (e.g book stores, food services) are mostly eliminated, but those were paid for either commercially or through a separate fee. However, you’re still paying your profs and the vast majority of the support staff. And there are the extra one-time costs of bulking up IT and instructional development services to deal with next term. A  new  online university might indeed be cheaper, but a  legacy  university sees only fairly small cost reductions in the short term.)
How this plays out politically depends a bit on how much you pay for tuition to begin with and what kind of government support exists for students. So, in Quebec and Newfoundland, where tuition is low and there is a lot of government support for students (through federal/provincial student aid, CESB, etc.), you probably won’t hear too much complaining. It’s trickier where institutions are more fee-dependent, as in Ontario, or at public American institutions. And it’s a lot different where students are paying full price or something close to it: say, private universities in the US, out-of-state students at US public universities, or international students in Canada.
In the US, I would argue that the debate is complicated by what I call the “revenge of the MOOCs” ( remember them? ). Back almost a decade ago, many were claiming that MOOCs would sweep away traditional institutions in a tsunami of change because, hey, so much cheaper! Basically, higher education was too costly because it “bundled” too many services and MOOC would help to “unbundle” them, thus making higher education cheaper, undercutting existing producers and allowing mass disruption and bankruptcy of existing institutions. This was always a preposterous argument partly because of regulatory issues and partly because higher education is a Veblen good, but mostly because “courses” are only a tiny part of what students are paying for when they pay tuition and the last damn thing most of them want is for all of this to be unbundled. Bundling is in fact the whole point!
But now of course the tech-bro types seem to think they are having their revenge. Due to the pandemic, universities now  can’t  bundle their services, so all those arguments deployed against MOOCs eight years ago? Useless. Now,  people like  Scott Galloway are saying to the expensive private universities  that you’re definitely going to go bankrupt and be replaced by God-knows what kind of stripped-down online system. At one level, he has a point: you can’t read private colleges’ justifications for high pricing from a few years ago without thinking “how do these people have the gall to charge full price, now?”
But I think at the end of the day, three things are going to be decisive in terms of pricing.
First, you need to account for the human capital perspective. And on this basis, the cost of a year in higher education has already dropped substantially, simply because massive unemployment means that the opportunity cost of higher education has dropped substantially. For anyone paying less than around $10K in annual fees, that’s a non-negligible consideration.
Second, you need to remember that, to some extent at least, students are not purchasing skills but credentials. Even if the teaching/learning experience is sub-standard, the credits are still worth the same amount. And to the extent that credentialing is why students go to institutions –  particularly high prestige ones  – institutions are going to be able to keep their pricing power, in the short term at least.
And third: this is temporary. As long as we can believe that this experience is a year or less, and we still all want to go back to the old system, we can’t starve our schools. In the absence of some sort of massive government bail-out, there simply isn’t a way to provide even remote education at a loss without making the return to face-to-face education worse. And at a basic level, I think most people understand that. Charging regular rates – or something close to it – isn’t “fair”, but then nothing about this pandemic is “fair”. Institutions are doing what they need to do to make sure they are still able to function in the After Times.
The pandemic is very good at making us think about what is important. And the pricing debate, I think, tells us something important about higher education. Prestige matters. Credentials matter. And in the short term, we can put up with a lot of sub-standard experiences, as long as those two things are preserved.

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