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Public No MoreA New Path to Excellence for America's Public Universities$
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Andrew J. Policano and Gary C. Fethke

Print publication date: 2012

Print ISBN-13: 9780804780506

Published to Stanford Scholarship Online: June 2013

DOI: 10.11126/stanford/9780804780506.001.0001

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An Efficiency-Based Subsidy and Tuition Policy

An Efficiency-Based Subsidy and Tuition Policy

(p.134) 8 An Efficiency-Based Subsidy and Tuition Policy
Public No More
Stanford University Press

This chapter considers public subsidy and tuition policy for higher education in the U.S. It argues that an ideal tuition fee strategy should be able to satisfy the preferences of the students who pay the tuition and the society which provides the subsidy while at the same time recognizing that public universities are constrained to cover instructional cost and break even. This chapter also offers a number of recommendations for tuition fee policy which include setting tuition rates as close to possible to program marginal costs and avoiding cross-subsidies to respond to unfunded mandates.

Keywords:   public subsidy, tuition policy, higher education, U.S., public universities, instructional cost, cross-subsidies

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