Part of this chapter (since revised) was given to the Planning and Policies Committee of the American Council on Education in June, 1958. A shortened version
was published in the Educational Record, July, 1959.
Speech to the American Council on Education, Oct. 10, 1958.
I find average costs per resident student, exclusive of those irrelevant for higher
education, in 1955-56 for public IHL were $750. I also estimate that unit current
educational costs per student would have to rise by 40 per cent, or $300. This total
of $1,050 should be increased by at least $250 for capital costs ($1 billion per year
for more than 4 million students). Hence the unit cost would be about $1,300.
But D. Wolfle and J. G. Smith have shown that for men of roughly equal ability,
the income of college students greatly exceeds that of noncollege students (see "Occupational Value of Education for Superior High-school Graduates," Journal
of Higher Education, 1956, pp. 38-39).
Cf., for example, the views of the president of Stephens College, who is impressed by the high incomes of the college graduate: J. M. Wood, "The Stephens
College Fiscal Policy," Journal of Higher Education, October, 1933, p. 353. In
reply to my position Neiswanger expressed skepticism concerning the material gains
of higher education, and also suggests that these are irrelevant considerations: W. A. Neiswanger
, "Tuition Policy and Benefits Received," Educational Review, July, 1959, esp. pp., 194-195.
aSee my Market for College Graduates, 1949, esp. part I, Chaps. 1-3, 6.
Estimate by P. C. Glick and
H. P. Miller, "Educational Level and Potential
Income," American Sociological Review, 1956; cf. T. W. Schultz, Education and
Economic Growth, p. 79, where he estimates the gain at $137,000 for graduates of
See S. E. Harris (ed.), Higher Education in the United States: The Economic
Problems, 1960; also D. S. Bridgman in Office of Education Bulletin 9, 1930, and Journal of Engineering Education, no. 3, November, 1931, p. 175.
Cf. Research in Economics of Higher Education, Office of Education, May 31-
June 1, 1960. (Mimeographed.)
O. Eckstein in Higher Education in the United States: The Economic Problems, 1960.
Ibid. Eckstein finds that prepayment for ten years at a rate of interest of 3 per
cent would provide $4,000 for four years of college at an annual cost of $365 ($383
inclusive of insurance of parent). For twenty years of insurance and an annual rate
of 5 per cent only $130 (and $143 inclusive of insurance) would be required.
These figures suggest the wisdom of a twenty-year policy and not one under the
control of savings banks that pay little.
Obviously, not all students would have to borrow. With a median family income
of $7,000 (and about $7,600 for the family at age of sending son or daughter to
college), it is doubtful that more than 60 per cent would have to borrow.