[fardo]

Simpler isn’t always preferable: note that the key feature from the consumer perspective in that system is

> you pay no matter what

Meaning if it’s assumed “despite learning little, you still will be able to pay for it”, there’s no longer any motive force towards quality, as your payment is assured. Incentives on taxpayers thereafter who want to minimize their tax burden would therefore be optimizing primarily toward cheapness of the educational process, rather than efficacy and quality of the education which outbound students received.

A vigorous market for education, would suggest you would likely get a variety of nodes along a “costliness to quality” options frontier.

[eesmith]

> there’s no longer any motive force towards quality, as your payment is assured

There are many excellent European universities, including ones which have been around for centuries, telling me there are ways to handle your concerns.

> A vigorous market for education

How's that Corinthian Colleges degree working out? Costly and no quality. And exactly the life-crippling outcome we should expect in a 'vigorous market'.

[fardo]

This is non-responsive to my point. Pointing out that paid universities like Corinthian in a grossly distorted market predictably are not very competitive offerings, or that good offerings can nevertheless still exist in heavily distorted markets, both fail to address that

> Current educational incentives caused by how payment is handled in these all-pay systems mean there is very little or no pressure exerted towards promoting an educational arms race towards quality, rather than minimizing cost to service that education.

In a more competitive market, yes, I believe you'd both likely see better European offerings, as well as substantially more compelling American paid offerings than the current batch of cash grab for-profit universities. They exist in their current form almost exclusively because financial lenders in the US have no incentive not to issue loans to students - even if the program is bogus, they are guaranteed re-payment.

This is a commonality shared between both current European offerings (via taxation guaranteeing repayment), and American alternatives (via guaranteed load repayment).

[eesmith]

'In a more competitive market' sounds like an article of faith, akin to the No True Scotsman, where there's no definition of what is competitive enough until it meets the proponents' sniff test.

What would a sufficiently competitive market entail? Has it ever existed?

Would it look like modern US K-12 systems where commercial schools prioritize the most profitable students and leave the others to the public schools? Where good marketing beats good education?

How would it not be "heavily distorted" by impositions like Title 9 and other civil rights requirements? By government requirements on the school in order to receive state and federal money? By accreditation requirements?

[fardo]

>has it ever existed?

This question being written as singular suggests to me you’re conflating some combination of education as a concept, education in America, and education in Europe. I see this as muddled thinking, they each have their own issues and their own timetables over which issues can and do exist.

Education history in Europe is actually decently hyperlocal and pretty path dependent for each country during the 19th and 20th century. Talking about it as a monolith is challenging, but there’s a pretty consistent pattern in societies with all-pay taxation-paid schooling that it has clear incentive structures that a school, having been “paid up front“, is not incentivized to put in the work to provide a high quality education, and as the financier of that education is the taxpayer, the pressure is primarily to keep costs low.

As for America, you don’t need much faith to believe that in the US instituting dischargeability would dramatically improve competition and quality in these spaces and the market for education - so yes, this market used to be substantially more competitive and used to exist. Since the 1970s when these laws were passed, student debt and tuition costs have skyrocketed, low quality for-profit university creation skyrocketed, and people have been hobbled with debt for degrees many are never going to pay back. Dischargeability reduces this greatly - it causes financiers to create motive pressure on education to not be a fiscal vampire preying on its students and equip them with meaningful trades and socially useful knowledge.

As for standards and regulations on schools, assuming the public sees fit to fund higher education through government spending, having requirements for a school to receive that government funding seems reasonable, so long as they reflect the desires of the local populace.

Ultimately, all this is a discussion of tradeoffs - I think someone can happily prefer

> everyone gets a free tertiary education paid for by their taxes

I think that it being free and paid-by-all means it’ll have low motive pressure towards quality and therefore be comparably mediocre to free elementary and secondary compulsory education, which even based on your own reckoning seems to be a two-tier system where the public institutions get short shrift - but you seem to care about it being free or less focused on fiscal student outcomes as its own value. It’s a tradeoff.

[eesmith]

> but you seem to care about

I care about having actual definitions of what "more competitive market" and "vigorous market for education" means, and gave examples of markets with significant market failures.

Is it even possible to have a vigorous market without strong government oversight?

[fardo]

> define more competitive markets - Is it even possible?

Yes it is, and I am using it in the traditional sense of "Sellers vying to make their offerings more compelling so consumers prefer them to alternatives". A more competitive market has more of the above fighting happening, which can be incentivized in several ways.

Specifically for the US, I already gave a massive truck-sized example of how you can make offerings more competitive: repeal recent 1970s policy changes that make college debt work different than essentially all other debt in being non-dischargeable, and lenders will put pressure by refusing to lend for failschools. This will slash their demand, and survivors will be expected to provide more compelling “when examined actuarially” lifetime student economic outcomes: from the lender’s perspective, the education needs to be expected to at least pay for itself. Schools in a world with dischargeability will therefore make efforts to compete on being able to compellingly show “we are imparting an effective education which equips you to repay what you spent”, and in general will be less able to get away with “we have a strong brand and you’re young and naïve, come study here!”. You can fool an 18 year old, you won’t fool the underwriter.

Specifically for the EU, there’s three approaches I’d like to see considered, the first and last more experimental than the others. It’s a widely agreed upon problem that faculty aren’t incentivized or often even that good at actually teaching, and to a lesser extent they’re also bad at training graduate students, because professorial incentives are to be good at research and grant writing, the thing for which universities pay their salary.

Historically, many universities used a different mode where they kept permanent salaried faculty positions very limited, and rather than charge a tuition, most schools and professors were expected to charge a fee or honorarium they would collect from their individual pupils as the bulk or totality of a professor’s compensation.

We moved away from this because historically teacher compensation was abysmal and we wanted to better support educators in studying - the pendulum swung way too far the other way though, and professors are essentially totally insulated from needing to seriously engage with their student body - they make a salary no matter what and it shows when they teach like it. Returning to a market where teachers’ financial outcomes are at least partially linked to their students explicitly choosing and paying professors chosen fees rather than a tuition which everyone in society pays stochastically, professors are incentivized to competitively vie for being better at training and teaching, because their prosperity and success would be linked to it.

Second, as much criticism as the US model gets for its prices, much of that appears to be driven by administrative bloat and nondischargeability, payment itself is actually really great when dischargeable because it seems prices stay low and this bloat doesn’t happen when it is. It also means a significant fraction of students do try to get into the best school they can and the schools have some incentive to fight to be seen as better - they make their money when students go. The results speak for themselves: something like half to two-thirds of the world’s top 100 universities are all in America.

Last, I’d like to see both European and US models collaborate harder on job and work placement as part of ensuring student success. Colleges being a source of a liberal education without concern for fiscal outcomes can be great, but the pendulum swung too far and these students are essentially thrown out into the world without any expectation of success, because the school no longer has any investment in them. I’d like to see some portion of the fee of education be moved to explicitly garnished wages from placed-into-their-trained field employees - you succeeding would therefore be the university’s success.

I’d therefore like to see taxes slashed on education with moves to paid models comparable to how they existed in the US prior to the 70s, reductions in permanent salaried academic positions with in-kind movements of price of tuition from the school at large to being in baked into professorial fees instead, and moving the funding of education from societal fees to a fixed percentage of post-graduation salaries for some fixed time, to incentivize effective job placement.

The common bailiwick that needs to die is that Europeans don’t pay for college - they do, it’s just compulsory, lifelong, and in a way that is not incentivized to produce quality.