Howard Bowen was was an economist and President of Grinnell College '55-'64 then at U of Iowa '64-'69 then moving to Claremont '70-'71 and is famous for his formulation of "Bowen's Law":
"1. The dominant goals of institutions are educational excellence, prestige, and influence;
2. There is virtually no limit to the amount of money an institution could spend for seemingly fruitful educational ends;
3. Each institution raises all the money it can;
4. Each institution spends all it raises."
Tuition at Iowa non-public K-12s will increase asymptotically to the amount subsidized by the state just as it has at public and private K-12s and universities (the latter fueled by apparently unlimited capacity of students to borrow), thus gradually extinguishing the benefit of the state's largesse. To think it would happen otherwise is to not understand supply and demand in a free economy--almost "goes without saying."
"Microeconomic theory predicts that, absent any limitations on tuition increases, the introduction of publicly funded school vouchers will lead private schools to increase tuition. Most work on this question has addressed higher education, responding to former Secretary of Education William Bennet’s hypothesis that “increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase” (Bennett 1987, 31)."
Thanks for this comprehensive report. I suspected this was the case. Subsidizing private schools with state money should not be done. And we say that as middle income parents who sacrificed to send their three children to Catholic schools.
So my take is that raising tuition will push low income families out of the market while improving cash flow to the school. It will be interesting to see if low income familiesGreat article!
t’s not surprising that directing dollars to private schools would result in in higher tuition. It’s also a good clue to why college tuitions have soared in an era of cheap student loans and grants. Subsidizing demand without increasing supply raises prices, whether the subsidies are championed by the right or the left.
It will be interesting to see if low income families are able to find a way to push back. A good example of a central tenet of Christian evangelical faith based values: greed.
Push back how? The private schools hold all the cards.
I do expect quite a few new schools to pop up to take advantage of the easy money. They may initially set tuition at the voucher amount to attract more students.
I wish I knew the answer. I can’t think of any legal recourse. They would just have to organize and try to delegitimize the voucher system. Obviously, this is not going to happen. It’s hard to believe that Iowa has become such a deep red state with hardly a whimper from Democrats.
Howard Bowen was was an economist and President of Grinnell College '55-'64 then at U of Iowa '64-'69 then moving to Claremont '70-'71 and is famous for his formulation of "Bowen's Law":
"1. The dominant goals of institutions are educational excellence, prestige, and influence;
2. There is virtually no limit to the amount of money an institution could spend for seemingly fruitful educational ends;
3. Each institution raises all the money it can;
4. Each institution spends all it raises."
Tuition at Iowa non-public K-12s will increase asymptotically to the amount subsidized by the state just as it has at public and private K-12s and universities (the latter fueled by apparently unlimited capacity of students to borrow), thus gradually extinguishing the benefit of the state's largesse. To think it would happen otherwise is to not understand supply and demand in a free economy--almost "goes without saying."
As the authors of this study note,
"Microeconomic theory predicts that, absent any limitations on tuition increases, the introduction of publicly funded school vouchers will lead private schools to increase tuition. Most work on this question has addressed higher education, responding to former Secretary of Education William Bennet’s hypothesis that “increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase” (Bennett 1987, 31)."
Thanks for this comprehensive report. I suspected this was the case. Subsidizing private schools with state money should not be done. And we say that as middle income parents who sacrificed to send their three children to Catholic schools.
Many people suspected this would happen. It's good to see a rigorous study of the changes.
So my take is that raising tuition will push low income families out of the market while improving cash flow to the school. It will be interesting to see if low income familiesGreat article!
t’s not surprising that directing dollars to private schools would result in in higher tuition. It’s also a good clue to why college tuitions have soared in an era of cheap student loans and grants. Subsidizing demand without increasing supply raises prices, whether the subsidies are championed by the right or the left.
It will be interesting to see if low income families are able to find a way to push back. A good example of a central tenet of Christian evangelical faith based values: greed.
Push back how? The private schools hold all the cards.
I do expect quite a few new schools to pop up to take advantage of the easy money. They may initially set tuition at the voucher amount to attract more students.
I wish I knew the answer. I can’t think of any legal recourse. They would just have to organize and try to delegitimize the voucher system. Obviously, this is not going to happen. It’s hard to believe that Iowa has become such a deep red state with hardly a whimper from Democrats.