Why Aren’t Public Schools More Like Universities?

this article originally appeared on FoxNews.com on Sept. 1, 2005

There is widespread agreement that America has the best universities in the world. Foreign students enroll by the hundreds of thousands, and American college professors dominate the Nobel Prize lists.

But virtually no one says we have the best K-12 education in the world. To the contrary, many lament the poor showing of American students on international tests. What makes American universities so much better than our primary and secondary schools?

While many factors are at work, much of the explanation can be summarized in two words: "privatization" and "markets." About a third of four-year college students attend private institutions, and the proportion is growing. By contrast, only one-eighth of K-12 kids attend private schools.

Moreover, even public universities are far more independent of the political process than K-12 schools. Public universities have greater ability to hire and fire staff, pay people on the basis of merit, change curricula, and face far less interference from obstructionist labor unions.

These organizational differences are important. Countless academic studies show that kids learn better in private schools or in public schools that manage to remain independent of central bureaucracies. While there are exceptions, universities are more decentralized, more innovative, and less constrained by mindless rules and regulations like teacher certification requirements and class-size restrictions.

More important, however, is the fact that universities are far more subject to the discipline of the market, meaning they face financial consequences for displeasing students or parents. Nearly every American college student has to pay tuition covering a significant percentage of the cost. If colleges fail to serve the students well, they may lose tuition revenues or fall in rankings issued by organizations. Top spots in the US News & World Report list are particularly coveted.

By contrast, very few public schools charge anything for attendance. Because parents "pay" for schools only indirectly through property taxes, they demand expensive but inefficient features like small classes. While classes of over 30 are rare for high school seniors, many college kids learn quite well a year later as college freshman in lectures of 200 -- and the parents rarely complain because they are now paying the bill.

Rising tuition charges at colleges and universities have increased opportunities for profit-making private schools like the University of Phoenix that have great promise both as educational institutions and as businesses. This competition forces traditional not-for-profit schools to improve quality, reduce costs, or implement other innovations to attract students. By contrast, for-profit K-12 schools tend to be financially weak since they face a huge price disadvantage relative to "free" public schools.

Can K-12 reformers learn something from the universities? Yes, with caveats. As costs for public schools rise, cash-strapped governments should consider freezing subsidies to the public schools and allow them to charge tuition. To avert arguments that we are denying access to the poor, "progressive vouchers" like those once advocated by Robert Reich might be used. As tuition charges rise beyond 10-20 percent of revenues, public schools could take on a more private dimension, perhaps by putting some parents on the school governing boards, and lowering government regulations and centralized control as private funding increases.

Yet there are limits to this approach. America's universities themselves face only limited market discipline owing to huge payments by federal and state government, not to mention private loan and scholarship programs. University tuition charges have gone up even faster than health care charges, largely because the customer has become insensitive to price changes as others pick up the tab.

A move toward the college model for K-12 schools should avoid the morass of government student loan programs that have contributed to the tuition rise. Moreover, accountability at many colleges is limited, allowing administrators to waste resources on pet projects that would not be approved by customers if spending were more transparent.

We must be careful to avoid the pitfalls that have caused universities to become more costly, less efficient, and disconnected from their consumers. But by adopting some of the strengths of American colleges we might be able to close the quality gap between basic and higher education which threatens American students.

Richard K. Vedder

Richard Vedder is Distinguished Professor of Economics, Ohio University and is author of Going Broke By Degree; Why College Costs Too Much (AEI Press, 2004).