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05
Aug
2012

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Graduate Winners: Assessing the public and private benefits of higher education

Andrew Norton

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By the middle of this decade, higher education tuition subsidies will cost taxpayers around $7 billion. Yet it is not clear why the public rather than students should pay.

Since most graduates do well out of higher education, enjoying good jobs and high social status, most subsidies are for courses that students would take anyway. Tuition subsidies therefore merely redistribute income to students and graduates, at the expense of the general public – particularly those who do not go to university.

Graduate Winners proposes a new model for setting the government’s contribution to the cost of higher education. Government should only subsidise tuition in the rare circumstances that this leads to public benefits that would not otherwise be created.

In virtually every degree, students perceive – and they are generally right – that they will be winners. Public money could be better spent than in subsidizing them.