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Higher Tuition For an Engineering Degree
i_like_spam writes "The NYTimes is running a story about a new trend in tuition charges at public universities throughout the country. Differential pricing schemes are being implemented, whereby majors in engineering and business pay higher tuition rates than majors in arts and humanities. Last year, for instance, engineering majors at the University of Nebraska starting paying an extra $40 per credit hour. One argument in support of differential pricing is that professors in engineering and business are more expensive than in other fields. Officials at schools that are implementing differential pricing are aware of some of the downsides. A dean at Iowa State said he 'thought society was no longer looking at higher education as a common good but rather as a way for individuals to increase their earning power.' And a University of Kansas provost said, 'Where we have gone astray culturally is that we have focused almost exclusively on starting salary as an indicator of... the value of the particular major.'"
... that at least you have a free-market system that works. I'm sure that, given time, this problem will resolve itself, one way or another. The market corrects itself. I just wish we had something like this here.
Think, for a moment, of what we have to face. The top engineering examination is the IIT Joint Entrance Examination, which is the only way to gain entry into the Indian Institutes of Technology. Every year, around 1,50,000 people appear for the IIT entrance examination, straight out of high school. That was the number last time. This time, I think it's much higher. Around 4500 get selected. Everyone else to told to go screw themselves. That means that only three percent of people who appear get in.
The next big examination is the AIEEE - the All India Engineering Entrance Examination. In this system, there are a number of colleges which choose to give admission based on performance in this exam. Here, around 8,50,000 people appeared last year. Out of that, only the top 50,000 are called for "counseling" - they are the only ones who have a chance at getting a place in a college. Out of those, only the ones getting into the top five thousand get the first tier colleges and universities. That works out to about 0.588% of all people who appear. But it usually works out for people with ranks up to 25,000 - they get into a good enough place. That's 2.94% of the total who appear.
The next level are the state examinations. Through them, you can get admitted into the colleges affiliated with the local state governments. In states with good colleges, this works out for the top five to ten percent of people in the state.
If you don't get in through any of these channels, then your only option is to pay huge amounts of money to a college of your choice so that you may be included in the "discretionary" admissions that they allow.
It's not difficult to understand, economically - the government controls who and what constitutes a university and a college. It also fixes the fees of all of them. Further, it also controls admission criterion - who will get in, what the admission policies will be, and every other little detail. Now, by forcing colleges to charge students less than what it costs them to run the place, and making the deficit out of its own pocket, along with imposing the hassle of bureaucracy, it provides a very effective dis-incentive to people to start new places, new centres of higher learning, all the while making sure that the few colleges and universities who have a name are the ones who are most profitable (because they can charge arbitrary amounts for the "discretionary" admissions, and the ones with the best reputation charge the most).
What this, in effect, leads to is that there is a ridiculous amount of competition for a very small number of seats, and that the vast, vast majority (above 70%) of the nation's students are getting an education which leaves them unemployable in any meaningful way.
It also has further, unintended, and catastrophic consequences, in terms of the allocation of resources, many of which are very scarce in a country like India (forgive me if I sound like Sowell here, I'm reading his book right now).
Because of this unnatural competition (in a market system, such an artificial shortage and scarcity would not have happened, and therefore I call in unnatural), people try to find ways to game the system.
These tests follow a pattern - the AIEEE, for instance, will consist of three sections, one devoted each to Mathematics, Chemistry, and Physics. The questions in each section will be multiple-choice. Now, given the general pattern, it is possible for a coaching institute, which trains students to take a specific test, to do a statistical analysis of every paper since the test's inception, and guess what will be asked next. The rich can, naturally, afford the best coaching, and thus overwhelmingly dominate the pan-Indian tests.
I remember that during my days in suc