Reforming Higher Education
March 22, 1995
Let me suggest a simple way to eliminate waste in higher education. It is that the government give the money to qualified students instead of qualified universities. You can do this with the so-called "voucher plan." Suppose that a hypothetical university, say Taipei University, now has 5,000 students and that the annual university budget is $2,000,000,000.00. Then the annual cost of education for each student is $400,000. Instead of giving the university the money, the ministry of education gives each student a $400,000 voucher that he can only use to buy higher education services. He can choose to attend any university he wants. If he attends Taipei U., the university can turn in its voucher and the ministry of education will give the school $400,000. If he attends Kaohsiung U., then Kaohsiung U. gets the $400,000. If no students attend a university, the administration, staff, and teachers get no money. They must work for free or go elsewhere.
Oh, and it wouldn't hurt to allow private companies to apply for the right to offer university education services, including branches of foreign universities. Wouldn't it be nice if a qualified student could use his voucher to choose between a degree from Kaohsiung U and, say, the University of Hawaii in Taipei? There is nothing like a little bit of true competition to eliminate waste and golden rice bowls.
Copyright © 1996 by James Patrick Gunning
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Gunning’s Address
J. Patrick Gunning
Visiting Lecturer
Department of Economics
Bryant University
1150 Douglas Pike
Smithfield, RI 02917
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