Another little bit of libertarian heresy

So I support vouchers/educational tax credits of some kind that will allow parents to send children where they please, within reasonable cost. In fact, I dare anyone to spend a substantial amount of time working in an average inner-city school and NOT support allowing these children to escape to private schools. Better yet, try sending your kid to an average inner city school for a year, and then see how you feel about vouchers.

But the one thing that worries me is looking at what federal support for student loans has done for the higher educational market. While federally subsidized student loans are not a perfect analogy to vouchers (the student has to pay them back eventually, after all, albeit at a much lower interest rate than could be found in a private market), they seem pretty similar in that they make college affordable for lower income students who would not otherwise be able to attend. And yet, the cost of higher education continues to skyrocket. Many libertarians believe that federal support for student loans only serves to fuel this bubble.

Why wouldn’t vouchers do the same thing? Suppose the government tomorrow gave every youth currently in public schools a $10,000 voucher that could be taken to any high school in the country. I think initially, a lot of new high schools would open up to take advantage of this demand. But wouldn’t some high schools hike their prices to price out lower income children? Could this lead to the same sort of price inflation for high schools that we’re seeing in college?

Don’t get me wrong, I still support vouchers. Children do need an escape from some of the truly awful schools. But I have my doubts that they’d be a panacea.


About irreparabiletempus

God have mercy on me, a sinner.
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3 Responses to Another little bit of libertarian heresy

  1. David says:

    Why not just require that all colleges must publicly disclose their finances if they want their students to be eligible for student loans? That avoids the harm of punishing kids who wouldn’t have access to education because they had the bad luck to be born to parents with less money while also increasing market transparency across the board. Doesn’t require government solution one way or the other for forcing cost reduction — let the market decide, just have a more transparent market.

  2. I think the fact that the market hasn’t already demanded this shows me that it wouldn’t make much of a difference in academic finances or determining where kids go to school. But I’m not opposed to it.

  3. bobozou says:

    if an efficient-market economist saw a $20 bill on the street, he wouldn’t pick it up bc he believes that the market should have already ‘priced-in’ this arbitrage situation…


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