Paying for Education
Education is important in making citizens independent and self-sufficient. But, is education a common good or is it an essential need or is it a want? The answer to this question indicates the payment model that is best suited for paying for education. This chapter discusses Education as an Essential in an ideal society and its ramifications.
Importance of Education
Education is one of the most important aspects of human life. Education has been the driving force of prosperity for human beings in recent millennia. Having education contributes significantly to our well-being. The path that a society takes is dependent on the education that it enjoys. Everything else is just a consequence of education. Our education system enables progress, and that benefits us all. Any society or country aspiring to be a Utopia will try its best to ensure that all its citizens can have the best education.
What is Education? We are not born with knowledge or skills. It is through education that we gain both knowledge and skills. Education has a teaching component and a learning component. Some parts of the teaching could be elaborately organized and others could be merely guided. Some parts of the education are mandatory while others are a choice and that choice depends on the liking, desires, capabilities and resources of the student. The education system attempts to advance the minds, thoughts and skills of citizens so that they can be more useful to others. How useful? Far more than what citizens are born with.
Education is needed for everything. It includes all arts, crafts and trades. Education includes all kinds of sciences, mathematics and all kinds of technologies. Education includes ideas from the field of philosophy, ethics, moral and spiritual. It includes lessons from history and knowledge of our geography. Education includes knowledge about the human mind and body and how to take care of both. Education includes everything from "how to do household chores?" to pondering about "what is the purpose of our existence?" and "are we alone in the universe?".
Without an education system our usefulness to others is limited by the education that our immediate family can impart to us, and in such a situation, progress would be limited and slow. Because we have the concept of education and an education system to implement the concept, we have made tremendous progress over several millennia. It also seems that progress has been accelerating in the past few centuries. This progress could be achieved only because we have been standing on the shoulders of giants and those giants themselves have been standing on shoulders of their predecessors and every one of those giants have had the privilege of obtaining education from the various education systems in their times, and we have the privilege of education systems of our times so that we can take advantage of standing on the shoulders of giants. The education system puts us on the shoulders of giants. The education system enables progress and that benefits us all. From this perspective, we should consider education as a common good, and hence the responsibility of society.
Education enables us to be independent and self-sufficient. Specifically, education benefits individuals, from this perspective it is an individual's need. When we are deprived of education, we suffer an impairment in our ability to be independent and self-sufficient. Not having an education is harmful. From this perspective, we should consider education as essential, and hence use the Utopian Payment Model to pay for education and that will ensure that the education needs of individuals can be satisfied for every individual regardless of the wealth possessed by that individual. Thus, education becomes a shared responsibility of the individual and the society.
If we take a very different perspective and consider why an individual may seek education, and if we focus on the benefits that the individual may derive from such education, then it would imply that because there is a significant element of self-interest in getting education, paying for it is the responsibility of the individual and not of the society.
Thus, there are reasons why we could consider education as either a common good or an essential or purely self-interest. We will need to find the right reasons to choose among these potential choices. We will need to consider education in its separate aspects to answer the questions "Who pays for education? And how much?"
Mandatory Education
Our society has evolved in a way that we mandate all children to obtain a certain education till they attain adulthood. Typically, citizens are considered adults at the age of 18, and it is at this age that society also gives them their right to participate in decision-making for society by means of voting.
Society needs all its citizens to be independent and self-sufficient. Society also needs all its citizens to be effective at participating in making social decisions. Hence, society sets up a mandatory education system with the explicit objective of accomplishing those two needs by the time a citizen turns 18 years old. Mandatory education is intended to impart all the knowledge and skills that a citizen needs to be at least partially independent and self-sufficient, and also to be effective in participating in making decisions for society.
Providing all children specific and standardized education is really a need of the society because we desire citizens to know specific things by the time they become adults. In this sense, educating children is a common good and a very essential common good. Without this education, we would lack a certain coherency in our society, and we cannot even dream of making it a Utopia.
We, the citizens of the society, mandate that all young citizens must obtain the initial mandatory education. Hence, society should pay entirely for mandatory education. Society should not charge any child or the child's parents specifically for imparting this mandatory education.
The costs associated with mandatory education should be collected from all citizens as taxes. When we say all citizens, it really means all citizens, from newborn babies to even centenarians. We can do this because all citizens have some wealth (remember the chapter on wealth redistribution) and hence can pay taxes (remember the chapter on taxes - which are also fair). Thus, no one can say that they are paying for someone else's mandatory education, because everyone pays for this common good during their entire life.
Mandatory education itself can be viewed as having multiple stages starting from kindergarten onto primary school, continuing to secondary school and concluding with high school. Kindergarten education starts when a child can start interacting with people outside their own family and generally lasts two years. Grades 1 through 4 can be considered primary education. Grades 5 through 8 can be considered secondary education, and grades 9 through 12 are high school grades. Note that the kindergarten stage of education is a preparatory stage with the intention of getting the child to a learning level that is suitable for enrollment into first grade. Since school is mandatory, any preparation required for that schooling is also mandatory.
An Overview of the Higher Education System
Generally, we tend to call formal education after high school "higher education". Higher education imparts knowledge and skills that build on the knowledge and skills imparted by mandatory education, and helps a citizen be more useful than what can be accomplished by mandatory education. Since higher education builds on mandatory education, it imparts specialized knowledge and skills. In the absence of higher education, obtaining such specialized knowledge and skills is almost impossible.
This kind of education is optional. It is optional because not everything that needs to be done for society needs higher education. There are plenty of tasks that can be done by a citizen who has only mandatory education.
At the core of our higher education system are the institutions of learning, teaching, testing, examining, certifying and declaring graduates, doing research, practicing and becoming doctors, etc. These institutions give out certificates, diplomas, graduate degrees, master degrees, doctorates, etc. to recognize the knowledge and skills obtained through this higher education.
Currently, students apply for admission to courses, and they are chosen or rejected based on some criteria. Then they have to pay whatever is the cost of education, attend the educational sessions, study the subject, eventually prove via some examination that they have absorbed what was being given as education, and finally they get certified as having acquired the education - that is they graduate.
In some countries, higher education is considered the common good and is paid using the free payment model and funded using taxes.
In all other countries, higher education is treated as a want or a desire of individual citizens. Hence, in these countries, the "full price payment model" is used to pay for higher education. In some of these countries, the Full Price but paid by Credit variation of Full Price payment model is used and "Student Loans" is the common term used for this payment model.
In some countries, a select few institutions of higher education also use the "Full Price but Subsidized and Rationed" variation of the full price payment model. This kind of payment model is offered to highly talented candidates, that too in educational institutions run by society. "Scholarships" are another form of this same payment model that are only available to highly talented candidates.
Plenty of employers employ these educated citizens, rely on their specialized knowledge and skills and organize work that cannot be accomplished using just the knowledge and skills obtained during mandatory education. These employers produce the products and services that most of the population needs or wants.
Thus, citizens who seek and obtain higher education contribute to the well-being of the society by using their specialized knowledge and skills to produce products or provide services which otherwise cannot be produced or provided. From society's perspective, it is highly desirable for a sufficient number of citizens to acquire higher education and use it.
Choosing a Payment Model for Higher Education
The simplest perspective to take is to treat higher education as a want or desire of the individual citizen. When an individual seeks education, the person seeks it either because he or she thinks that higher education in the chosen field would make the person most useful to others and as a consequence most beneficial to oneself, or he or she thinks acquiring that kind of education is the best way to make the most money. In either case, ultimately the individual stands to benefit. If we were to not consider anything else, we would say that the person is responsible for obtaining the education and hence pays for it using the full price payment model. However, that logic ignores many other important aspects.
One of the first aspects missed is the possibility of a very talented and gifted person who is poor. Such a person, however well suited for obtaining higher education, cannot afford it and hence cannot get it. This does not sit well with some people. This situation has led to the creation of the concept called "Scholarships". A scholarship usually provides money to poor and exceptionally talented people to obtain higher education. Scholarships are typically given by well-meaning individuals who intend to do some good, or organizations created to do some good. They solve the problem of money for the best of the talented people. The problem with this approach is that it does not solve the problem for those non-wealthy but talented people who are next to the best. While scholarships give opportunities to a very few talented people, those people and those organizations that give our scholarships do not have enough resources to take care of all talent. Even in the presence of scholarships, plenty of talent is wasted.
Seeing the limitations of scholarships, some societies and countries create institutions of higher learning and provide the learning opportunities to plenty of talent. The number of opportunities is far more than what a few scholarships can achieve, but those opportunities are available to only a small percentage of all citizens. Typically, it is less than 1%. The selection process for admission to such programs of higher learning requires students to give some sort of competitive examination and only the top 100 or top 1000 or top 10000 people get the opportunity every year. Citizens who qualify for this kind of opportunity have to pay either a token charge or have to pay the significantly subsidized full price. This solves the money problem for these talented people. However, it does not do a thing for the rest. Think about the next 100 or 1000 people who missed the opportunity. Perhaps the talent pool is 10 to 100 times larger than the number of people who get the opportunity. Currently, people tend to view this "full price but significantly subsidized for just a few talented people" as something good is being done by the society, and hence ignore the situation that rest of the talent is being wasted even when the rest of the talent is several times more populous than the talent that got the opportunity.
The next attempt of giving non-wealthy talent the opportunity to obtain higher education is by means of "student loans". One can imagine the entity giving student loans explaining the merits of a student loan to a potential student who needs money as follows: "Since you are talented, but you do not have money to pay for obtaining higher education, why don't I give you a loan so that you can pay the full price of the higher education. Thus, you not having money right now is not a problem for you right now. Once you finish the job of obtaining higher education, you can offer your specialized knowledge and skills to employers and get wages for that job and pay me back the loan that I gave you and also the interest that accrues on that loan over all the time that the loan is not repaid." This is the Full Price but paid by Credit payment model as applied to paying for higher education. It allows almost everyone the opportunity to obtain higher education, but at a personal future cost to the student. Such a citizen starts his or her working life in debt; that is, they start their working life with a negative amount of wealth and may spend several years just getting to zero wealth. Many citizens see this and other problems that taking on student debt will cause to themselves and choose other means of being independent and self-sufficient. The approach of talented individuals not falling for the "student debt trap" minimizes the risks for such individuals, and at the same time it reduces the amount of talent that the society can utilize. Thus, the Full Price but paid by Credit payment model fails to best utilize all the talent in the society. The price for being useful to society is paid by these non-wealthy students, and the rest of the society lowers its cost by not having to fund higher education. It is the unwillingness of the rest of society to consider higher education as a social need that forces individuals to bear the cost, which reduces the number of people who attempt to get higher education.
If we would like for our society to be a Utopia, then all of us will need to discard the attitude that higher education is a personal desire and want and hence the citizens should deal with it. Higher education is a means to an end. The "end" in this context is "having specialized knowledge and skills to do those tasks that require such skills". Higher education itself is not an "end". Hence, higher education should not be viewed as personal desire or personal want.
Consider a situation where there is no higher education for anyone. In that case, it is the society that loses. It is obvious that deserving individuals don't get any opportunities to increase their knowledge and skills, be more useful and as a consequence have a chance at a better life. However, the society is the biggest loser as it does not get a younger generation with the knowledge and skills required to maintain the current state of the society and there is no one with knowledge and skills to continue progress. Society needs at least some citizens to have specialized knowledge and skills to do overly specialized tasks. Instead of mandating that some citizens learn those tasks, society lets citizens choose if they want to specialize and also choose the area of specialization. Of course, citizens may need to qualify to obtain specialized education and will also have to put in effort to learn these specialized knowledge and skills. Such citizens may find that the specialized knowledge that they voluntarily gained opens up opportunities for them to earn higher wages for their subsequent labor. On the whole, society benefits from higher levels of specialization. Not having any higher education is extremely harmful to society and hence education should be considered as an essential need of society. If it is an essential need of the entire society, then it is the common good and hence it should utilize the free payment model and the costs should be recovered using taxes. When a society is of the opinion that most work needed to maintain society and advance it requires specialized knowledge and skills, then the society will easily recognize higher education as a need of the society and hence will treat it as a common good and hence will use the Free payment model. Hence, such societies and countries will provide higher education freely to their citizens and cover the costs through taxes. Such societies and countries also have the added motivation to improve their higher education system and make it more effective in addressing the knowledge and skills needs of the society.
Considering higher education as a social need and hence a common good is the best course of action for a society.
Most societies and countries are at a stage in their progress towards Utopia where they treat higher education as a personal desire or want. It might be a big leap for these societies or these countries to start thinking about higher education as a common good. It will be easier for such societies and such countries to first start treating higher education as an essential. Treating higher education as essential is a compromise between treating it as the common good and treating it as a personal desire. Treating higher education as essential will cost society more than treating it as a personal desire, but that amount is still much lower than treating higher education as a common good. The benefits of treating higher education as an essential are comparable to those of treating it as a common good. Treating higher education as an essential means that those who obtain higher education pay for it using the Utopian Payment Mode and as per this payment model, not having enough wealth would not prevent a talented youth from obtaining higher education as the charges to the individual will be scaled down to their wealth and hence would be affordable. Such societies and countries should adopt the Utopian Payment Model in the immediate future, use it for a few decades before building the consensus for the Free payment model for higher education. During this period, they can work on improving their education system, making it effective and cost-efficient and thereby making it easier to transition to the Free Payment Model for higher education.
Here is the logic for thinking about Higher Education as an essential need of an individual. Imagine a poor young adult who wants to be an engineer or a doctor or a scientist. Further, imagine that this young adult has the talent and aptitude for his or her desired line of higher education. If this person does not get a higher education just because he or she does not have money, then he or she will do something else. What was denied to this person is an opportunity to do something better, something that the person was passionate about but did not have the money to learn. Because this person is talented, he or she will succeed in whatever he or she decides to do, but he or she will always resent the entire society that places such a high premium on having wealth at the young adult stage in one's life. If the person was born to poor parents, there was nothing that this person could have done to have the wealth needed for higher education immediately after completing mandatory education. Not getting an opportunity to learn because of lack of wealth is not merely a disappointment. The situation is as follows: A young adult is at a stage in life when they are trying to learn something to be independent, self-sufficient and useful to society in specialized tasks. They are not yet independent and self-sufficient, and hence they need help. It is at this stage in their life when they need some help that society asks them to fend for themselves by paying the full price of higher education - either now or later using student debt. For a poor parent's child who has talents and aptitude, seeing a wealthy person's child who does not have talent and aptitude getting the opportunity for higher education when he or she does not get the same learning opportunity is extremely hurtful. It gives them a feeling of "people only care about money and ignore talents and aptitude". This experience builds in their minds an attitude of not caring for the society who did not bother to help them when they needed the help. This attitude tends to pervade their thoughts and biases all judgments that the person forms about society. The buildup of such an attitude is harmful both to the individual and for the rest of the society. In order to prevent this harm, we should think of higher education as an essential need.
From society's perspective, a young adult who seeks education, is talented and has aptitude is far more desirable than someone who does not have talent or aptitude. The talented person will take the opportunity to learn and do the most with it. Giving the learning opportunity to the talented person will yield better results rather than giving the learning opportunity to a non-talented person. This choice of whom to give the learning opportunity does not depend on the wealth of the individual, but on the talent and aptitude alone.
Thus, a society that desires to be a Utopia will choose to treat higher education either as a common good or as an essential need, and hence will adopt either the Free Payment Model or Utopian Payment Model for the costs associated with higher education. For such a society, everyone will be able to afford any kind of education, regardless of their wealth. For such a society, no one will have to deal with student debt.
When one is thinking about obtaining Higher Education, one is thinking about signing up for multiple subjects per quarter or semester. We humans have a limit on how many subjects we can study concurrently. This human limit translates to how many courses a student can take at a time. This limit is independent of the payment model that we choose for Higher Education. Thus, if we choose the Utopian Payment Model, we should not have any monetary limit on the category of Higher Education, because the course limit is sufficient to ensure that the Higher Education resources are not wasted.
If the Utopian Payment Model is adopted for Higher Education, then the associated payments will be automatically carried out. Further, in this case, we should also eliminate the full and upfront payment at the time of enrollment and convert the payments to daily frequency. From a student's perspective, the daily frequency eliminates large spikes of upfront payment and evenly distributes the money outflow over the entire duration of the education and better accounts for the evolving wealth situation of the student.