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October 29, 2008
The cost of higher education
This house believes that individuals, not the
state, should pay for higher education.
Economist Debates

Economist Debates: The cost of higher education
About
Economist Debates adapt the Oxford style of debating to an
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another (the “opposition”) in a contest hosted and overseen
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readers: opening, rebuttal and closing.
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Economist Debates: The cost of higher education
Table of contents
The proposition ........................................................... 5
Opening statements .................................................... 6
The moderator’s opening statement............................... 7
The proposition’s opening statement............................ 10
The opposition’s opening statement ............................. 15
Featured guest, Nicholas Barr ..................................... 19
Featured guest, David Breneman................................. 23
Rebuttal statements.................................................. 25
The moderator’s rebuttal statement ............................. 25
The proposition’s rebuttal statement ............................ 28
The opposition’s rebuttal statement ............................. 32
Featured guest, Neal McCluskey .................................. 35
Featured guest, Andreas Blom .................................... 39
Closing statements.................................................... 42
The moderator’s closing statement .............................. 42
The proposition’s closing statement ............................. 45
The opposition’s closing statement .............................. 49
Featured guest, Donald Heller ..................................... 53
Featured guest, Lan Gao ............................................ 56
Winner announcement .............................................. 60
Winner announcement ............................................... 60
Background reading .................................................. 62
The sponsor: Intel..................................................... 63
The sponsor’s perspective .......................................... 63
Q&A with Intel’s William A. Swope and Julie Clugage ...... 68
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Economist Debates: The cost of higher education
October 29th – November 10th 2008
The proposition
“This house believes that individuals, not the state,
should pay for higher education.”
Where does the lion's share of value rest when it comes to
higher education? Is it with the individuals who reap the
rewards of interesting work and higher salaries? Or is it the
state, which will benefit from an educated society and
competitive workers? In a globalised world where talent
shortages are growing and highly educated individuals move
freely between jobs and countries, has the balance of the
benefit of higher education shifted from the state to the
individual? If so, who bears the responsibility for paying for
higher education?
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Economist Debates: The cost of higher education
Opening statements
Opening statements were originally published on October
29th 2008. They can be viewed online at
http://www.economist.com/debate/days/view/232
The moderator
Helen Joyce
Education Correspondent, The Economist
Helen Joyce is Education Correspondent for The Economist.
As well as covering education, she also covers some
statistical, social and health-related issues, stories relating to
children and family life, and British science. Previous jobs
include editor of Plus, an online magazine about maths
published by the University of Cambridge, and founding
editor for the Royal Statistical Society's quarterly magazine,
Significance.
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Economist Debates: The cost of higher education
The moderator’s opening
statement
October 29th 2008
Governments all round the world want more young people to
go to university. They want growth, and are convinced that
having more graduates will create it; they want social justice
and hope that if lots and lots of young people go on to higher
education, at some point universities will run out of middleclass
students and start educating poorer youngsters who
will then become upwardly mobile.
But how to fund ever-increasing numbers of students? For
Alison Wolf, the author of "Does Education Matter? Myths
about Education and Economic Growth", the prime
beneficiaries of higher education are those who do it, and
therefore the answer is simple: they should pay. She is keen
on arrangements to ensure students are not put off by
poverty or the fear of debt, but these are arguments, she
says, for carefully designed student loan schemes, not for
the taxpayer picking up the tab.
Our other participant, Anders Flodström, is head of Sweden’s
National Agency for Higher Education. For him, education at
every level is a joint endeavour between the citizens of a
state. Higher education is certainly expensive, but it is part
of a country’s infrastructure, and common payment for
infrastructure is one of the things that lie behind the Nordic
dream of welfare for all and a classless society.
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Economist Debates: The cost of higher education
This promises to be a fascinating debate, and as moderator I
hope to gain an insight into some questions I have come up
against repeatedly while covering education for The
Economist.
First, a couple directed to those who want individuals to pay.
If you believe in meritocracy, what can, or should, be done
about the different aspirations of children born into different
social classes? And what to do about the debt aversion of
those whose families have no history of investing in
education? I once talked to some young men doing a very
highly regarded apprenticeship scheme who told me they
would never have considered higher education. They didn’t
want to be “old” before they started to work—and, as they
saw it, to live; you should have seen their faces when I told
them I had spent eight years at university (I have a PhD).
And they were adamant they did not want to start out in life
with debt—this despite Britain’s generous state-financed
bursaries for poorer students and subsidised loans for all.
And now a couple of questions for those who think the
taxpayer should pick up the tab. What about the overconsumption
that is bound to follow when education is
subsidised? If taxpayers pay for university, the young people
who go may be receiving something they do not appreciate,
and would not have bothered with if they had had to pay.
Many who are keen on subsidising education think, not
without reason, that some people do not know what is good
for them (and the rest of us), and hope, by cutting the price
of education, to lure potential wastrels into lives that are in
the end better for them and more all-round useful for others.
Is such paternalism justified? And what of the motivation of
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Economist Debates: The cost of higher education
these marginal students? Is higher education likely to be
wasted on those who do not passionately desire to learn?
Defending the proposition
Alison Wolf
Sir Roy Griffiths Professor of Public Sector Management,
King's College London
Alison Wolf holds the Sir Roy Griffiths chair at King’s College
London, and is director of its MSc in Public Services Policy
and Management. She writes regularly for the UK national
press, including the Guardian, Times Higher and Prospect,
and is a presenter for BBC Radio 4’s Analysis. She publishes
regularly on policy issues with think-tanks such as Policy
Exchange and the Social Market Foundation. She has been a
specialist adviser to the House of Commons select committee
on education and skills and is a Council Member of the United
Nations University.
Professor Wolf’s research focuses on the interface between
education institutions and labour markets, and her books
include “Does Education Matter? Myths about Education and
Economic Growth” (Penguin). She is a visiting professorial
fellow at the Institute of Education, University of London; and
a member of the International Accounting Education
Standards Board and of the editorial board of Assessment in
Education. She has been an adviser to, among others, the
OECD, the Royal College of Surgeons, the Ministries of
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Economist Debates: The cost of higher education
Education of New Zealand, France and South Africa, the
European Commission and the Bar Council.
The proposition’s opening
statement
October 29th 2008
Individuals should certainly pay for their higher education.
Anything else is deeply unfair to their fellow citizens.
For the children of the middle classes, attending university
has become a birthright. And a birthright that really pays.
The economic returns to a degree are large and lifelong;
graduates, everywhere, earn more than non-graduates.
Meanwhile social mobility—indeed, any chance of getting a
good job—is ever more dependent on having a degree.
Forget making it up from the shop-floor. Without higher
education, doors everywhere slam in your face.
Universities have expanded rapidly everywhere, but the
beneficiaries have been overwhelmingly middle-class. It is
not poor clever children who have been flooding into higher
education, but the children of the affluent, whether clever or
not. Yet bizarrely, in much of the world, governments seem
determined that to those who have it shall be given. How
else to explain the enormous proportions of public education
spending that are directed into higher education?
Huge differences exist in the quality of schools, with the poor
as the consistent losers. Developed countries are struggling,
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Economist Debates: The cost of higher education
with little success, to narrow the income gap between their
most and least advantaged citizens. In that situation, should
ordinary people also be paying, through their taxes, for the
university education of the affluent young? Because that is
what is actually involved when we say that the state should
pay for higher education.
A university education is of enormous and direct benefit to
the individual. A major reason for its value is that only some
people have it. So the individual, and not the taxpayer,
should pay for it. There are important and pressing calls on
the resources of the government. Using taxpayers’ money to
help a sub-set of young people to earn high incomes in the
future is not one of them.
Full government funding is not even very good for
universities. On the contrary, it can be the kiss of death. If
students have to pay for their education, they not only work
harder, but also demand more from their teachers. And their
teachers have to keep them satisfied. If that means taking
teaching seriously, and giving less time to their own research
interests, that is surely something to celebrate.
Adam Smith worked in a Scottish university whose teachers
lived off student fees. He also knew and despised 18thcentury
Oxford, where the academics lived comfortably off
endowment income in an intellectual backwater. Guaranteed
salaries, Smith argued, were the enemy of diligence; and
when the academics were lazy and incompetent, the students
were similarly lackadaisical. In Scotland, with its fee-paying
students and non-endowed staff, things were quite different.
“Where the masters really perform their duty, there are no
examples, I believe, that the greater part of the students
ever neglect theirs,” he argued. Scotland then, unlike now,
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Economist Debates: The cost of higher education
made its students pay; and was also experiencing its
greatest academic and intellectual flowering.
If you want a Eureka moment, just look at the differences
between America’s public schools and its universities. Huge
amounts are spent on the schools, which nonetheless remain
relentlessly mediocre. American universities, meanwhile, are
the envy of the earth. That is in large part because they are
competitive and have to earn their way. They have, in other
words, to attract students and student fees. It is not just the
private universities either. Public universities, too, charge
fees; and students pay them.
Fees also bring universities their independence. There are
some universities in the world which are fully, or almost fully,
government-funded, and also independent in their views. But
not many, and only in countries with a very strong, longstanding
commitment to open debate. The general rule in life
is that he who pays the piper calls the tune. And the history
of government-funded institutions is that they are not only
inefficient but timid and cowed. This is no basis for good
education or good research, and no way to preserve the core
values of the academy: reason, critical thought, openmindedness.
Many people believe that higher education should be free
because it is good for the economy, as proved by the fact
that graduates are paid more . Many graduates clearly do
contribute to national wealth, but so, even more clearly, do
all the businesses that invest and create jobs, whether
through a burger franchise or an internet start-up. If you
believe that the state should pay for higher education
because graduates are economically productive, you should
also believe that the state should subsidise businesses.
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Economist Debates: The cost of higher education
Anyone promising to generate jobs should receive a gift of
capital from the government to invest.
The money for business investors would presumably come
from the same place as for students: the taxes of citizens,
many of them less well paid. But actually the argument is
nonsense. Both businessmen and university students want to
make themselves better off. They are entitled to the
proceeds if they do. And so they should pay for the
investment.
Of course we need to make sure that poverty or fear of debt
does not stop people from going to university. But there are
well-worked out ways of doing that. In the UK, for example,
we now have a system of income-contingent loans. The
government lends all students, whatever their background,
the money for their fees. They only start paying them back
once they are working and earning above a certain minimum.
If things go wrong for someone and they are not able to
earn, then they do not pay the loan back either.
In many countries, universities also are the main home for
research on anything without immediate commercial value.
Research is a legitimate concern of government, but it is not
the same thing as higher education. That is something which
benefits individuals; and which they undertake because it
benefits them. And therefore it is they, not the state, who
should pay.
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Economist Debates: The cost of higher education
Against the proposition
Anders Flodström
University Chancellor, Swedish National Agency for Higher
Education
Professor Anders Flodström is University Chancellor at the
Swedish National Agency for Higher Education. Since 1985
he has been professor of physics at the Royal Institute of
Technology (KTH) in Stockholm, Sweden.
Anders Flodström has been the Secretary General of the
Swedish Research Council for Engineering Sciences and
president at Linköping University (LiU) in Sweden. He was
also president of the Royal Institute of Technology (KTH) in
Stockholm until July 2007 when he was appointed to the post
of University Chancellor for the Swedish universities.
He is a member of the Swedish Academy for the Engineering
Sciences (IVA). He holds honorary doctorates at Riga
Technical University in Latvia and Helsinki Technical
University (TKK) and is honorary professor at Dalian
University of Technology in China.
He is a member of the advisory board of Karlsruhe Technical
Institute (KIT) and the chairman of CLUSTER, a European
network of technical universities.
Mr Flodström has written about 300 articles in scientific
international journals and ten book chapters. He has
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Economist Debates: The cost of higher education
supervised more than 30 PhD and numerous Master’s
students. He is a referee for the journals Physical Review and
Surface Science.
The opposition’s opening
statement
October 29th 2008
A nation is made up of individuals, who identify themselves
with it. The nation stands for certain values agreed upon in,
hopefully, a democratic way. The nation also agrees upon
how it can be competitive compared with other nations when
it comes to increased prosperity and economic growth. The
most important and generic quality for a nation is its
intellectual capital or its composed knowledge. All knowledge
is carried by individuals and also needs individuals to be
applied. Thus the collective knowledge growth is the most
important task for a nation.
The citizens of the nation have different talents and
motivations to learn. Non-students or students will through
education increase their likelihood to succeed to get a
motivating job, to become successful, to make a career, to
make money and to live a full life from all aspects. As a
person you thus have a strong motivation to educate yourself
as far as possible for your personal success. Your parents,
relatives and friends encompass the same view and
encourage you to study.
Education and especially higher education is expensive.
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Economist Debates: The cost of higher education
Excellent teachers are rare and are expensive and should be
even more expensive for the sake of learning. Who benefits
most and thus who should pay? Developed nations in general
agree that all education up to tertiary or university education
should be paid by the nation through taxes. When it comes
to tertiary or university education, the view differs between
nations that share common democratic values. In the United
States the answer is obvious; the students should pay, not
the taxpayers. In the Nordic countries the answer is obvious:
the taxpayers should pay. Why these very different views?
The general attitude to the nation’s responsibility for the
nation’s infrastructure is very different. In the United States
the only infrastructure that all citizens accept, that it should
be paid by taxpayers is the infrastructure responsible for the
nations, otherwise the financial responsibility for all
infrastructure should be shared federally, among the state
and among the individuals. Citizens take a much greater
responsibility than in Europe and especially compared with
the Nordic countries. Consequently more money is left after
taxes for wealth-building for individuals. The American
dream! In the Nordic countries society’s entire
infrastructure—transport, healthcare, schools and
universities—is paid by taxes, resulting in high taxes. The
welfare and classless society dream!
Who is right? And more important who will be right in the
future? The United States has the world’s greatest
universities. Some of the best scientists work and some of
the best students attend the best American universities. Will
excellent university education for a few and expensive
mediocre education for other students create the future
knowledge society? The answer is no. It will create a
hierarchical society with diminishing social mobility, far from
the American dream. Ivy League universities will receive
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Economist Debates: The cost of higher education
generous resources, from rich students and from
endowments, to create excellent but too few students. The
average education level will become lower and in the end the
American university sector will suffer from similar problems
to the American healthcare sector. This higher education
system built on tuition fees will be counterproductive to the
American dream and will in the end result in a knowledge
crisis. There will in the future be no Indian or Chinese
students to save—that is, bright and prepared to pay—the
American universities, but America has to start to use its own
multiethnic resources. A “no child left behind” legislation
similar to the one for K-12 has to be enforced based on
public, state and federal resources, and this resource must
be used to create the future American knowledge society.
Is the Nordic taxpayer solution non-problematic? No. In the
political fight between competing tax-financed infrastructures
so far higher education and universities have been the losers.
Roads and hospitals are more tangible to politicians and to
voters and compete better for the tax-based funding. This
has resulted in much fewer resources to higher education, as
a percentage of GDP, as compared with the United States
and also the UK. Higher education in Nordic countries risks
having great access to all its talents and with the possibility
to substantially increase its intellectual capital. However, the
present tax-based funding is far too low to achieve this
objective. Higher education in the Nordic countries risks
becoming very fair but with a far too low average knowledge
level. Too low resources will also risk quality because
teachers will become less stringent and motivated. Recently,
the Swedish government increased the funding of university
research in a very significant way. Higher education is now
very much the poor cousin. This will make a combined tax
and tuition fee look attractive. A Nordic saga about equal
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Economist Debates: The cost of higher education
opportunities and equal access to higher education could
end.
I believe; however, that knowledge is so important in the
future that all countries need to put substantial tax money
into higher education to be able to get a classless knowledge
society that utilises the full power of the nation. I believe
from my personal experience of Swedish students that the
motivation for the individual students is as high and that the
students are as competitive as students in other countries
paying for their university education themselves.
If the nation is not prepared to pay for its most important
resource, we are in trouble.
Featured guest
Nicholas Barr
Professor of Public Economics, London School of Economics
Nicholas Barr is Professor of Public Economics at the London
School of Economics, the author of numerous books and
articles including "The Economics of the Welfare State" (OUP,
4th edn, 2004) and "Reforming Pensions: Principles and
Policy" (with Peter Diamond) (OUP, 2008), a member of the
Editorial Board of the International Social Security Review
and a Trustee of HelpAge International. He spent two periods
at the World Bank working on the design of income transfers
in central and eastern Europe and has been a Visiting Scholar
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Economist Debates: The cost of higher education
at the Fiscal Affairs Department at the IMF. Since the late
1980s, he has been active in debates about pension reform
and higher education finance, advising governments in the
post-communist countries and in the UK, Australia, Chile,
China, Hungary, New Zealand and South Africa. A range of
academic and policy writing can be found on
http://econ.lse.ac.uk/staff/nb.
Featured guest, Nicholas Barr
October 29th 2008
The core problems of higher-education finance are clear:
many universities are underfunded, many students are poor
and the proportion of students from disadvantaged
backgrounds is a major concern. Higher-education finance
matters: getting it wrong puts national economic
performance at risk and sells the poor down the river.
There is also considerable agreement about core objectives:
strengthening quality and improving access.
The policy to achieve those objectives has three elements.
Element 1: Variable fees to enhance quality. Variable fees
are highly controversial in western Europe but taken for
granted in the United States and many countries in Asia.
There are several arguments.
• Cost sharing: it is a standard principle in economic theory
that it is both efficient and fair if individuals pay for the
private benefits they derive (higher pay, more satisfying
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Economist Debates: The cost of higher education
work), and the taxpayer finances social benefits above those
private benefits.
• Quality: fees give universities more resources to improve
quality and, through competition, help to improve the
efficiency with which those resources are used. Why the
emphasis on competition? The answer from economic theory
is that competition is useful where consumers are wellinformed.
In the case of higher education, the model of the
well-informed (or fairly well-informed) consumer broadly
holds. Thus competition, with suitable regulation, benefits
the student.
• Paradoxically, variable fees are also fairer. Most students
are from better-off backgrounds; thus with ”free” higher
education the taxes of the truck driver pay for the degrees of
people from better-off backgrounds.
The obvious counter-argument is that fees harm access. That
is true of upfront fees, but not where students go to
university free and make a contribution only after they have
graduated. This brings us to student loans.
Element 2: Sharing costs without harming access. Student
loans should have two central characteristics. They should
have so-called income-contingent repayments. That is, a
person’s repayments should be x% of his/her earnings,
implemented as payroll deduction which stops once he/she
has repaid the loan. This is the system in Australia, New
Zealand and the UK. Second, the loan should be large
enough to cover tuition fees and living costs.
Such a package has profound implications. It eliminates
upfront fees, making higher education free at the point of
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Economist Debates: The cost of higher education
use. It frees students from forced reliance on credit-card
debt, and allows them to choose how much part-time work
they do, or do not do.
Element 3: Policies to widen participation. Exclusion has
multiple roots. A well-designed strategy addresses them all.
• Raising attainment: access fails when someone drops out
of high school, usually for reasons that started much earlier.
A central element in widening participation is to strengthen
pre-university education, from nursery school onwards.
• Increasing information and raising aspirations: activities
include mentoring of schoolchildren by university students,
visit days, Saturday schools and the like, so as to demystify
university and give schoolchildren relevant information. The
saddest impediment to access is someone who has never
even thought of going to university.
• More money: policies include financial assistance to
schoolchildren to encourage them to complete high school
and scholarships for students at university. The latter,
however, are the tail; it is attainment that is the dog.
In a UK context, spending £1bn raising the school-leaving
results of the 80% of young people from poor backgrounds
who do not go to university is a better way of widening
access than subsidising the tuition fees of the 80% from
better-off backgrounds who do.
Most countries in mainland western Europe and the Nordic
countries have yet to address the vexed politics of fees. This
is regrettable. The strategy above simultaneously enhances
quality and increases fairness. It is educationally, socially,
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Economist Debates: The cost of higher education
fiscally and administratively sound. It should form the core of
any reform proposals.
Featured guest
David Breneman
University Professor, Batten School of Leadership and Public
Policy, University of Virginia
Professor Breneman was Dean of the Curry School of
Education at the University of Virginia from 1995 to 2007. He
was Visiting Professor at the Harvard Graduate School of
Education from 1990 to 1995, where he taught graduate
courses on the economics and financing of higher education,
liberal arts colleges and the college presidency.
As a Visiting Fellow at the Brookings Institution he conducted
research for a book, "Liberal Arts Colleges: Thriving,
Surviving, or Endangered?", published by Brookings in 1994.
From 1983 to 1989, he served as president of Kalamazoo
College, a liberal arts college in Michigan. Prior to that, he
was a Senior Fellow at Brookings from 1975 to 1983,
specialising in the economics of higher education and public
policy towards education. As an economist, Professor
Breneman's research interests are in finance and the
economics of higher education.
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Economist Debates: The cost of higher education
Featured guest, David Breneman
October 31st 2008
The proposition as stated is so extreme as to be absurd,
whether considered abstractly as a philosophical principle, or
concretely as a policy proposal. The apparent assumption is
that higher education is a purely private good, like an
automobile, and thus should be bought and sold as one
would a Mercedes or Land Rover. But no country in the world
currently treats higher education in this fashion; indeed, if
one were to consider the opposite extreme, full state
subsidy, one could point to examples in recent history.
Where most countries find themselves now is somewhere in
between these two extremes, and the realistic discussion
involves how the costs should be shared between individuals
and the state, not whether they should be shared.
Why have all states subsidised higher education to some
degree? Higher education has long been viewed by
economists as investment in human capital, required to
enhance the productivity of individuals, both in the
marketplace and as citizens of the community. The benefits
produced are both private and public, a classic example of
externalities. The fact that educated people earn more
income is reason for them to bear much of the cost, but if
any state left the total of such investment to the pure,
unsubsidised market, the amount of education purchased
would fall short of the socially optimal level. This is an
efficiency argument, and although calculating the precise
shares of public and private benefits eludes us, societies
everywhere have found it in their interest to encourage more
education than the market alone would produce.
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Economist Debates: The cost of higher education
Year ago the Carnegie Commission under Clark Kerr’s
leadership wrestled with this question, and concluded that
the individual should pay one-third of the cost of education,
the state or private philanthropy the remaining two-thirds.
When forgone earnings—a cost borne by the individual—are
factored in, they argued that the balance overall shifted to
two-thirds of cost falling on the individual, one-third on the
state. While one could quibble with the balance they struck,
this allocation appears to be in a sensible range.
What has become increasingly clear to all economists is that
higher education is a key (if not the key) economic resource
for all countries in a global economy. The United States
adopted mass higher education a generation before most
other countries—and Americans benefited greatly from that
first-mover advantage—but many other OECD countries have
now caught up or surpassed that level of participation and
completion. To adopt a policy of zero state subsidy and
resulting full-cost tuition would be an economic death knell
for any country so foolish as to consider that move. While
demand for higher education is generally price-inelastic, it is
not perfectly inelastic, and thus higher prices to the
individual would reduce demand at precisely the time when
most countries seek the opposite outcome.
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Economist Debates: The cost of higher education
Rebuttal statements
Rebuttal statements were originally published on November
3rd 2008. They can be viewed online at
http://www.economist.com/debate/days/view/233
The moderator
Helen Joyce
Education Correspondent, The Economist
The moderator’s rebuttal
statement
November 3rd 2008
In their rebuttals, both our speakers consider how to ensure
high-quality higher education. Alison Wolf seizes on her
opponent’s admission that if the state pays, it may simply be
too stingy. With so much competition for tax money, would
state-financed higher education be able to maintain quality
as enrolments soar? Britain provides a pointed example:
some of its most illustrious universities are in Scotland,
which runs its own education affairs, and has decided to keep
higher education completely free. Its universities got far less
money than they hoped for from the exchequer this year,
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Economist Debates: The cost of higher education
and face falling well behind their rivals in England, which
receive student fees as well as government grants. Scottish
students may be grateful now—but if their universities enter
into a slow decline, will their free education still seem like
such a bargain?
For Professor Flodström the most important point in
maintaining the quality of higher education is the quality of
the young people who embark on it. He thinks that students
who must pay will treat education like a mode of transport to
the future, and prioritise speed and efficiency over the
quality of the ride. He raises an interesting new point: good
students benefit their teachers and fellow students as they
learn, not just their societies once they have finished. Is this
externality enough to make it worth paying them to study?
Neither speaker has raised a question I would be keen to see
discussed: regardless of whether the government should pay
for higher education, should it cap the cost? Do the top-tier
American universities really need to charge so astonishingly
much—or are they doing so because their fabulous
reputations put them in a seller’s market and, moreover,
extremely high fees are widely regarded as a sign of quality?
To echo Professor Flodström, are their illustrious names
attracting great students, whom they can then use to market
themselves and capture an economic benefit provided by
them?
There have been many interesting comments from the floor.
A few people have said that if citizens should have to pay for
their own higher education, they should have to pay for their
health care too. For some, this is a serious suggestion;
others are trying to show the absurdity of our proposition:
“Let’s all pay also for secondary education, primary education
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Economist Debates: The cost of higher education
and—why not?—health care. Back to the good old Victorian
times!” writes Dianoia.
Professor Wolf distinguishes between the two thus: none of
us know what our future health needs will be, and if we are
unfortunate they may be onerous. So for all but the richest
among us, paying for health care will require some element
of insurance. By contrast, each individual is best placed to
understand his own educational needs and desires, and the
cost is transparent and limited.
I was particularly struck by a comment that higher education
should be free to the student, but that entry requirements
should be very rigorous. That way no really deserving
candidates would be put off by fear of poverty, but the waste
of providing higher education to candidates who are only
marginally interested would be avoided. That would lead to
another sort of elitism: one that excluded the less talented
rather than the less monied. On the face of it, this is
attractive, but what to do about the fact that high-school
grades and performance on standardised tests are closely
linked to socio-economic status?
27

Economist Debates: The cost of higher education
Defending the proposition
Alison Wolf
Sir Roy Griffiths Professor of Public Sector Management,
King's College London
The proposition’s rebuttal
statement
November 3rd 2008
In his passionate defence of the Nordic model, Professor
Flodström notes that its higher education “risks becoming
very fair but with far too low average knowledge level”. He
thereby helps me to explain why this motion should be
carried. Practical necessity requires that individuals pay for
higher education which is worth the having. It is not just fair,
but unavoidable.
All over the world, higher education has moved from an elite
to a mass pursuit. In the process, its total cost has exploded.
Before the war, most European countries sent only 2-3% of
their young people to university; as late as the 1960s, it was
less than 10%; today, figures of around 50% are normal.
This reflects the legitimate and admirable aspirations of
democratic citizens for themselves and for their children. No
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Economist Debates: The cost of higher education
government could survive that tried to go back to a tiny elite
system; nor should it.
But this enormous expansion leaves governments with just
two basic choices. If they resist fees, they ineluctably find
themselves with a system of overcrowded lecture halls,
overstretched facilities and plummeting standards. Spending
per student fails completely to keep pace with numbers.
Countries such as Germany and Italy are all too familiar with
this scenario. It is why German university rectors have been
so determined to keep the federal government out of highereducation
policy. That gives reformist German states and
universities the chance to grapple with improving quality,
raising money and the need for fees.
France has responded rather differently, by running two
completely different systems in parallel. The tiny elite one, of
the grandes écoles, is well-funded, but sits alongside a mass
university system starved of funds. That approach is one way
of maintaining some quality, while keeping education free.
But I doubt if it meets Professor Flodström’s definition of
fairness, and it certainly does not meet mine.
The Nordic countries’ commitment to high taxes and to
education means they have kept quality pretty high until
now; but as my opponent admits, the strain is starting to
tell. And if we look at the world as a whole, the picture is
very clear. Governments that set their faces against making
students pay thereby choose the path that leads to lowquality
mass education.
The other choice is to make individuals pay. America
grappled with the funding of mass higher education earlier
29

Economist Debates: The cost of higher education
than the rest of the world, because it offered it sooner. It is
able to support a mass system which also provides high
quality because, and only because, it accepts individual
contributions as normal and right. Nor is it alone. Other
countries, including England, Australia, Japan and New
Zealand, operate university systems to which individuals’
fees make a major contribution. They do so in large part
because they cannot see any other way to maintain quality in
the education they offer.
This does not mean that individuals have always to pay the
entire cost of their higher education. It certainly does not
mean that they have to pay it all in full, upfront, from their
own pockets, as soon as they start to study. On the contrary.
That is not the practice of the United States nor, indeed, of
my own fee-paying country, England. (Scotland, please note,
is different.)
My opponent offers something of a caricature of American
higher education. This is the home, after all, of the University
of California, the most hugely admired of public university
systems. Texas, butt of so many European sneers, is
enormously generous to its state university. Overall, America
spends a very large amount of public money on higher
education (as, by the way, it does on health). But it
combines this with major contributions from individuals,
which they pay because what they are buying—higher
education—is worth a great deal to them, individually.
Professor Flodström invokes national solidarity, and the
importance of being a citizen; of contributing to your society,
and knowing that your fellow-citizens will correspondingly
feel a duty to you. So being educated means that you can
give more, as well as gain more; and in return, your fellows
30

Economist Debates: The cost of higher education
should be happy to pay for your education through their high
taxes.
The Nordic model is an extraordinary as well as an
extraordinarily successful one. In other countries, we tend to
admire it greatly while wondering just how much of a lesson
it can offer to places that are not simply bigger but far more
heterogeneous. But however great the solidarity people feel
with each other, there has to be a practical, financial limit to
what they will pay for on others’ behalf. Higher education is
not the only thing, and may well not be the first thing, that
citizens wish to support in the cause of common nationhood.
Health care, income support if we are unemployed, help at
home when we are aged or disabled, are not merely things
we feel society should provide to everyone. They are also
very hard if not impossible for individuals to provide for
themselves, even through insurance schemes. The state has
to be involved.
By contrast, with the right funding and loan systems, people
can finance their higher education; can make repayments
without undue strain; and do. When England first introduced
substantial fees for students, doom-sayers predicted that
there would be a big drop in student numbers. The opposite
has occurred; nor is there any evidence that poorer students
have been deterred or driven away. After all, while a country
with many highly educated and productive people is a
generally better place to be than one without, the immediate
financial benefits of higher education go into the pockets and
bank accounts of its graduates.
In that respect taxing people for higher education is quite
different from taxing them for health, welfare or, indeed,
31

Economist Debates: The cost of higher education
infrastructure. Politicians are quite right to give the latter
priority. My opponent’s solution to maintain quality in higher
education is yet higher taxes on the general population. Mine
remains the just and efficient policy of asking individuals to
pay.
Against the proposition
Anders Flodström
University Chancellor, Swedish National Agency for Higher
Education
The opposition’s rebuttal
statement
November 3rd 2008
A few years ago, I had a debate with the ministers of
education from Sweden and the UK about who should pay for
higher education: the students or the taxpayers. From a
political viewpoint, I had expected a minister from the Labour
Party and a minister from the Social Democratic Party to
share a common view. On the contrary, the Labour Party
minister was very much in favour of the tuition fees that had
just been introduced in the UK while the Social Democratic
minister stated that, in Sweden, tuition fees for Swedish, as
well as for European, students were unthinkable. The Labour
32

Economist Debates: The cost of higher education
Party minister thought the difference of opinion was very
illuminating and it reflects the other side of Alison Wolf’s
argument about tuition fees.
In a society with a clear social hierarchy or class system, it is
easy for a Labour Party minister to argue that the working
class should not, through taxation, pay for the education of
middle-class students of average ability. Exceptionally
talented working-class students will always succeed in
industry, academia or society. Scholarships will be provided.
A scholarship and tuition fee system will conserve existing
hierarchical social systems and will not create the social
mobility necessary to increase the nation’s intellectual
capital. In a more classless society such as in the Nordic
countries, dynamism and the increase of the nation’s
intellectual capital is guaranteed by access to higher
education for all students independent of class and economic
background. Still, parents and friends influence students’
choice of education and career. However, these choices are
not primarily determined by parental income. The economic,
social and personal rewards might be somewhat less in the
Nordic countries than in the US and the UK, but they are
enough to motivate the students as individuals. Does quality
increase if students buy their education? Students, like other
consumers, are not always rational in their choice of
education and do not always look for quality. Status is
probably more important: Cambridge University and BMW or
Gothenburg University and Volvo? I am quite sure that the
talent and social mix of students making the latter choice is
as good as the former, if not better. What perhaps is more
important for the quality of higher education is that teachers
know they have a cohort of students who are educating
themselves because they are talented and motivated and not
for any other reason.
33

Economist Debates: The cost of higher education
Students paying tuition fees will look upon university studies
as a form of transport. They pay for this and should make
the journey as quickly and easily as possible in order to take
advantage of the social and economic benefits awaiting
them. This will create universities with a uniform philosophy
about higher education. New pedagogy, new methods,
reflection and learning by research experience will be
demoted and efficiency will be promoted. It is sometimes
argued that tuition fees sometimes give universities financial
freedom, but freedom from what?
Universities and their research and teaching are the most
important part of every nation’s knowledge infrastructure.
Every individual with talent and motivation should have as
easy an access as possible to higher education, for the
benefit of the individual and the nation.
Featured guest
Neal McCluskey
Associate Director of the Centre for Educational Freedom,
Cato Institute
Neal McCluskey is the associate director of Cato's Centre for
Educational Freedom. Before that Mr McCluskey served in the
US Army, taught high-school English and was a freelance
reporter covering municipal government and education in
suburban New Jersey. More recently, he was a policy analyst
at the Center for Education Reform. Mr McCluskey is the
34

Economist Debates: The cost of higher education
author of the book “Feds in the Classroom: How Big
Government Corrupts, Cripples, and Compromises American
Education”, and his writings have appeared in such
publications as the Wall Street Journal, Baltimore Sun and
Forbes. In addition to his written work, Mr McCluskey has
appeared on C-SPAN, CNN, the Fox News Channel and
numerous radio programmes. Mr McCluskey holds a master’s
degree in political science from Rutgers University.
Featured guest, Neal McCluskey
November 3rd 2008
Government is in the higher-education business to advance
the public good, but what it creates overall is a painful public
loss.
Consider U.S. states' support for public colleges and
universities. Many of the motives for maintaining state
schools are laudable, including desires to increase human
capital through low-price education, or to establish hubs for
innovative state and regional economies. In practice,
however, these efforts are often wasteful. Funding for
specific institutions or projects, for instance, is frequently
influenced by lobbying prowess, not just public need. Schools
are often incorporated into hidebound state bureaucracies,
making nimble responses to changing demands, or
administrative efficiency, impossible. And because taxpayers
shoulder so much of schools’ costs—states and localities
spent $6,773 per full-time-equivalent student in 2007—
students demand things they would baulk at were full costs
reflected in tuition.
35

Economist Debates: The cost of higher education
The net outcome of state-funded higher education is
negative. As the economist Richard Vedder has shown
gher
1 ,
other things being equal, the more states expend on hi
education, the lower their rates of economic growth.
Individuals know their needs and attend to them more
effectively than politicians, so leaving money in their hands
produces the best overall results.
An even bigger problem than government subsidies to
institutions is generous aid to students, which between 1986
and 2006 rose from $3,967 per full-time equivalent student
to nearly $9,500. Quite simply, the more that students draw
on other people’s dollars, the more they can demand and
colleges can charge. In light of that, it is no wonder that
colleges and universities are suffering from administrative
bloat, facility underutilisation and teaching neglect. They are
also coming more and more to resemble theme parks or
cruise ships, with deluxe residence facilities, dining halls
serving gourmet food and such whoppers as the University of
Missouri’s Tiger Grotto indoor water park and Ohio State’s
Tom W. Davis Climbing Center, which features “25 top-rope
routes, eight lead routes, overhangs, cracks, jugs, arêtes,
dihedrals, crack climbing, a roof, and a bouldering cave!”
Overall, the results of massive student aid are somewhat
increased accessibility, tons of wasted money, and perverse,
unintended consequences. Full-time-equivalent college
enrolment has risen about 52% over the last two decades,
1 In Richard Vedder's book "Going Broke by Degree: Why College Costs Too
Much", pages 134 to 145. He offers further evidence in a brief called
"Michigan Higher Education: Facts and Fiction".
36

Economist Debates: The cost of higher education
but inflation-adjusted tuition and fees have leapt 85% at
four-year private schools and 129% at four-year publics.
Real, total aid volume has exploded nearly 263%, from $36.0
billion to $130.5 billion. Perhaps worst of all, it is the poor
who have been most hurt by aid-fuelled tuition inflation, with
assistance increasingly skewed towards higher-income
students, as prices have risen, and the poor feeling most
priced out.
Fortunately, there is a solution to these problems: Phase out
government support for higher education. It simply is not
needed. The average, lifetime earnings premium for a
bachelors’ degree in the U.S. is around $800,000, more than
enough to encourage private lenders to offer conventional or
income-contingent loans to promising students. Combine that
with the deflationary effect that ending government support
is almost certain to have, and affordability should not be
much of a problem for students with real potential.
All of the costs that come with government funding attest to
why individuals, not the state, should pay for higher
education. Quite simply, when we take from Peter to educate
Paul, Paul buys more than he otherwise would, and Peter is
less able to address his true needs. An overall loss, not a
public gain, is the ultimate result.
37

Economist Debates: The cost of higher education
Featured guest
Andreas Blom
Senior Education Economist, Human Development, South
Asia Region, World Bank
Andreas Blom works as a Senior Education Economist in the
World Bank's Department for Human Development in South
Asia. He specialises in the economic policy analysis of human
capital and creation of knowledge, and their efficient use in
society.
Mr Blom works with the governments of India, Pakistan and
Afghanistan to improve the quality, access and financing of
their higher education and training systems. In his previous
position, he worked seven years on higher education,
training and public spending in Latin America and the
Caribbean. He was part of a team that supported student
loan agencies in Latin America, in particular in Mexico and
Colombia. He has written several global and regional studies
on the financing of higher education, student loans, labour
markets, the quality of education, and science, technology
and innovation.
He holds a master’s degree in development economics from
the University of Aarhus.
38

Economist Debates: The cost of higher education
Featured guest, Andreas Blom
November 4th 2008
Both the individual and the state should pay for higher
education. The exact split should be determined by countryspecific
factors. Sadly, there is a tendency for ideology to
overpower reason when it comes to the question of who
should pay for higher education. This is in particular the case
with some of my interlocutors from both sides of the aisle
best exemplified by the left-leaning University Rector from
Latin America on the one side, and the free-market-loving
Chicago-educated economist on the other.
To the left-leaning University Rector, I agree that the state
should contribute, while stressing why the individual should
also pay for higher education.
o Private returns to higher education are high and
increasing. In OECD countries, workers with higher education
earn 51% more than workers with secondary education. In
the developing world, this gap is significantly higher. For
instance, in India, a university graduate earns, on average,
86% more than a graduate from secondary education.
Further, the gap has increased substantially in the last
decade due to rapid economic growth and technological
change. Therefore, many graduates will earn salaries that
allow them to repay the cost of their education.
o In many developing countries, the state ends up
subsidising the education of children from rich families. With
39

Economist Debates: The cost of higher education
all likelihood, a large proportion of these children would have
gone to university without this subsidy.
o Given competing demands on the state’s scarce
resources, state funding to ensure that every child learns to
read and write should be prioritised over funding to higher
education.
o When the individual pays, he/she considers in depth
whether the investment is worthwhile. He/she puts more
efforts into learning, and is more likely to finish his/her
studies on time.
For example in Rwanda, why should the state pay education
and living costs amounting to 37% of its education budget
for the benefit of only 2% of a youth cohort of which a large
share comes from the 20% richest households, when more
than 60% children do not complete primary education?
But I argue with the free-market-loving economist that there
exist market failures that explain why the state should make
targeted investments in higher education:
o Low-income students are not able to afford full-cost
higher education, in particular in developing countries.
Individuals in developing countries pay on average 61% of
GDP per head per year for higher education (compared with
only 30% in developed countries). Without publicly supported
student loans, few low-income families are able to sink in
over half of their annual income on just one child.
o Higher education has a number of benefits to society that
goes beyond the benefit to the individual. Foremost, it can
boost technological innovations and their diffusion. Second, if
40

Economist Debates: The cost of higher education
your neighbour or colleague is highly skilled, he/she
improves your productivity, adaptability and health
behaviour. Third, highly skilled manpower fuels progress in
key sectors, such as agriculture, education, health,
environment and art. In these sectors, the returns to
education are low, but their contribution to society and wellbeing
is large.
o In countries with high tax rates, the government reaps a
large part of the benefits of higher education, so to restore
the incentive of higher education for the individual the state
equally has to pay for a large share of the costs. A state
subsidy to higher education transfers a large share of the risk
of academic and labour market failure from the individual to
the state. This is in particular the case for the Nordic
countries, where the State pays for 94% of the cost of higher
education (compared with 53% in Anglo-Saxon countries).
Consider the case of Colombia, where over 65% of students
attend private institutions and public universities charge
tuition fees. Higher education costs the family 64% of GDP
per head, making it unaffordable for the low-income
students. Enrolment in higher education among low-income
families is five times lower than among high-income families.
Shouldn’t the state make a targeted investment in student
loans to poor students?
So when you vote to side with either the left-leaning
University Rector from Latin America or the free-marketloving
Chicago economist, please know that they both have a
point, but represent extremes. Both the individual and the
state should pay for higher education.
41

Economist Debates: The cost of higher education
Closing statements
Closing statements were originally published on November
6th 2008. They can be viewed online at
http://www.economist.com/debate/days/view/237
The moderator
Helen Joyce
Education Correspondent, The Economist
The moderator’s closing
statement
November 6th 2008
The clarity and passion of our speakers' statements makes
any attempt of mine to summarise their arguments
superfluous. So instead I will use my closing remarks to say
something about the wording of our proposition and to tell an
anecdote, hopefully illuminating.
First, the proposition. Quite a few of the comments from the
floor have been critical of it for being too black-and-white:
neither students nor taxpayers should pay the entire cost of
higher education, they say; rather, it should be shared. Of
42

Economist Debates: The cost of higher education
course, to be provoking is one of the jobs of a proposition,
and in fact both our speakers do address this point.
Everywhere, says Alison Wolf, governments do indeed pay at
least part of the cost; the only live question is whether
students should contribute too, to which she answers, yes.
Anders Flodström, whose home country, Sweden, asks
students for no money at all, muses about a "pragmatic
recipe" which would have taxpayers paying one-third, the
rest to be shared between graduates in work and the
employers who hire them.
Now for the anecdote. When I was a PhD student at
University College London in the 1990s, a friend was
studying sculpture and performance at the Slade, one of the
world's most renowned schools of fine art. Student fees were
then being mooted in England, and one evening in the bar
she said to me quite passionately that if she had had to pay
fees, she would never have done her degree.
The conversation moved on before I could ask her why, and I
have thought of her comment repeatedly during this debate.
She enjoyed her course, so it was not that it had turned out
to be a disappointment. She worked hard and, as far as I
could tell (my PhD was in mathematics), she was very good.
So was she speaking from an unexamined sense of middleclass
entitlement? In which case, the obvious response would
be: if you don't think your course was worth paying for
yourself, why on earth should taxpayers, few of whom could
afford the luxury of three years spent making art, pay for it
for you?
Or perhaps she simply meant that if she had had to pay fees,
she could never have justified making such a desperately
43

Economist Debates: The cost of higher education
unlucrative decision. I am sure she added little or nothing to
her expected lifetime earnings by studying fine art, which, by
the by, highlights the fact that the issue of who should pay
cannot always be finessed by offering loans to be repaid once
graduates start work. The chances are that had she taken
such a loan it would never have been repaid (last I heard,
after graduating she had moved to a campsite with some
other artists and was living on the dole). Then the question
becomes: do the rest of us think it is worth paying for her,
and others like her, to study? This is thrown into particularly
sharp relief by my friend's example, in which the benefit of
her studies to the rest of us are most unlikely to be financial.
It remains for me to thank our speakers, our six guests and
not least the hundreds of readers who commented from the
floor. The debate has been both fascinating and thoughtprovoking,
and the question it raises is both live and
extremely important. One of the defining characteristics of
our times is a huge expansion of higher education, only now
starting to slow in rich countries and to take off in developing
ones. The choices made in countries such as India and China
about how to pay for that expansion will shape higher
education in the coming century. Will they be the right
ones?
44

Economist Debates: The cost of higher education
Defending the proposition
Alison Wolf
Sir Roy Griffiths Professor of Public Sector Management,
King's College London
The proposition’s closing
statement
November 6th 2008
All governments are involved in and support higher
education. So the only live question is whether individuals
should also contribute. I think it is bad for universities, as
well as morally indefensible, if students do not pay. However,
to repeat what I have said from the very beginning, that
does not mean they should all be paying the full amount in
cash, upfront, with no assistance. No one anywhere follows
this approach; it is not a genuine policy option.
My opponent believes that university students should receive
their education totally free (or rather entirely at the
taxpayers’ expense). This is a policy which countries do
indeed follow; in Sweden, we are told, tuition fees are
‘unthinkable’. It is also a policy I strongly oppose. Higher
education is not like primary and secondary education, as
some comments on this debate suggest, because only some
45

Economist Debates: The cost of higher education
people go to university. They are overwhelmingly from
better-off backgrounds; they benefit individually, in a
multitude of ways; and they should contribute directly
towards the privileges they are being given.
Let me ask Professor Flodström a question. If Swedish
students contributed to the cost of their higher education,
might that not both preserve the quality of the country’s
universities, and free up money to address pressing social
problems? He has admitted his concerns about the former;
and even with Swedish tax rates, there are endless calls on
state funds. A particularly relevant issue in this context
would be Swedish immigrants’ inability to get jobs that
match their education levels.
The Nordic countries have higher social mobility than other
countries (or, to be specific, than the rather few countries for
which we actually have good data). But nowhere is paradise;
and Sweden compares rather badly with other parts of
northern Europe on its record of integrating immigrants into
the labour market. In the UK, for example, foreign-born
workers with higher education are almost as likely as the
native-born to be doing highly skilled jobs; whereas in
Sweden there is a very large gap between the two groups in
the sorts of jobs they hold.
Of course, there will be a number of complex factors at work;
just as there for one of the UK’s most pressing problems,
namely the failure of many schools in poorer areas to bring
students up to university entrance standard. It is why, to
quote Nick Barr , one of this debate’s featured guests, many
of us in the UK think it is better to spend “£1 billion on the
80% from poor backgrounds who don’t go to university’”
than on covering the entire cost of tuition for those who do.
46

Economist Debates: The cost of higher education
My point is that there are always social problems to be
addressed, always difficult choices to be made about where
to spend tax revenues. I find it impossible to believe that
Sweden, or any other country, has so few calls on its
resources that it can rule out entirely having students pay
towards their higher education. Are all the things that are not
done, in that situation , really less important than giving
people like me, and most Economist readers, a completely
free ride through university?
I cannot possibly respond to all the comments made, but let
me finish with a few specific points. The motion is, indeed,
phrased in an absolute way; and many people who are voting
against it seem to be voting against the idea that individuals
should pay the full cost and the state contribute nothing.
That is not my position: but my opponent does, it seems,
believe that the state should pay everything and the
individual nothing at all. Nothing he or anyone else has said
seems to me to justify that position.
Of course we can and should guarantee access to people who
are poor, through loans, scholarships and bursaries, and the
like. Those are especially important for students from poor
families who are very understandably debt-averse. But there
is an enormous difference between ensuring that people pay
only when and as they can, and not asking for any payment
at all.
Second, in response to the moderator’s comments, I
personally believe very strongly that people can and do make
very sensible decisions for themselves, far better than others
make on their behalf, and that all the evidence bears this
out. If people have to face up to (some of) the costs of
47

Economist Debates: The cost of higher education
higher education, their education choices will be more
reasoned and more reasonable. But I am slightly puzzled by
the example she gives of the two apprentices, who seem to
have made perfectly sensible decisions, and found
themselves something they enjoyed with excellent career
prospects. What does bother me is the way that higher
subsidies for university than for apprenticeship may distort
people’s choices, and the way in which some jobs are
becoming, quite unnecessarily, open to graduates only. That
means people can feel almost forced to go to university even
when they do not really want to, to their and the taxpayers’
cost.
Finally, I do, of course, agree strongly with those comments
that emphasise that we appreciate what we have to pay and
work for. I am horrified, at a personal level, by how little I
appreciated the real cost of my own “free” university
education when I was a student, and by how I took for
granted that I had some sort of right to it. It is also striking
that students who pay tend not only to be more engaged and
more demanding, but that differences persist after
graduation. The amounts that alumni give to their old
universities suggest that paying for our education makes us
more grateful, and more generous, too. So please vote in
favour of the motion, for the sake of universities
everywhere.
48

Economist Debates: The cost of higher education
Against the proposition
Anders Flodström
University Chancellor, Swedish National Agency for Higher
Education
The opposition’s closing
statement
November 6th 2008
University research and education are increasingly the
cornerstone for the progress of mankind. Almost everything
“new” or “improved” in areas such as the environment,
health care, economic growth, technology, media, culture
and communication, originates in university research and is
implemented by professionals educated at universities. The
new products, new services and new infrastructure lead to a
better quality of life for most people. The role of universities
in this knowledge society is vital and fundamental. The
integration of universities into the rest of the society is
fostering a new university paradigm, “the triangle of
knowledge”. Through the innovative process, researchers,
teachers and students prepare nations for global competition
and promote new sustainable global infrastructures in the
fields of energy, the environment, food supply and
communication.
49

Economist Debates: The cost of higher education
Who will pay for the university-educated professionals
required by society? Everyone gains from the work of these
professionals, not least the professionals themselves. On
average, they have more interesting and well-paid jobs and
have easier access to power than the rest of society.
Somehow, it is easier to discuss a pragmatic algorithm about
who should pay for further or higher education once a
student is in employment. The pragmatic recipe would be
one-third by the student because of personal gain, one-third
by the student’s employer because of company gain and onethird
by the taxpayers because of the benefit to society. The
presence of the employer moderates the ideological
discussion and makes it easier to discuss costs and benefits
from a contractual viewpoint.
In the United States, tuition fees are set by the market; in
England tuition fees are capped and supplement government
funding; and in the Nordic countries higher education is free
for the students. In all countries, students invest time and
energy in the learning process for the benefit of themselves
and for the benefit of society. After meeting young students
in many countries, my view is that students wish to use their
acquired knowledge to further their own careers and also in
the service of society. A nation’s progress rests on
maintaining a sustainable knowledge society independent of
how it is paid for. If a nation fails to create a competitive
knowledge society for the nation’s citizens the consequences
are devastating. Perhaps we should rather debate how, as a
nation, as part of Europe and as a global partner, we can
produce students and universities of excellent quality. What
are the means and what is the cost?
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Economist Debates: The cost of higher education
How education is financed influences the kind of universities
and students we produce. If students pay for their education
they have different demands on universities from students
attending public-funded universities. My view is that student
fees must be balanced by public funding. A constructive coownership
and a constructive discussion about the quality
and employability of students are necessary and should be
part of a vital democracy.
In a higher-education system financed by tuition fees, the
market plays a vital role. In an ideal market, niches exist for
all kinds of universities with different educational ideas and
philosophies and, to stay competitive, they produce
graduates that meet the demands of employers. Where
European students are not interested in science and
engineering studies, Chinese and Indian students are. They
move to Europe to get their education and choose to study
subjects that provide the possibility to acquire the best jobs
in Europe or in their home countries. This is the way the
United States has created a diversified and excellent
workforce for industry and for research. No one can dispute
all the Nobel prizes resulting from this philosophy.
The global education market has been developing rapidly.
Previously, the majority of students moved between
countries and universities on exchange programmes. Now,
students who are able to pay for their tuition move
independently to study the best programmes at the best
universities located in English-speaking countries. Until very
recently, it was thought that tuition fees, first for foreign
students and later for domestic students, would solve the
financial problems facing universities and save the taxpayers
and politicians money. It would also make a nation’s labour
market independent of the domestic students’ lack of interest
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Economist Debates: The cost of higher education
in areas of vital importance for the nation. The buzzword was
globalisation.
However, due to the financial crisis, the market is no longer
seen as a universal solution for all sectors of society. On the
contrary, we seem to want to put our trust in a strong state
that will use common resources to remedy the failures of the
market. Governments should take more responsibility,
including funding higher education.
There is a possibility for an educational market failure,
leaving Europe and the United States with an intellectual
capital crisis in areas vital for future industrial and
infrastructure development. It is a national responsibility to
ensure that we have enough teachers, engineers, economists
and doctors. It is a national responsibility that everyone with
interest and talent can educate themselves.
Featured guest
Donald Heller
Director, Center for the Study of Higher Education,
Pennsylvania State University
Donald E. Heller is Professor of Education and Senior
Scientist, and Director of the Center for the Study of Higher
Education (CSHE) at Pennsylvania State University. The
CSHE is one of the nation’s most well-respected centres of
higher education scholarship. Mr Heller conducts research on
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Economist Debates: The cost of higher education
higher education economics, public policy and finance, with a
primary focus on issues of college access and choice for lowincome
and minority students. He earned an EdD in Higher
Education from the Harvard Graduate School of Education,
and holds an EdM from Harvard and a BA in Economics and
Political Science from Tufts University.
Featured guest, Donald Heller
November 6th 2008
Both individuals and the state have a responsibility to pay for
higher education. When we examine the returns received
from investments in higher education, we see that it is both
the individuals who attend college or university, as well as
society in general, that benefit. Thus, investments in higher
education should be shared between individuals and the
state.
Individuals who continue their education past the secondary
level receive the primary benefit of increased human capital,
which results in higher earnings in labour markets. The skills,
general knowledge and experience learned while in college
are valued by employers. This is particularly true in the 21 st -
century economy, which puts a premium on higher-order
skills that can be obtained only through post-secondary
education. In the United States, as well as in other countries,
there are fewer and fewer jobs that provide the salary and
benefits necessary to enjoy what is often called a middleclass
lifestyle that one can obtain without investing in postsecondary
training.
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Economist Debates: The cost of higher education
But it is not just individuals who benefit from the investment
in post-secondary education. Thomas Jefferson, the chief
author of the United States' Declaration of Independence,
and the third president of the United States, wrote: "A
democratic society depends upon an informed and educated
citizenry." In his age, one could become "informed and
educated" with relatively few years of formal schooling.
Today, however, some form of post-secondary education is a
requirement for many to be active and engaged citizens in
society. One need only look at the complexity of the
economic crisis facing the world today to know that an
informed voter has to have a fairly sophisticated level of
knowledge and training to make judgments about
candidates, policies and programmes.
Higher education also provides other benefits to society
beyond just ensuring an “informed and educated citizenry”.
Research has demonstrated that people who attend college
are less likely to commit crimes, are less likely to need public
assistance, such as government-funded health care,
nutritional assistance and unemployment benefits, and enjoy
better health. These too are benefits that all society enjoys
when individuals invest in post-secondary training and
education.
Higher education is a very expensive undertaking. Without
state subsidy to help lower the price to students and their
families, overall investment in colleges and universities would
be at suboptimal levels. Without the public subsidy, many
students from low- and moderate-income families—even
though they have the academic talent necessary to attend
college and be successful once there—would be unable to
attend, thus leading to inequities in educational opportunity.
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Economist Debates: The cost of higher education
Thus, it is not individuals or states that should pay for higher
education, but is both who should share in the investment. A
failure to structure the funding for colleges and universities in
such a manner will lead to underinvestment in human
capital, a critical mistake in a time when the link between
education and national prosperity has become very
apparent.
Featured guest
Lan Gao
Institutional Research Associate, Lesley University
Lan Gao is working at Lesley University as Institutional
Research Associate. Ms Gao is well versed in domestic and
international issues related to higher-education opportunity
and access, with special focus on underserved populations,
including access and success for low-income students,
college readiness and preparation, federal and state highereducation
trends and policies, higher-education financing
options, and financial aid.
Prior to working at Lesley University, Ms Gao worked for the
Advisory Committee on Student Financial Assistance
(ACSFA), an independent source of advice and counsel to
Congress and the Secretary of Education on student financial
aid policy. Before joining ACSFA, Lan Gao worked for the
Institute for Higher Education Policy in Washington, DC, an
independent, nonprofit organisation dedicated to access and
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Economist Debates: The cost of higher education
success in post-secondary education around the world.
During her PhD studies, she also worked as an intern at the
World Bank in its International Higher Education programme.
Ms Gao received her BA in education from Beijing Language
and Culture University in China, and her PhD in Higher
Education Administration from the University of Maryland,
College Park.
Featured guest, Lan Gao
November 7th 2008
There has been substantial research exploring the impacts of
higher education on human development from multiple
perspectives, including sociological, psychological, political,
economic and cultural studies. That higher education has
favourable effects upon both individuals and society as a
whole is widely acknowledged, though opinions differ on the
degree and specific causes of these effects.
In both developed and less developed economies, there is a
commonly accepted belief that investments in higher
education can bring significant monetary benefits to
individuals. First, higher education influences the earning
capacity of individuals. Higher education can improve the
knowledge, skills and productive capability of individuals,
which in turn bring individuals higher income and higher
social status. Moreover, people with more education are less
likely to be unemployed, and thus obtain higher lifetime
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Economist Debates: The cost of higher education
earnings (Bombach, 1964; Bowen, 1977). 2 Second, higher
education can influence individuals’ productivity in activities
outside the labour markets, such as investment in capital
markets (Cohn & Geske, 1992). Besides these monetary and
direct returns to investments in higher education, various
studies have shown that there are substantial indirect
benefits of higher education to individuals (William Bowen,
1964; Bombach, 1964; Howard Bowen, 1977; Fagerlind and
Saha, 1989; Coleman, 1988; Cohn & Geske, 1992). The list
is quite long, including the enjoyment of learning and
working, more appreciation of arts and music, the efficiency
and frequency of investments in good health and nutrition,
higher family stability and an enhanced ability to provide
better education for the younger generation.
References
1. Bombach (1964). Edited by Harris, S. (1986). "Economic Aspects of
Higher Education". The Organizations for Economic Cooperation and
Development.
2. Cohn, E. & Geske, T. G. (1990). "The Economics of Education", third
edition. New York: Pergamon Press.
3. Bowen, W. (1964). Edited by Harris, S. (1986). "Economic Aspects of
Higher Education". The Organizations for Economic Cooperation and
Development.
4. Fagerlind, I., & Saha, L. J. (1989). "Education and national development:
A comparative perspective". Oxford: Pergamon Press.
5. Coleman, J. S. (1988). "Social capital in the creation of human capital".
American Journal of Sociology, 94(Supplement), 95-120.
6. Bowen, H. (1996). "Investment in Learning: the Individual and Social
Value of American Higher Education". Transaction Publishers.
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Economist Debates: The cost of higher education
For society as a whole, returns to higher education also
include both monetary and non-monetary benefits. First of
all, higher education influences the productive capacity of the
economy. The availability of substantial numbers of highly
educated people has significant positive effects on technical
and economic progress (Bowen, 1996). Second, tax
payments are positively associated with educational
investments (Cohn & Geske, 1992). By training people in
science and technology and expanding their capacities for
research, a nation can accelerate its economic development,
which in turn increases its overall wealth and helps to reduce
poverty (Bowen, 1977). Furthermore, higher education has
significant non-monetary benefits to a society. It can
promote an open and meritocratic civil society. As a lot of
studies have illustrated (Bowen, 1977; Fagerlind and Saha,
1989; Cohn & Geske, 1992), well-educated citizens generally
favour civil liberties, individual autonomy and freedom,
oppose discrimination on grounds of race, gender, religion,
nationality and social class, respect diversity, and have more
interests in community and political affairs. Moreover, higher
education discourages antisocial or illegal behaviour, and
thus decreases criminal acts.
In conclusion, both the public and private returns to higher
education are substantial. Therefore, it is in both individuals’
and a society’s interest to invest in higher education.
However, extensive research has indicated that low-income
families, when faced with major financial barriers to higher
education, exhibit a stream of counterproductive educational
choices, despite the high rate of return to higher education.
Therefore, to narrow over time the unacceptable incomerelated
gaps existing in higher education participation, the
government should consider heavily subsidising higher
education by directing financial aid towards those students
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Economist Debates: The cost of higher education
whose families could not be reasonably expected to
contribute to higher-education expenses as a result of their
low incomes.
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Economist Debates: The cost of higher education
Winner announcement
The winner announcement was originally published on
November 10th 2008. It can be viewed online at
http://www.economist.com/debate/days/view/235
The moderator
Helen Joyce
Education Correspondent, The Economist
Winner announcement
November 10th 2008
After two weeks of penetrating insights and passionate
comments, we have a verdict. You have voted against the
proposition by 53% to 47%.
This house does not believe that “individuals, not the state,
should pay for higher education.”
The vote was close, but through the last week of debate the
balance remained on the same side. The many comments
along the lines of “I’m suffering under the weight of crippling
student fees right now” suggest one reason was simple
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Economist Debates: The cost of higher education
outrage felt by those who have to pay through the nose for
something that until recently was far cheaper, or even free.
But I suspect that the biggest reason for the “no” vote was
that the very many readers who thought the cost of higher
education should be shared between students and taxpayers
tended to vote against the proposition. That made the task of
Alison Wolf rather difficult. As she pointed out, nowhere in
the world do fees from students in higher education cover
the entire cost of their tuition; nor did she want to argue that
they should. Simply stated, her central point was that those
countries where students pay nothing at all are making an
unjust and unwise decision about how to spend taxpayers’
money. No one will be surprised to be told that The
Economist agrees entirely.
As the number of students in higher education soars, it
remains to be seen how long those countries that charge
nothing for higher education can continue to do so—and what
are the implications for quality. Everywhere else,
governments, citizens, employers, students and parents will
continue to debate how the cost should be shared between
them. The Economist will be reporting on their conclusions—
and the consequences.
Though we have counted our votes and declared a winner,
you can still comment on the debate and its outcome until
Monday November 17th. I look forward to seeing what else
you have to say.
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Economist Debates: The cost of higher education
Background reading
How can corporations improve the bottom line by fostering
education for the workforce of the future? Register now for
Economist Conferences' executive forum: Global Education
2020.
Debate on technology in education
Debate on university recruiting
Debate on social networking
A special report on higher education
62

Economist Debates: The cost of higher education
The sponsor: Intel
The sponsor’s perspective
Inspiring the Next Generation: Educate. Innovate
“We have the opportunity to create and cultivate
knowledge and the capability to advance social and
economic well being, not only of individuals, but of
nations."
Craig R. Barrett, Chairman, Intel Corporation
For nearly 40 years, Intel Corporation has developed
technology enabling the computer and internet revolution
that has changed the world. Founded in 1968 to build
semiconductor memory products, Intel introduced the world's
first microprocessor in 1971. Today, Intel supplies the
computing and communications industries with chips, boards,
systems and software building blocks that are the ingredients
of computers, servers, and networking and communications
products.
Intel's mission is to enhance lives by accelerating access to
advanced technology for everyone, everywhere. Our focus is
not simply on what products we deliver, it is on what we
make possible for people around the world. Along with our
passion for innovation, we have a strong commitment to
corporate social responsibility. Being an asset to our
communities worldwide through philanthropy and volunteer
service are ways we put our corporate values into practice.
Education is one of Intel's primary focuses because we
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Economist Debates: The cost of higher education
believe deeply in the importance of a quality education.
Intel's education commitment
We are committed to helping young people gain the skills
they need to succeed in today's digital economy. From local
schools to global universities, Intel works to help improve the
quality of education around the world. Over the past decade
alone, Intel has invested over $1 billion and Intel employees
have donated over 2 million hours towards improving
education in more than 50 countries. Some of the key
programmes are as follows.
– Intel® Teach Program, a teacher professional
development programme that helps teachers integrate
technology effectively into the classroom.
– Sponsorship of science competitions such as the Intel
Science Talent Search and the Intel Science and Engineering
Fair to promote math and science globally.
– Intel® Learn Program and Intel Computer Clubhouse
Network, after-school programs that teach key skills to
under-served youth globally.
– Intel® Higher Education Program, a worldwide
collaboration between Intel and universities to provide
students with access to world-class research leadership,
technology support and technology entrepreneurship skills.
– Intel Involved volunteer programme allows employees
around the world to get involved in their communities.
Intel® Teach Program: teaching the teachers
Intel believes that computers aren’t magic, but teachers are.
For close to a decade, the Intel Teach Program has been
helping K–12 teachers around the world to become more
effective educators by training them on how, when and
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Economist Debates: The cost of higher education
where to bring technology tools and resources into their
classrooms to promote problem solving, critical thinking and
collaboration skills among their students. Intel Teach has
trained over 5 million teachers in over 40 countries and plans
to train millions more over the next few years.
Intel Science Competitions: inspiring the next
generation of innovators
Intel® International Science and Engineering Fair
For more than a decade, Intel has sponsored the world’s
largest pre-college science competition, the annual Intel
International Science and Engineering Fair (Intel ISEF), a
programme of the Society for Science and the Public. In
2008, Intel ISEF brought together more than 1,500 young
scientists from more than 51 countries, regions and
territories to compete for more than $4 million in awards and
scholarships.
Intel® Science Talent Search
A $100,000 scholarship awaits the winner of America’s oldest
and most prestigious pre-college science competition. The
Intel Science Talent Search (Intel STS), a programme of the
Society for Science and the Public, provides an opportunity
for US high-school seniors to complete an original research
project and have it recognised by a national jury of highly
regarded professional scientists.
In October 2008, Intel Corporation announced a $120 million
commitment over the next 10 years to stimulate more
interest among youth in math and science, so they will be
prepared to address global challenges in innovative ways.
The funding from the Intel Foundation for its long-time
science competition partner Society for Science and the
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Economist Debates: The cost of higher education
Public supports the company's historical commitment to Intel
ISEF and Intel STS. The support also adds a robust youth
outreach programme plus an online science community and
science fair alumni network which includes a mentoring
component.
After-school learning: helping youth achieve
Intel® Computer Clubhouse Network
The Intel Computer Clubhouse Network is an after-school,
community-based learning programme that enables youth in
under-served areas to access cutting-edge technology and
become self-confident, motivated learners. The network, of
over 100 clubhouses in 20 countries, is based on a learning
model created by the Boston Museum of Science in
collaboration with MIT Media Labs.
Intel® Learn Program
Developed with governments and non-governmental
agencies, the Intel Learn Program provided opportunities for
young learners in developing countries to learn key skills
needed for tomorrow’s success, with a focus on technology
literacy, problem solving and collaboration. This program has
helped more than 740,000 children in 10 countries.
Higher education: advancing innovation
Intel® Higher Education Program
The Intel Higher Education Program is a collaborative
worldwide effort working with more than 150 universities and
governments in 34 countries that not only brings cuttingedge
technology expertise to universities, but also helps
move that technology from university labs to local
communities through research grants, technology
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Economist Debates: The cost of higher education
entrepreneurship forums and mentoring by Intel
technologists.
Intel Involved: a global commitment, a local focus
Intel employees around the world devote their time to
engaging local schools and students. They mentor and read
to students, explain algebraic equations, participate in field
trips and provide real-world examples of what an engineer
does every day. This year, Intel employees set a goal to
volunteer 1 million hours around the world to celebrate the
company’s 40th year of business.
In May 2008, Intel received the US Freedom Corps Volunteer
Service Award from the president, George W. Bush. The
Volunteer Service Award honours the hard work and
dedication of those who serve in their communities.
"Community involvement has been a critical element of
Intel’s culture for each of our 40 years of existence," said
Paul S. Otellini, Chief Executive Officer, Intel Corporation.
For more information, please visit www.intel.com/education.
Intel Videos
- Advancing Education Globally
- Intel Science Competitions
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Economist Debates: The cost of higher education
Q&A with Intel’s William A.
Swope and Julie Clugage
October 29th 2008
Q. How is Intel helping educators, education
foundations and development institutions to use
technology to improve education outcomes?
On our website, we highlight four major areas: accessibility,
connectivity, education and localised content. Accessibility is
about whether students and teachers have access to PCs.
Connectivity is about whether they are connected to the web
so they can communicate with other people. Education
addresses the skills needed to make good use of the
technology, and localised content is about whether there is
access to relevant information. We always start with these
four main concepts.
Building upon this foundation, the Intel Education Initiative
focuses on two main objectives: improving education through
the effective use of technology, and advancing math, science
and engineering education and research. As a global
technology company, we understand that the skills that will
be needed to solve the challenges that face our planet are
ones that require the highest order of imagination, problem
solving and technical knowledge. That is why in every area of
involvement in education, whether science competitions or
broader education policy on standards and skills, fostering
the next generation of innovators is our goal.
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Economist Debates: The cost of higher education
Q. Why does Intel put so much emphasis on teacher
training?
We focus on professional development within education
because we think the teacher is the key to a high-quality
education. Technology is a tool, but the teacher makes the
difference. If you look at the data, you can make the
argument that countries which focus on improving teacher
skills are the ones that are going up in the rankings. We have
been focused on education since we started. It began with
Gordon E. Moore, one of Intel’s co-founders.
So far, we have trained 5.5m teachers. As a company, we
are pretty good at creating good processes. We are also
pretty data-driven, and with 5.5m teachers already trained,
we have had a lot of opportunity to create a robust process
and generate a lot of data. We plan for another 7m-8m
trained teachers by 2011, which will put us over the 10m
mark.
Q. How can developing countries improve
connectivity? Do you see a path towards widespread
computer availability and connectivity within their
education systems?
The world has connected 1 billion people to the internet. We
are going to continue to struggle to connect the next 2
billion. We have done a lot of work with governments to
determine how they can get low-cost broadband and low-cost
computers to teachers. Governments are also working with
other governments to solve these problems.
One promising development is a wireless technology called
WiMAX. A coffee shop with WiFi creates a connection with a
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Economist Debates: The cost of higher education
30-metre radius. With WiMAX, the connection is made up to
50 kilometres. Imagine if you could get schools in Africa
connected to each other: they could share lesson plans and
curriculums. We have a professor who took 1m pages from
1,000 books and put them all online. All of this information
could become available to help students learn what they
need to know.
This WiMAX technology is running in Baltimore, as well as in
some 300 trials around the world in the Philippines, Brazil—
take your pick.
Q. Our education debate focuses on the roles and
responsibilities of public versus private actors in
education. How does Intel think about public-private
partnerships?
We try to base everything we do on education research and
best practice. We make no claims to special knowledge. What
we aim to do is to help the people who are in charge of
education: governments, educators and boards of education.
We show them our programmes and our technology and ask
them how we can help them.
We can also play a useful role in highlighting success stories
and helping to create status and prestige in attaining
educational goals. For example, we sponsor the Intel
International Science and Engineering Fair, which celebrates
success in science, math and technology.
Millions of children round the world compete in our science
agility fairs, 15m of them in China alone. The Chinese
government recognises how important these children are to
the country. In fact, each year the top 50 students at the fair
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Economist Debates: The cost of higher education
are allowed to skip taking the university entrance
examination. University entrance in China is highly
competitive. To be exempt from the entrance examination is
a powerful endorsement of the value of the science fairs.
Q. Are governments receptive to public-private
partnerships?
It depends on the government. Some governments do not
want to introduce the private sector to public education
systems. At the other end of the scale are countries like
South Korea, where the government wants all teachers to
have training in the effective use of technology, and
Guatemala, where there is a programme under which
thousands of teachers are getting notebook computers and
being trained in methodologies to develop local content.
We believe strongly in transparency and third-party
evaluation. It makes sense for governments to be sceptical:
if they are, we do not push. Our focus remains ensuring
technology in general can help improve education.
Q. What is Intel's approach in higher education?
At the college level, we focus on engineering and science
curriculum fundamentals, engaging with student pipelines
and introducing breakthrough technologies. For example,
computer chips everywhere are introducing multiple
processor cores. For this technology to become truly
powerful, we need to learn how to program in a
multithreaded, multiprocessor environment. At Intel, we
have pioneered a lot of tools and techniques that can help in
the development of how this is taught. The human brain is
not good at multitasking. None of us does very well operating
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Economist Debates: The cost of higher education
a cell phone and writing an email at the same time. This is an
important challenge which will be with us for the next 20
years, and we want to help make progress with it at all
levels, including higher education. As we close 2008 we will
have provided multicore tools and training to 1,000
universities worldwide.
We sponsor curriculum, professors, fellowships and
scholarships in over 150 universities in 34 countries. We
have some very close relationships with universities, focusing
on technology leadership and research, including direct labs
at UC Berkeley, University of Illinois (Urbana Champaign)
Carnegie Mellon and the University of Washington. Globally,
we directly connect with professors supporting researcher-toresearcher
relationships that target new technology areas.
These relationships foster research exchange and provide
professors and students with an insight into corporate
research programmes, though of course ultimately, the
professors are in control of their research. We try to be
sensitive to this. We are looking to move the educational
prowess of the world forwards and we want to support and
invest in those doing it.
Intel also focuses on engaging the students at undergraduate
levels and encouraging them to continue to graduate schools,
as a strong student pipeline is key to fostering the next
generation of technology breakthroughs.
William A. Swope is corporate vice president and general manager of Intel's
Corporate Affairs Group and is responsible for ensuring Intel's continued focus on
corporate social responsibility as an integral part of Intel's corporate strategy. In this
role, he leads the company's global education and citizenship programs, as well as its
community and corporate contribution activities and the Intel Foundation. His team is
charged with driving policy, education, and community agendas that effect positive
change around the world.
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Economist Debates: The cost of higher education
Since joining Intel in 1979, Swope has held numerous roles including manufacturing
technology planning, strategic product planning and product management. Swope was
director of Digital Enterprise Brand Management, and prior to that he was general
manager of the Software and Solutions Group (SSG), reporting to the president and
chief operating officer of Intel. In that capacity he managed the software products and
enabling efforts within SSG. From 1993 to 1995, Swope was the general manager of
the Intel® Pentium® Pro processor team. Swope was promoted to vice president in
1996 and corporate vice president in 2003.
Inspired by Intel's commitment to corporate social responsibility, Swope is honored to
be the steward of the company's 40-year legacy of support for education, environment
and the community. His responsibilities span from the Intel Foundation to Intel's global
education programs to its Volunteer Matching Grants and the Intel Involved employee
volunteerism programs. Swope is also a frequent keynote speaker at global forums
such as the World Economic Forum, eLearning Africa, and the UN Global Alliance on ICT
and Development.
Swope received his bachelor's degree in applied physics from Tufts College. He earned
his master's degree in management from Massachusetts Institute of Technology. Swope
serves on the board of directors for Rim Semiconductor, Inc.
Julie Clugage is Chief of Staff to the Vice President of the Intel Corporate Affairs
Group, which is charged with driving policy, education, and community agendas that
effect positive change around the world. Prior to joining Intel in 2002, Julie worked for
the World Bank and the Inter-American Development Bank in Washington, DC from
1996 to 2000. She also worked for two years in rural Guatemala at a teacher training
high school for Mayan youth and served as a legislative assistant for former
Congressman Leon Panetta. Julie holds a Master of Public Affairs from the Woodrow
Wilson School at Princeton University, an MBA from the Haas School of Business at UC
Berkeley, and an AB in Government and Economics from Dartmouth College.
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