Many of us who blog in the esteemed bloggernacle have profited from the incredibly low cost of a BYU education. Whether we attended ourselves and personally paid the low tuition, or a spouse or child attended. But is BYU tuition too cheap?
I was raised in a lower middle class family and college was affordable for me because of a generous set of grandparents and the below-market cost of a BYU education (otherwise I would have had to attend the University of Utah–the horror). But is tuition too low? I am no economist, but I do know that people react to incentives in all walks of life and never more so than when money is involved. When prices are artificially low, demand becomes artificially high (within certain parameters–this caveat for all the real economists who might read this).
A good example is the gasoline crisis in the 70s. The government pegged the prices at an artificially low price by subsidizing the cost. Lines grew around the block and shortages occurred. The government subsequently allowed the prices to rise to their market level. At the higher price, demand fell and the lines and shortages disappeared. Of course, the other side of the equation is that fewer people drove and companies that depend on gasoline prices (in this case trucking and delivery companies) went belly-up.
Members of the Church often discuss the high demand for a BYU education. Parents complain to Church leaders often enough about their children not getting admitted that Church leaders often address the issue from the pulpit. They discuss the alternatives to BYU and continue to extend those alternatives (BYU-Hawaii, BYU-Idaho, on-line classes). Still the demand cannot be met. If tuition were raised closer to market much of the demand would disappear. Alternatives to BYU (like Idaho and Hawaii) would become more attractive. Church leaders would probably have to deal with less complaints (after-all BYU tuition could be placed at a mid-range cost: still below market but above current).
However, one advantage of artificially low costs (besides the great affordability) are artificially high demands. In college rankings, high demand (leading to lower acceptance rates) equals higher rankings. By pegging tuition at a low rate and keeping attendance levels constant, BYU rises in the rankings. Perhaps the benefits to the Church and to BYU students of high rankings outweighs the cost of Mormon students who want to get in but can’t. So, is artificially high demand at BYU a good thing?