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<p>No, this misstates the economics of post-secondary education. These days many public universities get a state subsidy that represents just a fraction of the value of the tuition discount the universities give to in-state residents. They make up the rest through a combination of endowment earnings, recapture of a fractional share of research grants earned by faculty, intellectual property licensing fees, and cross-subsidies by OOS and international students.</p>
<p>It’s also not the case that per-unit (i.e., per student) costs are the same. Faculty salaries vary widely. Faculty-student ratios vary widely. Research universities generally require much larger libraries than LACs, but at both the research university and the LAC level, there are substantial differences in acquisition and operational costs depending on the size of the collection, but those costs, once the size of the collection is established, are more or less fixed, and can be spread among a larger or smaller number of students depending on the size of the school, introducing opportunities for scale efficiencies. Land costs and construction costs vary widely by community, as does the prevailing wage that must be paid to maintenance, custodial, clerical, and technical employees. Building operational and maintenance expenses vary widely, depending on the age, design, configuration, and energy-efficiency of the buildings. Large universities may be better positioned to negotiate more favorable employee health insurance rates; and/or to reduce health care costs by integrating their employee health benefits with their own medical schools and hospital services; and/or to self-insure, thus “eliminating the middle-man” and paying health care insurers only a paperwork management fee and not a premium based on the insurance company’s exposure to the risk of loss.</p>
<p>For these reasons and probably a hundred more, per-unit instructional costs are not uniform. Far from it.</p>