If all university students had to pay the full cost of their education,
A)the federal debt could be eliminated.
B)they would probably choose less education than what is socially optimal.
C)the economic efficiency of the higher education system would be greatly enhanced.
D)vertical equity would be enhanced,since university students would internalize the externalities of their educations.
E)horizontal equity would be worsened because university students in general come from the lowest-income families.

Question

Quizplus · Accepted Answer

If all university students had to pay the full cost of their education, it is highly likely that some students from low-income families would not be able to afford the tuition fees. As a result, they would choose less education than what is socially optimal, leading to a reduction in the economic efficiency of the higher education system. Therefore, option B is the best choice. The other options are incorrect because paying the full cost of education by all university students does not guarantee the elimination of federal debt, it would not greatly enhance the economic efficiency of the higher education system, and it would not enhance vertical equity. Additionally, horizontal equity would be worsened because low-income students would face significant financial barriers to accessing higher education.

If All University Students Had to Pay the Full Cost