Course Title: National Economic and Financial Issues in Postsecondary Education

        Instructor Professor Donald E. Heller
       Institution University of Michigan
Office Number 734.647.1984
E-mail address

This seminar will provide an overview of the economics and financing of postsecondary education in the United States, with an emphasis on national issues. The course begins with a brief introduction to economic theory that applies to higher education, including: fundamentals of microeconomics; public finance; human capital theory; and individual and societal returns to postsecondary education. Additional topics covered include: student financial aid; access and choice in higher education; federal support for research; and tax policy. The goal of the course is to provide students with an understanding of the key concepts and issues relating to the federal role in the economics and financing of higher education in the United States today. The course will include presentations by guest speakers who will address current issues in federal policy towards higher education.

While a background in economics is not required for this course, students must be willing to devote the time to master small amounts of technical vocabulary and economic concepts in some of the readings. Some familiarity with the structure and operation of U.S. federal and state governments is assumed.

Course Requirements

1. Analytic Papers

Each student will be responsible for writing two (approx. 4-6 pages) analytic papers on readings assigned in the course syllabus. The opportunity will be provided to write on three topics (on three different weeks), and each student will choose any two of the three on which to write. The analytic papers are intended to be an opportunity for you to reflect on the topic and readings before coming to class.

The analytic papers will be due in my mailbox by noon on the Monday before class.

2. Class Participation

Students in this seminar will be expected to be active participants in both the teaching and learning processes, and will be expected to complete all assigned readings for each class and come prepared to participate in the discussion. As a seminar, the quality of the course will depend strongly on students' participation in class. Students will present the results of their research in class.

In addition, each student will be asked to review and provide feedback on one or more of their colleague's research papers, and participate in a policy simulation exercise.

3. Research Paper

Students will choose a research topic related to some aspect of national economic and financial policy in postsecondary education. Suggested topics will be provided in class, but students are free to choose a different topic as long as it relates to the course subject matter.

Research papers should be approximately 20-25 double-spaced pages in length (with a 30 page upper limit, not including appendices, references, etc.). You should write in a manner that emphasizes clarity and efficiency of presentation.

Paper grades will be based on the content of the paper: its organization, thoroughness and specificity, logical analysis, and persuasiveness. In addition, grades will depend upon: the quantity and quality of your research; use of proper English composition (spelling, grammar, punctuation, and syntax); and the ability to meet required deadlines.



Required Textbooks (available at Ulrich's and on reserve at the Undergraduate Library):

Bowen, H. (1997). Investment in Learning: The Individual and Social Value of American Higher Education. Baltimore: The Johns Hopkins University Press.

Hauptman, A. (1990). The Tuition Dilemma: Assessing New Ways to Pay For College. Washington: The Brookings Institution.

Mumper, M. (1996). Removing College Price Barriers: What Government Has Done and Why It Hasn't Worked. Albany, NY: State University of New York Press.

McPherson, M. S., & Schapiro, M. O. (1998). The Student Aid Game: Meeting Need and Rewarding Talent in American Higher Education. Princeton, NJ: Princeton University Press.

Additional readings will be drawn from both classic and contemporary articles, reports, and chapters of other books, and will be available in a course packet. In addition, students will be expected to read The Chronicle of Higher Education weekly in order to keep abreast of federal policy issues relating to postsecondary education.

Course Schedule

1.January 13: Introduction and overview

2.January 20: Basics of microeconomics: supply, cost definitions, demand and choice, the nexus of supply and demand, externalities, pricing of public goods

3.January 27: Human capital and individual returns to education

4.February 3: Social returns to higher education - First analytic paper due noon on February 2

5.February 10: Financing of higher education: overview

6.February 17: Financing of higher education: The federal role

7.February 24: Financing of higher education - the state role

March 3: Spring break, no class

8.March 10: Access and choice in higher education - effects of tuition and financial aid

9.March 17: Access and choice in higher education - opportunities for reform

10.March 24: Tax policy and higher education

11.March 31: Federal support of research

12.April 7: Student presentations of research results

13.April 14: Student presentations of research results

14.April 21: Student presentations of research results


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