A deeply held belief in Europe is that university education should be financed almost entirely by the government. In France, undergraduates pay about $400 per year in tuition; in Germany, federal law explicitly forbids public universities to charge tuition. However, European governments typically don't provide much money for universities, leading to problems with maintaining quality. In response, some observers want to start charging students substantial amounts of tuition. One German official responded that "one of the prime rights of humanity is to have a free university education." In the same way, a Labor member of the British parliament argued that "Introducing a market into higher education is something the Labor Party should not be doing" (Lyall, 2003, p. A3). Discuss the efficiency and equity consequences of a system of taxpayer-financed higher education.

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Efficiency 1 There could be greater competition for places at universities leading to higher standards overall If universities are free there may be more competition for places This could lead to high... View the full answer