Changing the Economics of Education

Tuesday, June 5, 2012
Is there anything to be done about the rising price of higher education? That was the question posed to John Hennessy, president of Stanford University, and Salman Khan, founder of Khan Academy, a nonprofit online-learning organization. They sat down with The Wall Street Journal's Walt Mossberg to discuss how technology might be part of the solution. Here are edited excerpts of their conversation. Cost Curve MR. MOSSBERG: Is it either moral or sustainable for elite colleges and universities to be charging what is approaching $60,000 a year to go to college? MR. HENNESSY: I think the real question is whether or not what we're charging is a worthwhile investment for the American public and for families. That's the key question. The elites have the advantage in that they have been able to significantly subsidize what they charge with financial aid. It's a really interesting business we're in. First we charge less than it costs us to provide an education, because we subsidize everybody to some extent. And then if you can't afford it, we give you a discount.

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