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Instead of wait lists and closed classes, Santa Monica College in California wants to offer premium-priced sections of crowded courses, reports the Los Angeles Times. Students could pay as much as $200 a unit for high-demand courses; the regular rate will be $46 per unit by summer.

Students would be able to use financial aid to pay for the classes, and college officials hope to raise private funds to establish scholarships for needy students.

The 34,000-student Santa Monica campus has one of the highest transfer rates to four-year universities in the state and a reputation for innovative programs that are a model for other community colleges. But some say higher-priced classes are tantamount to privatizing the public institution.

Administrators say the plan is a reaction to drastic state funding cuts, which have forced the campus to pare more than 1,000 class sections since 2008. In the current year, funding was reduced by $11 million. The campus could lose an additional $5 million in the 2012-13 budget year if a tax initiative on the November ballot fails.

The plan is unfair to low-income students, critics charge. And it’s not at all clear that it’s legal, although the college plans to create a nonprofit foundation to run the program.

Premium pricing is not a new idea, notes Community College Dean. Two years ago, Bristol Community College in Massachusetts contracted with a for-profit provider to offer nursing classes at a premium price to students who didn’t want to wait to get into low-cost sections. “It’s the academic equivalent of a next-day shipping option,” the dean writes.

Community colleges offer services far below cost, using state and local subsidies, the dean explains.

The theory behind the subsidies is that the entire population benefits from having an educated workforce and citizenry, so it’s fair to have the entire population kick in some money.

. . . But when the subsidies don’t track enrollments — which they absolutely have not for many years now — growth is a problem for a college. In the Massachusetts case, student fees didn’t come close to paying for the cost of more nursing seats. In the California case, incredibly enough, the low tuition that students pay goes entirely to the state; the college keeps none of it. In that system, new enrollments are pure cost.

The “express shipping” option already exists for students from wealthy families, who “can buy their way into undistinguished private colleges,” the dean notes. Public colleges are supposed to be the alternative.

Many low-income and minority students enroll in for-profit colleges, which aren’t subsidized and therefore charge much higher tuition than community colleges or public universities. It’s a form of premium pricing. Since for-profit colleges make money from new students, they add courses immediately to meet demand. Students pay more — nearly always with federal aid — and get the classes they need. At the two-year level, for-profit students have much higher completion rates than community college students, so the premium may be worth it. That’s not true for four-year for-profit programs, which have lower completion rates.

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