How should higher education funding be distributed?

Yglesias » Higher Education From 50,000 Feet:

I can think of two broad principles that would be more defensible than funding by exclusivity. One would be funding by need. This would say that teenagers whose parents have modest incomes need resources more than do teenagers whose parents have high incomes. So institutions that attract a disproportionately high income client base should attract little support from the public. That means reduced direct appropriations, and at a minimum social pressure on civil society actors not to donate to highly privileged institutions. Another would be funding by quality. Here you would say that resources ought to flow to institutions with a proven track-record of producing unusually large student learning gains. In our current system, I think that funding quality is what we think we’re doing. Yale is “better” than the University of Connecticut so funds flow to it. But in our current setup, better simply means more exclusive. It’s a measure of the quality of the inputs, not the quality of the instruction. The result is that both the public sector and the civic sphere are essentially acting to redistribute wealth and opportunities upwards.