This is the Cato Daily Podcast for Monday, March 21st, 2011.

I'm Caleb Brown.

States are defunding higher education, or so the story goes.

The only problem with the story is that it's wrong.

Worse than wrong. It has the relationship between state spending and the price of higher education

exactly backwards.

Neil McCluskey, Associate Director of the Cano Institute's Center for Educational Freedom, offers

his thoughts.

The price of college, that sticker price of tuition fees, room and board that students are confronted with every year continues

to go up at incredible rates, far beyond normal inflation.

And a major argument that defenders of higher education offer for why this is, is that states

have quote unquote defunded higher education, that every year they've given less and less money to colleges and

universities forcing those schools to raise their tuition price to make up for

that lost revenue. That's the argument that's presented for why prices keep

going up. So just in the last week or so, two reports have come out that have really helped

to drive home how wrong this is.

Not that the data wasn't out there before.

You could see pretty clearly that this wasn't the case, that this argument that states

have been defunding schools is why they have to raise prices.

But it's interesting these two reports came out right at the same time.

So the first was from the State higher education executive officers organization that every year puts out

a report on higher education funding.

...