The Pricing Quandary of Engineering Degrees

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Tuesday, July 16th, 2013
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Industrialized nation such as the US and UK could face greater difficulty in overcoming a shortage of engineering professionals due to the rising cost of degrees in the discipline.

In the US, despite the difficulties companies and research bodies have experienced in finding sufficient numbers of American-born engineers, degrees in engineering from public universities have risen in price relative to other academic disciplines as a result of cuts to state funding.

A recent study of undergraduate programs found that up to 57 per cent of public research universities implement a policy of differential pricing for engineering degrees, justifying the premium on the grounds of the greater cost of providing training to engineers compared to other majors, and the greater projected earnings that engineers enjoy over the course of their careers.

While these price increases may ameliorate the short-term fiscal hardships of tertiary institutions, they also have the effect of deterring interested students from entering the profession – particularly those hailing from disadvantaged backgrounds – and reducing the pool of engineering talent just as the Obama administration has launched a drive to increase the number of members inthe profession.

Research by University of Michigan economist Dr. Kevin Stange examined differential pricing for engineering courses at over 140 schools and found that price increases averaging 14.5 per cent led to a 7.5 per cent drop in degrees conferred within only three years. The study also found that the price differential had a disproportionate impact on women and ethnic minorities, who are already underrepresented in the profession.

While providing engineering degrees at lower prices could heighten the financial hardship experienced by tertiary institutions, they could also create a more productive workforce and lead to greater benefits for the rest of society in the long run.

Stange notes, however, that his research does not conclusively establish that reduced tuition fees will raise demand for engineering degrees, pointing out that some universities saw enrollment levels increase after raising their prices.

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