Note that systems of financing education have gotten very interesting over the years. In the 14th or 15th Centuries there were apparently quite a number of Italian towns which would give a purse of gold to any of their sons who returned from Bologna with a Doctorate of Laws. Smith (who, recall, is himself Professor of Moral Philosophy in the University of Edinburgh, which operates to this day under a charter from the Pope which hasn't been seen in approximately 400 years, but is believed to have been destroyed during the French Revolution) would have been exceedingly familiar with a system under which some wealthy patron paid a certain number of students to take a particular course of study, as well as that under which certain professors were paid to offer a certain course whether anyone took it or not.

I must say, the idea that armed force in the hands of the civil authorities can never be dangerous to liberty has proven optimistic!