Why Free College Tuition is a Bad Idea

While watching the Democratic debate last night, a few things knocked me out of passive viewership and really caught my attention. First was Bernie’s Kissinger moment, second was Hillary equating her small donations to Bernie’s, and lastly, Hillary pointing out that Sen. Sander’s would leave it up to State governments (and Governor’s like Scott Walker) to round out his “free tuition” plan.

This kind of in the weeds back and forth was exactly what a wonk like me was looking for, but unfortunately Bernie was able to slide out of any substantive fiscal debate by referencing his silver bullet tax on Wall Street (which will magically pay for seemingly everything). While I agree with the Senator that more social good is derived from accessible higher education than high frequency trading, free tuition is not the answer.

Free vs. Affordable

 

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Democratic Nominees Sanders and Clinton

Sanders is proposing a system wherein the federally government would pay for 2/3 of the tuition costs at public universities in the United States, and State legislatures would pick up the rest. This system rests on the assumption that when free money is laid out in front of them, even the reddest of states will take Sanders up on the offer. Sen. Sanders argues that making tuition free would then allow the most economically disadvantaged students to use government Pell Grants to pay for their cost of living, and effectively make college free for them. This is where it gets interesting.

Sanders is advocating a free tuition system (in public universities) hoping that this will allow for greater social mobility and over all more egalitarian education outcomes. While at face value this is a compelling argument, it’s also misleading. Sanders is (for the most part) describing an outcome that already exists. In the United States, students at 4-year public colleges that come from the lower quartile of the income distribution already pay zero net tuition, while also receiving grants to pay for expenses.  Making tuition free would not make these students any better off, it would benefit the upper-middle class who are sending their kids to college and paying full price, like the bankers that Sen. Sanders loves to chastise.

With that being said, the student debt problem in the United States is undeniable, and something should be done, but that something should be more a kin to what Hillary Clinton is proposing. Hillary wants a debt-free higher education system rather than a free one. While it may seem like semantics, it amounts to a big difference. Secretary Clinton is proposing a system that grants federal funding to public institutions that sign on to keeping their tuition affordable (how that will be calculated is still TBD). By keeping tuition reasonable, and continuing to offer Pell grants, this would allow for all Americans to access public higher education more affordably, without disproportionately and unnecessarily benefiting the upper-middle class.

Canadian Connection

This seems strikingly familiar to the Ontario post-secondary system, which has its darts and laurels, but manages to strike what I see as a balance between equality and personal responsibility. In Ontario, 63% of working age adults have some form of post-secondary education, and the government hopes to bump that up to 70% to meet the demands of our modern economy. The Ontario government gives accredited universities and colleges across the province operating grants which subsidize the tuition payments that would otherwise fall solely on students. American public institutions operate under a very similar system. The government also offers grants and low interest loans to those students who qualify based on household income. This system means that the average student in Ontario graduates from a 4-year university program with $22,000 in debt. All things considered, if you made the most of your university experience, finding a decent paying job to cover that debt is not an insurmountable task.

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Beautiful Queen’s University

Now there has been debate recently in Ontario as to how much of the education pie students should be paying for. For example, at my alma mater Queen’s University, in 2007–08, 49.6% of the universities revenue was derived from provincial government grants, 42%  from tuition fees, and the remainder came from investment income, sales and services, and donations. As of 2012 (the most recent data I could find), that balance had shifted to 43% from provincial grants, and 47% from tuition. This trend is visible at other universities across the province, and has pushed some student organizations to call for a tuition freeze.

Now, I am sympathetic to the idea that higher education is a good in and of itself (as an Arts major I had to convince myself of that early on), and while creeping tuition costs should be questioned, and the share of revenue coming from each party should be discussed, for the most part the calls for lower tuition in both the Canadian system and the American public system, make a marginal difference to a group of people who are going to, on average, be better off regardless of their debt burden thanks to their post-secondary education. With that being said, the operative phrase here is “on average”, and who benefits from post-secondary education is something that needs to be unpacked.

Who Really Benefits, and What Should We Be Striving For?

While the now truism that university graduates on average earn considerably more than their high-school only counterparts still holds, when economists tease out specifics, pushing as many students as possible to  university begins to look like less of a cut and dry solution. Allison Schrager argues that in the long term, a college graduate that finds them self in the 25th percentile of income can expect to earn less than the average high-school only worker.

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Bloomberg Business

So what does this tell us about higher education, and what on earth does it have to do with free tuition? Well, a lot actually. If we believe in merit based hiring, then we can assume that the 25th percentile of college graduates should have probably thought about pursuing another avenue of post-secondary education. And again, I know education is a good in and of itself, and that many people pursue their passion in fields that are not always lucrative, but how many students in that 25th percentile enjoyed reading Beyond Good and Evil by Nietzsche, or Locke’s Two Treaties of Government ? If I were a gambling man, I would wager very few.

While I agree with the Ontario government’s goal of 70% post-secondary attainment, and I understand why the United States would want to pursue similar targets,  we need to think about what that attainment functionally looks like. If we have students slog their way through higher education (hating their classes all the while), with little to show for it other than some fond memories and a degree, why on earth would free tuition and increased enrollment be a good thing? We need to think about outcomes, and correctly incentivise students to pursue post-secondary education that makes sense, and that does not mean everyone should pursue a four year university or college degree. Being able to add value to your community and society is not limited to those of us with Bachelors degrees, and taking on student debt to attend classes you are not interested in is not a pathway to prosperity.

Most importantly however, the conversation around free tuition only pays lip service to equality and social mobility, especially in the United States. As was argued earlier, free tuition would disproportionately benefit those who can already afford to pay for higher education, not those most in need. All the while, those worst off need better K-12 education, better vocational training, and access to community colleges (something the Obama Administration is already working on). Additionally, there needs to be a more robust conversation about for-profit higher education and its abysmal graduation rates. Too many young Americans are going to small for profit colleges, many of them using their GI-Bill funding, and dropping out before they complete their degree. They end up with the scars of student debt without any of the benefits. This is where the gains in equality can be made. Ensure students from disproportionately poor areas finish high school, find a trade or a skilled career, and pursue education and training that fits their needs. Promises of free tuition sound nice, but we need to think about the voices that are being drowned out when we focus on academic post-secondary education.

And in both the US and Canada, we need to seriously think about who should be going to four year university or college programs and why, otherwise we run the risk of continuing to put a premium on growth without actually stopping to consider if that growth is optimal and effective for the purposes of not only students, but also society at large.

It’s time to rethink our fixation on higher education, not the cost of tuition.

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