College tuition has grown enormously expensive. For the 2018-19 school year, the average cost of tuition and fees was $35,676 at private colleges, $9,716 for state residents at public colleges, and $21,629 for out-of-state students at state schools, according to a U.S. News and World Report analysis. That’s at least $38,864 for a four-year degree.
Although many policymakers and researchers acknowledge that tuition has skyrocketed in recent decades, debate abounds over what to do about it. One increasingly popular idea: free tuition. Since Sen. Bernie Sanders pitched tuition-free public colleges and universities as a presidential candidate in 2015, the idea has gained steam. Presidential candidate and Democratic Sen. Elizabeth Warren offers her own free tuition plan, and former Vice President Joe Biden has supported the idea since 2015, though it has not been a centerpiece of his current presidential campaign. Other Democratic candidates, including South Bend Mayor Pete Buttigieg, oppose the idea. Meanwhile, as the Manhattan Institute’s Reihan Salam noted in the Atlantic, a tide of conservative politicians are questioning the value of higher education over options like vocational training in the first place.
Here in Pennsylvania, lawmakers have more than once proposed their own alternative: a Pennsylvania Promise that would make tuition, and in some cases room and board, free at public colleges for families earning less than $110,000 a year. In late June, Gov. Tom Wolf signed a law granting free tuition for youths who were in foster care at age 16 or older. But the state has not committed to universal funding programs.
The Inquirer turned to higher education researchers, one a local university professor, to debate: Should tuition be free at publicly funded institutions?
College has become a place that Americans love to hate. Many people understand that it’s easier to get a steady, decent-paying job with college, but they can’t afford to enroll. Some work full-time but can’t find a course schedule that allows them to keep their job. Others pay for college even though it compromises their ability to pay rent or put food on the table. The entire bottom 50% of families faces these challenges, since their incomes grew very slowly over the last 30 years. Even upper-middle-class families find that no matter how much they save, today’s prices mean having to disappoint their children, deny their dreams, or take on more debt than they ever imagined.
This is not an accident. Students struggling to pay for college and the nearly 45 million people holding student debt are living with policy decisions best articulated by President Ronald Reagan’s budget director, David Stockman. In 1981, Stockman said: “I do not accept the notion that the federal government has an obligation to fund generous grants to anybody who wants to go to college. If people want to go to college bad enough, then there is opportunity and responsibility on their part to finance their way through the best way they can.”
It’s time to ask whether this is the best approach. Every year talent is wasted as millions of students drop out not for lack of effort, but for lack of money. Yet the college wage premium remains substantial. Even an incomplete degree pays off. What would have happened if instead of making public high school free, we insisted that people pay for it themselves? The evidence is clear: the unparalleled rate of technological advances and scientific discoveries in the 20th century would not have happened.
Today’s policymakers face a clear mandate: Align the price of college with how much it matters both for individuals and for the country. Those who go to college are better able to repay the nation through productive work, paying more taxes, and depending less on government services. Investments in public higher education pay off across generations.
We should focus our investment on America’s open-access public colleges and universities. This includes the vast majority of state universities, all community and technical colleges, and all minority-serving institutions. These are the institutions driving social mobility.
As we design tuition-free public higher education, we should avoid past mistakes. Administrative burden must be kept to a minimum. We should be inclusive — a policy focused on the public sector can sufficiently target students based on need without requiring them to prove their poverty. The current financial aid application (FAFSA) is a bureaucratic tragedy and ought to be eliminated.
We must also hold colleges and universities accountable for educational quality. Taxpayers should no longer fund for-profit colleges, which derive up to 90% of their revenue from financial aid and waste it on advertising. Since we cannot hold them accountable, let’s focus on lowering prices at nonprofit private schools through real competition. Finally, we need to improve on the current financing system’s failure to ensure that public colleges and universities offer affordable supplies, housing, food, transportation and child care.
Education is not a cure-all, but it is also not the enemy. Since the lion’s share of the financial payoff from higher education goes to the federal government, it should lead this investment.
The next presidential election matters. If you think college costs too much, vote.
Sara Goldrick-Rab is professor of higher education policy and sociology at Temple University, where she founded and directs the Hope Center for College, Community, and Justice.
“Free, free, free” is the Democratic presidential front runners’ proposed solution to many kitchen-table issues, including the high and rising price of college. Joe Biden indicated his support for 16 years of free public education in a 2015 statement. Sens. Bernie Sanders and Elizabeth Warren have made free college, as well as total or significant student debt “forgiveness,” part of their campaigns. However, prices give students and the public essential information, and we need to let the price system work with minimal distortions to help students tailor their best educational path.
Past federal attempts to increase higher education affordability — third-party payments of guaranteed private loans and direct federal loans and grants — contributed to non-transparent pricing and fueled rising prices. Free college would make things worse, while simultaneously transferring the entire burden to taxpayers. What American colleges need is more price transparency, not less.
It’s virtually impossible to know what four or more college years will cost at the time of admission. Prospective students and their families must face the daunting task of combining colleges’ listed price, possible institutional scholarships, government grants, loans, work study, and more to determine the true price. Now add the confusion of third-party payment, out-of-pocket vs. future student-debt payments, and various loan forgiveness programs, and the true price becomes even more obscured.
By having a high “sticker price” and adjusting the amount of aid (needs based or other) for some, colleges charge different prices to different students. Colleges can effectively “price discriminate” in terms of ability to pay, because they know exactly how much families earn. To qualify for financial aid, detailed financial records are required, including tax returns. Because only some students pay the listed price, schools can increase it, not worrying about losing applicants, and choose which students will pay based on their family’s capacity.
Students already have easy access to federal loans, which enable colleges to increase tuition knowing students have access to more debt. President Ronald Reagan’s then-Secretary of Education William Bennett famously explained this relationship in a New York Times op-ed: “If anything, increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that federal loan subsidies would help cushion the increase.” A 2015 Federal Reserve Bank of New York study concludes that for every dollar increase in the subsidized loan maximum, tuition increases by about 60 cents.
Even with higher education’s confusing finance system, students and families have a sense of the cost and some responsibility in making payments. “Free” — really taxpayer-funded — college would eliminate the existing transparency and remove families and students’ incentive to consider the underlying costs. If all costs are paid by the government — eliminating tuition and fees amounts to about an $8,804 annual price drop for students looking at 4-year public colleges — then there could be an over-consumption of college. That would mean students enrolling in more classes for more years than will concretely pay off for them.
State per-student higher education spending grew 26% (2012 to 2017) following a 14% (2008-11) recession-induced enrollment surge. The enrollment surge resulting from a four-year $35,000 college subsidy would likely be much larger. Moreover, when someone (government) spends someone else’s (taxpayers) money, they will neither economize nor maximize value.
Clear, accurate prices are necessary for households to make informed purchasing decisions. Policies should enhance clarity and help families make responsible decisions. Free college does neither. Fully government subsidized college wouldn’t solve the problem of rising prices, it would simply hide it.
Russell Rhine is a policy analyst at the Cato Institute.