Free college tuition for all is an idea gaining political traction, with proposals by multiple politicians and candidates.
Without a doubt, college affordability is a growing problem, with tuition rates growing faster than inflation and student debt approaching $1.3 trillion.
I will also add that I am a firm believer in educational access for all and regard the fruits of learning as the single most important factor in our long-term economic and social progress. Even so, free tuition for all is not a good solution, despite the idea’s attractiveness as a headline in a presidential campaign.
For one thing, tuition is only a portion of the expense of college. In addition to fees, there are room and board expenses as well as the opportunity costs of what might have been earned in the workforce. There will still be a need for loans or other resources for many students, and they will still be both a barrier to entry for some aspirants and a burden for some graduates.
If getting a handle on student debt is the objective, it is important to understand that public community colleges and universities only explain part of the issue. According to a recent Brookings Papers on Economic Activity by Adam Looney (U.S. Treasury Department) and Constantine Yannelis (Stanford University), for-profit institutions are a big reason for ballooning debt. The paper looked at the 25 institutions in 2000 and 2014 whose students owe (collectively) the most in federal student loan debt. In 2000, all but one were either 4-year public or private non-profit institutions, often state flagship universities and institutions with large graduate programs. In 2014, eight of the top 10 and 13 of the top 25 were for-profit institutions (one of which is largely online). Completion rates at for-profit institutions tend to be lower, as are future labor market outcomes.
If the objective is to help those students most in need, free tuition doesn’t get there either. With free tuition, even families with the resources to pay for college would get the benefit. While such families would doubtless enjoy the extra budget bonus, the bottom line is that it’s a somewhat regressive move given the current breakdown of college students and the income levels of their parents.
Furthermore, there is a basic supply and demand problem. How will colleges deal with the increase in demand and resulting influx of students free tuition is designed to spark? The additional space in classrooms and qualified instructors cannot be generated overnight. If free tuition equalizes all public schools, what are now more selective (and higher priced) schools such as the University of Texas at Austin or Texas A&M University are suddenly equal in terms of cost to regional universities. One outcome would likely be that they become even more selective, since a higher tuition rate had been one way to deal with the large numbers of students desiring to attend the state’s flagship universities. If the free tuition does not spur additional attendance, then that objective isn’t met either.
Even if tuition is free, the benefits of higher education cannot be realized by students who are unprepared. Unfortunately, there is clear evidence that many high school graduates are simply not ready. One of the leading college admissions exams, the ACT, was taken by about 57 percent of the 2014 high school graduating class (1.8 million students). The ACT sets “College Readiness Benchmarks” which it defines as “scores on the ACT subject area tests that represent the level of achievement required for students to have a 50 percent chance of obtaining a B or higher or about a 75 percent chance of obtaining a C or higher in corresponding credit-bearing first-year college courses.” In 2014, only 26 percent of ACT tested graduates met the benchmark in all four subject areas (English, reading, math, and science). A full 31 percent didn’t meet benchmarks in any of the areas. The results vary widely by race/ethnicity, with Asians most likely to meet standards.
Almost 1.7 million students took the College Board’s SAT, the other major college entrance exam, and fewer than 43 percent in the class of 2014 met the SAT College and Career Readiness Benchmark. The numbers of students taking these tests have been rising (indicating a broader cross-section of seniors sitting for the exams), but it is still alarming that such a small proportion measures up to college readiness benchmarks. Free college tuition will not solve this problem. In fact, College Board research into student performance indicates that it is very difficult to change patterns which emerge by the time students reach middle school.
Finally, the fiscal implications cannot be ignored. The Federal government and many states are strained in their resources, and the above concerns suggest that such a program, no matter how laudatory in principle and intent, might not provide a meaningful return on taxpayer dollars. There is also the danger, which we have seen realized in other contexts, that such a mandate would ultimately end up as an unfunded or partially funded burden on the institutions.
Many Americans have worried over how to pay a tuition bill or student loan payment, and the huge sums of money owed by some students have made many headlines. However, free tuition is not the answer. It has been tried in other countries, and it hasn’t worked. It would also be extremely costly, and would introduce additional problems. Free tuition is one of those ideas that sounds good on the surface and makes a great sound bite, but fails to hold up upon closer inspection. Affordability is a must, how we get there matters as well.
