Pethokoukis, Economics, U.S. Economy

Should college be free for everyone?

Image Credit: shutterstock

Image Credit: shutterstock

If college is so necessary (college grads and higher have just a 3.3% jobless rate) and so expensive (published tuition has more than doubled in real terms since 1980) and student debt is so out-of-control (it now stands at $1.2 trillion), then why not make college free for everyone? Why not make taxpayers pick up the cost for this important public good?

It’s an idea that pops up every now and then. But expect lots more talk if Tennessee makes good on a proposal to offer two years of community college or technical school free for all students with a high school diploma or equivalency degree.

But government should think twice before creating a public option for higher education. First, strong evidence that student outcomes will improve is lacking. As AEI’s Andrew Kelly points out, retention and completion rates at California’s community colleges — which have the nation’s lowest published tuition and are free to many because of Pell grants — were above the national average but below those at some schools with tuition several times higher.

Second, Tennessee’s focus is misplaced. The problem isn’t how much students have to pay. It’s how much education costs. As economist and college president Howard Bowen described the inflationary dynamic: colleges raise and then spend all the money can. And why not? Students are at an information disadvantage. They equate higher prices with higher quality and are unable to accurately gauge the value of specific institutions or programs.

Third, the adverse though unintended side effects could be quite large. Significantly reducing costs and increasing value will require more cost-benefit transparency for students, as well as “unbundling” what colleges do. We need to rethink the delivery of knowledge and credentials, explains AEI’s Daniel K. Lautzenheiser, with reforms such as massive open online courses and competency-based education. And these disruptive innovations are best generated by outside competitors who might be crowded by a public option. It’s also worth noting a 2004 New York Fed study that found a “high-subsidy, low-tuition policies have disincentive effects on students’ study time and adversely affect human capital accumulation.”

Finally, why exactly should taxpayers subsidize the higher education of kids who can afford it and will reap huge lifetime gains from more schooling? They shouldn’t. While the Tennessee proposal is correct in signalling the importance of  increasing education levels, it distracts from more fundamental reform.

Follow James Pethokoukis on Twitter at @JimPethokoukis, and AEIdeas at @AEIdeas.

11 thoughts on “Should college be free for everyone?

  1. Also take a look at international experience. France provides free and pretty much unlimited access to universities for all with a high school diploma. With a few exceptions, the results are overcrowded, poorly equipped facilities providing low quality education. The poor state of most universities has led to a duel system whereby nearly all the bright students go not to the universities but to the highly competitive grandes ecoles (specialized colleges for very smart kids). Most university graduates find it very difficult to get a job.

  2. The kind of increasingly incompetent financial analysis I’ve come to expect from persons on the right. The actual cost (expenditure including subsidies) of public higher education has actually increased little (in inflation-adjusted terms) over several decades. The reason tuition has gone up so much is to compensate for drastically reduced subsidy (per student, inflation adjusted) over the same time period. If reducing subsidies is the answer, as the article suggests, it has been going on for decades, and we’re reaping the benefits now. Private college costs are a somewhat different, more complicated matter.

    The answer the author suggests is MOOCs, competency based exams, and the like. Is he another slumming Ivy Leaguer recommending crumbs for the masses? No, Northwestern. I guess noblesse oblige has spread downward some. I’ll believe it when their kids start going for a MOOCs degree.

  3. Three points:
    1. Kids who can afford college probably go to four-year-college (university), rather than technical school.
    2. What if we called this not a public option, but a voucher? Take the money, and go where you want. Private schools/MOOCs/… Then?
    3. The voucher could be need-based.

  4. My understanding is that, in the years immediately following WW II Mississippi did this. I don’t know what became of it.
    George Wallace provided school bus service to community college or trade school in Alabama, but I don’t know what tuition was and if that program still exists.
    Georgia, for a number of years (it’s been modified now and includes SAT ) has done this – 3.0 was required for college and 2.0 for trade school and maintenance of GPA during college (not sure about trade school) was required. Many students still take advantage, some even riding public transportation to the community college near my house. My take (I live in Georgia) is that it has 1) given kids, the day they enter school, the idea that seriousness can get them to college, 2) provided a better workforce and attracted business to the state, 3) given us some serious people (retired military) who bring us some serious students in the high schools. I strongly support the program and have not seen any layabouts take advantage of it.

  5. Giving a college education to all is not the answer. Most employers want motivated workers. Students show they have that motivation to learn by going onto higher level learning that is NOT required. This is currently college, but was high school back in the day when all that was required was an 8th grade education. If college is provided for all students how will employers separate the motivated from unmotivated potential employees? Grad school? I think the better solution is to require merit based aid. Students who feel education is important get a 3.0 or higher for high school and then they get aid for college as long as they maintain grades.

  6. College cannot be free for everyone. Someone must pay for it. It is very expensive.

    “Government” cannot pay, since government has no money, and government everywhere today is broke.

    Jim Peterson

  7. i do not understand why my daughter has to use my salary to determine if she gets help. i think help should be based solely on grades and not their parents income.

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