Tag: free college

The Burden of College Costs

By Chase Wheaton

Higher education should be one of the key pathways to increased access and opportunity for every American. It should provide people with the prospect of increased knowledge, training, and expertise so they can pursue their passions and positively contribute to their communities without limitation. It should, at the end of the day, be a gateway to a more equitable and just society. Unfortunately, in the United States, higher education has been a gatekeeper for all of those things, and it is past time for that to change.

More often than not, the extraordinarily high cost of a college education in the United States, especially compared with much of the rest of the world, serves to prevent an otherwise qualified person from accessing higher education, or it becomes a massive burden for the person to carry after graduation. In 2017, the U.S. Federal Reserve estimated that the average debt from college is $32,731 per graduate. Couple that tremendous debt with the high interest rates many students are forced to pay on loans from private lenders that can easily double the cost of a college education, and you have many graduates paying off loans well into their 30s, 40s, even 50s.

That seems more than the lack of access and opportunity to me. It’s an explicit barrier that only the wealthy and privileged can possibly overcome. This barrier only serves to increase the divide in the quality of life that exists between different populations in the United States. Aside from the vast majority of jobs in the U.S. that require some level of education beyond high school, even employers who don’t require college are much more likely to hire someone with a bachelor’s degree than someone without. There are all kinds of studies showing how lucrative a college degree can be, often higher earnings of $1 million or more over a lifetime.

From this disparity, the cycle repeats itself, and those with the ability to pay for higher education continue to earn higher wages and have better access to higher-paying jobs, which in turn makes them more financially stable over the course of their lifetime, which then allows them to send their children to a college or university, and on and on through the generations.

I think the solution is incredibly simple: Cut military spending. Take a small portion of the $733 billion annual Defense Department budget and re-allocate it to the U.S. Department of Education. Time and time again, the federal government has defunded the Education Department to help pay for more defense spending, so why not flip that script? The College for All Act of 2017 introduced by Sen. Bernie Sanders, I-VT, and Rep. Pramila Jayapal, D-WA, estimated that the cost of free college to the federal government would be $47 billion a year. That’s just 6.5% of the entire Defense budget.

Budgets and federal spending reveal the priorities and values of an entity or institution, and right now, the federal government is telling us it cares more about the idea of complete global military domination than it does about providing all its citizens with programs and services that would vastly improve the quality of life for millions of people. As long as the federal government can continue to afford to give $733 billion to our military every year, you won’t be able to convince me that they shouldn’t be able to do one-fifteenth of that to guarantee every American access to higher education. 

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The Fascination with Free College

By Charles Dervarics

For people of a certain age (read: young), the allure of free college is almost irresistible. At a time when some private universities charge more than $70,000 annually and top public institutions cost $30,000 a year, the entire process may seem daunting to students and their families.

And that’s before even reading about how the “sticker price” may differ from your final cost (like a car negotiation!) or the merits of online and “hybrid” learning during a pandemic.

One thing we do know: Americans already have a lot of college debt. According to the Federal Reserve, 20% of the U.S. population owes a combined $1.5 trillion in education loans. Not surprisingly, low-income students stand the most to lose. As the U.S. Department of Education notes, a low-income student is four times less likely than a wealthier student to earn a bachelor’s degree.

While free college is not in the massive $1.9 trillion stimulus bill, the issue looms as an upcoming flashpoint for Congress and President Biden. The president has proposed tuition-free public college for families earning up to $125,000 a year. In a recent CBS interview, Biden said he could provide that benefit for $1.5 billion, though his staff quickly backtracked and pegged the cost at approximately twice that level.

Part of the challenge is that, similar to K-12 schools, colleges rely not on the federal government but on state and local funds for much of their budgets. College costs also differ greatly by state. As reported by CollegeCalc, the average public college or university in Pennsylvania charged $23,167 last year. In New Mexico, the average was just $6,807. Does higher cost bring higher quality? And knowing the federal government would soon foot the bill for many students, would states cut their own contributions as a result?

Some lawmakers also want to help recent grads who wouldn’t reap benefits from this Biden plan. Sen. Elizabeth Warren, D-MA, is proposing to forgive up to $50,000 of a student’s loans, while the White House says it’s open to forgiveness of up to $10,000. Help for graduates now navigating the job market is politically popular, with several polls showing strong public support. 

Still another alternative is free community college, so more low-income students might earn a technical credential or associate degree at lower-cost, two-year schools. Biden has talked about this, too, as has First Lady Jill Biden, a community college professor. But here recent data show the devastating impact from a year of COVID-19. Despite low tuitions, community colleges suffered a 10% enrollment decline in Fall 2020, far more than other areas of higher education. Most alarmingly, based on data from the National Student Clearinghouse, freshman enrollment at two-year colleges dropped by a whopping 21%.

When times are bad, community colleges usually do well as the unemployed return to school. But that’s not happening now, perhaps because prospective students lack child care and technology or just don’t like virtual learning.

What’s interesting here is that some states already offer free community college to many students. Tennessee, an early leader, saw an 11% enrollment drop in fall 2020 with African Americans showing notable declines. Leaders cited factors such as economic uncertainty and lack of connectivity and child care. All of which may indicate that, when it comes to education and so many other issues, free isn’t always free.

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The Cost of Free College

By Andrew Boyd

To start where Charles Dervarics‘ column concludes, I‘d submit that free is never free, with the possible exceptions of hope, love, compassion and sorrow. So, let’s dispense with the notion of “free college.”  

In the realm of public goods and investments, we don’t say free military might, free infrastructure, or free police protection; but it certainly makes sense to think about education as a public good, although, unlike an interstate highway, most if not all the value of a higher education accrues to the individual in such a way for which free-market mechanisms can account. 

In terms of the mechanism, I’d be more inclined to support tax credits and/or subsidies for higher education with associated economic means testing and requirements for some base levels of effort and achievement on the part of the student, not unlike the kinds of constraints we place upon things like welfare and unemployment, although the erosion now on those constraints, I’d propose, has serious and even dire implications for our social and economic well-being. 

Statistically, Americans with a college degree on average earn twice that of those with a high-school diploma. This, according to the Bureau of Labor Statistics for CY2019. Of course, if you increase the supply of something (those with college degrees), the price (wage) is likely to fall, so there is the notion of diminishing returns. Also, there’s strong evidence that many people might derive greater benefit from a vocational degree. It took me 10 phone calls this week to find an electrician who would even respond to my work request, and I’ve yet to even get him to show up. You can’t outsource that value to Indonesia or Lethoso, after all.

Ideologically, if we’re prepared to swallow the moral hazard of yet another social welfare program, a.k.a compelled spending (at the threat of harm, which only the government can do) and all the attendant inefficiencies and market distortions, I think it should at least be accompanied by some strategy that ties back to our national economic wellbeing – a degree in underwater basket weaving not being the same, in this context, as one in STEM (science, technology, engineering and math). 

Finally, let’s not set aside the growing menace of our national spending problem and the increasingly unbearable financial burdens we’re placing upon future generations, which at something like $90,000 of public debt per American, might be thought of as a pretty significant offset to the economic benefits of more education.  At what point, I wonder, do we have “the talk” about how much of America's productivity should rightly be consumed by compelled spending, propped up by a fiat currency and the utter foolishness of modern monetary theory? A column for another day perhaps.

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