In my last post, I considered at some length the pros and cons of tuition-free public higher education, as advocated by some candidates now campaigning to be the next president of our country. After all, the reasoning goes, free tuition has been a long-standing policy in the K-12 sector; why not higher education? Different candidates vary with respect to how generous they are prepared to be, with one advocating a means test and at least a token investment by the students and their families, whereas another wants simply to do away with tuition at public colleges for everyone.

Unfortunately, the candidates are not discussing what particular problem their policy is intended to solve. Surely, in order to be effective, solutions have to derive from a collective agreement on, and understanding of, what problem the solution is intended to remedy – and our presidential candidates appear to have skipped this step.

The presidential election is almost a year away, so we still have time to think more about the problem we want to address before we fall in love with a particular solution.

“Highly Affordable, Minimal Debt or Cost Containment?”

Our country seems to have two positions on higher education, and they are maddeningly incongruent. On the one hand, we embrace the notion that all children deserve to pursue their dreams to their best of their abilities, regardless of the circumstances of their birth. If those dreams include a college education, then we should see to it that the opportunity exists for them to attend college. Over many years, state-supported (i.e., public) universities and colleges have increased in number and size to accommodate a growing population of prospective students. Regrettably, most states have found in recent years that the rapidly increasing costs of supporting these public institutions have outstripped growth in tax revenues, and state appropriations to higher education have been cut drastically. These cuts have, in turn, led to sharp increases in tuition costs, as the public institutions have endeavored to replace lost state appropriation dollars with tuition dollars.

On the other hand, we want an effective and efficient expenditure of tax dollars in every aspect of the states’ budgets, and we are frustrated by the number of poorly prepared students who are entering higher education only to find they must do non-credit remedial work before they can enroll in college-level classes. Underprepared students drop out at disproportionately high rates, such that the six-year graduation rate at public universities hovers around the 50 percent level, and the three-year graduation rate at community colleges is generally less than 30 percent. No company could stay in business if it lost half its product during the manufacturing process. How, then, can we justify spending so much public money when we have such a huge dropout and failure rate at public colleges? (See, for example, “Billions in Pell Dollars Go to Students Who Never Graduate,” Hechinger Report, August 17, 2015.)

These two perspectives have converged in recent years, as tuition prices (and therefore student debt) have increased while graduation rates have not, and as we have struggled, as a nation, to emerge from a crippling recession with associated job loss and flat, or declining, family incomes.

But what problem do we, as a nation, want solved? Dramatically lower college costs? Relief from student debt (and do we mean relief for prospective students, or for graduates – or non-graduates – with existing debt)? Greater opportunities for low- and medium-income families to send their children to college? Higher college graduation rates? How do we address the concern that many children from low-income families have received a K-12 education that is inadequate to meet college admissions standards (see, for example, “Only 1 in 9 South Carolina 11^th Graders ‘Ready” for Success in College, Scores Say,” The State, Oct. 22, 2015)? Are the colleges expected to remediate problems caused by the inadequacies of the K-12 sector? Isn’t asking colleges to make up for K-12 shortcomings just about the most expensive option available – and the one least likely to succeed?

Which of these problems does free tuition solve? Or perhaps we should be asking, what is our most important problem, and what options exist to solve it? Here are three ways of looking at the issue:

1. As a nation, we need more of our young people to have a post-secondary education. Free tuition at public universities is the best way to increase the number of college graduates. Our highest priority should be to make a college education highly affordable. 

   The percentage of adults with a four-year degree has risen only marginally in the U.S. in the past 30 years, but has risen markedly in many other countries, to the point that we have long since lost our primacy in this metric, thereby handicapping our nation’s ability to compete economically on the world stage. While not everyone needs or wants a four-year degree, the proportion of students from the top quartile of family income that graduates from college is several times that of students from the bottom quartile – and this statistic has not changed significantly in decades. Therefore, if more Americans are to obtain a college degree in the future, the increase in enrollment will be primarily students from low-income families. To the extent that high cost is the reason for low rates of college attendance among students from low-income families, then free public college tuition may be a reasonable option. But is free public tuition the best way to increase rates of attendance of low- and middle-income families? Might the estimated $70 billion annual cost of free tuition at public colleges be better spent on increasing the size and number of Pell Grants, for example? (At a total cost of just over $30 billion, the Pell Grant program currently provides up to $5,775 annually to more than 9 million qualifying students – but the average grant meets only about 30 percent of the average costs at public institutions. Meeting full costs for Pell-eligible students would cost less than providing tuition-free public higher education for everyone, and it would direct the funds to students with demonstrated need.)

2. Higher education is much more expensive today, in both absolute and relative terms, than at any time in the past. The consequence has been a dramatic increase in both the number of students graduating with debt, and in the amount of debt per student. High student debt slows down the national economy. Our highest priority should be to reduce student debt.
   
   We tend to see debt as inherently a bad thing. But Americans have long relied on borrowed money to acquire homes, and collectively we have several trillions of dollars in mortgage debt – but while we pay close attention to mortgage interest rates, we don’t worry much about the debt itself, because we see the investment value in buying a home. Student debt is a much more recent phenomenon, and the fact that it now totals $1.2 trillion has caused no end of hand wringing by politicians and the media. But in strictly economic terms, borrowing to receive a college degree is actually a better investment than borrowing to buy a house – the differential in earnings between college graduates and high school graduates is such that the average student loan can easily be repaid from the differential in monthly earnings, and still leave the college graduate ahead financially. And of course the ultimate irony is that Americans readily take out car loans to acquire commodities that, from day one, decline in value, whereas homes and college degrees are almost always investments that increase in value. Yet we are more concerned about the $1.2 trillion in student debt than we are the $1+ trillion in car loans – because the first is relatively new, whereas the second is a long-standing tradition. But to the extent that fear of debt deters some high school graduates from attending college, then free tuition at public universities may be sound policy. Of course, a Pell Grant program that met a higher proportion of actual need – or even full need – would be more efficient and less expensive, because the benefits would be limited to those students with actual need – but the most popular proposals from politicians are those where everyone receives a benefit. Will a politician who promotes a value for some receive support from those who do not benefit? Most politicians would like to avoid asking that question, and that is why they advocate for a chicken in every pot, not just in some pots.

3. Free tuition at public universities would eliminate the problem of rapidly escalating higher education costs, because the public institutions would be forced to operate within whatever appropriation they receive, and private colleges would have to constrain their cost increases or risk becoming so much more expensive than the publics that they would lose enrollment. Our highest priority should be to constrain the growth of college operating budgets.
   
   Not many people are talking about it, but one consequence of free tuition at public universities would be that, over time, universities would have fewer dollars per student. It is inconceivable that state or federal appropriations to public universities would keep pace with the pressures that increase the operating costs of higher education institutions. To date, colleges and universities have been passing these cost drivers on to the students in the form of annual tuition increases. To be sure, many people would see the failure to increase state appropriations as a good thing, because there is widespread anger that colleges – public and private – have, in the mind of the public, done such a poor job of managing their costs. We continue to hear references to “frills,” and to a “country club atmosphere,” with climbing walls being the primary object of ridicule. (In actuality, the costs of climbing walls pale in comparison to the millions of dollars public universities transfer from tuition dollars to their athletics departments to support obscenely expensive Division I sports programs – but almost no one wants to see their football program go away, regardless of the cost. See, for example, “Small Crowds, Big Subsidy for UB Sports,” The Buffalo News, Nov. 28, 2015, that reports a $24 million annual transfer from student fees and general operating funds to the athletics budget of the University of Buffalo.) But in the spirit of “no good deed goes unpunished,” capping costs at public colleges would result in economies that few would wish to see – larger classes; fewer permanent faculty; more reliance on online instruction; more credit for work experience or credits earned in high school – all mechanisms that reduce the cost of a college degree by reducing its current value. Just as some states have increased high school graduation rates by weakening academic standards (thereby reducing the actual value and significance of the diploma), public colleges would be forced to follow suit. This isn’t the outcome intended by a policy of free tuition at public universities, of course, but it will almost certainly happen. Sadly, this is an outcome where everyone would suffer, and no one would benefit. The law of unintended consequences raises its ugly head once again.

So the bottom line is that the creation of tuition-free public universities would be an expensive and inefficient way of increasing college attendance of low- and middle-income students, and it would risk cheapening the value of a university degree. Increasing Pell Grants to a level where they cover most of the costs of a public university education is less expensive, more efficient (because this solution doesn’t subsidize high-income students that have no financial need), and it doesn’t risk dumbing down a college education.

Next week, Part 3: Is the primary purpose of college to prepare young people to get a good job, or is it for them to have a great life?

I have worked as a higher education instructor, researcher and administrator for more than four decades. Over that span, I’ve seen many presidential campaigns, and in almost every case, higher education has not been a plank in the platform of either of the major parties. Those of us in the groves of academe may have been ignored by presidential candidates in the past, but at least we knew that we would not be troubled by them.

Ah, for the good old days!

This year, higher education seems to be a part of every candidate’s agenda. (See, for example, “Punch Lines Versus Polish on Iowa Trail,” The New York Times, Jan. 1, 2016.) The Democratic candidates are focused on making college far more affordable – even tuition-free in the mind of at least one candidate. The Republican candidates are focused on affordability as well, but with much greater emphasis on the need for institutions to reduce their prices and/or the need for Washington to reduce federal financial aid – since some argue that it is the easy availability of federal grants and subsidized loans that permitted colleges to raise their prices so much in the first place (although there are few studies that support that contention, and many that refute it). Finally, at least one candidate is focused on “practical” education (“we need more welders and less [sic] philosophers,” “In GOP Debate, Rubio Again Criticizes Philosophy,” Inside Higher Ed, Nov. 11, 2015).

As the political primaries take place, with the inevitable coalescing behind a single candidate in each major party, it will be interesting to see how these various ideas play out: How will each of them be received by the American public, and which one will emerge as the most important?

Lost in the sound bites from the candidates is the fact that these ideas are not discrete, but rather are very much interrelated. However, before we discuss how they interrelate, let us first look at them individually.

“College for Free (Sort Of)”

In several previous posts, I addressed the angst felt by students and their parents as they confront the reality of today’s posted prices for tuition and other college costs, and the likelihood of the family’s having to assume substantial debt to pay for college. Further increasing their concern are the many articles and stories in the media that focus on individuals with student loan debts of more than $100,000, and the consequences these people face in trying to become financially independent with such high levels of student loan debt. There is no question that a politician who advocates for sharply reduced (or free) tuition, or educational debt relief, will find broad support from those soon to enter college, or from those who have graduated with substantial debt.

But we should be skeptical about quick fixes to complex problems that have arisen over long stretches of time. Consider the following:

• The first public colleges and universities in America date to 1790; many more were created as a consequence of the Morrill Act of 1862. The idea of highly subsidized public higher education has been around for a long time, and the number of institutions (and the number of students served) has increased dramatically over the past two centuries. But since about 1980, most states have greatly reduced their subsidies (especially during the last decade), and, to make up for lost state support, public colleges and universities have significantly increased their prices, making public higher education much more expensive (as a proportion of median family income) than at any previous time in our nation’s history. The point is, pricey public higher education is a very recent phenomenon, largely caused by decisions at the state level to cut public funding for higher education. Democratic presidential candidates propose either direct federal support, or mechanisms to “encourage” states to make the funding of their public colleges a higher priority, or lose federal dollars. Is this a wise strategy?

• The relative unaffordability of public higher education is far more true for the flagship state universities than it is for community colleges. Low-income students are generally eligible today for Pell Grants that fully cover the costs of tuition and books at almost all community colleges. Thus, for these students, college is already free – and community colleges are designed, in number and location, to be within commuting distance of a very large percentage of the American public, thereby avoiding the additional costs associated with on-campus room and board. I don’t mean to suggest that it is easy for low-income people to earn a college degree. Many have to work while in school to pay for living expenses – and community colleges generally do not offer four-year degrees (although this is changing rapidly, because of collaborations with four-year public institutions that permit students to stay at the community college while earning their four-year degree). But it is far from certain that tuition-free public universities would see a dramatic increase in their enrollment of low-income students, because these students will find that the remaining costs associated with room and board, books, fees and living expenses still would render the public institutions unaffordable.

• It is important to recognize that there is no such thing as ”free tuition.” What the candidates are suggesting is a transfer of the costs of public higher education, in whole or in part, to the American taxpayers. That is arguably a good thing, insofar as it returns us to the situation that existed 40 years ago, when public institutions received very large subsidies from the state. Some presidential candidates have said that we, as a country, should be thinking about publicly supported higher education in the same way as we now think about publicly supported K-12 education – as an investment our society makes in its own future. But the decision by the states to have publicly supported K-12 education was made over an 80-year period (from the time Massachusetts adopted the practice, before the Civil War, until Mississippi agreed, in the early years of the 20^th century). Surely a decision to have the taxpayers on the hook for paying the costs of tuition for students in public colleges and universities deserves a longer debate than the time allowed in a single presidential campaign.

• And there is the practical aspect of exactly what is the taxpayer paying for? Tuition alone? Fees? Books? Room and board? Miscellaneous living expenses? Will prospective students need to demonstrate some level of academic proficiency? (The large majority of students who begin community college fail to receive a degree, and almost half of the students who start at a four-year public institution fail to receive a degree within six years. Should the American public support programs with such a high failure rate?)One might reasonably assume that underlying idea behind free tuition is to create a more level playing field, such that a larger number of low-income students will enroll and ultimately receive a college degree. But unless the lower-income students receive a far better K-12 education than most now receive, they will likely find themselves still academically ineligible for admission to most four-year public universities.

• Perhaps we should consider using a means test to determine who would be eligible for free tuition. At present, students from high-income families are far more likely to attend college than are students from low-income families. In fact, the percentage of low-income high school graduates entering college actually fell by 10 percent between 2008 and 2013 (“Study Finds Drop in Percentage of Low-income Students Enrolling in College,” Inside Higher Ed, 25, 2015). But because affluent students are not eligible for need-based institutional aid, they currently pay significantly more than students from low-income families. Are presidential candidates advocating that students from families with high incomes should pay no tuition – especially given that some of the tax dollars that would support free tuition would come from people with lower incomes and no college education themselves? Is that sound policy?

• Finally, the absence of tuition at public universities will draw students away from private colleges and universities that will receive no taxpayer support. A significant fraction of the private colleges are likely to close as a consequence, meaning a migration of their students into the public sector – and that will require still more taxpayer dollars not just to cover the additional tuition costs for these students, but also to build more classrooms and laboratories and to hire more faculty and staff.

In summary, we have to be wary of the law of unintended consequences when we listen to politicians’ ideas. There is, as we have long been reminded, no such thing as a free lunch – and there is also no such thing as “free” tuition. (See also “Free Tuition Is Not the Answer,” The New York Times, Nov. 30, 2015.)

Next week, Part 2: College for some, college for many, or college for all?