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?

In Part 1, I argued that the proper way of determining whether college was worth the investment was first to examine four distinct concerns—high cost, high debt, scarce jobs, and low graduation rates.  Last week, in part 2, we looked at the first of these concerns: has college simply become too expensive for many families? This week, we’ll examine the second concern:

There is a student debt “bubble” that is preventing young college graduates from buying homes, starting families, and thereby acting as a drain on the entire economy.

This topic has been the subject of much hand wringing in recent months (National Public Radio, “Senator Warns of a Student Loan Bubble,” March 27, 2014). It’s not enough, the critics say, that colleges have become too expensive. No, even worse, their extravagance and self-indulgence is crippling the American economy! (The New York Times, “How Student Debt May Be Stunting the Economy,” May 15, 2014) Young college graduates, collapsing under the weight of huge educational debt, are living in a kind of indentured servitude, doomed, it would seem, to forgo having a family or purchasing a home, possibly forever! (The Boston Globe, "Crippling Debt Defers Graduates' Dreams," August 24, 2013, a report subtitled “Thousands of recent college graduates with loans to pay off are putting their plans for better lives on hold,” and focused on four graduates, three of whom accumulated more than $70,000 in debt acquiring undergraduate degrees, placing them in the top six or seven percent of all students graduating with debt.)

Well, not so fast. This is a topic awash in lurid commentary, coupled with the sort of breathless tone generally reserved for describing an unfolding natural disaster, or the potentially winning putt on the 18^th green at the Masters.

Let’s take this statement apart. How serious is the student debt issue? For a tiny fraction of college graduates—those with high five-figure or even low six-figure debt—it is a serious matter indeed. But however real and daunting those stories may be, they are not representative of the situation facing the great majority of college graduates.

First, about one-third of college graduates have no debt at all (Council of Independent Colleges, "Student Debt: Myths and Facts," April 2014).

Second, of those who have debt, the median is slightly under $30,000—not much more than the price of a new car—and median debt per bachelor’s degree recipient (that is, including those without debt) is approximately $16,000 (Council of Independent Colleges, “Student Debt:  Myths and Facts,” April 2014).

Third, more than 65 percent of all graduates have debt of less than $10,000 (The Chronicle of Higher Education, “The Miseducation of America,” June 19, 2014).

Fourth, it is important to distinguish debt acquired to obtain an undergraduate degree from debt accumulated for a graduate or professional degree. Not surprisingly, people who have borrowed both at the undergraduate level and at the graduate (or professional) level often have very high debt levels—but their anticipated income is also significantly higher than the income generally earned by a person with just an undergraduate degree.

Fifth, the fraction of income devoted to loan payments by the average person with student debt has not changed significantly over the past 20 years. It was 3.5 percent in 1992, 4.3 percent in 1998, and 4 percent in 2010 (The New York Times, "The Reality of Student Debt is Different from the Cliches," June 24, 2014).

But total student debt is over $1 trillion and climbing! It’s more than all credit card debt combined! Isn’t this a really serious situation?

Let’s put this issue into perspective. First, one important driver of the total amount of student debt is the fact that there are more students in college today than there were a decade or two ago. 

Second, although a larger percentage of students are taking out debt than they did a decade ago, some of the growth in debt is the result of inflation.  The only fair way of looking at the growth of debt over time is to adjust it for inflation. When we examine the growth of debt in inflation-adjusted dollars, the increase is much less dramatic.

Third, paying off the debt is not the onerous process so often described.  The monthly payment on a debt of $30,000 is $350—not a trivial sum, but just nine percent of the average salary of $45,000 of a college graduate aged 25 to 34 (The New York Times, "Finding Shock Absorbers for Student Debt," June 14, 2014). Given the difference in income between a high school graduate and a college graduate (a topic to be discussed in another installment of this blog post), a payment of this amount seems manageable. And concern over increases in the interest rate charged by the federal government on student loans seems overwrought:  the recent increase to 4.66 percent (from the previous 3.86 percent) amounts to just $4 more per month per $10,000 of loans—unwelcome, to be sure, but hardly crippling.

A very recent analysis of this topic (Brown Center on Education Policy at Brookings, “Is a Student Loan Crisis on the Horizon?” June 2014) concluded that a quarter of the overall increase in student debt was from an increase in the number of students taking graduate degrees—and that the increase in lifetime earnings more than kept pace with rising debt loads, and therefore “the reality of student loans may not be as dire as many commentators fear.”

A subsequent commentary on the Brookings report by Pulitzer Prize-winning journalist David Leonhardt (The New York Times, “The Reality of Student Debt Is Different from the Clichés,” June 24, 2014) should have put concerns of an impending student loan “bubble” to rest—but no such luck. It’s more fun to talk about doom and gloom, and so, after a pause of a day or two, the pundits were right back at it, predicting the end of civilization as we know it, as a consequence of rising levels of student debt.

To be fair, there is one area where the concern over student debt is justified. The worst case scenario arises when a student takes on debt, but does not graduate. That individual will not reap the economic benefits that come with an undergraduate degree, and will instead have to pay back the debt from the much lower salary earned by those with just a high school diploma. I’ll deal with this very important subject in the next blog post.