Free Tuition Subsidizes the Rich

By Kevin Carey

Tagged Collegecollege affordabilityDemocratsEducationtuition

Read Mike Konczal on the case for free college.

“Free college” sounds like a great idea. Free high schools and affordable colleges have been pillars of American prosperity for the past century. In building a movement around the issue, Bernie Sanders has tapped into a rich vein of middle-class anxiety and righteous anger over rising tuition and student debt. It’s heartening to see progressives rally to the cause of helping more people afford higher education.

But “free college,” as defined by Sanders, is not the best way to achieve that goal. The Sanders plan is wasteful, unfair, and ultimately undermines the long-term interests of low-income students.

Many arguments for free college begin with the political economy of government funding. Programs like Social Security that provide universal benefits, it is pointed out, are enduringly popular. Programs, like welfare, that only benefit the poor are often embattled and short-changed. Sure, free college benefits rich students who could afford tuition on their own, we are told, but that’s the unavoidable price for getting needy kids into school.

However, this ignores the fact that, unlike Social Security, “college” isn’t a standardized benefit. The value of free college depends greatly on which college you attend. As Matt Chingos of the Urban Institute has found, upper-income students would get a disproportionate share of free college benefits under the Sanders plan, because they disproportionately attend selective public universities that spend more, and that charge more tuition.

Low-income students, by contrast, are more likely to attend community colleges, where tuition is often relatively cheap. Therefore, the dollar value of reducing their tuition to zero is far less. Over one million students enrolled in California Community Colleges are receiving a fee waiver right now. For many students attending two-year schools, the biggest cost of college is not tuition, but room and board, which isn’t explicitly covered by the Sanders plan.

So “free college” isn’t actually like Social Security. It’s like replacing Social Security with a plan that pays the monthly rent or mortgage wherever senior citizens happen to live, with greater subsidies going to people living alone in mansions than to people crowded together in cheap nursing homes.

The Sanders plan also discriminates between public and private colleges. In the popular imagination, private colleges are expensive liberal arts enclaves where affluent kids drive nice cars. In reality, most private colleges are not just for the rich and enroll students from across the economic spectrum.

Tougaloo College, a private, historically black institution in Jackson, Mississippi, where 88 percent of students are poor enough to qualify for the federal Pell Grant, would receive no aid from the Sanders free tuition plan. Neither would Berea College, which specializes in providing low-cost education to first-generation students in Appalachia.

By contrast, the University of Virginia, a technically public flagship institution, where only 12 percent of students receive Pell grants, would likely receive millions of dollars from Sanders. So would the University of Michigan, which has a $10 billion endowment, yet only enrolls 16 percent low-income students in their freshman class.

The Sanders free college plan also limits subsidies to providers of higher education that are, officially, “colleges.” And who decides who gets to be a college? Other colleges. To be an accredited higher education institution, and thus eligible for Sanders’s subsidies, colleges have to be recognized by nonprofit accrediting bodies that are governed and financed by existing colleges.

The anti-competitive nature of this arrangement is obvious; and is one of the main reasons new, innovative colleges haven’t been built to handle the huge surge in new college students over the last three decades. Further entrenching a fixed number of these existing institutions will give change-averse administrators and feckless state legislators even more reason to increase college tuition.

None of this alters the fact that large new federal subsidies are needed, along with major regulatory changes, to wrestle the student debt beast to the ground. An ideal plan would make higher education affordable—but not free— for everyone, at any institution, public or private, that is willing to be held accountable for helping students learn, graduate, and get good jobs. (You can read one plan to accomplish this, from my colleagues at New America, here.)

The Sanders plan was an important step toward building a political movement around society’s obligation to help all students receive a great education. The next, and best, step forward is a plan that, instead, focuses our resources on students who need them most.

Read more about Collegecollege affordabilityDemocratsEducationtuition

Kevin Carey directs the education policy program at New America.

Also by this author

College Savings Plans Shouldn’t Be Tax Shelters for the Rich

Click to

View Comments

blog comments powered by Disqus