Why “Free College” is a Terrible Idea

My work for the James G. Martin Center for Academic Renewal brings me into contact with many books relating to higher education. Some are good and some are bad, but even a bad book can be useful by helping to clarify your thinking.

The bad book in question is After the Ivory Tower Falls by Will Bunch, a writer for the Philadelphia Inquirer. He is a through-and-through “progressive” who sees great flaws in our higher education system, and who argues it is a “public good” that ought to be made an entitlement for all Americans — the “free college” idea famously championed by Senator Bernie Sanders and other leftists.

Bunch writes, “Today, the principle of universal higher education demands thinking outside the confining box of our current web of institutions and programs. Instead, the US body politic should agree that government has an obligation to help young Americans navigate the perilous straits that run between high school and entering adulthood, with an ambitious ‘new deal’ that offers tuition- and debt-free traditional university education to those who desire one, but different kinds of opportunities for those seeking a different path.”

Bunch builds his case for a college entitlement paid for by government around an array of bad experiences by Americans who have gone to college, racked up a lot of debt, and cannot afford to pay back their loans because their degrees didn’t land them jobs that pay well enough. This has certainly been a growing problem for decades.

I found little to like in the book, which is loaded with the author’s contempt for those who don’t share his views. But what is wrong with his plan?

First, “free college” would completely sever the financial connection between the seller (colleges) and the customer (students). With the full expense of college falling on third parties (the taxpayers), students would no longer have any incentive to economize. Neither would colleges. As former Harvard University president Derek Bok has written, “College presidents share a common trait with gambling addicts and exiled royalty – there is never enough money.” If college presidents no longer have to worry about losing students because their schools’ tuition and fees are too high, the only remaining constraint on their spending would be how much money they can wheedle out of Uncle Sam. With “free college,” still more of our limited resources would be drawn into higher education, but the cost would be spread out over the taxpaying public.

Second, people usually don’t put as much care or effort into things they get for free as they do with things they are paying for. When it comes to college studies, those with a monetary stake in them will predictably bear down much more than will those who are paying nothing from their own pockets. Over the decades, we have seen a sharp decline in the number of hours college students put into their coursework (see this study by Babcock and Marks), and it’s easy to imagine a further decline in effort by students if they are attending college for free.

In her 2004 paper “The Incentive Effects of Higher Education Subsidies on Student Effort,” New York Federal Reserve economist Aysegul Sahin made the case that the less they have to pay, the less students work. She wrote: “I find that although subsidizing tuition increases enrollment rates, it reduces student effort. This follows from the fact that a high-subsidy, low-tuition policy causes an increase in the percentage of less able and less highly motivated college graduates. Additionally—and potentially more important—all students, even the more highly motivated ones, respond to lower tuition levels by decreasing their effort levels. This study adds to the literature on the enrollment effects of low-tuition policies by demonstrating how high-subsidy, low-tuition policies have both disincentive effects on students’ study time, and adverse effects on human capital accumulation.”

Another adverse consequence of free college would be a further degradation of the college curriculum. In the days before the government started to subsidize college with grants and easy loans, most schools had (and prided themselves on) a demanding curriculum that required students to learn about many aspects of Western Civilization (its literature, fine arts, history, and philosophical foundations), as well as some rigorous math and science courses. Over the decades, however, most schools have relaxed their standards, making formerly demanding courses optional and permitting a profusion of trendy, popular, and often politically charged courses.

That trend will accelerate once college becomes “free.” Radical professors will press for more of the courses they love to teach (courses with a high percentage of their opinions and grievances and a low percentage of knowledge), and administrators will have even less reason to resist than they do today. Many students really don’t want to waste their time on courses that won’t be of any economic value to them, and politicized courses often have small enrollments. But if we have “free college,” administrators will have less reason to be concerned about courses with low enrollments. Thus, the loss of fiscal discipline will also adversely affect our already crumbling college curriculum.

Still another bad effect of free college would be to undermine competition in higher education. Since the government will only support established, approved institutions, newcomers will have a hard time. Unless and until they can jump through the bureaucratic hoops needed to qualify for federal funding, new schools will have to charge students tuition and fees, in competition with institutions that are free. While it’s possible that a few might be able to survive under those circumstances, there will certainly be far fewer new entrants into the market. American higher education badly needs the creative destruction of competition, but if we make it free, such competition will be suppressed, if it can exist at all.

Finally, under “free college,” we can expect more credential inflation — that is, demands from employers that applicants have college credentials if they want to be considered.

The advent of federal student aid programs led to a huge increase in the percentage of Americans getting college degrees. Employers reacted to that by deciding, for a steadily increasing number of jobs, that they would not bother with presumably less intelligent and trainable high school graduates when they could have their pick of college graduates. Here’s an example: A man I know has made his career in the insurance industry, which he entered right after high school in the early 1970s. He says that today, he would be deemed unqualified for the job he has been doing well for decades because he doesn’t have the college credential his company now demands. Credential inflation has placed a huge number of jobs off limits to people who haven’t been through college, even though they could readily learn to do them.

Once college is free, even more people will choose it, thereby worsening the credential inflation problem.

In the end, if the US were to embrace the idea that college should be an entitlement, the results would be very undesirable. More resources would be drawn into providing college education, and we’d get less educational value in return.

Ironically, Bunch begins his book with a family story. His grandmother successfully ran a for-profit college for women in Illinois in the 1950s and 60s, before the era of federal subsidies. She had to compete to attract students, and could only get them by offering educational programs that students thought were worth the expense. That’s how commercial transactions work, and in nearly every instance, the parties to the deal are content with the deal. They would not have accepted its terms were they not. It’s a national tragedy that we ever got away from this in education.

Leftists often say that education is different and should somehow be above the “grubby” world of commerce and profits. But there is nothing grubby about students and schools making contracts for services. Doing so compels both to pay close attention to the costs and benefits. The horror stories Bunch relies on wouldn’t have occurred if America had stayed with the discipline of the market in education. His free college prescription would take us in precisely the wrong direction.

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