Think College Is Expensive? Wait Until It’s Free
Higher-education costs have risen every time student aid has been made more generous
Has the time come for free college?
Democrats certainly think so. President Obama called for tuition-free higher education in his State of the Union address in 2015, and it’s already a reality in some form in at least 17 states. Among progressives, support is almost obligatory, so it’s no shock that Democrats who want to challenge President Trump in 2020—Sen. Elizabeth Warren, Rep. Tulsi Gabbard, former San Antonio Mayor Julián Castro and counting—have jumped on the free-tuition bandwagon.
Europe already has a free-college system, and the argument for an American version has a certain logic to it. There’s a strong correlation between higher education and economic prosperity; advanced societies have large numbers of college-educated citizens while poorer countries do not.
On an individual level, people with college degrees typically make more money and experience lower levels of unemployment. During the nadir of the Great Recession, for example, the jobless rate peaked at 10% for all workers but never rose above 5% for those with at least a bachelor’s degree. The unemployment rate last month was just under 4% overall but closer to 2% for college graduates.
The college-for-all crowd maintains that in addition to increasing a person’s earning potential, university experience has positive spillover effects that are important but hard to quantify. College students make new friends and enjoy new experiences. College graduates are better communicators, commit fewer crimes, and supposedly make more-informed political choices. Increased college attendance is also supposed to promote upward mobility and meritocracy—the American dream. The more college graduates, the better, right? And if the college-educated make our society more prosperous in the long run, what’s wrong with increasing government subsidies to cover everyone’s tuition costs?
Well, plenty, according to Richard Vedder, an economic historian at Ohio University whose new book on higher education, “Restoring the Promise,” is due out later this year. It’s a follow-up to his 2004 tome, “Going Broke by Degree,” and it argues that federal subsidies aren’t the solution to rising college costs—quite the opposite.
I called Mr. Vedder this week to get his take on the free-tuition fad. He said college costs have risen whenever student aid was made more generous. He doesn’t expect it to be any different this time. Tuition is only about 20% of the total cost of attending college. If tuition is subsidized, he expects colleges will raise nontuition costs.
“I’ve come out very strongly against free college on a whole variety of grounds,” Mr. Vedder said. “But the most important is that a majority of people going to college are not poor. Even at state universities, a majority of the students are from moderately affluent, upper-middle-class families.”
But doesn’t a college education help lift the prospects of poor students who attend? Sometimes, said Mr. Vedder, but you have to graduate first. “Forty percent of our kids who go to college don’t graduate. We have a tremendous dropout rate, much bigger than the high-school dropout rate. These kids are saddled with a certain amount of debt and their earnings prospects are barely equal to that of a high-school grad.”
Though schools ought to be more discriminating about whom they admit, student financial-assistance programs push them to admit students who are not prepared to succeed. In 1970, about 12% of recent college grads came from the bottom 25% of the income distribution. Today, it’s about 10%. “We’ve had a decline in poor people graduating from college. More poor people are attending, but fewer are graduating. We have not really improved making college a vehicle for achieving the American dream.”
And there’s a strong case that the country is already being flooded with college graduates. Even with an unemployment rate below 4%, the number of college graduates is growing faster than the number of jobs requiring a degree. The Great Recession made the mismatch more salient. According to Mr. Vedder, the U.S. had nearly 50% more employed college graduates than it had jobs requiring a college degree by the second decade of the 21st century. More than 13 million bachelor’s degree holders were working jobs that don’t require one.
As the professor sees it, many people who would be better off with a vocational degree or on-the-job training right out of high school are instead pursuing four-year degrees because tuition subsidies have distorted incentives.
Progressive opinion may be ready for free college, but that doesn’t make it a good idea. College isn’t for everyone, and pretending it is does more harm than good, sticking young adults with massive debt when they could have flourished taking another path. As the professor says, “There’s nothing wrong with being a welder who makes $150,000 a year.”
This piece originally appeared at The Wall Street Journal
This piece originally appeared in The Wall Street Journal