16307452547_40cc3337ea_kI happened to watch Fareed Zakaria GPS on CNN this morning (apparently Meet the Press was pre-empted locally in Houston by various sporting events) and caught a story about a proposal from Vermont Senator and Democratic candidate for President Bernie Sanders to provide a free college education to all.  Sounds great, right?  No more student loans, an increasingly educated electorate, and a much more competitive domestic work force.  What’s not to love?

Well, the cost for one.  As the story noted, the cost of a college education in the U.S. has skyrocketed in recent years, and it’s not solely an issue with public colleges.  When I started college at the University of St. Thomas in Houston in 1999, one credit hour was $390, and there were very few additional fees charged to me.  Today, one credit hour at UST comes in at $970 per credit hour.  That’s a staggering 148.7% increase in tuition in 16 years.  If we adjust the increase for inflation based on CPI, that’s a 75% increase in tuition ($970 in 2015 is equivalent to $683.02 in 1999 dollars).

Let’s examine the question of free college from a non-partisan perspective and determine what it would take in order to make it happen, and whether it’s a good idea.  Ultimately, it’s a question of whether the cost (which is going to be substantial) is worth the potential benefits.

What would it take to make college free?

Let’s start by examining what it would realistically take to fund the cost of college for everyone in college today (we’ll get to the question of adjusting admissions numbers in a moment).  The National Center for Education Statistics reports that for 2011-2012 (the latest year available) U.S. colleges and universities took in $65 billion in tuition and fees.  Now, if you look at the average increase for the most recent years, revenues increased by approximately $5 billion each year.  So that would put us around $85 billion (assuming a linear increase, which is unlikely) in tuition and fee revenue for the 2015-2016 school year.

As large of an expenditure as it is, it would represent only 4.6% of the projected expenditures under the 2015 federal budget, with most of the usual suspects coming in ahead, such as Medicare, Medicaid, Social Security, Defense and even interest payments costing more.  Yet, that is still a massive expenditure that would only worsen our budget deficit, which is projected to be $430 billion for fiscal year 2015.

Keep in mind, however, that eliminating the expense of college for someone graduating from high school would likely cause a dramatic increase in demand for college.  It’s likely, therefore, that the total cost of this program would rise dramatically.  Also, with costs eliminated, the last remaining market forces forcing colleges to keep costs in check would be eliminated.  That’s a recipe for disaster.

How can college costs be controlled?

The only way to ratchet back those expenditures would be to control the expense of college.  With the cost of college skyrocketing in recent years, what has to change to not only cease that increase, but actually reduce the cost of college?

Let’s start by looking to a major economy that has made college free already: Germany.

Slate published an excellent article last year detailing the differences in college life in Germany compared to the United States.  To begin with, higher education in Germany is a no-frills proposition.  No fancy student unions.  No movie theaters.  No major college sports.  What little housing that exists is spartan compared to dormitories in the United States.  Most students in Germany, as it turns out, commute to college from home.

The very format of the educational experience in Germany is very different as well.  Expecting those low faculty-to-student ratios of elite colleges in the U.S.?  No dice.  Expect to take most classes with 200-300 of your classmates.  Need the help of an academic adviser to decide which courses to take?  Too bad, you have to figure it out on your own.

So then who thrives in such an environment?  Germans would likely argue that those who were meant to succeed in this environment do just fine.  The rest should seriously consider a different educational path.  In fact, the German secondary educational system begins to segment students by abilities somewhere between the ages of 10 and 12.  Students with a high aptitude will find themselves admitted to a Gymnasium, which tend to be analogous to U.S. collegiate prep schools.  Those who don’t do so well will find themselves in one of the various forms of vocational schools.

Why is this relevant to the U.S. higher education system?  All too often, we funnel most students into a traditional university, whether they are prepared for it or not.  The reality is that people have varying aptitudes and skill sets.  Not everyone is suited for a traditional four-year university education.  Some may perform better in a vocational program.  Others may be better suited to an apprenticeship program that allows them to learn a skill while earning a wage.  Germans long ago learned that when it comes to education, one size does not fit all.

Why is this structural difference important?  Too many students are spending a year or two in four-year universities and then dropping out due to poor performance.  Even if they do make it through the program, they find it difficult to find a job because there are multitudes of people out there with the exact same degree and few discernible job skills right out of college.  This is not only a waste of their money, but also a waste of scholarship money and other public assistance.  It also increases the cost for everyone else because there are only so many seats in institutes of higher education.  When the demand rises, the price rises as well.  There’s a reason why someone who attended in college 40 years ago paid much less – the demand for those seats was much lower.  Today, with the easy availability of federal loans and the pressure to pursue a traditional higher educational experience, the demand is much higher.

Instead, if more students were encouraged to pursue a post-secondary educational path that was more appropriate to their skill set, they would be much more likely to succeed and would spend much less money doing so.  It would also ease some of the shortages in certain fields such as welding, nursing, electrical work, carpentry, mechanical maintenance, etc.

So how does this affect the feasibility of Sanders’ plan?

If Sen. Sanders wants to pursue a plan where higher education is made available at no cost, he needs to be prepared to address many of the cost issues in our public universities.  Admissions processes must be radically changed.  High school counselors must be prepared to better inventory the skills and aptitudes of their students and direct them to a post-secondary education or training program best suited to their skills.  Once those issues are addressed, and the overall costs of higher education are addressed, not only will it make his proposal more affordable, the structural changes to the job market and the resulting benefits for the economy (and, therefore, tax revenues) could make such a program self-sustaining.

Until then, however, the Sanders proposal for free college is little more than a pipe dream.

 

 

Written by Bobby Warren