Why we should take a critical look at the idea of free college beyond an easy sound bite that allows politicians to attract voters without explaining or solving the problem of why college is so expensive in the first place.
You’ve seen the headlines before: Americans are burdened with a record $1.2 trillion in student loans—with default rates above 10 percent. The overall balances are eye-popping and speak volumes about the cost of education, which continues to rise. College costs are an issue across higher education, but the student debt crisis is focused squarely on two groups of students: those who do not complete college, and those who complete degrees or earn credentials that have little to no value in the labor market. The highest default rates on student loans are actually those who owe the least—less than $5,000. Although there are always exceptions, borrowers with high-debt balances also tend to be very high earners who racked up big balances paying for law school, business school, or medical school. High-cost programs that lead to high-debt balances aren’t tremendously problematic as long as they have a significant return on investment. The big problem is when high tuition doesn’t lead to high earnings—or when programs don’t retain students through to graduation. Refocusing colleges on completion and high-value degrees would pay huge and immediate dividends to students, their families, and our society.
The current hot solution to college affordability: make it free. My colleagues at the Christensen Institute have written fairly extensively on our views on “free college” proposals. Our diagnosis is that the key issue facing higher education is a problematic business model. Subsidizing access to a broken system doesn’t fix the system. Who should pay for education is an important policy question, but it can’t be used to cover up or avoid dealing with the issues of why college is so expensive in the first place. There are real problems in U.S. higher education, and “free college” is an easy sound bite that allows politicians to attract voters without explaining or solving those problems. This critique applies to promises made on the campaign trail, as well as to President Obama’s push to expand the College Promise programs.