On the surface, the notion of “free college for all” sounds like a good idea, especially to progressives. What supporters of tuition-free college might not understand is that transitioning from the current U.S. system of financing higher education to one where the student pays nothing would thoroughly disrupt a workable system that gives according to need and charges according to ability to pay.
The current approach has its roots in the early 1970s, when higher education officials — with strong support from the Nixon, Ford and Carter administrations, and most state governments — long ago subscribed to the notion that every able student should be able to afford college. This was accomplished through financial aid that met each student’s needs through a combination of grants, loans and work-study programs provided by the educational institution, private grants, and federal and state governments.
In the years since the big federal aid programs were put in place, state and especially federal financial aid has failed to keep pace with ever-rising college costs, causing the burden of providing sufficient aid to increasingly fall on colleges.
The result is a sort of Catch-22 for colleges, since the only way to come up with more money for financial aid is to raise tuition, which of course increases student need. State support for financial aid also has been in sharp decline since the Great Recession hit in 2008, exacerbating the dilemma for public colleges. At the federal level, the increasing demand for more student aid also is being met primarily by loans.
Today, students from relatively affluent families often don’t qualify for aid, most students from middle-income families must resort to loans to afford college, and poor students primarily pay for college through financial aid.
For those looking for a socialistic approach, that comes pretty close.
In private colleges, much of the financial aid for poor students comes from tuition paid by better-off families who must cover the full price of their child’s education, and from the middle-class families who might receive a modest amount of aid and rely on loans to make up the difference. This also helps inflate college costs because most colleges have to increase tuition to cover the increasing needs of poor students.
If we were to move from this system to a “free college for all” system, the wealthiest families would receive a huge subsidy, and the burden of paying for it all would fall on all taxpayers, but especially the already-strapped middle class. How socialist would that be?
Some of the problem of financing college could be alleviated merely by tinkering a bit with what we already have.
The federal loan program is a disaster, burdening middle class and even some poor students with massive debt. More than a million people default on their student loans each year. With such a huge default rate, the loan programs are not really that cost-effective, so why not convert most of them into grant programs?
A portion of the funds currently being invested in loans could also be diverted to expand federal work-study programs, which partially fund jobs for students with financial need. About half of the nation’s 3,000 colleges and universities offered work-study to more than 100 recipients last year. The university benefits by being able to stretch its workforce dollars while students benefit financially — and can feel more connected to their colleges.
Fiscal conservatives would object to the increased costs of these changes, but converting financial aid from loans to grants would constitute a significant investment in America’s productivity and eliminate much of the costs and bureaucracy associated with loan programs.
Bankers might also object strongly to such a change because they would be losing a significant revenue stream — the total student loan debt in the U.S. tops $1.5 trillion. The average individual student loan debt is more than $31,000 and takes 10 to 30 years to pay off. That’s a heavy burden to take into the working world.
The toughest education-financing problem could well be at the state level — especially among state governments controlled by Republicans that have drastically reduced state financial aid support, which in turn is forcing public colleges to regularly increase tuition. In cases where tuition increases are not permitted, destructive cuts have been made to student support services, academic programs and other vital offerings.
American higher education has long been the envy of the world, but polls show international enrollment has been falling for the last two years. It stands to reason that the overt xenophobia being exhibited by President Trump is partly to blame as well as the high cost of college tuition in the U.S., where tuition and fees at top-tier universities can add up to about $60,000 a year.
How students manage to pay the high costs of college has become a major issue of concern among Democratic presidential candidates. “Free college for all” may have a promising ring to it, but given the complexities of student financial aid it would be a mistake to judge the efficacy of a proposal for major change in college financing on the basis of a simplistic label like “progressive.”
Alexander Astin is the founding director of UCLA’s Higher Education Research Institute. His latest book is “Are You Smart Enough? How Colleges’ Obsession With Smartness Shortchanges Students.”