Stephen
Kershnar
Free Community College? Too much
college?
Dunkirk-Fredonia Observer
January
19, 2015
President
Obama has proposed making community college free. This is a bad idea and it is
worth considering whether the state should be in the business of subsidizing
higher education at all, let alone at the current high level.
Obama’s
proposal is intended to benefit 9 million students. His administration claims
that when implemented, the typical full-time community college student would
save $3,800 per year, although the student would have to maintain a C+ average
to get the freebie. It further claims that it would cost $60 billion over 10
years. The vast cost overruns of the major federal programs suggest that the
number is much higher. Obama’s proposal is to have the federal government pick
up 75% of the tab, the states pay the rest.
Why
is this a bad idea? First, community colleges are failure mills. Neal McCluskey
of the Cato Institute points out that only 20% of first-time, full-time
students at community college students get their degree in three years and it
is a two-year degree. It is unlikely that making students invest even less in
their education will make them invest more time and energy into their studies.
Second,
McCluskey argues that after accounting for grants and scholarships, tuition at
these colleges is already free for many members of families earning less than
$65,000. Thus, we are largely focused here on making community college free for
the middle class and rich. This is hardly a priority.
Third,
writing in The New York Times,
Catherine Rambell points out that tuitions and fees at colleges and
universities have skyrocketed in the last few decades. Since 1985, the price of
these institutions have increased roughly two and a half times faster than that
of consumer goods and far outpaced the exploding price of medical care. Opening
the money spigot will further increase the cost of education, even if it is shifted
from students to taxpayers.
Fourth,
writing in The National Interest,
Kevin James points out that federal funding will undoubtedly lead to increasing
federal control of community colleges. Giving more power to the architects of
Obamacare and their Congressional brethren is just a bad idea.
The
interesting issue is why we subsidize college education at all, let alone community
colleges with large drop-out rates. College is a good deal. Economists Janice
Eberly and Kartik Athreya point out that college graduates earn more than
50-70% more than high school graduates and that money spent on education has a
rate of return roughly twice that of the stock market. Also, as economist Bryan
Caplan points out, a college graduate is 7 times more likely than someone with
only a high school degree to marry a college graduate. Thus, college graduates
often get a sizable marriage bonus. It is unfair to force taxpayers, especially
those who didn’t go to college, to pay for such a good deal. We are talking
real money here. Writing in The New York
Times, Jason Deslisle estimates that the federal government is spending at
a rate of more than a trillion dollars a decade on higher education.
One
defense of subsidizing college is that doing so is necessary to give poor people
equal opportunity. If this were correct, then the state should subsidize the
poor directly through grants and subsidized loans rather than paying for middle
class and rich students. Not only are the latter a large percentage of college
students, they’re an even larger percentage of those who graduate.
There
is also the issue of how much money and opportunity the poor should be given.
They already pay little, if anything, in taxes and often receive free or
subsidized food, housing, medical care, welfare, and K-12 education. Enough
already.
A
second defense of subsidizing college is that education provides benefits to
society, independent of the benefits college graduates themselves receive, and
we want to give students additional incentive to go to school as a way to
provide society with more of these benefits. That is, education has positive
externalities.
If
the extra money put into higher education leads to an explosion in spending by
colleges and universities, then it is unclear whether the extra money will
serve as an incentive for more education. The concern here is that government
subsidies will be diverted to hire new armies of administrators and staff
rather than to lower the price of a college education.
Also,
weaker students traditionally have not graduated at very high rates and
subsidizing them is likely a bad investment both for them and for the
community. If the justification for spending taxpayer money on higher education
is to produce positive externalities, then it should probably be spent on
better students, rather than wasted on those who did poorly in high school and are unlikely to
graduate from college.
There
is also a theoretical issue as to whether education has positive nor negative
effects on the communities (externalities). Economist Bryan Caplan points out
that much of what colleges and universities teach has little relation to the
real world and students often don’t retain much of what they learned. Far too
many students fail to pick up even the critical thinking skills that are
thought to be useful across an array of jobs. On Caplan’s signaling theory,
employers pay more for college students not because they’ve picked up valuable
workplace skills, but rather because a college degree is evidence that such
workers are more productive. The idea is that it signals that, on average, they
have higher IQs, better work ethic, or conform to workplace norms. We should be
hesitant to spend taxpayer money into higher education without being confident the
signaling theory is wrong. Even if it is wrong, we might want to limit taxpayer
subsidies to fields that clearly teach workplace-skills, such as engineering, medicine,
and accounting.
For
those of us who work for public universities, this argument is disturbing,
which is different from saying it’s mistaken.