Stephen
Kershnar
Andrew Cuomo’s Excelsior Scholarship:
Stupidity on Parade
Dunkirk-Fredonia Observer
April
1, 2017
Andrew Cuomo’s Excelsior Scholarship
makes college tuition free for the middle class. This is an embarrassingly
stupid idea. Full disclosure: I am a professor at a SUNY university.
In the last election, presidential
candidates Bernie Sanders and Hillary Clinton put forth plans to make college
free. Cuomo jumped on the bandwagon, making state colleges and universities (government
schools) tuition free for the middle class. Here is how Cuomo’s plan works. New
York taxpayers will pay $163 million to make college tuition free at state
colleges for those students who families make up to $100,000 in 2017. This will
rise to $125,000 in two years. Tuition is roughly $6,500 a year. This does not
cover room, board, and fees. These cost roughly $14,000 per year. The
scholarship only applies to students who go to school full-time, graduate in
four years, and stay in the state for four years after graduation. If a student
doesn’t stay, the scholarship becomes a loan.
Writing in The Washington Post, the Urban Institute’s Matthew Chingos points
out that this plan does nothing for the poor. Chingos points out that Cuomo’s
plan (unlike Sanders’ and Clinton’s plans) covers the difference between
tuition and the student’s existing financial aid (read: college welfare). Poor
students who would have gotten more than $11,000 in education-welfare (via Pell
Grants and a state specific program), in effect get $0. They still have to come
up with roughly $10,000 to cover room and board. In contrast, students from
middle class families making $75,000-$110,000 will in effect get roughly
$6,000. Cuomo thus decided to give the middle class $6,000 and the poor $0. He could
have targeted the money toward the poor via the Tuition Assistance Program
(TAP) or other programs, but decided that the middle class needed the welfare
more.
The taxpayers are getting hosed on
this and it will get worse. Anyone who thinks that the poor will not eventually
be taken care of has no idea how leftist, especially minority, politicians
think and vote. The middle class will shortly begin screaming like stuck pigs that
room and board need to be covered and that the four-year requirement must be
scrapped and politicians will accommodate them. Predictably, then, the cost of
this program will explode.
As
the state increasingly fails to cover the cost of forgone tuition, state
colleges will ratchet up housing and food costs as a form of backdoor tuition. Grade
inflation will also get worse. Professors increasingly won’t endanger or flunk
a student knowing that this could cost him his scholarship.
The poor and especially minority
students will not get this benefit or, if they do, will have to pay it back. The New York Times’ David Brooks points
out that most poor, and especially minority, students do not graduate in four
years. In fact, he notes, fewer than half of black and Hispanic college
students at state colleges graduate in six years. They will thus not get the
scholarship or be victimized by the scholarships becoming loans and backdoor
tuition.
The higher education system and the
tax burden in New York will worsen. Private colleges will not be able to
compete against free colleges and a significant number will shrink or close.
This will reduce competition and thereby hurt the overall system of higher
education. It will also redistribute students into government schools, thereby
driving up taxes. This will occur despite the fact that New Yorkers already pay
the highest taxes in the country (see Tax Foundation).
It is unclear whether it will even benefit
the middle class students who receive the scholarship. The scholarship requires
that they live in New York for four years after graduating. On average, this
will harm their ability to move to jobs that provide the most opportunity and pay
the most. Over a career, it is likely to reduce to lifetime earnings more than $26,000
($6,500 welfare per year x 4 years). Instead, this is a protectionist measure
that like other protectionist measures redistributes money from one group to
another and does so inefficiently.
Also,
as Brooks points out (citing Northwestern University’s Chenny Ng), studies show
that making education free results in students working less hard and being less
likely to graduate. It is strange how paying for college makes students work
more likely to graduate.
The most disturbing aspect of the
program, though, is not that it makes things worse for the poor, minorities,
taxpayers, higher education, and, likely, middle class beneficiaries, it is its
unfairness. Over a lifetime, Georgetown University’s Anthony Carnevale and
colleagues found that a college degree adds roughly $1 million in lifetime
earnings over a high school diploma. A professional degree adds $2.3 million. There
is nothing fair, just, or caring about using government force to take taxpayers’
money and give it to middle class families whose children go to college,
especially when these children will make lot more money than those who don’t go.
This
is a disgusting redistribution of wealth, much of which will go to the upper
middle class. Consider, for example, Fredonia’s student body. It tends
to come from the upper middle class with a median family income of $97,000 and
with 4 out of 10 coming from the top 20% of family incomes (2013 numbers from The New York Times).
This
disgusting redistribution to the upper middle class is made worse by the fact
that the money is given away in a haphazard manner. If the state really cared
about benefitting New Yorkers, it would give scholarships to those majoring in
engineering, computer science, and finance and not to those majoring in
elementary education, fine art, and drama because the former majors’ skills are
so much more valuable.
It
would also require graduates work full-time for the four-year period after
graduation. In addition, it would exclude those with low SAT scores and low
high school grade point averages.
Even if
a college degree doesn’t add anything to an individual’s productivity, but
merely signals higher intelligence or better work habits, there is still no
reason to take more money from people who are shoulder the most crushing tax
burden in the country and give it to adults with these competitive advantages. Andrew