Free college tuition for everyone?

by on October 23, 2015 at 12:57 am in Current Affairs, Economics, Education, Uncategorized | Permalink

A few of you have written in to ask what I think of the Clinton plan (NYT link) to dramatically reduce tuition for a four-year college education.  The focal point of the plan is this:

Under the plan, which was outlined by Clinton advisers on Sunday, about $175 billion in grants would go to states that guarantee that students would not have to take out loans to cover tuition at four-year public colleges and universities. In return for the money, states would have to end budget cuts to increase spending over time on higher education, while also working to slow the growth of tuition, though the plan does not require states to cap it.

By the way, here is a more extreme Bernie Sanders plan, closer to free tuition period, though in both cases a variety of details remain murky.

One issue is to debate the social value and externalities associated with a college education, but that would lead us far afield.  Let’s assume that such externalities are present.

A more pressing issue is that community college is already close to de facto free for lower-income individuals, if they piece grants and aid together.  Yet the completion rate at these colleges is at best approaching thirty-eight percent.  The real problems come before college, and encouraging more people to attend four-year colleges is unlikely to do much good.  In any case, here is further evidence that higher subsidies to community college attendance very often do not lead to more actual education.  The same or worse is likely to hold for state universities.

It could be the goal is not “college for more people” but simply to redistribute income to students who otherwise would have debt burdens.  But they, with their above average human capital, are not the most deserving recipients of additional redistribution.  Might a cynic wonder if this is simply a way to reward a constituency which often votes Democratic?  Or a way to make the Republican Congress look like meanies?

The end result of the plan would be price controls on tuition, even though the plan itself does not stipulate that.  There simply isn’t the political constituency to support an extra federal $350 billion for higher education (over ten years), plus the state kick-ins which are supposed to follow.  The federal money will sooner or later dwindle, while the tuition restrictions will stick.  In the longer run, this isn’t even a net subsidy to higher education.  In the short run higher ed quality will go down, and in the longer run the move away from tuition support will imply more fiscal starvation for these institutions rather than less.

In sum, let’s not do this.

Addendum: Here is information on the Scottish experience with free tuition.

1 Michael October 23, 2015 at 1:00 am

Man whose income comes from tuition prices advocates against controlling rising tuition prices. Immediately awarded with “Objective Position of the Year” award from the Society of Ironic Accolades.

2 meets October 23, 2015 at 2:30 am

I prefer it when Ray Lopez or Thomas posts first.

3 Ray Lopez October 23, 2015 at 2:40 am

Yes, I agree and approve of this message.

4 DanB October 23, 2015 at 7:29 am

Except that this plan would just be more federal subsidies to universities and more applicants. Neither of which has ever reduced the pay of professors. Indeed, our experience with such subsidies has shown precisely the opposite.

5 Gochujang October 23, 2015 at 9:14 am

First, that is a poor reading. A professor arguing for lower enrollment is arguing for lower costs.

Second, it certainly does not address the real problem that Tyler raises, that we do push more to higher ed than can finish.

And dumbing down degrees and certificates for “completion” adds neither human capital nor good signalling.

6 prognostication October 23, 2015 at 10:51 am

And that last one is well underway at even fairly prestigious institutions.

7 T. Shaw October 23, 2015 at 9:23 am

A bit off topic.

, It seems trillions of dollars on public education were wasted. Now, they need four additional, free years to brainwash your youth.

I went to college when it was about academics and scholarship. Now, it’s about brainwashing and ideology.

8 TheAJ October 23, 2015 at 11:45 am

Unless you went to college in 1940, you are just making stuff up.

9 Thiago Ribeiro October 23, 2015 at 12:05 pm

This is the funny thing about the Golden Age: it always advances as the previous generations of reactionaries die or succumb to Alzheimer disease.

10 DougT October 23, 2015 at 12:18 pm

Jefferson: “The generation that commences a revolution rarely can complete it.”

11 Thiago Ribeiro October 23, 2015 at 12:55 pm

But does any generation ever complete a revolution? Paradise–or Hell– is always about thirty years from us– past or future, depending on the person asked. Except with the Soviet leaderss, it was usually twenty years: in the 60’s they promised paradise–i.e. West Europe-style social services– for everyone by the 80’s. If they were around, 2035 would be the big year.

12 Dave D'Rave October 23, 2015 at 12:27 pm

As recently as the 1960s, the problem was _right_wing_ bias in college classrooms. That is what the Free Speech movement at UC Berkeley was about. The university had a rule that students were not allowed to publicly criticise the Vietnam War.

The modern problem of “political correctness” is simply a case of Left-Wing A**holes doing what Right-Wing A**holes were doing en masse prior to the mid-1970s.

And yes, I remember these things because I am old.

Those of us who support Free Speech were said to be radical lefties 50 years ago. Today, we are called right-wing nut-jobs. There may be a lesson here. . .

13 Art Deco October 23, 2015 at 1:40 pm

As recently as the 1960s, the problem was _right_wing_ bias in college classrooms.

You don’t know what you’re talking about. See Stephen Tonsor for an account of what academic life was like ca. 1962. or Paul Greenberg regarding his experience of graduate school ca. 1960.

14 Jan October 23, 2015 at 12:04 pm

Haha. In my day..

But somehow the differences in earnings between college educated folks and others has only grown in recent decades. That education is really going downhill!

15 Urstoff October 23, 2015 at 9:55 am

Ad hominems are so tedious

16 Jay October 23, 2015 at 11:12 am

How do either of these plans control rising prices and not subsidize the exact opposite?

17 B Cole October 23, 2015 at 1:11 am

Like most people, I wonder why so many people are going to college. A lot of labor is expended, but little output is gained. My niece just graduated from Macalester. Grueling work, and for what?

Another issue: Really, there cannot be a BA in law, after which students try to pass the bar? Do we need a general bar, or could there be smaller bars for real estate law, or contract law, tax law etc?

Do students really need to go two years to get an MBA? How much of what they learn is used? Would one-year programs suffice?

18 RobP October 23, 2015 at 1:15 am

not really, no. Perhaps criminal law and civil law are broadly seperable but a good tax lawyer needs to know contract law, and vice versa.

19 Ray Lopez October 23, 2015 at 2:42 am

no not really, RobP. Without any need for lawyers (i.e., abolish all state bars) there’s no need to know every aspect of the law when you represent others. German lawyers would perhaps disagree (they have to know all areas of law equally well, and their law education is I think a four or five year program, not a three year program like in the USA).

20 Jan October 23, 2015 at 6:32 am

And how rich are German lawyers, Ray? That’s right, not as rich as ours. And don’t bring up torts either. Germany has more torts than us, so many delicious torts.

21 Ray Lopez October 23, 2015 at 11:21 am

Germans make less than Americans in all areas. When I was working for a US company my administrative assistant (secretary) was making close to $100k a year, back many years ago when that was good money (and still is). I bet German secretaries don’t make that kind of money.

22 Jan October 23, 2015 at 11:35 am

That was not a typical admin. Hot dooog!

23 Lord Action October 23, 2015 at 1:21 pm

It’s not that atypical… I think our younger admins mostly make around $70k, but at least one makes $150k. The younger ones are jealous.

24 dearieme October 23, 2015 at 6:45 am

“Really, there cannot be a BA in law …”: quite . American exceptionalism.

25 nigel October 23, 2015 at 10:21 am

There used to be an undergraduate degree in law, after which you could take the bar. There’s still some (old) lawyers practicing out there who only have an LL.B. The idea of the universal J.D. was invented by some dude at Harvard at the turn of the century on the theory that we needed a more “scientific” approach to the law. Typical overestimation of the value of formal education and misunderstanding of the nature of learning. Lawyers used to learn by apprenticeship and practice (and they still do, just after spending $160K and spending three years hanging out in excessively lavish facilities) but then our good friends in the Ivies decided this was too banal.

Law school is unnecessarily long and time-consuming, and it mainly trains you to be an appellate lawyer which nearly no one will be. But it’s more worthwhile than 95% of other degrees just in terms of actually requiring critical thinking and good writing. I’d happily trade all the Ph.D.s in sociology and anthropology out there for J.D.s. Plus the libraries are usually gorgeous.

Bar exams are worthwhile insofar as they make you look at areas of law you wouldn’t otherwise and you should have some general knowledge of most of the things on it. Not necessary for testing competence though as anyone with diligence can pass, and you forget most of it afterward anyway.

Even in spite of all this, law would be the best profession ever if it weren’t for the billable hour. Actually law school is a lot of fun if you like learning.

Anyway this is all completely irrelevant but thanks for listening everybody.

26 DougT October 23, 2015 at 10:54 am

I think it should be required that all lawyers have a good background in Shakespeare. That’s said only half in-jest. The case for a liberal arts education has been made eloquently by Steve Jobs, who dropped out of Reed because he thought he was wasting his family’s money.

Bill Bennett and Robert Connor may disagree, but — at its best — college is a way to invest in a portfolio of “human capital call options.” I needed to know matrix algebra or how to code in Fortran (I know, I know …) to get my first job, but I’m drawing on my readings of Rousseau and Milton now that I’m in management. (BTW, a close reading of Abdiel’s character is helpful when interviewing job candidates). Who knows what deep out-of-the-money options may become callable later?

I say this as a homeschooling father of six, who has put three through school and has three to go. And the first three majored in tech / stem subjects, at both state and private schools.
And are gainfully employed, I might add. And Shakespeare helps.

27 Larry Siegel October 23, 2015 at 2:40 am

>My niece just graduated from Macalester. Grueling work, and for what?

To become an educated adult. And, unless she’s in the hard sciences, it’s not that grueling.

28 Gochujang October 23, 2015 at 9:26 am

High schools should produce adult citizens. It is only when their diplomas become attendance awards that they lose their value, and you must begin (as we have now?) another layer deciding whether it should be achievement or attendance.

29 DougT October 23, 2015 at 12:20 pm

Becoming an educated adult is grueling. Heck, just *being* an adult is grueling.

30 mbutuomalley October 23, 2015 at 9:23 am

I like it we can call it the lower bar.

31 Albigensian October 23, 2015 at 4:00 pm

Perhaps the larger question is, to what extent would these larger government subsidies stifle innovation in higher ed.?

It may be in the interest of much of the academic world to retain the credential-by-seat-time standard (credit-hours), but in a world in which the cost of education itself is rapidly decreasing, credential-by-comprehensive-exam offers the potential to deliver higher ed. to a wider audience at dramatically lower cost.

If some large developing nations produce low-cost, high-quality higher ed., will the USA, UK, etc. remain stuck with an increasingly obsolescent and costly system?

32 Boris Fain October 23, 2015 at 1:30 am

Dear Tyler:

Not everything in life is governed by cost/benefit analyses.

33 Nebfocus October 23, 2015 at 1:35 am

Enlighten us to what kind of analysis would be appropriate here.

34 Alain October 23, 2015 at 2:29 am

Bwhahahahah.

35 j r October 23, 2015 at 5:27 am

There is a refreshing honesty in Boris’ comments. Lots of people support free tertiary education and claim it is about making investments in human capital, when in fact it is just about subsidizing consumption.

There is an argument to be made that a highly developed country like the United States ought to undertake a bit of redistribution to allow everyone who wants and who is capable (and not just the sons and daughters of the relatively wealthy) four years spent pursuing a liberal arts education and generally pondering the mysteries of themselves without coming away with the burden of five figures of debt. It is an an argument with which I have some sympathy, but not outright agreement. It is an argument that is, at least, coherent and that can be honestly debated.

36 chuck martel October 23, 2015 at 6:04 am

Isn’t that kind of what high school is all about?

37 (Not That) Bill O'Reilly October 23, 2015 at 12:33 pm

Alcohol is much harder to come by in high school.

38 Jan October 23, 2015 at 7:07 am

Well how many of those kids would be doing liberal arts and pondering mysteries? What if we limited it to certain fields of study and made the subsidy contingent on actually graduating?

39 DougT October 23, 2015 at 10:56 am

Good idea. In my field, we pay for professional certification exams for our employees, but only if they pass.

40 Gochujang October 23, 2015 at 9:29 am

It is a teachers’ fantasy that if you can just get the student in the door he will be motivated and transformed.

It is a harsh reality that the dream is more often promised than delivered.

41 Mike W October 23, 2015 at 10:50 am

“four years spent pursuing a liberal arts education and generally pondering the mysteries of themselves”

The first two years of general ed is about mystery pondering…is an additional two years of listening to lectures, reading textbooks and running up debt really beneficial?

42 cthulhu October 23, 2015 at 11:32 am

I think the only mystery that many college students ponder is why his or her beer stein is empty, and how long it will take to get it refilled. Anybody who isn’t already at college that would be helped by Madame Secretary’s plan would just be another stein-gazer.

43 nigel October 23, 2015 at 11:54 am

Have you been to a four year college lately? There isn’t a lot of “pondering the mysteries of themselves” going on. It’s more like pondering the mysteries of how to get laid, get drunk, and piss away completely unrealistic amounts of free time. Colleges are education-themed amusement parks. Case in point is that most colleges have one or more rock climbing walls. We need less college, not more. Way too many people are going to college, and it isn’t doing them any good. And they’re not even coming out with the liberal education colleges used to provide. They haven’t read a word of the classics (too Western triumphalist for the “educator”/indoctrinators at most schools), or likely very many words of anything.

Redistributing to entitled young hedonists is not in society’s interest. And anyway more college subsidy would be a welfare program for untalented university administrator worker bees, less than a subsidy for students.

44 Albigensian October 23, 2015 at 4:02 pm

“Colleges are education-themed amusement parks. ”

Perhaps an exaggeration, but a great phrase nonetheless.

45 DougT October 23, 2015 at 12:26 pm

Just because an investment is stupid doesn’t make it consumption. I think a great deal of education is mal-investment–investment in areas of human capital that are overpriced and unlikely to deliver acceptable returns. It’s because there are such poor feedback mechanisms and the time-lags are so long that there is not more pressure to improve the ROIC.

I know I sound like an engineering / finance dweeb here, but I’m really advocating for a liberal arts education that emphasizes basic skills like reading, writing, math, science, athletics, and analysis–along with social skills.

46 Mike W October 23, 2015 at 1:15 pm

But the issue is, should taxpayers continue to pay for that “basic skills” acquisition beyond high school?

47 Mike W October 23, 2015 at 1:25 pm

Or maybe, how much should students be expected to contribute to their post-HS education? The debt load of the average graduate, I have read, is about $25k…that’s the cost of a car…the interest rate is reasonable and it can be repaid over an extended period. Such an amount of payments for the investment in their future…or for their current consumption if all they got out of it was football games and frat parties…does not seem to me to be unreasonable.

48 Dan Weber October 23, 2015 at 2:57 pm

Make the debt dischargeable in bankruptcy and you will very quickly find that schools discover that loading up students with tens of thousands of dollars in debt can’t happen.

49 The Anti-Gnostic October 24, 2015 at 1:57 pm

That should be the staring point. Convince me why the taxpayers should fund the education of legal adults, or guarantee the loans to finance the education of legal adults.

50 Pshrnk October 23, 2015 at 10:19 pm

Life should entirely be governed by a cost benefit analysis. Unfortunately using money as a proxy for all costs and benefits is just a crappy way to do it. When people mistake money as being the benefit rather than an imperfect signifier thereof you get off track.

51 Thomas October 23, 2015 at 1:31 am

If I thought this would to fiscal starvation–or, really, even a temporary diet–for our gilded higher ed institutions, I’d reluctantly sign up. $35 or $40 billion a year isn’t enough to cause controversy anymore.

52 Tony October 23, 2015 at 1:40 am

Tyler – would be interested in your thoughts on the new generation of online coding bootcamps that are emerging, as potential college replacements (well for college CS anyway) at a fraction of the cost? This one in particular https://learn.co/verified seems interesting as it is guaranteeing a job outcome…

53 Nathan W October 23, 2015 at 2:45 am

I’m not sure how they did their math, but think of it this way. Someone dedicated enough to complete ALL of the material and follow through on all the job search support stuff seems pretty dedicated to get a job in the field.

Let’s say they think there might still be a risk that 20% will not land a job. Easy – increase prices by enough to accommodate the payback, make a money back guarantee, and redistribute the additional gains. Presumably they are assuming that the extra business earned from the guarantee will more than cover those who get a return.

I would be more impressed by employment stats after 1, 6 12 months than a money back guarantee, since it seems kind of gimmicky.

54 Tony October 23, 2015 at 3:03 am

It looks like the Learn-Verified program is by the Flatiron School, which published independently-verified jobs placement data for their in-person program (which is cool—I don’t know of any other coding school to have been this transparent?). Would love to see employment stats for this online program once that data rolls in. Hope they remain as transparent!

I tend to agree with your point that this should be a fairly self-selecting group of students, particularly pre-disposed to being employable if they manage to get through the material on their own.

Regardless, I think the ROI for a student is attractive—especially given that they can do this part-time, unlike many other boot camps where students would need to quit their jobs to attend.

55 s October 23, 2015 at 4:06 am

Here is a free one. http://www.eIntern.com. Not sure how they make their money. Maybe they charge the employers like an employment agency.

56 DougT October 23, 2015 at 11:00 am

This one isn’t free: http://www.launchacademy.com — but I know a little about their business model. They only accept candidates who they think they can place after graduation. And the business serves as a placement agency for employers, getting a headhunter’s fee after the candidate has passed a certain anniversary.

Employer wins, candidate wins, bootcamp wins. Ain’t capitalism grand?

57 Ricardo October 23, 2015 at 1:55 am

“not the most deserving recipients of additional redistribution.”

I haven’t delved into the details of Hillary Clinton’s plan but I think it is a proposal to tie loan repayments to income much more closely and to forgive outstanding debt balances after a certain number of years. So it seems much more like a means-tested transfer to those who graduated from college with large debts but did not actually earn an income high enough to make them “undeserving” of redistribution.

And remember that student loans are relatively unique in that they cannot be discharged in bankruptcy. If you have a stroke of bad luck and find yourself not earning enough to pay back student loans, you really can lose everything.

58 Alain October 23, 2015 at 2:37 am

> If you have a stroke of bad luck and find yourself not earning enough
> to pay back student loans, you really can lose everything.

While it is possible that bad luck can limit how much a person can earn after graduation, do you really think that is the dominant reason why so many graduates find themselves in financial hardship? Or do you think it is the section of majors that do not have high earning potential?

59 Ricardo October 23, 2015 at 4:20 am

I think this point is overstated. I have looked at data on salaries of B.A.-only (meaning, people who did not attend graduate school) holders 10 years after graduation and, as long as your major wasn’t music or performing arts, you are in decent shape.

The problem, of course, is that it really does take 10 years of hard work for some people to earn a middle-class salary and, in the meantime, these people are expected to pay off a big chunk of their student loan, pay rent, buy a car (needed to get to work for most people), and (family values and all…) at least start thinking seriously about buying a house and having children. The student loan system could probably do more to mitigate the risk of students going through spells of unemployment or underemployment.

60 Bernard Yomtov October 23, 2015 at 9:44 am

What’s this?

Some actual facts? You must be new to this Internet business.

61 FUBAR007 October 23, 2015 at 11:14 am

“Or do you think it is the section of majors that do not have high earning potential?”

Despite popular folk myth, there’s been no tsunami of liberals arts and humanities majors over the last generation (coinciding with the explosion of student loan debt). The tsunami has actually been in the quasi-vocational majors like business administration, marketing, communications, etc.

The stagnating fortunes of college graduates is due to a convergence of several factors: 1) automation gradually wiping out the low-end, entry-level jobs that new grads used to start out in; 2) globalization putting them in cost competition with cheaper foreigners (e.g. H-1B workers in IT); 3) shifting expectations in the business world such that specific job training is no longer viewed as the responsibility of business, but rather of the university system, and thus that new employees be able to perform with full competency immediately upon hiring with no guidance or ramp-up; 4) hyper-specialization in the job market increasing career path dependency and inhibiting lateral movement between fields; 5) the collapse of job security in certain fields (e.g. journalism, academia) and a shift to a freelance, “gig” employment model; 6) NIMBY-driven artificial scarcity of affordable housing in and around cities where the jobs are, jacking up the cost of living and inhibiting starting a family; 7) the demographic shift away from large nuclear families to small ones, reducing dramatically the size of the informal safety net; 8) runaway inflation in the higher education market subsidized by government; 9) more people graduating with college degrees, thus increasing the supply of college graduates and reducing the general value of having a college degree.

62 Albigensian October 23, 2015 at 4:10 pm

Perhaps there’s no tsunami of liberal arts/humanities graduates, but there surely are far more than employment markets can absorb.

Which is not to say such degrees have no value even if they do not lead to related employment, as (assuming significant learning occured in the process of obtaining one) there may be enormous personal value in such degrees.

BUT if many of these degrees are mostly an exercise in personal enrichment, does it make sense for taxpayers to subsidize them? For that matter, wouldn’t it make sense for students to obtain the education yet forgo the costly credential?

63 jatb October 27, 2015 at 3:53 am

Gross economic output is high enough that the US can afford to subsidise whatever it pleases, if it would just get it together and tax the rich. I live in “socialist” Norway, after a few too many years in the US, and pay large amounts to the state in tax (I have honestly not worked a day in my life, for a decade I sold cheats for popular online video games on a subscription basis to teens with their parents’ credit card xD). I feel the taxes are worthwhile – my society is very equitable, I have a fair police force, my friends can afford to quit abusive working conditions without suffering irrecoverable economic ruin.

64 Dan Weber October 23, 2015 at 3:07 pm

a proposal to tie loan repayments to income

This is the worst idea in the world.

Already schools are experts at putting you into maximum debt. They get to look at your economic history and decide “how much you can afford to borrow.” Gee, thanks.

Income-based repayment is even worse. It gives the schools the power to look at your economic future and capture what should have been the consumer’s surplus back to themselves.

Seriously: worst idea in the world.

65 Albigensian October 23, 2015 at 4:12 pm

How about linking student loan interest rates to probability of default (as predicted by school attended, grades, major)?

66 honkie please October 23, 2015 at 1:56 am

I think most folks who have done it will agree: the system as currently structured is an inefficient (but lucrative) mess. The material for the bar is learned 90% in the weeks between graduation and the exam, which makes the current three-year structure a bit of a head scratcher.

The pitch at the time was, the schooling isn’t about learning the law, but about how to think like a lawyer. Pffft.

67 honkie please October 23, 2015 at 1:57 am

>>response to B Cole

68 meets October 23, 2015 at 2:30 am

Signaling!

69 Ricardo October 23, 2015 at 4:26 am

Also, there is no such thing as a Ph.D. in law so, at elite schools, legal education might be biased toward teaching students what they need to know in order to become law professors instead of practicing lawyers.

70 Jaunty Rockefeller October 23, 2015 at 7:55 am
71 The Anti-Gnostic October 24, 2015 at 2:07 pm

LOL. Three additional years of law school and at the end of it they call you a Ph.D. They have Ph.D.’s in Architecture now as well.

Colleges have become rent-seeking atrocities. They should probably be dismantled, and we can leave legal adults to figure out their tertiary education and job training on their own.

72 s October 23, 2015 at 4:01 am

What matters is does it sound good to low information voters. Free education is a winner.

As far as the results, price controls on traditional colleges should do what? Result in shortages or lower quality. It may even have the silver lining of hastening the transition to online colleges which seem more efficient to me anyway. I mean I work online and it doesn’t seem to be a problem, I don’t know what one loses other than sports and frat parties from going to school online.

73 Rich Berger October 23, 2015 at 7:29 am

Unfortunately, when the LIVs hear “free”, they go “YAY”. Of course, it would take some rudimentary economic insight to realize “free” means paid for by other people (including some of the LIVs). Following that understanding, they might realize that mandated diversion of resources to education means less available for other things that people might freely choose.

Isn’t 100 years of “progressive” stupidity enough?

74 Jan October 23, 2015 at 7:45 am

Come on, Rich. You know that more education increases GDP, broadens the tax base and increases funds available to pay for education.

Back to class for you–I will of course be willing to “divert” some resources to subsidize your schooling.

75 ladderff October 23, 2015 at 9:22 am

Yeah, Jan, I just “know” these things.

Gochugong may be a recent upstart but you are still the go-to insufferable leftist here.

76 Gochujang October 23, 2015 at 9:53 am

lol, you understand neither me nor leftists.

77 Jan October 23, 2015 at 10:36 am

Do you dispute my statement? Show me evidence.

78 Gochujang October 23, 2015 at 10:46 am

There are definitely benefits to public education, and my only reservation would be where “more” stops.

And I think this is something that is becoming more publicly discussed. Even 2 years ago I think “college for all” arguments faced little public opposition. Or opposition was limited top anonymous commentators.

Here is an interesting “masters in business” with Jeremy Siegel. Somewhere around 1:10 Siegel takes the “we are sending too many to college” position as well. He addresses the ROI you are asking about.

It is starting to be an acknowledged thing.

79 Jan October 23, 2015 at 11:38 am

Ok, so are we at that tipping point? We are still at only ~40% with a college degree.

80 Gochujang October 23, 2015 at 11:51 am

I am open to discussion. My sense is that we are having trouble pushing past current levels of graduation, and face declining returns on investment. It isn’t so much that we should stop graduating people (though if some are low value degrees, perhaps) it is that we might have unrealistic expectations that we can go much higher.

data on current levels here

81 Dan Weber October 23, 2015 at 3:13 pm

Ok, so are we at that tipping point? We are still at only ~40% with a college degree.

Look at the bottom 10% of college students today. Any talk of “let’s give even more people a college education” means finding people at this level or worse to try to educate.

http://www.theatlantic.com/magazine/archive/2008/06/in-the-basement-of-the-ivory-tower/306810/

And what are those people going to do with a college education? A college degree doesn’t magically increase one’s wages. If it did, just have the Social Security office mail everyone a Master’s Degree in the mail, right now.

82 Gochujang October 23, 2015 at 5:20 pm

“In the Basement of the Ivory Tower” is one dark piece.

83 Jan October 23, 2015 at 5:47 pm

I think it’s common for many college educated people to instinctively say it’s bad to expand the pool of graduates, simply because it decreases the relative value of their degree. But more educated people is actually better for everyone.

84 The Anti-Gnostic October 24, 2015 at 2:12 pm

Except past a certain age, you are not going to “educate” people any more, and you are just going to devalue the degree, hence the proliferation of graduate degrees and ever-extruded PhD programs.

85 Rich Berger October 23, 2015 at 9:51 am

Let’s consider your claim that more education increases GDP. The first tradeoff is the opportunity cost for the student, who cannot be working when he is in school (I know that some can also work, part-time or even full-time, but time spent in school is time not working). The second is the explicit cost for tuition and course materials. Unless the value of the schooling exceeds these costs, it does not increase GDP. For a typical four year liberal arts college (such as the ones my children attended), the total can easily hit $200,000. So here we have a pretty big nut to make back to make it worthwhile.

I went to college in the 60’s and 70’s and it was feasible for a student to pay for his own education. My initial cost for a private college was roughly $3,500 in the first year. Between summer and part-time work, a small scholarship and loans, I was able to pay for college myself. I dropped out after my junior year but went back four years later and figured that I had to work full-time to pay for that last year. I did, it was a real grind but I finished.

I cherish my high school and college experience for what I learned, although much of it was not directly useful in earning a living. I developed credentials for what would be a rewarding career based on self-study, which cost me little but my time. I do not think that college is necessary for most people to earn a living – unfortunately, it has become a very expensive credential to gain entry to many jobs. I blame that mostly on the federal government, for essentially outlawing aptitude tests and for fueling college costs with easy loan terms.

86 Dan Weber October 23, 2015 at 4:31 pm

This is easy to test. Set up one city with 40% of production going towards science, and another city with only 10%, then wait 10 turns. Boom, the city with more science is richer.

87 MC October 23, 2015 at 2:32 pm

Starbucks baristas with college degrees may be slightly more interesting conversationalists, but where is the evidence that there is a major shortage of college-educated people?

88 Nathan W October 23, 2015 at 7:49 am

Let’s defund free primary schools. After all, it’s not “free”.

Better not to mandate diversion of resources, so the uber-wealthy can put the money where they want. Third vacation homes will grow the serving potential of the servant classes exponentially.

89 derek October 23, 2015 at 8:45 am

What do people get for free and 12 has of their life? Pretty much what they paid for.

90 ladderff October 23, 2015 at 9:21 am

Sounds good. Primary schools are glorified daycare centers. Perhaps when parents have to pay out of pocket for attendance they will insist that their children receive useful instruction in a safe and disciplined environment. Meanwhile selling off the free schools would be a big hit to the bastard subsidy we’re running, not to mention the can-barely-tie-her-own-shoes primary schoolteacher subsidy.

91 dm October 23, 2015 at 9:44 am

Dude, parents pay for elementary schools through housing costs. Why do you think parents care about living in “good” neighborhoods?

92 education realist October 23, 2015 at 4:23 am

“The real problems come before college”

Presumably you mean “birth”, because the people who are incapable of doing the middle school level work that is taught in remedial community college courses these days are not people who could do the work if only their high school teachers had been Tyler-deemed competent. They are people with IQs below 100.

So be brave and stop pretending that college would be a great idea for the functionally illiterate if only their high school teachers had done a better job.

Why not instead look to your own institution, 10-13% of its freshman class have SAT scores below 500 in writing and math, or ACT scores in the 12-17 range? What are their odds of graduating?

I agree that free tuition is a terrible idea. I just get irritated at your suggestion that the failures are caused by K-12, rather than cognitive ability.

93 Art Deco October 23, 2015 at 4:42 am

I just get irritated at your suggestion that the failures are caused by K-12, rather than cognitive ability.

You mean you get irritated that not everyone fancies Linda Gottfriedson is the last word in understanding social relations.

94 j r October 23, 2015 at 5:27 am

When did the word “realist” get redefined to mean “reductionist?”

95 Gochujang October 23, 2015 at 10:51 am

There is no need to go to “birth.” That’s a hobby horse, not a policy argument. It is also complex and up in the air, with percentage contributions and etc.

It makes no difference if high school performance is nature or nurture, high school performance is still the number one predictor of college potential.

96 education realist October 23, 2015 at 3:38 pm

“high school performance is still the number one predictor of college potential.”

Fine. But there is an assumption that a low high school performance means you can’t go to college, when in fact community colleges accept everyone. So if high schools barely graduated someone–which is not in any way a guarantee of college readiness–he can still go to college.

When Tyler says the problem starts earlier, he is pretending that the kids who can’t get through college *could* have gotten through college if the high schools had done a better job. But in fact, college simply isn’t that difficult these days, and anyone with an IQ above 100, possibly even 90, can get through college courses even with a barely adequate high school education. So even *if* the high schools failed to educate someone intellectually capable of attending college (which is very unlikely), that person would be able to make it through college.

The people who aren’t making it through community college aren’t able to comprehend middle school material. That’s a cognitive issue, not an educational one.

97 Gochujang October 23, 2015 at 3:59 pm

We probably do need a place like community colleges where you can try again, and possibly fail, at low cost.

98 Art Deco October 23, 2015 at 4:40 am

People on higher education payrolls are Democratic Party clients. You mean the Democratic Party is advocating more subsidies for its clients? Say it ain’t so.

If you want free tuition, eliminate tuition, room and board, and fees at public institutions and finance them with voucher redemptions (with donation and endowment income providing some supplementary income and fee-for-service income providing flow at institutions with university hospitals). Finance the voucher redemptions from a dedicated fund financed by a special income tax. The tax would have a high exemption so wage earners do not pay it and have two brackets beyond that, one financing baccalaureate schooling and a higher one for the finance of graduate and professional schooling. The vouchers would be distributed via competitive examinations and families would pay a recipient fee derived from the number of years the family filed tax returns in a given state, with people who had filed (say) 14 tax returns paying nothing, 7 returns paying half-price, and no returns paying full freight. The fees could be financed with unsubsidized consumer bank loans and would go into the general treasury and be spent on items other than higher educaiton.

Private higher education would be cash on the barrel-head and receive no subsidies or loan guarantees.

No, this will never happen. It would fix the share of aggregate personal income devoted to public higher education, would end the faculty’s addle-pated race patronage schemes, would run afoul of fraudulent equal protection jurisprudence, and would cut off important Democratic Party clientele at the bar.

99 Jan October 23, 2015 at 7:18 am

A new special income tax? Remember your problem with this proposal was that it’s a subsidy for democrats who work in education. That would mean republicans need to push your alternative plan. That won’t happen, because republicans wouldn’t do it. Though they may call a 15 hearing to grill Clinton about it.

100 Nathan W October 23, 2015 at 7:51 am

I read today that the number of Congress hearings on Benghazi are just one shy of the total number of hearings on 9-11, about which GWB was grilled for a grand total of three hours.

But there’s nothing political about it …

101 Art Deco October 23, 2015 at 1:42 pm

What of it?

102 Nathan W October 23, 2015 at 4:13 pm

It’s obviously a political attack. How many embassies were attacked under Bush? How many public investigations?

103 msgkings October 23, 2015 at 4:44 pm

Ya see, our man Art gets apoplectic about Democrats feeding their supporters, but when his team gets partisan it’s “what of it?”

Hypocrisy is one of the uglier sins.

104 Nathan W October 23, 2015 at 6:26 pm

Republicans are never hypocritical. Ds are just brainwashed by left-wing education and media 🙂

105 Art Deco October 23, 2015 at 1:41 pm

No, it replaces extant subsidies and fixes the public commitment to higher education.

106 Jan October 23, 2015 at 4:10 pm

Haha. Try that with republicans. No, really, it’s only a smaller new tax to replace a bigger old one..

107 Art Deco October 23, 2015 at 5:41 pm

You’re incoherent.

108 Art Deco October 23, 2015 at 4:44 am

It could be the goal is not “college for more people”

No, that’s the goal. They figure the schools are a Democratic Party vote farm.

109 Moreno Klaus October 23, 2015 at 5:23 am

You mean the more dumb people are, the more they vote republican ?

110 RG October 23, 2015 at 7:58 am

MK, you seem to confuse credentialing with intelligence.

111 Jan October 23, 2015 at 7:27 am

If the prospect of more people with an education makes your political tribe restless, it might be time to think hard about your tribe’s long run viability.

112 honkie please October 23, 2015 at 11:56 am

Funny but disingenuous. The remark more parallels Descartes’ comment about bribing people with their own money. Applies to transfer payments at all levels of the ladder.

113 Nathan W October 23, 2015 at 6:28 pm

Your Descartes comment might apply, but I don’t think her comment is the least bit disingeneous.

114 Axa October 23, 2015 at 6:06 am

There’s no free lunch. There are countries with free tertiary education, their experiences are interesting.

In some places there’s free tertiary education but the path to the university is filtered by an exam at young age around 11 years old. Not everyone can go to university, the Germans are so Un-American. In other countries, the filter to the free university is an admission exam where you compete against 10K people for 100 positions, like France. In other places, there are plenty positions in free universities but education quality is compromised, like Latin America. So, free tertiary education is not equal to failure, it depends on the details.

Also, before pushing for free tertiary education it is worth to spend some time in soul searching. Does the US really wants to climb that mountain? So you push tertiary education statistics to Japan and Canada levels and then…………what is the precise accomplishment? 1000 points? Look at OECD data: https://data.oecd.org/eduatt/population-with-tertiary-education.htm

115 MS October 23, 2015 at 9:31 am

Only the elite schools (Grandes Ecoles) in France have highly selective admission by examination. The universities are open to any student who receives a high school diploma (baccalauréat)

116 Bob from Ohio October 23, 2015 at 10:56 am

” The universities are open to any student who receives a high school diploma (baccalauréat)”

Do not they limit the number who can get a “baccalauréat” by putting kids into a vocational track at the “lycée professionnel”?

117 Floccina October 23, 2015 at 10:08 am

Now that you say that, the USA does have tuition free education at the military academies and for the exceedingly intelligent and for folks from low income families. Bernie and Hillary are just trying to run a scam on the middle class to get them to think that they will no longer be paying for college but they will pay every penny and more.

118 Axa October 23, 2015 at 10:27 am

mmmm, you’re damned right. They will pay every penny of university fees plus government overhead costs. But, if the government gains control of the funding system, will they keep running the college sports scam?

119 DougT October 23, 2015 at 11:05 am

Who was the last Presidential candidate who attended a military academy?

120 Bob from Ohio October 23, 2015 at 11:09 am

Jim Webb.

But Carter was the last successful one.

121 eccdogg October 23, 2015 at 12:13 pm

Aren’t the biggest players in the college sports scam public institutions? And does the colleges sports scam really have any impact on the cost of tuition? My sense is that the big boys run at about breakeven and the net subsidy is usually not more than 10 mil a year.

http://sports.usatoday.com/ncaa/finances/

Take UNC for instance. There is a net subsidy of $9 million a year to athletics (probably from student fees which give students free tickets). Total expenses for UNC Chapel Hill in 2014 $2.8 Billion. So you could get rid of athletics and cut expensies by a whopping 0.3%.

122 Art Deco October 23, 2015 at 1:46 pm

you compete against 10K people for 100 positions

We can check, but I think north of 20% of each age cohort attends some sort of tertiary institution and about 4% attend one of the grandes ecoles.

123 Albigensian October 23, 2015 at 4:22 pm

A high-stakes exam at age 11 to qualify for a free tertiary education would not work in the USA because it would produce disparate impact.

As long as we’re talking disparate impact, is it not the engine behind much of the credentialism that’s driving the need for a 4-year degree in the first place? For employers are loath to give pre-employment tests to applicants as practically any test will produce a disparate impact for some group, and thus may trigger a costly lawsuit.

124 HL October 23, 2015 at 8:39 pm

Yes, meritocracy is mislabeled or otherwise dead. Between liability and shaming you have immense pressure to shift agency onto secondary education or some other institution. Then they have their own similar incentives to inflate grades and lower standards. Stop the bullshit and Make America Great Again!

125 Jan October 23, 2015 at 6:20 am

Argument: Free is not worth it, because most people don’t even finish community college. CC is not the same as 4-year, but ok. In any case, we know that people with some college end up making more money than those with no college. But, Tyler is questioning whether the goal is really to help people go to college.

Argument: If what we really want to do is redistribution, then there are more deserving people than college students. But what if that isn’t the main goal? What if like all presidents in recent memory, Clinton’s goal is increase the share of people with a good education?

You can argue against any policy by questioning the motives, and especially by asserting that it is a political handout. But that’s not very convincing, and there is no evidence of either.

Finally, the quantum leap in logic: this is really just going to lead to price controls in tuition. Really? We can’t even prevent 5000% price increases for life-saving drugs in this country, but we are going to introduce universal college price controls.

126 Gochujang October 23, 2015 at 9:44 am

What high school class position are we talking about? If we are talking about getting the top half into college there might be some real return … but college for all folk have an unrealistic hope that bottom 1/3 high school students will suddenly transform, begin reading books.

Not everyone wants to be an intellectual, and college is for making intellectuals, not mere citizens.

127 Jan October 23, 2015 at 10:48 am

There are certainly low-performing high school students that go on to do well in college. I am not proposing to change admissions standards, but I think we could ensure that those who attend are able to pay for it. I am up to date on the evidence of which students can and cannot benefit from college, but I don’t think it always needs to be exclusively a typical liberal arts, intellectual pursuit. And we could prioritize the subsidy for fields we most want to develop a workforce–computer science, physician assistants, etc. Also, I would guess that those truly not inclined or able to succeed in college would drop out very quickly or not even apply in the first place.

128 Jan October 23, 2015 at 10:49 am

Should say I am *not* up to date on the evidence of which…

129 Gochujang October 23, 2015 at 10:52 am

I’ll outsource to Ritholz and Siegel in that audio interview linked above. They describe a pragmatic view, IMO.

130 honkie please October 23, 2015 at 12:14 pm

This implies that there’s an effective filtering mechanism once you gain admission, when in fact the incentives of nearly every school are to keep you there, not to weed out the riffraff. The diploma-mill element would propagate all the more were the whole racket free to the student, I’d think.

131 Jan October 23, 2015 at 1:02 pm

I think this could be solved by combining the program with something similar to what Obama proposed in 2013–make the funding for those students contingent on the colleges doing things like actually graduating people, proving that graduates are able to get jobs, etc. I don’t think it would be too hard to weed out bad institutions.

132 rayward October 23, 2015 at 6:36 am

The government spends more on subsidies for higher education than the total tuition paid to all public colleges and universities. In other words, if the government simply substituted a tuition-free education at a public college or university for all the current subsidies (such as the subsidies for student loans), the government would actually spend less. Of course, it’s not going to happen, not with all the private colleges and for profit schools feeding at the government trough.

133 Jan October 23, 2015 at 7:30 am

If this argument does not resonate with opponents of Clinton’s plan, makes me think they are being dishonest.

134 Gochujang October 23, 2015 at 9:45 am

This could work, with lower enrollment, more meritocracy.

135 Curt Doolitlte October 23, 2015 at 6:40 am

The solution I usually advocate, given what I have learned both from Sowell’s work and the evidence coming in over the past decade, is that we should force universities to obtain payment as a deduction from payroll over some number of years, at a maximum of ten percent – with the treasury providing the loans. And in doing so require that administration costs are under twenty percent, and that all increases in their endowments come from contributions. Secondly we must separate graduate school research faculty from undergraduate teaching faculty. Without this structure the perverse incentives of the Academy/State/Media complex will persist in privatizing vast amounts of social wealth without warranty of future value.

The Academy is the largest industry not required to provide warranty on basic goods and services. And like any business that can circumvent warranty, it does so profligately.

Curt Doolittle
The Philosophy of Aristocracy
The Propertarian Institute
Kiev, Ukraine

136 dearieme October 23, 2015 at 6:50 am

Dear Curt,
Higher ed has become a racket. I advocate a new Dissolution of the Monasteries.

137 Bob from Ohio October 23, 2015 at 10:49 am

“I advocate a new Dissolution of the Monasteries.”

+1

138 HL October 23, 2015 at 8:40 pm

180

139 Jan October 23, 2015 at 7:20 am

I liked Obama’s proposal two years ago to tie student loan eligibility to the performance of each institution and its graduates on a range of measures.

140 honkie please October 23, 2015 at 12:18 pm

NCLB for colleges? Professors will seek the highest ledge on campus.

141 Nathan W October 23, 2015 at 7:55 am

Interesting idea. It would certainly encourage higher learning institutions to become more oriented to the job market, and to provide better post-graduation employment services.

142 The Anti-Gnostic October 24, 2015 at 2:20 pm

Then we can call it “job-training,” not “education,” which should have happened in high school, and we can leave it to employers and their prospective employees to figure out how to structure and fund it.

143 Nathan W October 25, 2015 at 9:51 am

Positive externalities to education: the case for public-funded education which need not imply giving a shit about those who couldn’t afford it otherwise.

144 Cyrus October 23, 2015 at 6:50 am

If what the school can legally charge the student is limited to expected family contribution, then at schools with competitive admissions but not already stratospheric endowment, the fee the student’s family can legally be assessed becomes a de facto criterion of admission: students from low income families become disqualified by no longer being legally permitted to fund their education through debt.

The Sanders plan of free tax funded tuition, period, has cleaner incentives.

145 chuck martel October 23, 2015 at 7:18 am

Does anyone seriously doubt that government policies are, in fact, behind the astronomical growth of college tuition? Why would more government intrusion into the process make things better for the customer? The government fouls things up and then successfully repairs the damage? There doesn’t seem to be much of a history of this. We’re still pumping fermented corn into our gas tanks. We’re still building aircraft carriers. We’re still subsidizing sugar producers.

146 Nathan W October 23, 2015 at 8:00 am

Can you clarify as to why government policies have resulted in higher college tuition?

In Canada, it is quite obvious that tuition has increased a lot because public funding has decreased, but for the US case it seems that you’re referring to something more complicated or even counterproductive.

147 ladderff October 23, 2015 at 9:36 am

Because.

“Education,” as we are basically talking about it here, is largely a positional good, which means it can absorb as much money as anyone throws at it in price increases. So government subsidy => price increase. Housing is like this, too: people don’t pay for square footage or nice wainscoting or whatever, they pay for good neighbors. Other policies, too, contribute to this sort of “inflation” (like degree requirements for various positions in government and corporations).

The deadweight loss here is in time wasted studying bullshit and teaching bullshit. If the bullshit (or the concomitant keg parties, beer blasts, tailgates, opportunities to rape/get raped, etc) is a consumable to you, you should pay for it. If you are a purveyor of the bullshit (in other words you make your living in the higher-ed apparatus one way or another), you do not deserve this subsidy. If you are in that minority of higher ed students actually acquiring useful skills and knowledge, there are loan markets for this.

148 Nathan W October 23, 2015 at 11:28 am

” So government subsidy => price increase”

I can hardly think of anything more counterintuitive (econ101 would certainly disagree with this idea), but you seem pretty sure. Can you explain the logic a bit more completely?

I don’t think degree requirements have risen particularly much to explain this.

149 (Not That) Bill O'Reilly October 23, 2015 at 1:02 pm

One element to this model is that the consumers are not especially sophisticated–we’re talking about teenagers whose student loans are often the first credit product they have ever encountered in their life, and almost certainly will be the first they have to pay for with their own money.

Starting from the presumption that students are unsophisticated, nigh-unlimited subsidies make them price-insensitive when choosing a university, which in turn provides an incentive to compete on absolute quality (which to the average student is often measured more in terms of fun than education) rather than to compete on value; with consumers demanding the highest-quality experiences regardless of cost, the only incentive is to adopt measures that increase the cost, or so the model goes.

150 eccdogg October 23, 2015 at 1:15 pm

Many of the federal subsidies are paid to the buyer in the US not the Universities directly. These buyers are competing for a very limited supply of spots at well regarde universities. This pushes up the price. Also the money can only be spent on things called education so there is an incentive to gold plate things so that lots of creature comforts can be called education spending.

151 Albigensian October 23, 2015 at 4:25 pm
152 Jan October 23, 2015 at 8:07 am

Disagree on education, but at least you are ideologically consistent.

153 rayward October 23, 2015 at 7:32 am

It’s true that the completion rate at community college is low, much lower than 38% in my state. But the flip side, not mentioned by Cowen, is that almost all of those who do complete community college go on to obtain a BA or BS, over 90% in my state. Young people choose community college for a variety of reasons, including failure to devote sufficient effort in high school. Community college gives them an entry into higher education, a chance to correct earlier mistakes. Sure, many will never complete community college, but that does not take away from the achievements of those who do and go on to a productive and rewarding career. Young people, all people, act irrationally at times, which may be contrary to the perfect model of rational behavior that economists prefer. We can devise a system of higher education that takes into account real people or we can devise the perfect system for perfect people. The latter is about as helpful as those economic models that are based on rational behavior.

154 Floccina October 23, 2015 at 7:46 am

It looks like a political scam to me. A completely tax funded college system should not require any creases in taxes. We have all been scammed

“Yet UC’s annual spending exceeds that of most state governments, amounting to roughly $100,000 for each of its students. Much of this is unrelated to instructional function.” Richard Vedder From here: http://www.bloombergview.com/articles/2013-07-15/napolitano-expert-in-bloated-bureaucracies

I think it should cost less to teach a college student economics, history. education, sociology etc. that to teach a K-12 student.

The fact that Bernie proposes taxes to pay for this makes me think that he is beholden to the industries involved.

Besides you cannot subsidize the middle class.

155 Ricardo October 23, 2015 at 9:16 am

This is not a helpful analysis. The $24 billion figure includes very expensive activities such as running teaching hospitals and conducting or funding scientific research that are not funded by fees collected from undergraduate students. The budgets for the medical school and teaching hospital UC San Francisco (one of the best medical schools in the country, if not the world) or for the Lawrence Berkeley National Laboratory are not relevant to the cost of undergraduate education.

156 Floccina October 23, 2015 at 10:35 am

Can you point me to a better break down? A few years back I saw a site that showed sending per university student per state. It looked like there were huge differences and my state Florida was near the lowest spending states and it has low tuition.

157 Ricardo October 23, 2015 at 1:49 pm

I didn’t see any careful analysis but I did pull up the UC budget myself (it comes up if you google it) and saw that teaching hospitals alone were about $6 billion of the $24 billion budget. To be sure, the UC system is an enormous bureaucracy and maybe they should spin off some functions and put them under separate management. But lumping all their expenses together in a single budget means the author of this Bloomberg piece is treating the expenses of UCSF’s hospital — most of which are covered by paying patients and insurance companies — the same as the expenses of the UC Berkeley faculty salaries. That number isn’t valuable to anyone except administrators and accountants.

Keep in mind that Berkeley has an element on the periodic table and a version of the Unix operating system named after it. In the past, they have produced science that has changed the world and the money to do that path-breaking research is covered by a mix of external grants and some government money rather than fees charged to students.

158 Just Saying October 23, 2015 at 7:52 am

I’m also skeptical about the “free college” program, but for different reasons; namely, that college is less and less a reliable source of real-world job skills. As far as the “community colleges are basically free for the poor” – that’s rubbish. As an economist, opportunity cost should be an obvious thing to look at – time in class is time not earning money for rent, food, clothing, heating, etc. So let’s be a bit more intellectually honest.

If you look at what the goal is – to reduce student debt, and perhaps to encourage a more educated, enlightened society – I would look toward some form of education forgiveness program. Student who graduate with certain degrees that the country vitally needs (STEM jumps to mind) get their loans forgiven upon graduation. Students in other degrees serve 4 years in AmeriCorps type programs, substinence-wage volunteer-style programs that work to make America better. Students with highly marketable and lucrative degrees can go straight to Goldman’s Sach’s and start earning 200k and pay off their loans out of their own earned wealth.

It’s not perfect, but it’s the start of an idea that I think is better than “let’s just give out free money”.

159 chuck martel October 24, 2015 at 12:11 am

“If you look at what the goal is – to reduce student debt, and perhaps to encourage a more educated, enlightened society….”

The educated, enlightened society is a goal of government only in so far as its enlightenment and education make the government acceptable to that society. The government has no wish to finance or provide at all education and enlightenment that produces doubt or distrust in the government. The price for any education provided through government auspices is belief in dogma rather than true knowledge.

160 Floccina October 23, 2015 at 7:53 am

Ome way to save money:
http://un-thought.blogspot.com/2013/01/state-universities-and-taxpayer-interest.html
I live in the city where the University of Florida is and son got 3 B’s in high school and all the rest were A’s and he scored 1380 on the Math and English SAT portions he was reject by the University of Florida (UF) but was accepted by the University of Central Florida (UCF). Since he needed to move and get an apartment to go to UCF, were he could have lived at home had he gotten in to UF, it will cost me $50,000 extra to send him to college. He is also further away which weakens family bonds. So I ask how does it benefit the Florida taxpayers to have a difference in who UF and UCF will accept? My thought is that it benefits the administration of UF to become a prestigious school but does not benefit the tax payers.

161 dm October 23, 2015 at 9:48 am

That is some soft grading unless it was non-honors track! Someone with nearly a perfect GPA should have an SAT well above 1400.

162 Floccina October 23, 2015 at 10:40 am

I have know many straight “A” students with lower SAT scores than that. 1380 is in the 95th percentile.

163 Nathan W October 23, 2015 at 8:04 am

Since I took years off between school several times, my contribution to official data is a 2/5 graduation rate, or a 40% graduation rate. But the reality is that I had a 100% graduation rate. I just took years off and changed majors a couple times.

I don’t think this sort of stuff is effectively reflected in official data.

164 Linus October 23, 2015 at 8:30 am

Cowendom has erupted like a volcano on this issue, it is just a couple of hours into the morning and 60+ comments – I wonder why? Is it because the issue hits close to their heart? They are either paying off their debt or expect (themselves or their wards) to take on new debt in the future?

That is why college costs may be a winning electoral subject.

Good for you, Bernie and Hillary.

165 Gochujang October 23, 2015 at 9:22 am

Actually it is an issue that splits this self described moderate independent from the Democrats. It is old style unrealistic liberalism.

166 DougT October 23, 2015 at 12:14 pm

It is an issue that cuts close to the heart — and pocketbook — of most people. I wonder what Donald Trump’s plan would be? And if he would call it “conservative”?

In the Kling Freedom/Constrain; Civilization/Barbarism; Oppressed/Oppressor structure, where does higher education fall? Libertarians are suspicious of the taxes needed for “free” tuition; conservatives should favor education as a bulwark of civilization, but the modern academy is a hotbed of barbarism; liberals support students, who are oppressed by their professors, but they also support professions, who are oppressed by the administration. And they support the administration, because they are oppressed by state regulations and budget cutbacks. So we get:

Liberals: For
Conservatives: Against
Libertarians: Meh

What am I missing?

167 Gochujang October 23, 2015 at 9:20 am

We should be brave and endorse something like 1/3 college, 1/3 two year certificates, and 1/3 high school diploma. There are jobs for those.

Perhaps admit that 5% should fail high school to give that achievement some merit.

168 Nathan W October 23, 2015 at 11:38 am

About 25% of high school freshman fail to finish high school on time: https://www.dosomething.org/facts/11-facts-about-high-school-dropout-rates

So presumably teachers are not shy to fail students in a class that they don’t deserve to pass.

169 Gochujang October 23, 2015 at 11:58 am

That does surprise me. While searching for more I found this: “Today, ready or not, nearly 70 percent of American high school graduates go on to college.”

Sad. Broken.

170 Jeff R. October 23, 2015 at 9:30 am

“In the short run higher ed quality will go down, and in the longer run the move away from tuition support will imply more fiscal starvation for these institutions rather than less.”

Yes. I also think the end result would likely stratify higher education further. The better state-run institutions will likely respond by reducing enrollment, while lower-tier state schools that are more or less required to accept whoever shows up will have to water things down.

171 Edward Burke October 23, 2015 at 9:33 am

As much as the quality of education bears upon a discussion of the costs of education, I again advocate the elimination and abolition of ALL university-run remediation programs. Universities themselves have no business running such programs, and students who are not prepared to begin post-secondary studies have no business stepping foot onto any post-secondary campus.
If this limits recruitment options for the NCAA, so be it. (If the NCAA complains too loudly, let the NCAA pay for all remediation coursework for all athletes requiring remedial coursework.)

172 Gochujang October 23, 2015 at 9:51 am

I agree. A path to enrollment would be good, a challenge entrance exam for students who fall off the path.

But as I understand it, “remedial” courses have become the path at some state universities.

173 Floccina October 23, 2015 at 10:15 am

BTW wouldn’t it better to have BIG that say pays all USA citizen adults $200/week? If they want to go college they can live with their parents and spend the money on tuition.

174 Axa October 23, 2015 at 10:16 am

Wait a second…….what would happen to college sports if tertiary education is free?

175 Nathan W October 23, 2015 at 11:50 am

The big scholarships are much higher than the cost of tuition.

176 Bob from Ohio October 23, 2015 at 10:47 am

“price controls on tuition”

Yes, please. But without increased federal spending.

The behavior of colleges, both public and private, in the last decade has been disgraceful. Massive tuition increases every year despite non-existent inflation. Hoards of vice Presidents and directors and other useless bureaucrats.

Colleges have been nothing but greedy hogs.

Hogs get slaughtered.

177 Tyler Fan October 23, 2015 at 11:15 am

The proposal doesn’t seem like real price controls and even classic price controls don’t seem like they would reduce supply here.
The fed gov’t should impose price controls on colleges by not allowing students to borrow more every time tuition gets hiked. Tell the colleges that students will be able to borrow 2% more next year not 7%. I doubt colleges would respond by reducing the number of seats. They’d just trim the fat or grow at the rate of the rest of the economy.

178 Bob from Ohio October 23, 2015 at 12:14 pm

Neither Clinton nor Sanders support price controls, they are just giving a blank check to the colleges.

I want no increased spending but a forced rollback of tuition coupled with hard inflation adjusted tuition caps. Colleges have forfeited their claim to independence by their greed.

Otherwise, no federal grants to the college nor any federal student aid. Then they can charge whatever they want.

179 Ralph Cramdown October 23, 2015 at 11:08 am

I see tuition as somewhat akin to a signalling device, for a scarce resource, to show “who wants it most.” It is analogous to mobile phone spectrum auctions. The problem with mobile phone spectrum auctions is that the license fee becomes a deadweight cost which the phone companies pass on to their subscribers, which makes it quite an expensive little signalling device. But the telecoms have cash and access to cheap capital, and can spread the cost among their millions of subscribers.

Contrast with college tuitions, where the students do not have cash or customers to pass the costs onto, or the experience to be able to judge how effectively they will be able to monetize the ‘scarce’ resource of a college education in the future. The author elides this somewhat by asserting that all poor students can attend college for free, if they can navigate the byzantine system of grants and scholarships.

Being willing to finance/pay the tuition is signalling what, exactly? If the college system isn’t set up to ensure that the most able students get the best educations in skills that society needs, regardless of ability to pay, then what is it set up for? Veblen good? Signalling device for the parents? Profit machine for the college & loans complex? I’m having trouble seeing how anything that is desirable to society is being maximized with the current setup.

180 FUBAR007 October 23, 2015 at 11:18 am

…or, we could make student loans fully dischargeable in bankruptcy, and let the market do the rest.

181 Gochujang October 23, 2015 at 11:27 am

Is’t the technical problem that most students graduate with <=0 net worth, and could declare bankruptcy immediately?

Every student who tries to convert 0 net worth to bankruptcy creates a burden on the courts, who must then decide how much, if any, debt to discharge.

182 efcdons October 23, 2015 at 11:48 am

Bankruptcy isn’t some fun experience. Even with no income or assets bk effects your life for years in the future, is a difficult and intrusive process, and still carries (for some reason) a sort of stigma. Prioer to about 1977 loans were dischargable in bk. The argument about some doctor getting their degree and filing for BK the next day was the “welfare queen” of higher education. It turns out:
“according to a 2013 report titled “No Way Out: Student Loans, Financial Distress, and the Need for Policy Reform” [PDF], the current relationship between student loans and bankruptcy was a result of panic and exaggerated stories claiming wealthy doctors would file bankruptcy to discharge student loans.”
http://consumerist.com/2015/03/17/you-cant-discharge-your-student-loans-in-bankruptcy-because-of-panicked-1970s-legislation/

The idea that students would finance their education and immediately is a myth that has had impressive staying power. Thanks to the wonderful GWB private student loans became non-dischargable because of the same bs reasons.

183 Gochujang October 23, 2015 at 12:07 pm

It doesn’t need to be 100% bankruptcy to be bad. Out of 10M students, even 10K immediate bankruptcies would be an unnecessary burden on the courts.

Perhaps as a compromise they should have just said “no bankruptcy within 2 years of graduation?”

184 Dan Weber October 23, 2015 at 3:43 pm

There was never a bankruptcy burden under the old laws.

185 Benny Lava October 23, 2015 at 11:20 am

The problem with Tyler’s argument is met here:

“But they, with their above average human capital, are not the most deserving recipients of additional redistribution”

That is quite an assumption!

186 M October 23, 2015 at 11:27 am

We are running out of ideas to postpone the onset of adulthood. The real question is how can we push the bar beyond 30?

187 Moreno Klaus October 23, 2015 at 11:59 am

Easy: Start a Phd 😉 😉 😉 or a new master degree …

188 Vertical Driver October 23, 2015 at 11:31 am

What the people in the U.S. who want free university for everyone usually forget is that those “socialist” European countries they want to emulate usually ration the education in other ways than cost.

For example, the government will fund a university system with X number of slots for psychology majors (just as an example). Those slots are then rationed by academic performance. If you can’t meet the high standards, then you don’t get into the program.

The very expensive American system has in fact created a much larger supply of education available to students. People who wouldn’t really qualify for a University education (at least not in the major they desire) in Europe end up going to university in the United States. If the United States had a system like many European countries, a lot of these kids wouldn’t be getting a free university education, they would end up with a lot of rejection notices.

189 Nathan W October 23, 2015 at 11:54 am

They would be in apprenticeships and trade schools, following the German approach.

190 Vertical Driver October 23, 2015 at 12:00 pm

Yes, and the German approach is probably better than the U.S. approach. But Americans wouldn’t want the German approach. They want EVERYONE to be able to go to university for whatever they want, and get 100% free education, with no downside. This is of course ridiculous and without precedent anywhere in the world.

191 Nathan W October 23, 2015 at 4:22 pm

That’s how it used to be in the UK. I was living in Scotland when they introduced 1000 pounds a year tuition in 1999, and people were outraged.

I don’t think college should be free, but I think there should be loads of scholarships for anyone with particularly strong applications so that if you’re poor you don’t have to be top 1% to get a free education.

192 Moreno Klaus October 23, 2015 at 11:58 am

In my experience US, is a lot more competitive than Europe regarding schools and universities. These so-called slots are only relevant in a handful of study fields (for example in my country medicine has very few slots, but economics has more than enough). So i am not really sure if your point is true. Wealso have the equivalent of low-tier colleges in Europe or low-tier Universities, so my feeling is that there is no rationing at all…

193 Vertical Driver October 23, 2015 at 12:42 pm

High tier universities in the U.S. are likely more competitive than that in Europe (larger population). And I would concede standards for most science/engineering schools are probably compatible between Europe and the U.S.. But I get the distinct impression that for social sciences, teaching, etc., that university standards are way higher in Europe. How common is it for food servers in Europe to have advanced liberal arts degrees?

194 Mike W October 23, 2015 at 12:13 pm

“There simply isn’t the political constituency to support an extra federal $350 billion for higher education (over ten years)”

Where’d the $350 billion come from…earlier he referred to “$175 billion in grants” for the Clinton plan?

195 Mike W October 23, 2015 at 12:16 pm

Never mind…found it.

196 Swami October 23, 2015 at 12:16 pm

Ideas…

1) Low income grants for people COMPLETING jr college.
2). A requirement for an OPTION of low cost, no frills degrees from any college receiving public aid. No college football, no giant quad overlooking the coastal surf of La Jolla, no sushi bars, no giant bureaucracy of administrators, no puppeteering degrees, no $60 million dollar modern art library, no million dollar Dean salary (or football coach salary), no $200 text books, extensive use of online video instruction, etc. If you want any government aid at all, you must provide the option of a low cost degree which meets certain standards. In other words, Ivy League diplomas at closer to community college prices. Granted many exclusive colleges would not agree, but now we are no longer subsidizing 6 year country club vacations.

197 Larry October 23, 2015 at 3:07 pm

Both the Sanders and Clinton plans would destroy private universities, including HBCs. You can’t compete with free and privates are excluded from the “free stuff” plans.

198 RustySynapses October 23, 2015 at 5:36 pm

This is a great example of the attraction of the safety net in the form of one lump sum of cash/year (versus a million different programs like these proposals, plus gov’t guarantees of loans). If you had that (maybe with a bump for your college years), plus allowed bankruptcy to discharge loans (just like any other loan) – say, it has to be at least 8 years from loan origination (if you’re worried about an assetless new graduate gaming the system), I have no doubt the market would solve the “problem” of tuition.

199 Floplo October 23, 2015 at 6:55 pm

So Vox claims based on a working paper that England’s tution fees led to a 30% drop in applications…

right, that’s one working paper in need of updating….
https://www.timeshighereducation.com/news/undergraduate-applications-hit-record-number-says-ucas/2018255.article

What did happen was that a substantial number of applicants decided to apply a year earlier than usual, leading to a temporary bump just before and temporary drop just after the introduction, the total lasting effect seems to be pretty much even out… and that includes social composition as measured by postcode income

the main effect it seems to have had is a shift away from mature/part-time study towards full-time degrees

200 Ed October 24, 2015 at 8:31 am

All of this money just to avoid saying that some people aren’t cut out for college. Probably has something to do with the some people not cut out for college are disproportionately black & Hispanic.

201 Katie Woolf October 29, 2015 at 12:33 pm

The second the word “free” is thrown into a conversation, it seems that sides are divided. The author of this claims that college is already almost free for low income families. Sadly, this just isn’t true. Looking at it from a far it may look so, but up close that changes. Scholarships are not free money, they require time and effort. Financial aid may be difficult to non-existent in certain areas. Not to mention the fact that many people are trying to support families while simultaneously trying to get into college.

Private universities are a different beast than public. Being private I believe that entitles them to set their own price of admission and give aid where and to whom they see fit. Public universities however, I believe should be drastically reduced. Cries may ring out from people concerned about what that will do to the already substantial national debt, but with rearranging of our priorities I believe we can find the money

We spend quite a lot in this country on defense, and not nearly enough on education. Maybe if we shifted some of the money sent to defense, and put it into public education, both lower and higher, we’d realize that it’s not such a huge deal after all. One more thing I’d like to point out, the author of this is a white male. Someone with historically higher rates of income, education, and accessibility to higher education. For many minorities, and to a lesser extent women, this is the first century where college is even able to be thought about. However, it might be near impossible for them to achieve that dream even with scholarships and financial aid. Many of these people work hard, and are more than deserving of a college education.

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