Hillary Clinton Embraces Free Public College. Beware.

Free college sounds like a boon for families, until you examine the unintended consequences.

By Alex Chediak Published on July 7, 2016

Fresh off her victory lap with President Obama, enjoying North Carolina BBQ while ignoring the details of the otherwise scathing FBI non-indictment, Hillary Clinton is making an earnest play for those pesky Bernie Sanders voters. A few key elements of what’s new:

  • Year-round Pell Grant funding.
  • A three month moratorium on loan payments for all federal borrowers (which Clinton plans to enact by executive order). The goal is to give borrowers some breathing room to consolidate their loans, sign up for income-based repayment (IBR) plans and reduce their monthly interest payments and fees.
  • Public higher education to be offered tuition-free to all who are from families with annual incomes of up to $85,000 (rising by $10,000 each year to $125,000 in 2021).

The year-round Pell Grant fund availability seems like a great way to give students the flexibility of completing their degree requirements in the summer. And I’ve got no problem with streamlining the process for borrowers to sign up for IBR plans (though these plans could be improved). Whether that should take three months is another question. The Clinton campaign argues that allowing borrowers to make other choices, like buying a home or starting a business, would make up for the 90 days of lost interest (estimated at one billion dollars).

A Costly Free Lunch

The real dinger is Clinton’s plan to make in-state public education free for about 80-85 percent of families. (Sanders would have made it free for everyone.) So it’s this part of Clinton’s announcement on Wednesday that is the biggest concession to her former rival, eliciting this glowing praise from Senator Sanders: “This proposal, when implemented, will revolutionize the funding of higher education in America, improve the economic future of our country and make life immediately better for tens of millions of people stuck with high levels of student debt.”

Free in-state public college sounds like a boon for families, until you examine the unintended consequences for society as a whole (including said families):

  • People value what they pay for. Making college free encourages passivity regarding educational pursuits. This means more students signing up for majors with little to no value in the marketplace. While such students might graduate debt-free, if they’re not employable, they’ll be saddled with low income for a decade or more.
    Or — lacking financial skin in the game (Clinton will require a 10 hour per week work commitment) — students might not graduate. Two year colleges are already tuition free for students from families earning less than $65,000. Yet a recent study found that only “39.1% of the students who started at a community college completed a program either at the starting institution or a different institution within 6 years.” So the majority of students failed to earn a credential. We need to look at the academic preparation, study skills and discipline level of students coming out of high school — something we’re arguably less likely to do if we just wave a magic wand and make college free.
  • It’ll probably be more expensive than we think. Senator Sanders’ campaign had given a price tag of $70 billion per year to his free public college plan. I’ve not yet seen an estimate of what Clinton’s people say her plan would cost, but presumably it’d be about 80 percent, or $55 billion (just going off the percentage of the population that could avail themselves of the benefit). Here’s the problem, though: that price is just based on current enrollment, not on the increased enrollment that would inevitably result from making college free. Ever seen the line at Chipotle when they have a two-for-one special on burritos? The wait time is two to three times longer than usual. Likewise, making public college free will dramatically increase enrollment and include students who would be better off elsewhere, but are passively pursuing their one free option.
  • We’re less able to capture the necessary funds than we think. Clinton’s plan is to pay for the benefit by closing income tax loopholes utilized by the wealthy. Estimates for how much money can be gained in this manner tend to be high as they don’t account for the creativity of the wealthy to minimize their taxation. When insufficient funds are raised, either the threshold on those who must pay more will creep lower, or we will get hit with a broader tax hike.
  • Public colleges aren’t encouraged to control costs. While Clinton — like Obama before her — talks tough about accountability for reigning in costs, it’s apparently easier said than done. While widespread, bipartisan concerns about an amenities arms race have been reported for many years now, mischief continues apace. For example, LSU will soon have a lazy river, part of an $85 million leisure project. Laurie Braden, LSU’s director of recreation, boasts, “I will put it up against any other collegiate recreational facility in the country when we are done because we will be the benchmark for the next level.” That’s exactly what I was afraid of!

 

Alex Chediak is a professor at California Baptist University and author of Thriving at College (Tyndale House, 2011), a roadmap for how students can best navigate the social, academic and professional challenges of their college years. Learn more about him at www.alexchediak.com.

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  • Cowboy

    No such thing as free – someone always pays – and usually the people who get the least benefit from the so called free. When I was in school I saw a lot of students wasting their parents money on college — they either were not there to get an education or were getting a degree they would not use. Now that the US government is paying the bill – what will change – how much money will be wasted on this boondoggle.

    • Ryan

      It is still a vote buying freebee, the only change will be, less people paying the bill as the Clintons don’t have a good record when it comes to a job producing economy. Clinton was handed the best economy in the 20th century and it was in the tank by 2000.

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