What does “free university” really mean?

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Utopia has perils. Is the free college a progressive and humane plan or will it encourage even more reckless spending by colleges and universities, leaving taxpayers with the bill. And will it ensure that more students get meaningful degrees that prepare them for successful careers, or could it become a boon to the bureaucrats whose academic standards and students, ironically, are paying the price? Last month at ForbesEconomist Richard Vedder has raised pressing questions about the Biden plan for higher education. His analysis and criticism call for serious consideration. Whether free college means progress or the devil is in the details.

For decades, higher education has dug into an increasingly deep hole. Of 1986 to 2018, the average total of tuition, tuition, room and board increased by 128% at public four-year universities and 105% at private four-year universities after adjusting for inflation. The picture is not much better for two-year colleges, with costs rising 51% for public institutions and 72% for private institutions over the same period. Add the fallout from the pandemic to the equation and you have a lot of promising students who postpone if not cancel their college plans.

And then there is the mater of $ 1.6 trillion of the outstanding student debt that these costs have caused.

President-elect Joe Biden’s plan would make a two-year degree free and do the same for a four-year degree for families with incomes below $ 125,000. Mr Biden calls for a “federal-state partnership, with the federal government covering 75% of the cost and the states contributing the remaining obligation.” This could solve long-standing problems of access to higher education. How affordable it is – or ultimately how healthy it would ultimately be for American higher education – is much less certain.

Under this plan, what incentive would colleges have to maximize education quality and operational efficiency and keep costs low with such a secure revenue stream from government? Obviously, admitting and retaining students would be in their best interest, keeping the income stream solid. Colleges could race to gain and retain as many students as possible, paying less attention to the academic rigor upon which career success depends.

Private institutions other than HBCUs (Historically Black Colleges and Universities) and MSIs (Institutions Serving Minorities) would be extremely disadvantaged compared to the competition, so much so that the survival of the uniquely American phenomenon of the small liberal arts college would be seriously threatened. , with the exception of the most prestigious schools. In 2018, the Economist ironically noted that what makes America’s higher education system so effective is that it is not a system. The “free” college could well put an end to the brilliant diversity of our establishments.

In October 2019, Biden’s website estimated a cost of 750 billion dollars for his higher education reforms, which also include the cancellation of student loans, institutional support and other benefits. This dollar figure was derived and then deleted from Biden’s website before the Biden campaign added a free college to the platform. Other estimates exceed the trillion dollar mark. Bowen’s Law, developed by the late economist and president of Grinnell College, Howard Bowen, states that colleges will raise as much money as possible and spend it all, without saving enough or shifting the savings to students or taxpayers. As part of the Biden plan, what will deter schools from frivolously hiring an even larger roster of administrators and launching even more non-teaching campus programs, if they can count? on endless government revenues?

Bennett’s hypothesis of 1987 postulates: “If anything, increases in financial aid in recent years have allowed colleges and universities to blithely increase their tuition fees, confident that federal loan grants would help amortize lending costs. ‘increase. Indeed, with the availability of federal funds, spending is skyrocketing, schools are raising prices, and more and more students are taking out loans to cover tuition, fees, room and board. Richard vedder suggests that for every dollar in federal aid, tuition fees increase by about 35 cents. Other economists put this figure closer to 60 cents. The theory has drawn supporters and detractors, and while the magnitude of the impact is disputed, the link between federal money and student prices seems clear. The college will be a good financial bargain for those eligible for the Biden plan, but the hammer of the tuition hike will fall more and more heavily on students beyond the $ 125,000 threshold, as the cost of attendance will increase.

How does the cash injection benefit students? The conventional wisdom is that more money spent equals better service provided. Yet, according to data from a 2018 report According to the Organization for Economic Co-operation and Development (OECD), the United States already spends 95% more per student on tertiary education than the average of 36 other OECD countries, while its graduates rank slightly below the international average on measures of basic college skills that matter to career success.

Where will the new money go? We have already seen continued growth in the higher education administrative class. The American Association of University Teachers reported in 2008 that the median presidential salary at a public doctoral institution was $ 338,228. In 2020, the median was $ 495,813, an increase of 47%. The growth in non-educational spending has been a long-standing problem. According to a Delta cost project report, between 2000 and 2012, professionals – business analysts, HR, admissions staff, etc. As campuses add bureaucrats and the inevitable compliance professionals that come with increased federal funds, the university must find revenue for these salaries. Some universities, such as Akron University, found the money by cutting their teaching budgets.

The Biden plan could end up costing a lot more than expected, even with such a substantial upfront price. A previous has been established that countries that have provided free colleges eventually have to start rationing them because they cannot afford the cost. Potentially stricter admission restrictions or funding limits will be a barrier for students.

It is very ironic that plans to make higher education more accessible can make quality college education more difficult than ever. Proceed with caution.

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