Make College Free

March 8, 2013 | Blog

It is long past time to make college free, and thankfully the Atlantic writer Jordan Weissman just laid out the case very nicely.

Jordan points out that the money invested in our financial aid system could instead be invested in appropriations to public colleges and universities to drive down costs.  Yes, aid to private colleges would end. Oh well!  Why do we pay for private colleges when we don’t pay for private high schools? (Well, we are starting too but we should stop.)  And yes, we need to cover costs of attendance for the poorest students too and we can do that by charging very low tuition to rich kids to give to poor kids (for whom tuition is free)– and that’s a progressive tuition structure rather than this incredibly deceptive price discounting scheme we now have in place.

As I’ve been pointing out in talks around the country on the subject “When America Goes to College,” our current system of affordability was developed at a time when the college-going population largely had advantaged parents who understood and had faith in the system, and when costs of attendance were much lower, and thus sticker shock wasn’t so rampant.  That approach recognizes that colleges costs are a barrier to attendance but allows those costs of attendance to be determined by colleges and universities, with some input from states. Those costs of attendance are then discounted with financial aid and that aid is distributed directly to students, not to colleges.  Therefore, accessing aid requires substantial action and responsibility on part of the student.

That model makes several assumptions:

  • Equitable access to postsecondary education will be achieved via price discrimination and redistribution
  • Some students will pay more than others, and the extra money will go to needy students via financial aid
  • Needy students will respond to the discounted price –the lowered cost of attendance will make the benefits more evidently attractive

Well, those assumptions could be blown for many reasons and my research on the Wisconsin Scholars Longitudinal Study— which will be documented in a forthcoming book–suggests that they are.

For example, discounting college costs with financial aid is far more complicated than discounting the price of a movie ticket with a student ID (a classic example of price discounting).  For one, you have to file a FAFSA to get the discount– and until you do it, you have no idea what discount you’ll get. For another, you have to trust the government and the school to give you the discount. And with all the mistreatment of low-income families in this country, why would they?

Another issue is that the discount itself has changed over time.  We moved from aid in the form of grants to aid in the form of loans, and those do not mean equal things to students or have equal effects.  In addition, we have witnessed a proliferation of grants and scholarships with a multitude of requirements (which can conflict in unproductive ways), and from an array of sources, such that students have no idea who’s helping them go to college and why, or how long they can count on the support.  Aid shifts from year to year, seemingly without warning, and often declines unexpectedly. Students from poor families have little ability to smooth their consumption and adjust to these shocks, and this perpetuates the feeling that aid is untrustworthy.

Perhaps even more importantly, in our effort to ensure that the discount is well-targeted, we’ve create a monster of program complexity. An industry has grown in order to help students process the FAFSA and yet it’s still not working.  The formula penalizes students for temporary improvements in their parents’ income, even when they will not realize those gains (e.g. when dad finally gets a job after 5 years, it’s not likely he can share that new money with you as he struggles to pay off bills, and yet you lose your Pell).  And it assumes monetary exchanges between family members that are based on a 2-parent household with middle-class norms– e.g. parents provide money to kids and expect nothing in return.

What an absolute mess.

If we really wanted to make college affordable, we would direct all dollars towards providing one good affordable option for everyone.  We would focus less on choice and more on access to a real outcome- a degree. We wouldn’t let aid flow to private or for-profit schools, and by funding public institutions we’d hold them accountable for keeping costs low and campus-climates reasonable so that everyone can fully participate in the experiences.

I thank people like Jordan for putting big bold ideas like free college on the table and making it possible to surface the real issue:  most Americans want college to be a privilege and not a right because they care more about “getting ahead” then creating an equitable society in which we live as a community.  To get ahead requires leaving someone else behind, and higher education has come to be a major way in which Americans work on doing just that.

1 Comment

  1. Reply

    Dr. AnnMaria

    March 9, 2013

    The best thing that could ever happen to higher education funding would be to cut financial aid to for-profit institutions - the default rate and drop out rate combine to be an investment no informed consumer would make with their own money.


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