Should Taxpayers Give Free College To Charlotte Simmons And Her Friends?

Author Tom Wolfe, in his novel “I am Charlotte Simmons” portrayed college as four years of parties, alcohol and sex by students who were not mature enough, or didn’t care enough, to demand that professors teach them skills and abilities for which employers might actually pay.  This cynical view was a parable when published in 2004.  However, many believe that the quickest way to make such a scandal the reality, would be to require that the taxes of working Americans pay college costs for each and every willing student regardless of pre-college preparation or chosen field of study.

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Two highly contradictory happenings have occurred over the past year.

The first is that, “Published research increasingly suggests that the high returns on investments in higher education are minimally exaggerated and often even non-existent.  This research suggests that a student’s career related benefits from most non-technical fields of study do not reflect much actual vocational relevant learning.  Instead, diplomas are used for preliminary screening to tell employers that a job applicant is likely smarter, more disciplined, and more motivated for reasons unrelated to college curriculum” (Forbes, “The Case Against Free College,” April 12, 2018).

This research clearly suggests that pragmatically, we are already over-invested in universities, and that public subsidies for colleges actually have a relatively low rate of return for the broader society.

The second and contradictory trend is a growing movement by one political party to buy the college age student vote by making college “free.”  It’s a fraud.  There is no “cost” reduction taking place.  What is being attempted is to have taxpayers pay all of the costs rather than just a shared proportion with the directly benefiting students. 

Still several states (New York, Oregon, New Jersey and Tennessee) have embraced the concept of free tuition using community colleges as the door opener.  Apparently these advocates believe that taking billions more from taxpayers shall be easier if they argue, “We have free tuition now for 11th and 12th grade, why not for 13th and 14th?

The simple answer is that although community colleges have lower tuition costs, they are also less productive. The most recent National Student Clearinghouse data show that 47% of community college enrollees drop out of school, far more than the 27% who eventually graduate.  And Their research also shows that dropout rates increase the less students pay towards the cost.  It is easy to conclude that the drop-out rate for students paying nothing to attend a community college would be even higher than at present; probably much higher.

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William F. Buckley once said that a conservative is one who believes policy decisions should be based upon past “real world experience;” while a liberal believes policy decisions should be based on the philosophical perfection that can come only from “ideas,” whether or not they have been tried in the past and failed.

The following are a few of my William Buckley type real world experiences as both a student and university trustee: 

STUDENT

When I started college most of my friends and I expected a degree to take five or six years.  We weren’t stupid, we were just middle class or lower middle class kids, who had to work at least part-time part time to pay all or a share of the tuition.

Those of us who had already been in the military – there was a military draft for males then – had government assistance and more often could finish their classes in four years.  However, those students had already delayed college for three or four years of military service to earn that support.  Those on academic or athletic scholarships were also able to graduate more quickly, but only if they achieved certain expected performance.  So the scholarship and G-I Bill students were paying too, just in different coin.  Other than these, only those from families with the resources to pay for it all could reasonable expect to graduate in four years.  But many of these might also have been under family pressures to perform. 

What’s different today is student loans.  The hope was that borrowers would graduate more quickly and start their higher paying careers sooner and end better off financially.  However, this easy money may have eliminated the sense of urgency felt in the past by those who better understand they had skin in the game.  Despite this immediate funding, only 19% of public university students are graduating in four years, and even at the “flag ship” (most selective) universities, only 36% graduate in four years.  It’s still taking as long, it may be more fun, but at the end is debt.  Not surprisingly it is complaints about this self-inflicted debt that drives the “free” college argument. 

I was once asked by one of my daughters if I believed that those of us who were paying our own way took fewer “just for fun classes” and worked harder?  My answer was, “How could both of those not be true?” 

UNIVERSITY TRUSTEE

During the summer of 2006 the governor and the MN state senate appointed me to the Minnesota States Colleges and Universities System (MnSCU) Board of Trustees.  That board was responsible for recommending tuition rates for the System’s 32 colleges and universities to the state legislature. The legislature and governor then made the final decision as part of the biennial Higher Education Bill.

During that process the board was aggressively lobbied by various constituency groups including the community college and university student associations.  Their goal of course was to reduce the board’s tuition recommendation.  I found the students enthusiastic about lowering tuition, but generally unaware of the rudiments involved in doing so. The following would have been typical:

  • Student Association: “Our most important priority is to reduce higher education costs.  Tuition is too high and increasing.  Student debt is killing us.”
  • Board of Trustees: “We can certainly support looking for ways to cut costs.  Are there costs you’re suggesting we target?” 
  • Student association: “Our priority is only the student tuition cost.”
  • Board of Trustees: “Your tuition is actually not a cost, it’s the price.  If we keep expenses the same, and just reduce the tuition, which is the student share, it means increasing the MN taxpayer’s share; and the legislature is committed to not increasing the State share above 40% (varied by biennial budget).  That means to do what you ask we would have to tell our college and university presidents to do things like reduce the number of times each class is offered, increase average class size, eliminating programs of study with too few students, or reduce miscellaneous expenses such as student lounges and health clubs in our bonding bills.”

My experience as a trustee convinced me that a lack of understanding for the trade-offs of the college cost-price structure is a big reason that “free” college appears such a simple solution to so many.  But be careful of what you ask.  I believe that if the taxpayers share increased by the billions required to go from 60 to 100%, the cuts in the “nice to have” features which student now enjoy would be huge.

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I have provided the reasons why I believe that the transfer of a larger share of college costs from students to unrelated taxpayers shall not increase student performance.  So my William Buckley conclusion is that Charlotte and her friends should have to continue to pay at least some of the college price.

There is also reason to believe there would be no positive macroeconomic benefit to the total economy if we charged less to Charlotte and her friends.  As summarized by Richard Vedder, Distinguished Professor of Economics, Ohio University, and a top scholar on this subject:  

“Rather than the greater college attendance [anticipated by a “free college” plan] enhancing economic growth, a better bet is that economic growth would be retarded.

“I have run literally hundreds of regression equations on the relationship between state higher education spending and economic growth: the relationship is almost always negative –higher spending, and lower growth.

[The reason is that] “Raising taxes on private sector earnings to fund colleges lowers growth because the output reduction associated with higher taxes on the highly efficient and market-directed competitive private sector is far greater than any positive effects of more education administered by the less efficient and market undisciplined higher education providers.”