Is Bernie Sanders’ ‘College For All’ Plan Realistic?
In May 2015, Bernie Sanders proposed a piece of legislation called the College For All Act. While the plan gained no traction in the Republican-controlled Congress, it has become the basis for the higher education platform of his presidential campaign.
In a nutshell, Sanders’ plan proposes free tuition at all public colleges and universities.
To date, proposed legislation has centered on student loan relief put forward by Elizabeth Warren, and on providing more relevant costs information to students and their families through the 2014 Higher Education Act.
The total cost of the Sanders’ plan (before any growth for increased demand for what will be a “free” education) is expected to be $75 billion per year. Two-thirds of this would be funded with federal money raised through the “Robin Hood” tax on Wall Street transactions. The final third would be funded by the states.
Issue #1 – States have been cutting funds to these same institutions, not increasing them.
Bobby Jindal, Governor of Louisiana, cut the state’s higher education budget by $279 million, according to the Washington Post. He is not alone. A Pell Institute study predicts a dire scenario for many other states:
In 2025, Colorado will become the first state to allocate zero funding to higher ed.
Iowa will follow in 2029, then Michigan (2030), then Arizona (2032).
At a House Ways and Means subcommittee meeting on October 7, 2015 Terry Hartle, the senior vice president of the American Council on Education, named the decline in state funding as one of the two key drivers of recent increases in tuition. Mary Frances McCourt, Senior VP and CFO of Indiana University, stated that plummeting state funding was “the most challenging financial pressure facing her institution.”
Bottom line, states will not come up with their designated share of these costs.
Sanders’ plan would, therefore, cost much more than anticipated.
And we haven’t considered what happens to “Robin Hood Tax” revenue from Wall Street if there is another downturn.
Issue #2 – Free Tuition
There is huge concern about the rising level of student debt in this country ($1.3 trillion and growing). Because of that, there’s the additional issue and rising incidence of delinquency and default (17 percent). The New York Federal Reserve estimated that between 2004 and 2014, the number of borrowers increased by 89 percent. The average size of the loan balance increased by 77 percent.
Free tuition will not eliminate the need for debt in the U.S. Even in the European countries that Sanders cites as models for his plan, students still borrow money for living expenses (though Denmark does provide a stipend to students). Furthermore, cultural differences between the U.S. and Europe have an impact on the total cost of education. For example, French students attend the closest university and live at home. This minimizes living expenses.
Sanders’ plan may not go far enough to help those it aims to help.
It may not do enough for the lower income students. But it would most certainly provide a windfall to those who could otherwise afford to go to school.
Meanwhile, Matthew Chingos, research director at the Brookings Institute’s Brown Center on Education Policy, has questioned whether free tuition is the best way to make college more accessible to low income students. “A lot of affluent families send their kids to college. A lot of college students are from families that can pay,” he said. “So do we want to make it free for everyone, to make it accessible for kids who can’t pay? Or do we want to have a program that’s more targeted, more progressive?”
I have personal experience with the HOPE Scholarship in Georgia. This scholarship covers tuition at public colleges and universities within the state if academic criteria are satisfied. The scholarship is funded by the State Lottery. Studies by UGA have shown that the students who most benefited from the HOPE program were from the middle and upper classes. They could’ve afforded a college education anyway. Ironically, some wealthy and well-to-do students were being funded indirectly by money from lottery tickets sales. These were bought largely by the less fortunate classes.
Issue #3 – Controlling Costs
The educational systems of the countries that Sanders uses as examples are very centralized. As a result, making costs and other policies would be much easier to control.
Kevin James of the American Enterprise Institute further questions whether such a plan would result in quality education. “But even more important than how much we spend and who we spend it on, we should ask ourselves what impact free public college would have on the delivery system of higher education. That is, would free college make higher education more efficient, more innovative and higher quality?” he wrote in an article for US News.
Providing good quality, cost-effective education for all of the new “customers” is a challenge that should not be underestimated.
Sanders’ aims are laudable, and it is true that European countries are able to offer free tuition. However, there are structural and cultural differences (even beyond tax rates) between the U.S. and Europe. These differences would impede its success, even if such a far-left plan ever got through Congress.
Join the conversation here with your ideas. It’s perhaps the most critical question facing young Americans today.