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Free college tuition would only increase inequality

Robert Birgeneau, professor of physics, former chancellor | February 29, 2016

Free tuition at public colleges and universities — it’s a rallying cry in Bernie Sanders’ presidential campaign, and it sounds like an effective strategy for ensuring that the widest range of students can graduate from college without burdensome debt. But zero tuition actually runs counter to Sanders’ core principle of reducing income inequality. In this case, what sounds good is not.

Sanders is correct in emphasizing the importance of higher education in reducing income inequality. The evidence is overwhelming that the single most effective mechanism for narrowing the gap between the wealthy and the poor in the United States is a college education. Indeed, studies by many different investigators, such as Henry Brady of Berkeley and Michael Hout of New York University, have shown that over a lifetime, people with a four-year college education will earn at least a million dollars more over their lifetimes than those with only a high school diploma. Thus, we need strategies that will enable public universities to provide excellent educations for students, without saddling those students with crippling debt.

The way that we accomplish this now is principally through “return to aid.” It is, simply put, a mechanism for redistributing wealth within universities. At the overwhelming majority of public universities, a significant portion (typically one third) of the tuition paid by well-to-do students is returned to low income students in the form of financial aid.

In the University of California system, those who can afford tuition will spend about $14,000 a year for in-state tuition and fees, and $38,000 for out-of-state tuition and fees. Low-income California residents already pay no tuition at all; it is covered by state-funded Cal Grants. The return-to-aid program, along with federal Pell grants, then helps low-income students with educational expenses other than tuition: food, shelter, books and computers, which typically make up over half of the total cost of attending college. At UC Berkeley and UC Davis, return to aid from international students provides significant financial aid for middle-class Californians too.

In other states, return to aid helps students with both living needs and tuition expenses, usually in combination with state and federal grants. Whatever the mix, return to aid is an essential element of support for students who otherwise could not possibly attend college.

Sanders’ plan, in contrast, would increase taxes on the wealthy and on corporations to pay the basic cost of educating all students, rich and poor. Superficially, it’s an appealing idea, but it would be counterproductive to increase taxes to enable students from well-off families to attend college for free. Zeroing out tuition nationally would require tripling public funding for most state colleges and universities. It is entirely unrealistic to believe that taxes would be increased enough to provide that funding. The share for return to aid would certainly drop and probably disappear, defunding low income students.

The past decade has seen unprecedented disinvestments by states in higher education. Shockingly, at least 12 states, including California, now spend more money putting people in prison than they do educating them. In spite of a much improved economy, public funding of the University of California is still meager. For example, in 2004, the state provided 29 percent of Berkeley’s budget; now it is about 12 percent and shows no sign of improving. If a newly elected President Sanders were able to increase tax revenue, what reason is there to believe that it would go to higher education?

Much attention is paid to the student debt crisis, but because of return to aid and Cal Grants, students who graduate from the University of California have the lowest debt load of any public research university graduates in the nation — about $18,000 for those students (slightly more than half) who finish school with any debt at all.

It is presumed by zero-tuition enthusiasts that free tuition will go hand-in-hand with lessening income inequality in the United States; in fact, it will mean the exact opposite. Fewer low-income students will be able afford the full cost of going to college.

In my view, the financially well off can and should pay for the excellent public education they receive at UC and other public universities around the country. The last thing we want to do is to take away the single most reliable mechanism of income redistribution already in place: return to aid. Said starkly, zero tuition equals zero low-income students.

This piece appeared originally as a Los Angeles Times op-ed.

Comments to “Free college tuition would only increase inequality

  1. I’m not sure if I find this persuasive, either. The argument here is against a very abstract, un-nuanced strawman. Each of these concerns, it seems to me, can be addressed with friendly amendments to the core proposal, which is that cost should never be an obstacle to a university education–and that no young person should graduate with tens of thousands (and sometimes hundreds of thousands) of dollars in debt. That level of student debt isn’t just a drag on the individual; it makes twentysomethings more risk-adverse, and thus less entrepreneurial. The argument is also flawed in assuming that the middle-class is not being squeezed by forces like crazy mortgages. We have an entire generation graduating with loads of debt, including kids from relative affluent backgrounds, whose parents can’t save money. Sanders has proposed a solution that cuts out a lot of middlemen. I suspect that’s the problem for most who are resisting the proposal.

  2. Free tuition is not a binary issue; rather it is more nuanced. The issue should be re-framed: free to whom, and why.

    I have personally had the pleasure of knowing a rather famous Berkeley alumnus/Nobel Laureate/former Chancellor who had stated on numerous occasions that had their undergraduate and graduate education not received state subsidies, they would have been unable to attend. Given his role in U.S. history, one must wonder how different things would have turned out had he been arbitrarily excluded from higher education. One thing is certain: the periodic table of the elements would be different.

    A paradigm case analysis supports the proposition that tax supported public education, at least for citizens (I have no truck with charging what the market will bear for foreign students), is in the long-term best interests of the Republic.

    Historically, this country has understood the need for tax-supported public education. It is only quite recently that we have moved away from the idea (to our detriment).

    Let me, therefore, state the paradigm case: supporting public education with tax revenue is in the best interest of the United States of America.

    This nation provides tax supported public education for primary and secondary education (i.e., through high school). The underlying rationale does not simply evaporate; rather it applies with equal or greater validity at the baccalaureate level, and beyond. It is a given that the long-term economic contributions of the well educated and well trained members of society more than repay the cost of their education.

    The applicable perspective is not that one is repaying the Nation for the cost of his/her education, but rather that he/she is paying forward by underwriting the educational costs of the next generations.

    Note that I am not suggesting that anyone who wants to shell out the tuition charged by private institutions should be prohibited from doing so. Neither am I suggesting that these same private institutions should be subsidized in any way by public funds.

    We can have both: elitist, private institutions for those born with a silver colonoscope, and the advantages of a meritocracy, without financial impediments limiting the educational prospects of the rest of us.

  3. Neither of these solutions meet my concern: in Europe, money given to U’s is used on education. In the States the money also goes to sports programs, designer dorms, and more and more high-priced administrators. I would like to see a program which gives money for teachers, from instructors to professors. There is too much reliance on adjunct instructors now.

    There are programs in place now for poor students. However, working-class parents just above the cutoff shouldn’t have their money going for extras. I would very much support a no-interest loan program for college, which would concentrate on the basics and keep students’ tuition costs down.

  4. Foreign students should pay higher tuition than out-of-state students. Why? Because students from other states come from households that contribute to Federal taxes, and the Federal government is a source of funding for state universities, yet foreign students come from households that have not contributed to Federal taxes and hence are getting a bit of a free ride on Federal government funding for state universities.

    And even if crunching the numbers shows that foreign-student tuition should only be raised 10%, fair is fair and all parts of the funding field should be equitable. Furthermore, higher tuition from foreign students could be redirected to assist low household income students.

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