You Wouldn’t Believe How Much Free Higher Education Would Cost

Free public higher education should be available.

The cost of higher education is inflated due to our current funding model. Countries all around the world provide higher education at affordable costs. Image: Tax Credits

The cost of higher education is spinning out of control for American students. But what if there were a way to provide affordable public education, perhaps even for free (If that’s what you’re into)? According to the Department of Education, public universities collected $62.6 billion from undergraduates in 2012. Yes, that’s only $62.6 billion! That’s if we don’t include student loans.

The United States government spent $69 billion on  financial programs including Pell grants, tax breaks and work study funding. The federal government could actually save money if they simply paid outright for everyone’s education. The government already spends more than enough money to cover the costs. To put things into perspective, the government loses out on over $90 billion in tax breaks exploited by the most profitable corporations. These tax breaks are more than enough to cover the costs of providing higher education.

Student Loans and the Effect on College Tuition Increases

For two decades states have been cutting per student funding.At the same time raising the costs of tuition on students. This led the government to increase their financial aid programs to make up the difference. Student loans currently account for $107.4 billion.  The government is on track to make 184 billion dollars on student loans over the next 10 years. It seems, instead of making college more affordable student loans have actually increased the cost of tuition. This is called the Bennett hypothesis, named after Reagan’s Education Secretary. Many scholars have tried to test this hypothesis. The studies have shown different results. But the studies suggest that Bennett might have been on to something. Last year Matt Taibbi wrote in Rolling Stone,

”After the mortgage crash of 2008, for instance, many states pushed through deep cuts to their higher-education systems, but all that did was motivate schools to raise tuition prices and seek to recoup lost state subsidies in the form of more federal-loan money.”

For-profit universities have also added to the increase in university tuition. For-profit education takes in 25 percent of all federal dollars. Studies have also shown, rises in tuition when federal loan dollars are increased. Jordan Weissmann of The Atlantic calls it the 10, 25, 50 problem,

“They (for profit universities) educate around ten percent of students, who receive about a quarter of federal student aid and are responsible for about half of all loan defaults.”

What about a “public option” for higher education?

Oregon has already taken action to find better ways to help students receive affordable education. However, given the slow movement to address the problem of rising tuition costs at the state level, federal intervention is needed. Jordan Weissmann proposed an interesting idea,

“Instead of handing money to students and parents, the federal government could instead send the cash down to the states, on the condition that local legislatures kept per student funding at a certain level, and colleges lowered their tuition rates (otherwise, it’s likely some states would just cut their support further while relying on Uncle Sam to prop up their schools, all while tuition kept rising).”

There are some minor setbacks for students attending for-profit universities. Access to federal aid could be cut in order to help pay for public education. Similar to the argument for a public option in healthcare, the federal government would no longer be in the business of subsidizing for profit universities. Prices would have to come down in order to compete with public institutions.

Mike Konczal, fellow at the Roosevelt Institute, writes,

“Free public universities would function like the proposed public option of healthcare reform. If increased demand for higher education is causing cost inflation, then spending money to reduce tuition at public universities will reduce tuition at private universities by causing them to hold down tuition to compete.”

The cost of higher education is inflated due to our current funding model. Countries all around the world provide higher education at affordable costs. There isn’t a reason the richest country in the world could provide affordable education through a new, gutsy federal plan. Unfortunately, the irrational American fear of any federal government intervention serves as a blockade for new policies. The problem comes from trying the same methods that landed us in this problem in the first place. We need to try new policies that step out of the box and challenge the status quo. Education shouldn’t be considered a luxury. Education is important for any great democracy and maintaining a competitive workforce.