The Consequences of Free Higher Education
Gretchen Stockschlaeder
11/30/2017
ECON 309
Dr. Fuller
During the 2016 presidential race, one of the reoccurring topics amongst candidates was
the proposal of free college education in the United States. This was a particularly important topic
to democratic candidate Bernie Sanders. After Sanders lost the primary, Hillary Clinton took on
the proposition and it became a large platform within the Democratic Party. The promise of a free
college education sounds great on the surface because college education is rising in importance for
students to earn at least a middle class living. The problem has become that college is expensive
and some simply opt out of college due to the high cost or end up paying loans for years. Since
1978, the cost of college tuition has increased more than any other good or service in the U.S.
Today, the average cost of a four-year bachelor degree program is anywhere from $16,188 at
public institutions to $41,970 at private nonprofit institutions
1
. These increasing costs have led to
a student loan debt totaling $1.2 trillion in 2016. This rising cost of college and the debt creates
financial concern that it is stopping young people from buying homes, starting families, opening
businesses, or saving for their futures, in an attempt to dig themselves out of debt.
2
In 2017, the New York State Legislature passed The Excelsior Scholarship Program. It is
the first of its kind in America. New York State Governor Andrew Cuomo proposed the bill in
2016 and after it passed the New York State Legislature, the program began to roll out during the
Fall 2017 college semester. Under this bill, more than 940,000 middle-class families and
individuals making under $125,000 per year will qualify to attend college tuition-free at all CUNY
and SUNY two- and four-year colleges in New York State. The goal of this program is to make
1
“The NCES Fast Facts Tool provides quick answers to many education questions (National Center for Education
Statistics).” National Center for Education Statistics (NCES) Home Page, a part of the U.S. Department of
Education,
2
Kamenetz, Anya, and Eric Westervelt. “Fact-Check: Bernie Sanders Promises Free College. Will It Work?” NPR.
February 17, 2016. Accessed November 28, 2017.
higher education accessible in the same way high school is accessible to all.
3
In the United States,
individuals with some form of college education have a significantly lower unemployment rate
than those with only a high school diploma. According to the Bureau of Labor Statistics, in April
2015 individuals with a high school diploma had an unemployment rate of 5.4% whereas those
with a bachelor’s degree or higher had an unemployment rate only at 2.7%.
4
With statistics like
these, there is no surprise that a college education is highly valued and demanded.
Free college tuition sounds great, but important economic considerations frequently get
ignored. In a world of scarcity, nothing is ever truly free. Free college education in America means
paying for it elsewhere, monetarily and/or otherwise. By considering economic principles, the
consequences of free college education in America can be determined including the effect of the
quality of the education, the value of degrees, and the employment of degree recipients.
New York may be the first state in America to try out free college education, but there is
other precedents elsewhere in the world. Many countries across the globe have free college
education programs including Norway, Finland, Sweden, Germany, Slovenia, and France.
5
In
2014, Germany implemented free college tuition for all public colleges and universities. This
regulation has had a series of effects on students and the country as a whole. While Germany is
educating more students than before, there have been significant downsides to the implementation
3
“Tuition-Free Degree Program: The Excelsior Scholarship.” Welcome to the State of New York. September 14,
2017. Accessed November 24, 2017.
4
“Unemployment rates by educational attainment in April 2015: The Economics Daily.” U.S. Bureau of Labor
Statistics. May 12, 2015. Accessed November 24, 2017.
5
Goetz, Lisa. “6 Countries with Virtually Free College Tuition.” Investopedia. May 26, 2017. Accessed November
24, 2017.
of free tuition, including increased demand, increased taxes on German citizens, decreased
spending per student, and lower ranking schools.
With free tuition in Germany, the demand for a college education has increased
domestically and internationally. German university enrollment rose by 22% when tuition
disappeared, while the number of students in vocational education declined.
6
The problem with
this increased enrollment, is that the supply of colleges has remained constant resulting is a
shortage of academia. The supply of colleges currently cannot match the larger demand. The
government and colleges have struggled to keep up with the increasing number of students.
Classes at these colleges are massive, with over one hundred students in each class filling lecture
halls beyond capacity and there are not enough seats, teachers, or living space for the students. In
2014, German colleges received 400,000 new students with only 230,000 places to house them.
7
This has become a crisis among many schools and is leading to a decline in the quality of
education.
