What Does Free College Buy the Taxpayer?

Eakinomics: What Does Free College Buy the Taxpayer? Among the proposals in the president’s budget is the notion that it “Adds at least four years of free education” because “It would provide universal access to high-quality preschool to all three- and four-year-olds, led by a well-trained and well-compensated workforce. It would provide Americans two years of free community college.” I have some real reservations with the idea that the K-12 education system is fine, and that the problem is with the bookends before and after. Let’s put those aside. And Eakinomics has already weighed in on the idea of free college. Tom Lee’s latest research raises another issue: The return on these dollars could be incredibly low. Under the proposed American Families Plan (AFP), two years of community college would be free for first-time students. The federal government would cover 75 percent of the national average tuition of community colleges, with states picking up the remainder. The program is estimated to cost $109 billion over 10 years. As it turns out, getting people to enroll and paying their bills is the easy part. The hard part is getting a degree. Lee looks at the 2009-2013 cohort of students and finds: “Of the 8.6 million students in the combined public two-year cohort, only 3.3 million (38.9 percent) received a degree or credential while 5.2 million (61.1 percent) did not receive a degree. The free community college proposal would therefore pour large amounts of federal funds into the least-successful sector of colleges. At least 60 percent, or $65 billion, of the $109 billion allocated for free community college under the AFP would go toward students who never finish or receive a degree.” (For purposes of comparison, the completion rate in public 4-year schools is 64.1 percent. In private 4-year schools it is 74.9 percent.) One reason that community college completion rates are lower is that students tend to be older, have tighter time constraints, and have more responsibilities while attending college. Assuming they are also first-time students, these problems would remain. Another reason is inadequate academic preparation. Per Lee, “At least 80 percent of community college students enroll in at least one remedial course. The attrition rates of these remedial courses are high, so many students never make it past this point and drop out.” The problem is that the proposed free college program makes no attempt to diagnose and solve the problem of low completion rates, thereby guaranteeing that much of the money will effectively be wasted. Indeed, Lee argues that free college might make the completion problem even worse: “Finally, by making community college free, the AFP may worsen the problem of non-completion. Tuition is a big motivator for students to complete their degrees as it is the cost they face regardless of completion. By removing tuition costs, community college students would no longer have to take into account their sunk costs should they drop out. Community colleges could see a large influx of students that want to take advantage of free tuition but have a much lower incentive to complete a degree.” Free college looks like anything but a bargain for the U.S. taxpayer.