Could We Get Free College at Last?

Well, maybe. Jordan Weissmann at the Atlantic writes that, surprisingly enough, it is possible for the federal government to provide free higher education to every student now enrolled in a public university, without spending any more money. As he explains:

Here’s a little known fact: With what the federal government spent on its various and sundry student aid initiatives last year, it could have covered the tuition bill of every student at every public college in the country. Doing so might have required cutting off financial aid at Yale, Amherst, the University of Phoenix, and every other private university. But at this point, that might be a trade worth considering.

Let’s start with a quick survey of the numbers. Between graduate students and undergrads at both four-year and community colleges, students paid just under $60 billion in tuition to attend state institutions of higher learning in fiscal year 2012.

So far so good. But as he points out, we’ve actually got that $60 billion, and then some:

That’s our threshold: About $60 billion. Now how much does Washington spend on aid? According to the New America Foundation, Washington appropriated some $77 billion worth of it in 2012 via a giant salad of tax breaks and grants…. The money we’d need for this grand experiment is already there.

Technically, yes. Could we use that money more effectively? As he puts it,

With the money that’s either going to private colleges, or or being paid to the public sector in a roundabout way via tax breaks, we could probably make tuition at public institutions — which educate about 76 percent of American undergrads — either free, or ridiculously cheap. The question then becomes whether that’s a vision of higher education finance that we would want to embrace, and if it is, whether it would be a feasible policy.

Well, no, not really. The problem is that while it’s true on a balance sheet we could perhaps move this money around so as to provide free public college to all. But we can’t do that in the real world (Weissmann acknowledges this). That’s because that $77 billion is being spent on things.

Some of it is no doubt being wasted. Some of it is padding the balance sheets of for-profit schools. Some of it goes to supplant high tuition at private universities with large enough endowments to fund the aid on their own.

But that doesn’t really matter. Any attempt to move all federal aid directly into state universities would result in a vast and angry outrage (and lobbying efforts) from America’s private universities (not to mention for-profit companies that offer higher education).

“You’re cutting off aid to poor students,” they’d complain. And they’d be right. The reality is that while Princeton or Amherst could continue to exist fairly well without federal financial aid, University of Phoenix would go bankrupt. Also destroyed under this plan would be a huge swath of small private colleges that educate many middle and working class Americans.

And that’s why it will never happen.

But the specific point that Weissmann is making here is very important, and it’s one that might be very useful for education reformers, particularly advocates of public higher education, to make: affordable state colleges are possible. There’s no natural reason for public colleges and universities to be so expensive. We’ve devoted public resources to a complicated federal financial aid system that funds many, many institutions and fails to keep college affordable. We may not have done this on purpose, but this is what we’ve done.

Any reform ideas should start from this reality. How much money are we spending, and what is it buying?

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Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer