The Death of Private College? The Threat of Free College to Private Institutions
By Hayden Daniel ‘19
One of the most divisive and distressing issues that has arisen in the 2016 election cycle has been the question of college affordability. The question of college affordability itself is split into two parts: how to help graduates pay down the debt they have accrued, and how to reduce the amount of debt that future graduates will incur. The number of students graduating with debt continues to rise, and has now become the second biggest source of consumer debt. In 2012, 1.3 million students graduated with debt, a significant increase from 1.1 million in 2008. Also in 2012, 66 percent of students who graduated from four-year public colleges had student loan debt. 44.2 million Americans are burdened by a total of $1.26 trillion dollars in student loan debt. The average Class of 2016 graduate had $37,172 in student loan debt. Meanwhile, the two most popular majors for university students in 2015 were business administration and psychology. The average starting salary for a business administration major was $41,200 and the average starting salary for a psychology major was $34,700. The average monthly student loan payment in 2015 was $351 a month.
Quite understandably, the question of student debt and college affordability became a main fixture for young voters and a main selling point for presidential hopefuls during the 2016 election cycle. As with many other policy questions, newly President-elect Donald Trump has fluctuated from being totally silent to effusively, extraordinarily vague on the issue. Mr. Trump’s official campaign website says that his goal for higher education is to “Work with Congress on reforms to ensure universities are making a good faith effort to reduce the cost of college and student debt in exchange for the federal tax breaks and tax dollars.” Granted, Mr. Trump has made K-12 education a fixture of his campaign and consequently has not yet fully addressed the issue of higher education. Instead, the Democratic Party has largely taken up the crusade for college debt reform.
First heralded by the self-described Democratic Socialist Bernie Sanders during the Democratic primary, the issue was soon adopted by Hillary Clinton, who has continued to champion a plan to make public college debt free and provide college debt relief for graduates. The Clinton campaign adopted many common tenets of both the Sanders campaign and the debt-free college movement in general, including making public college and universities tuition free for families making under $125,000 a year, allowing graduates to refinance their loans at lower interest rates, expanding government need-based aid such as Pell grants, and of course imposing a tax on high-income taxpayers. Secretary Clinton has also advocated for a three-month moratorium on all student loan debts and income-based repayment for student loans. Though it seems unlikely that this plan will be enacted anytime soon since the Election Day upset, college debt and affordability remains a serious problem facing the nation, especially since the deficit between jobs requiring bachelor’s degrees and actual bachelor’s degree holders continues to grow.
However, is making public colleges and universities tuition free the best way to address this problem? What affects would making public college both tuition and debt free have on the quality of education at these institutions? Finally, how would making public institutions tuition free affect private, liberal arts colleges like Washington and Lee?
The free college plan makes a great political talking point, but in reality it is a faulty policy. First off, “free college” is in no way “free.” No free college plan yet proposed offers free room, board, or books, so not everyone would leave college debt free. It would not fix the problem of rising costs, but would only defray those costs - not to the students themselves, but rather to taxpayers. Instead of each student and their family paying the price of tuition at a public college, those costs would be deflected to American taxpayers. In fact, the free college plan would likely only succeed in compounding rising costs rather than diminishing them. The plan for free college caps tuition to zero, but does not actually change the rising cost of college. If we apply a giant influx of federal money through subsidies to college tuitions, college costs are much more likely to still rise than fall. The almost definite increase in enrollment that would come with the promise of a free higher education would also drive up the tax burden for this policy. The equally substantial influx of both students into colleges and degree-holding job seekers into the job market (driven by the allure of free higher education) would depreciate the worth of those degrees, which will in turn decrease the earning power of college degrees. The actual cost for the federal government should also be taken into account. Estimates range between $350 billion for Hillary Clinton’s version of the free college plan and $750 billion for Bernie Sanders’, on top of the $80 billion that the federal government already spends every year on higher education. Both politicians claim to be able to pay for their plans by proposing an old, untenable solution for any new welfare project - tax the rich.
The prospect of tuition-free college may also have dire consequences on private institutions. The 1,600 private colleges around the country enroll about 20 percent of all college students. Of those students who attend private college, almost half come from households that earn less than $50,000 a year. Also, students who attend a private institution on average borrow $7,000 to $10,000 more than their public-school counterparts, spending around $29,000 dollars more per year for tuition than their in-state public college counterparts, so the appeal of tuition free and debt free college may be irresistible to many enrolled in private schools. According to a Georgetown study, enrollment at private institutions could drop by as much as 15 percent if Mrs. Clinton’s plan were to be enacted. Free college threatens to become a retroactive step in higher education from a demographic point of view. The hardest hit private institutions would most likely be women’s colleges, religious colleges, and historically black colleges, especially ones that serve a mostly low-income population. Also, low and middle income students are the most likely to make the switch to the free public option if public college is made tuition free, which would undo decades of federal policy diligently aimed at diversifying private institutions. Ivy League colleges with widespread name recognition will probably not be widely affected, because of the certain dollar amount placed upon the notoriety associated with attending that school provides students who attend them; private institutions without instant name recognition, however, would be hard pressed to compete for students against a highly subsidized free public option. The fate of Washington and Lee itself is unclear in this scenario. The stellar reputation of W&L carries with it a certain guarantee of continued success regardless of the price tag, but no doubt some prospective students would be lured away by the promise of a free tuition. Though the recent presidential election results make the implementation of a tuition free and debt free college plan unlikely, the question of college debt and affordability is likely to remain a hot topic on the political stage as both costs and student debt continue to rise.