Saturday, February 13, 2016

The Problem With Free College

Bernie Sanders wants to make college free, arguing that college is the new high school, and high school is free.   Is this really a good idea, considering that colleges are privately run?


The free college idea is not new, and in some countries, it is already free or nearly so.  Bernie Sanders argues that "College is the new High School" and thus should be made free.  There are a number of problems with this.

First of all, yes, he is right, College is the new High School - and this is not a good thing.   This reflects how shitty High School has become and how we have infantalized our children so that by the time they are 18 they are still children and no longer ready to fly a B-17 against the Nazis as our ancestors did.   We have made High School into preschool, and that is the problem.   The solution isn't to extend High School until age 22, but to put the guts back into High School again, lower the drinking age to 18, and treat young adults as ADULTS again - and give them a High School diploma that is more than just a certificate of attendance.

Second, College is different than High School in that you don't have an automatic right to attend any College you want to.   You go to High School and they have to take you in.   In fact, you are required by law to school your children.   You can't not send them to High School, at least for the first few years.  So Bernie is comparing Apples to Oranges, which he tends to do a lot.

And yes, if you want to home-school your kids, you can - on your own nickle.  Similarly, if you want to send your kids to private school you can - but you have to pay for it (Republican voucher schemes notwithstanding).

In order to get into College, you have to apply and have to have the grades and SAT scores.   Unlike High School, admission is not a matter of right.   If everyone is guaranteed free college, then it goes without saying, that everyone should have guaranteed free admission.   How exactly would that work?

The third problem is that most Colleges and Universities are private institutions, albeit non-profit (although some odious ones are for-profit!).   Even "State Schools" are quasi-independent from the government, as legislators are finding out the hard way, when they try to fire people like "Professor Click".   So the comparison of High School - which is a government owned and run institution - with Colleges and Universities - is completely apples and oranges.

And this brings about the fourth problem - costs.   If you say "Free College" what does that mean?  That the government would pay any amount of tuition that the College or University decides to charge?   Or like Medicare, the government would decide what is a "fair" tuition amount (much as they decide what doctors can charge)?  If so, who pays the difference?  The student?   If so, College is no longer free.

Or do we just nationalize all College and Universities?   Bernie isn't clear on this, and like so many of his ideas, they are half-baked.  Nationalizing anything usually results in costs escalating out of control, so this would be a horrific idea, if the idea is to get the overall cost of College down.

The fifth problem with "Free" College is that once you subsidize any activity, you raise the real costs.   It doesn't matter whether it is the home mortgage interest deduction or tax credits for electric cars, once you put in tax subsidies or government grants, costs go up, not down.   For example, most Americans buy a home based on monthly payment, and they factor in the tax subsidy in the form of home mortgage interest deduction.    Based on monthly payment and interest rate, they figure out how much home they can "afford" in terms of purchase price.   Without the tax subsidy, they could afford less, so they would pay less, as demand dropped.   The mortgage interest subsidy ends up just raising prices, not lowering real costs.

(And this raises the issue of what to do about for-profit colleges?  You can bet the for-profit colleges would love it if the government paid them directly, instead of indirectly through guaranteed student loans, as they do now.   Free college would be a boon to the for-profit college industry.  But that does not mean the degrees would be of any value whatsoever).

Which brings us to the sixth problem.   Once you create a subsidy, it is damn near impossible to get rid of it.  If you got rid of the home mortgage interest deduction, for example, people would lose their houses - particularly those who recently bought.   Get rid of the tax credit for electric cars, and likely they will go away as well.   Or take farm subsidies.  Once you enact them, it is damn hard to get rid of them, even after some of them have been shown to be harmful or ineffective in the marketplace.   Once you have "Free College" and it doesn't work out the way you planned (which it likely will) it will be impossible to make it un-free again.

And countries where this has been tried have had this problem.   In the UK and other European countries, the government has tried to raise the nominal tuition rates in order that at least some of the cost be recouped.   Students rioted and protested.

Which brings us to the seventh problem - people do not appreciate that which is free.   When you make college free, it becomes even more of a joke that it has already.   College degrees are not only expensive today - most of them are worthless.   People go to school and spend tens of thousands of dollars on an "education" and end up working in a service-sector minimum-wage job.   It is not that college is too expensive these days, but rather that it is a poor value proposition for most people.

Consider this:  For people getting Liberal Arts degrees, a college education is about as valuable as a brand-new Yugo automobile.   The Yugo was a shitty car and not even a "value" at $3999 MSRP.   Making Yugos free doesn't make them any more of a "value" to the consumer, it just creates a huge cost for the government (meaning taxpayers) to pay.    A better idea is to make better Yugos - better college educations - so that people get value for their money.

Which brings us to the eighth problem with "Free College" - most people are going to get worthless degrees, much as they are today.   I recounted before how a friend of mine got a degree in Physics in the UK, which I thought was pretty keen.   But then he explained to me that he received an "ordinary degree" which means he basically showed up, some of the time.   Unless you have a "first" or a "second" degree, your degree is worthless.   And if college is "free" this only encourages more young people to seek worthless majors, rather than think hard about the cost/benefit proposition of college.

And this goes back to the premise of Saunders' argument - that any college degree is somehow the key to wealth an success in America.  It isn't.   If you go to a good college and get a good degree, it might help you up the economic ladder.   If you go to shitty college, get shitty grades, and get a shitty degree (or any one of those three things) you are just wasting time and money - whether it is your money or the governments is irrelevant.   Degrees in "Liberal Arts" from no-name university with a 2.5 grade average are not going to qualify you for any job other than waitstaff at the Outhouse Steakhouse - for the rest of your life.  The best that can be said of such degrees is that they keep young people out of the workforce for another four years.

You'd be better off going to welding school or at least learning a trade.  Which brings us to the ninth problem with "Free College" - not everyone is cut out for college, and in fact, many succeed better without it.   The guy who poured my concrete driveway the other day never went to college.   He has a successful business, however, and owns his own ready-mix truck.   Does he need to study "the great authors" or "African-American studies" to do his job?  Would he even want to, or succeed in such studies?   Given the guy is a Trump fan and a racist, I think such an "education" would be worthless to him and moreover would just frustrate him, as he failed at it.

The tenth problem with "Free College" is who pays for it?  A lot of young people have naive ideas that we could "just tax the rich" to pay for college.   But the entire operating expenses of every college and university in the United States, if added up, is a staggering amount.  The government already spends over $60 Billion a year in financial aid programs.   Depending on who you ask,  they would have to either double or triple this amount.   But the costs would not end there.  If college were "free" then obviously more people would go (why not?) and costs would escalate further.  And if colleges could bill the government for their fees they clearly would have no incentive to keep fees reasonable - further raising costs.

We already spend billions of dollars to subsidize college.   With grants, loans, and work-study programs,  it is possible to go to college, even if you have little money.   I went to night school while working for $16,000 a year.   The key of course, is the word "working."   Sure, making it easier for the poor to attend college might be a good idea.   But free college for the rich?  Or even the middle class?  Why?  Just so we can be more comfortable at someone else's expense?

Which brings us to the problem of what exactly is free college anyway?   Do we mean just free tuition or does this cover room and board and other expenses.  In order to live for four years, a student needs to pay for their room and board, and this can add tens of thousands of dollars to the cost of college.   Even if tuition was "free" a student would still need to come up with money to at least live in a dorm.   Do we provide this as well?  Or is this based on need?   It is an interesting question.   A lot of student loan debt is not just for tuition, but for living expenses as well.

The eleventh problem with "Free College" is that it will never, ever happen in the United States of America and this also illustrates the problem with Bernie Sanders' pie-in-the-sky ideas.    Even if Sanders were elected, he cannot dictate by fiat that such things will happen.   He would need a majority in both the House and Senate to make such a thing into law.   And even if the Democrats controlled both the House and Senate (highly unlikely) many conservative Democrats would vote against these socialist proposals.  A Sanders Presidency would make the gridlock of the last eight years look like the express lane.

Hillary tried to address this in the last debate - noting that Sanders' plan also requires the States to fund this fiasco.   Getting 50 States - most with Republican governors - to go along with this plan while they struggle with their budget deficits is not only highly unlikely, it simply ain't gonna happen.

And this is what makes me sad about America - not that we try to vote for a free lunch, but that people even think a free lunch is possible.  Economic and Political reality are thrown to the wind in favor of "what's in it for me!"

And online, you see this sort of attitude from so-called "Millennials" who have issues with their parents and think that we should start taxing the savings of Americans to pay the bills that college students have rung up.   They went to crappy college and got a crappy degree with crappy grades and now they can't find a high-paying job because they are not qualified to do anything.    And somehow this is our fault and the measly sums we have accumulated to survive in retirement are to be taken away and given to younger people to make things "fair".   I can only say, I hope they never grow old and have that happen to them.   Sure, it is fun to use the elderly as a punching bag - just remember you will be one too, someday.

Hey, I get it.  I hated my parents, too.   But I never thought that I had a "right" to their money.  I worked my way through 14 years of night school and spent ten years after that paying off $38,000 in student loan debt (worth over $65,000 today).  So excuse me if your $25 grand in debt doesn't seem like some onerous burden.

And please, don't whine about "high rents".  I have a condo I rent out in Alexandria, Virginia for $1100 a month, including utilities (and it sat six months unrented with no takers!).   That sounds like a lot, but in 1989, I was paying $900 a month (nearly $1800 today) to rent an apartment just down the street.   In terms of "injustice" to this generation, I just don't see it.   If anything, they have it far easier than we had it back then.

Of course, back then, we didn't have cell phone and cable TV bills to pay.  Right?

Something has changed with this latest generation.   And maybe the infantilization of young adults is part of the problem.  Maybe further infantilizing them by making College a place to park for four years is a really, really bad idea.

Maybe a better idea that making "College the new High School" is to put the balls back into High School.   Make it hard.  Make it tough.  Make a High School diploma worth something.  In order to graduate from High School, you should know at least one foreign language.   Today, we graduate students who cannot read and write their own.   In Europe, kids know two or even three languages by the time they graduate from High School.  In America, many can barely speak English.

Stop pandering to students and stop coddling them.   Give teachers authority to discipline students without fear of retribution.   Let's stop feeling sorry for ourselves and feeling sorry for some dumb-ass kid who won't put down their smart phone in class.   And at the same time, give these kids the rights and responsibilities we once had - to have a beer at age 18, and to have responsibilities and freedoms in life.

Maybe, if High School becomes the new High School, we will graduate fewer whiny "Millennials" who think the world owes them a living.

Just maybe!

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