In the last column I promised that I would begin a discussion about “Free College.” It is just one of the terms that many people use when they talk about the government, whether state, federal or both, providing free college tuition, and/or living expenses, and/or fees and books to some or all students enrolled in a two-year community college or a four-year state college or universities.
Whether you approach this as an economic, social policy, philosophical, political, or fairness issue, or some combination of those, it can quickly become a very complex one. As a result, I am not sure that I can do real justice to it in this personal finance column. However, since I don’t believe that the issue is going away, and it does have some important financial implications, for both individuals and our larger economy, I will attempt to lay out some of the issues that I think will need to be addressed if there is going to be “free college." They are things that I have read about, and, also, things that I have heard from people who frequently ask me for my opinion, because I have written so much about college costs.
It is not my intention to make this a political discussion, even though in many ways it is. However, I do intend to revisit some of the things that we have discussed in the past, like grade inflation at the high school and college levels, because I feel that they are relevant to the issue of “free college.”
To begin our discussion, “free college” would be a reality right now if all Americans, or a vast majority of them, believed and agreed that, in order to be competitive in today’s job market, and to be an informed citizen, after high school you need a college education, whether it be in a two- or a four-year program. After all, we, as a society, have agreed that you need, and are entitled to, a free K-12 education, and this would just be an update to meet today’s realities. Therefore, the government, state and/or federal, would need to provide it. It’s just the right thing for our society to do, in order, among other things, to ensure equal opportunity.
In order to support that particular “free college” proposal, it would include a conclusion that this would improve the overall economy, because debt-free graduates could buy more homes and other goods, a better educated workforce could fill many of the unfilled skill jobs in the economy and be able to pay more taxes, and other factors that might grow the economy.
That particular “free college” proposal would also include an agreed conclusion, and a promise, that the governments involved can and will be more efficient and effective in spending, so that taxpayers would not have to pay more taxes.
I am certain that you have all heard a variation of that proposal.
Before we get into some of the “details” that may need to be addressed if the above proposal and its rationales are not accepted, I have to say that, in general, I agree that if governments were more efficient and effective, even without making major shifts in their spending priorities, some “free college” would most likely be affordable and not require additional taxes.
We have talked a lot about government spending inefficiency in this column. However, let’s be honest, government inefficiency often creates jobs that would be lost if it were more efficient. Having five people do the work that private industry would do with three means there are two more jobs, where people are paying taxes and spending money in the economy. In addition, there is no guarantee that those two people could find a comparable job in the private sector. When it comes to building projects and purchasing, a similar analysis is possible.
Beyond the government efficiency proposal, other funding proposals that I have heard for “free college” include cutting military spending, taxing the wealthy, closing corporate loopholes, and taxing certain Wall Street transactions. The problem with these proposals is that some Americans, lobbyists, and lawmakers would not agree with them.
Before we get into “the details”, I have to say that although some states, like Oregon and Tennessee, have free college programs, and Governor Cuomo has made a proposal for New York state, “free college” is most likely a ways off. Therefore, doing all of those things that we have talked about in this column to get the best value for every dollar you spend or borrow for college, and minimizing any student loan debt, is still important, if not more important than ever. They include aggressively pursuing scholarships; looking seriously at 2 + 2 programs, ROTC, and similar programs; graduating on time; and, if you are looking at student loan debt, doing whatever you can to make sure that your monthly loan payment, when you graduate, is not more than 10 to 15 percent of your monthly salary.
I apologize for such a long introduction to the “details," but we will get into them in the next column, as I continue to hear from people and ask them for their opinions. The first detail: If not everyone, who should be eligible for “free college?"
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program.