Would “Free Tuition” Make Inequality Worse?

I’ve got a couple of work phone calls today, so Steve is taking the boys to look at a SLAC in Pennsylvania without me.  I would have liked to go, too, but it will be really nice to work without a million distractions. I can’t properly getting into the writing mode with the boys around. I’m always bracing myself for an interruption that tears me away from a thought. I hate that. I’m not the most admirable parent, when that happens.

Ronald Brownstein has an interesting article in the Atlantic today about the impact of Bernie’s — and now Hillary’s — plan for free tuition at public colleges. He quotes research from Anthony Carnevale from Georgetown.

If tuition is eliminated at public universities for families with income up to $125,000, as Clinton has proposed, more upper- middle-class students who now attend private schools may decide that Austin, Ann Arbor, or Berkeley are better bargains—and intensify competition for the limited slots available there. “What this will do is create a lot of people competing for spaces at public institutions and it will have a bumping effect,” said Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce. “For minorities and low-income students it will push them down the selectivity queue, toward open admission and two-year colleges.”

I know that there are parts of the country where a family income of $125,000 is upper middle class, but it isn’t around here. It certainly isn’t around Carnevale’s Georgetown neighborhood. A $125,000 is the family income of a school teacher with ten years of experience married to an office manager. That’s not upper-middle class.

$32,000 — that’s the in-state tuition for Rutgers — is a stretch for a family making $125,000. College tuition might amount to a third of the take-home income for that family. If that kid is lucky enough to finish in four years, that B.A. will cost the family more than an entire year of salary.

A kid with an average GPA and test scores from a family like this isn’t going to Georgetown or other very selective private colleges that have a price tag of $70K. Rich kids are hardly going to be swamping the campuses of Rutgers and Delaware and pushing out more needy kids, if a plan like Hillary’s actually makes it through Congress (pretty unlikely anyway).

Now, a plan like this would be great for the lower and the middle middle class. For families that have enough resources to prepare their kids for college, but not enough to afford them. Would it help many lower income families? No. Because not enough of those kids are going to college and those that do are going to less selective colleges and many of them don’t finish school, because they weren’t adequately prepared in high school.

Brownstein does hit on a real problem in his article. The problem is that public colleges have become too competitive. While $32,000 is a lot of money, it is still cheaper than the $70K for the private colleges. With all the new amenities on these public school campuses, they are drawing kids that would have gone to the private schools. There aren’t enough seats in the classrooms for kids with average academic backgrounds. So, the traditional students of public colleges – middle class kids with B’s – are in a jam. Parents are sending them to out of state colleges with price tags in the $40-$55K range and racking up more debt.

So, there are three separate problems all of which need different solutions. Problem One is that college is unaffordable to middle class families. Problem Two is that there aren’t enough seats in public colleges in some states, like California, New York and New Jersey. Problem Three is that lower income kids are getting funneled to less selective schools and failing out.

The “free tuition” proposal solves Problem One, but doesn’t do anything about Problems Two and Three. Unlike Brownstein, I don’t think that “free tuition” will make Problems Two and Three worse.

52 thoughts on “Would “Free Tuition” Make Inequality Worse?

  1. I think public colleges cost too much, compared to what I think they should cost and compared to what is affordable for a wide range of income. But, I think this is a “pony for everyone” initiative that has 1) no chance of passing into law and 2) if it were actually being discussed as a law, would indeed have significant ripple effects in our current system (the role of the state, federal aid, on private colleges, on community colleges, . . . .) that would require significant changes to the bare bones outline.

    I skimmed the Clinton talking points on the plan, and it’s hard for me to imagine supporting it, in the version I see in the brief summary. Glancing at some universities, in state tuition for four year publics ranges from $8500 in North Carolina to $14000 in New Jersey (and apparently, there are both higher and lower tuitions than I spotted). Would this plan make either free? Would there have to matching funds from the state?

    Would that free tuition be guaranteed regardless of family assets? Would it be guaranteed at any public university, or only in the state in which you/family/? are a resident (looked at the numbers, and was surprised to realize that in 2010, 60% of people live in the state in which they were born; the western average is 49%, substantially lower than in the NE 63% or midwest (70%)).

    The NYT discusses this particular issue, but there is clearly lots of vagueness in the plan: http://www.nytimes.com/2016/07/20/upshot/the-trouble-with-hillary-clintons-free-tuition-plan.html?_r=0, i.e. vague promises with no really implementation.

    I thought the idea of free community college made more sense, but, it was probably the equivalent of a chicken for everyone, and didn’t have the populist traction and, since the free tuition isn’t a real plan anyway, you might as well promise ponies instead of chickens.

      1. Tried to change it, but didn’t fully succeed. But also the “plan” is absurd.

        I rate the tuition plan feasibility nearly on par with the wall that mexico pays for (with the caveat that unlike the wall, which would be wrong, free tuition wouldn’t be wrong).

  2. I realized that I had no idea how people afford college now, and thought this article was interesting, in CNN Money: http://money.cnn.com/2016/05/25/pf/college/graduate-college-debt-free/index.html?iid=EL

    How did they pay for their four years: 1) instate tuition 2) working 3) parental help 4) aid 5) scholarship

    1) Student 1,OSU, 100K, 50K from parents (first year expenses, rent ), 50K earned working in a bar.
    2) Student 2, Arkansas, 95K, Tuition paid by scholarship, 22K from parent, RA/dorm costs covered
    3) Student 3, Maryland, 100K, GI Bill, tuition paid, housing allowance of about $1500, pell grant (after 6 years of service, and independent student status).

  3. I think you’re right.

    But I think it will exacerbate a different problem if we just do that – we are steering way too many people towards college instead of developing alternative credentials. And if we are sending more and more people to college without increasing public funding, the quality of the education will continue to get weaker.

    1. I agree that we are steering too many to the traditional american college education (4 years, broad based, education and not training). The rates of 25-29 year olds college degrees have gone from 22% to 33% between 1975 & 2013 (http://www.nytimes.com/2013/06/13/education/a-sharp-rise-in-americans-with-college-degrees.html) and there must realistically be some theoretical limit to offering/earning the degree as it currently stands to everyone.

      But if not everyone goes to college, college can’t be a necessity for a stable economic life, which means we have to have opportunities for those who won’t go to college. I see higher minimum wage, paid internships with guaranteed employment (something like an apprentice system), company-sponsored education (I keep hearing tidbits about germany having a model of education that ends in employment at a private company as all being a prerequisite.

  4. Of course, $32,000 (although the website says it’s actually $26,506 for New Brunswick) is the sticker price for Rutgers. I’d be curious what the net price calculator says a family with two kids making $125,000 would actually pay – I get the strong feeling that the headline figure is a “soak the rich” price, like most private schools’ tuition, that bears little relation to reality for most people.

  5. Because I am obsessed with the issue of college and the role it plays in children’s lives, from the Net Price Calculator for Rutgers-New Brunswick, in state calculations.

    Rutgers Tuition & Room & Board: $27,323
    Rutgers (other): Books & Other: $5,326
    Total Cost $32,649

    Your estimated need:
    Expected Family Contribution: $23,023
    Total Need: $9,626

    Your Estimated Grants and Scholarships: $3.500
    Your Estimated Net Price: $29,149

    They also offer another $5,500 in direct student loan, which would make the out of pocket $23,649/year.

    (for a family of four with one child, making 125K, no other sources of income, average taxes, 100K in assets, and no significant assets outside of home & retirement accounts, and a student with 1500 combined SAT & a 3.9 GPA)

    And, although zero-ing out that 100K in assets changes the need, it doesn’t change the bottom line — because without the 100K, the EFC is less ($16,294), there is no scholarship/aid available other than the direct loan & the $3500 discounting.

    University of Washington, with similar family numbers, yields 26K as the cost of attendance (which can be discounted by a Stafford loans, to meet an EFC of 22K with 100K in assets or 18K with 0K in assets).

  6. The problem with Laura’s analysis is that it doesn’t allow for marginal changes, and treats the world as rigidly divided into (I) “rich” (who wouldn’t think of sending their kids to State U.) and (ii) middle-class, where she sees herself. There are in fact lots of families who scrape their way through Georgetown or Emory, because it makes sense to spend $250K instead of $150K for a slightly better education, but who would absolutely head to State U. if it cost zero. Those families (mostly people with incomes between, say, $150K and $500K) would definitely crowd out the kids who now go to State U., thereby exacerbating problem 2 Those with incomes over $500K might not change their behavior, but t.hat is well under 1% of the population.

    1. Yes. “Rich” is a sliding scale and few are really completely price insensitive. And, there are the students who go to the smaller privates with discounting that brings the cost in the range of the publics. They might make other decisions for free tuition, too.

      I think the public universities would have to scale up if tuition was free, and I don’t know how successful they would be at scaling up.

      Is it really the case that CA doesn’t have enough spots for students? Or only that they don’t have enough spots in their premier system (UC)? Aren’t there enough spots if you include the CSU system and the community colleges?

      1. Last I heard, Merced and Riverside were easy entries and very decent schools. But, if only Berkucla will do, this is trouble.

    2. Though, if we compare this with the private school phenomenon, is this the behavior we’ll actually see? Most of the people I went to college with came from the lower-rich/upper upper middle class bracket outlined above (family incomes between 200K-1 million), and most of them came from areas with great public schools but had gone to private school anyways. Sending one’s kid to an expensive school is a form of status signalling just like driving a luxury car or wearing designer clothing. It’s absolutely not necessary, but most people who can afford it seem to do it anyways. No one’s afraid BMW is going to go out of business because Toyota Camrys are available.

      1. Yes, it’s behavior we would see, if we weren’t talking about unicorn ponies. We see it now at the level where parents would pay for Yale over our state public but won’t pay for something less (with different schools qualifying as something less). We ourselves decided that the cost was worth it for only one of our city private schools for our child (though we also were not sure the other privates were even better)

    1. That article – barf. “Let’s shame some young women for caring about stuff other than what I want them to care about.”

      1. I love decorating and did try to make my space my own in college. The XY version of this, back in the day, when safety regulations weren’t as rigorous was to build elaborate loft beds, that would stay with the room (I inherited a room in which the previous owner had built tansu chest steps leading to the loft bed). Roommates are bonding over this planning too.

        But, ““It’s really competitive,” she said. “So I was like, we definitely have to make ours look good. A lot of them here are done up.” does suggest pressure beyond pure enjoyment. Am also pretty creeped out about the twinning.

      2. There are people who love things like this. It’s like the people drawn to developments with restrictive deeds that limit things like open garage doors or visible clotheslines. We once lived in a development which specified no vegetables in any outdoor gardens.

        I will admit we didn’t remain in the neighborhood long. Our lawn was never up to snuff.

      3. Yeah, the sexist judgment was annoying, and there are excellent critiques of this phenomenon but judging the girls for being girly isn’t one of them. The article mainly made me realize how culturally different most of the US is, because for me the spartan barracks aspect of the dorm room was for me considered to be part of the rite of passage of college.

      4. But most dorms are not that spartan anymore. That’s not what students want and that desire for nicer accommodations supposedly drives the climbing walls etc. Where a friend of mine went to school, there was one phone per floor in the dorm. I remember thinking how much I would hate that and my dorm had phones in every room (and they were recently installed at the time).

  7. It isn’t my taste, but that article makes it pretty clear that we should all condemn them for their taste and how dare they care so much about their dorm room. It isn’t about what is driving the pressure or any of that. It is a very Slate article and very gross. A good reminder to me to not read Slate.

  8. Somehow couldn’t reply above. I went back last year for my 10 year college reunion and stayed in the dorms, and the rooms were just as spartan. Still the same duct taped mattress, and still no air conditioning. My school had a very WASPy Quaker side that pushed back against offering indulgences in dorm rooms, although they existed elsewhere on campus (e.g. white table clothes, silver serving platters for holidays in the dining hall). Some of the newer dorms were outfitted with air conditioning, but it was kept off and students were not allowed to bring window units. The no cable rule was probably a bigger deal back then than it would be now what with netflix.

  9. Dorm amenities are a competition between colleges below the very top tier. There is a study I found somewhere…here is a mention of the study: https://www.insidehighered.com/news/2013/01/29/many-students-opt-colleges-spend-more-nonacademic-functions-study-finds.

    During our time touring colleges, it was noticeable that the very tippy top generally did not give dorm tours. You don’t go to Harvard for cushy dorms. (Although I’m willing to bet some of the rooms have great molding.)

  10. Now that I’m a college tour pro, I’ve seen a lot of dorms. The tour guides always leave it for the final destination on the tour. It must be the money shot of the tour.

    Dorms are a little nicer than the dorms than the old days, but not hugely nicer for the average, non-honors college, freshman. What’s different? Target. They have a ton of cheap, china-made bedspreads with matching waste paper baskets and picture frames.

  11. Laura said:

    “Dorms are a little nicer than the dorms than the old days, but not hugely nicer for the average, non-honors college, freshman. What’s different? Target. They have a ton of cheap, china-made bedspreads with matching waste paper baskets and picture frames.”

    You know, I think you’re right.

    A few years ago, we found ourselves having to spend one year as a family of 4/5 in a student apartment rental–four tiny bedrooms and four tiny baths squeezed into just under 1700 sq ft.

    When I did a tour of a similar unit before we committed, the property company took us to see a similar floor plan college girl apartment that was ALL done up. Not expensively, but super cute. (Those girls would even put up seasonal wreaths on their front door.)

    We wound up living upstairs from a group of college boys that was definitely not on the property manager’s tour…

    I actually am very positive about college kids doing some adulting, even if it’s basic adulting like having a cute apartment.

    1. My own particular college boy in a student apartment rental told me he was looking for the red pillow cases because he wanted a red theme for his room. Be still my beating heart. Coulda knocked me over with a feather. ‘Theme’???

  12. There are a lot of holes in this Atlantic article, which could have been filled in with a little more research. University of Georgia and Georgia Tech, our two flagship 4-year universities, have in-state tuitions and fees at about $12,000. When Georgia initiated the Hope Scholarship about a decade ago, which then paid 100% tuition and fees to students graduating high school with a minimum 3.0 GPA, it effectively stopped up the brain drain of the best and brightest students leaving the state for college. (Today the Hope Scholarship pays only about 80%, but students with a 3.5 GPA or higher qualify for the Zell Miller scholarship, which pays 100%.) Because UGA and GT became so competitive, students graduating with lower averages began attending the less regarded Georgia State, Georgia College, Kennesaw State University, University of West Georgia, etc., as well as the community colleges here. With so many bright students attending the second and third tier state schools, the quality of those schools improved tremendously. Now you can get a first-rate education at a wide variety of affordable Georgia 4-year and 2-year institutions, all because the brightest kids quit leaving the state. And then there’s the larger issue of how stopping the brain drain helps the overall state economy, but since that’s an argument I barely understand myself, I’ll just stop here.

  13. Anjali said:

    “And then there’s the larger issue of how stopping the brain drain helps the overall state economy, but since that’s an argument I barely understand myself, I’ll just stop here.”

    This is not my area, either, but there does seem to be a lot of synergy between colleges and tech hubs. I believe UT Austin is an example. I just found this–not sure if it’s a big deal or not.

    “The Austin Technology Incubator is the startup incubator of the University of Texas at Austin. A program of the University’s IC2 Institute, ATI has a 25-year track record of helping founding teams achieve success.”

    “ATI focuses on helping startups compete successfully in the capital markets. We don’t write checks. But we have strong, long-term, trust-based relationships with investors—the local angel investors community, local and national venture capital firms, and sources of public funding. It works. Some stats:

    “85% of our 2012 graduating class received funding while at ATI
    Members of that class have now collectively raised over $335 million
    Since 2007 ATI companies have raised over $650 million in the capital markets
    More than 40% of Texas Emerging Technology Fund awards in Central Texas have gone to ATI members”

    http://ati.utexas.edu/about-us/

  14. Georgia is an example of the model that a number of states have abandoned. I think Alabama and NC, too, and Texas. Maybe part of the difference is that the sell to voters is easier when the competition is in other states? That Georgia saw loosing its best and brightest to Harvard and the NE but Massachusetts doesn’t have the same worry?

    1. The difference though is that Georgia historically has had poorer quality state schools (aside from Georgia Tech). Anyone could get in, anyone could go. Maybe in states with a better state colleges, there was already an incentive to stay. In Georgia, there just wasn’t until the Hope scholarship.

  15. bj said,

    “Georgia is an example of the model that a number of states have abandoned. I think Alabama and NC, too, and Texas. Maybe part of the difference is that the sell to voters is easier when the competition is in other states? That Georgia saw loosing its best and brightest to Harvard and the NE but Massachusetts doesn’t have the same worry?”

    That probably is a pretty big issue–that some states need to work harder to keep them down on the farm.

  16. “..Problem Three is that lower income kids are getting funneled to less selective schools and failing out…”
    I’ve got serious doubts that lower income kids do relatively less well at the less selective schools than they would at either state flagships or high grade private universities. For whatever reason – families were stretched and could not support them academically, lack of native talent, they went to less effective high schools where they got less teacher support and their peers didn’t inculcate high expectations, you pick – they hit college less well prepared to succeed. They probably look better relative to their peers at the less selective schools – I know I looked better next to my fellow students when I was in community college than I did when I clawed my way up to state flagship.
    I do think a lot of kids get schnookled, going to college and not making it and dropping out at Year 2 with nothing marketable and $25.000 in debt. The book to read, if you want to see where a lot of my bilious views here come from and a discussion of less selective schools doing better for lower income kids than did state flagship, is Paying for the Party, about young women in a dorm at Indiana.

    1. I would add, the conventional, and statistically accurate, information that it is almost impossible to flunk out of HYP is mostly a product of having kids who are so smart that they can pass college level exams without working very hard. If you look at the unqualified D.O. (development office) kids–I know because several of them are the children of friends–they do indeed flunk out fairly often. It’s just that there aren’t more than 20 or 30 kids like that in a class at HYP, so they aren’t statistically perceptible. It’s not because those schools are somehow more supportive or pedagogically more effective or better at exciting the average 18-year-old about the life of the mind or anything like that.

      If there were any significant number of children from middle-income families who weren’t mega-geeks at HYP, they would flunk out in large numbers. Sending children like that to top schools would not necessarily be doing them a favor.

      1. I’ve never heard the term D.O. kids, but when I was a TA at an HYP, I had one – the child of two very famous people who were not just celebrities but pretty smart celebrities. She was by far the slowest student in the class, and possibly the only person who got lower than a B-. (Yes, grade inflation, but those HYP kids know a lot already, are supersmart, and usually work pretty hard.) She was sweet and did not try to use her celebrity status to get any advantages, but I remember thinking it was unfortunate they had obviously used it to get her in.

    1. Do those costs include capital costs and the overall scale of the enterprise? This list is 5 years out of date, but still, the percentages of out of state students are striking: http://www.thedailybeast.com/articles/2011/08/18/college-admissions-which-state-schools-give-an-edge-to-out-of-state-students.html.

      If more than a third of the students are out of state, doesn’t that mean the entire campus and operation must be larger to accommodate them? So how are the “costs per student” calculated? Do the full costs of bonding for larger dorms, larger athletic facilities, food service, more classrooms, etc. get added to the total?

  17. My floundering directional state university, in the most failingest of failing states, used to offer in-state tuition to residents of a few surrounding states. This year it began offering it to residents of all 50 states; only international students pay full fare.

    1. I’m trying to figure out what the “most failingest of failing states” is. Seems like there are so many different dimensions on which one could define the failingest. Our state is doing OK; but I do feel that its government is the same impossible gridlock we see nationally. And the gridlock affects everything, including education and our state university.

  18. Wow. Great discussion and I missed it. Sorry. I had to finish an article. I’m totally rusty and it took way longer than I thought. It’s done now and the editor can’t get to it for a couple of weeks, so I’m taking a day off.

    The reason that more states aren’t following the GA model is that they can’t afford to. The priority is no longer educating kids in the state. The priority is keeping the lights on in the building. And the only way that they can do that is by bringing in kids from other states and countries.

    Bernie kinda screwed things up by shooting for the moon with the free tuition thing. It’s not going to happen at all. What state colleges need is just a return to getting some support from the state. Public colleges in VA, for example, only get 10% of their funding from the state. In order to stay financially afloat they have to do whatever they can to bring in the bucks. So, it’s bread and circuses for rich, out of state kids. It’s rather a large leap to go from 10% funding to 100% funding like Bernie wanted.

    1. But why does Georgia prioritize paying for college for all their residents (and, honestly, I don’t know how long this will last — there are changes afoot everywhere), while New Jersey doesn’t? The difference in priority isn’t overall wealth.

  19. I actually have some views on Carnevale’s notion of crowding out, too: informed by my posltion in VA, where we have a wide array of public colleges and an exquisite hierarchy of how ‘good’ they are, from William-and-Mary and UVa at the top to, probably Radford and UVa-Wise bringing up the rear. If you have mediocre high school grades and mediocre board scores, you will get in somewhere. Our family is in what I’ll call the ‘sour spot’ for college costs – we make enough that they expect us to pay for the whole thing, and we don’t make enough that paying for the whole thing wouldn’t make a huge dent in retirement, paying for a wedding, paying for our time in Geezerville, etc., which we see looming in the future. So maybe Carnevale is thinking we should suck it up and pay for Oberlin, or something, so that a cheap place is freed up for someone else? Screw ‘im! That’s my view. And further, I’m not convinced that Radford and Wise don’t serve their students well.
    Whether we ought to be sheltering upper middle class kids from the cost of college is another question, there is a real regressivity to using taxes from poorer people to make college cheaper for richer people. I prefer the situation in Va to that in Jersey, in that there are enough places in decent colleges for all the grads from this state and a good number of additional spaces for kids from underproviding states – like Jersey.

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