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Should Higher Education in the United States Be Free?

Americans agree that elementary and secondary education is a right, and hence, it ought to be and is free. Recently, many have argued that post-secondary or higher education in the nation’s public universities also is a right and therefore should be without charge too.

Once a fringe idea, this perspective has now moved to the center of educational policy discussions because two leading Democratic candidates for president in 2020 – Senators Bernie Sanders and Elizabeth Warren – have endorsed it. But does it make sense to make higher education free of cost?

Based on my research and teaching in microeconomics, I argue that it does not. To see why not, let us first focus on the number of people involved and then address the economic and moral aspects.

In the U.S. and most other advanced nations, only a relatively small proportion of the population attends university. Data published by the OECD, a group of 36 developed countries, shows that across these nations, approximately 45 percent of adults between 25 and 34 receive some sort of post-secondary education.

In addition, these individuals tend to come from wealthier families. So, if higher education were to be free, it would help only a small fraction of the population that does not particularly need this assistance. It makes more sense to provide financial support to those who are in greater financial need.

Economics

Proponents claim that free universities would provide many economic benefits, including reduced student debt and a diminished need to apply for other forms of public assistance. Some of these claims are undoubtedly true, but this notwithstanding, it is costly to provide free higher education.

Elementary economics shows that when a good that is costly to provide is made available for free, the consumption of this good will typically exceed the socially desirable level. Practically, this means that people who either should not or would not be in university are now more likely to be in university and/or to spend a longer time to complete their degrees.

The decision to pursue higher education is an investment decision with attendant benefits and costs. In other words, one is investing in one’s future earning power by bearing present expenses. Although these costs are not insignificant, the benefits from the increase in a person’s knowledge and skills, the networking opportunities, and the diploma that is ultimately obtained, flow largely to the individual making this investment decision. Therefore, it makes sense for individuals to bear the present costs, typically by borrowing against their future earning power.

Morality

Many observers believe that economic factors alone should not determine whether higher education should be free. In this regard, both Senator Sanders and Warren have contended that the case for making higher education free is, to a considerable degree, a moral one.

The basic idea here is twofold. First, there are many spillover benefits from higher education that benefit society broadly. Second, making higher education free would be part of a package of services that society owes its members.

The problem with this line of reasoning is that policies designed to implement this rationale are unlikely to be sustainable in nations such as the U.S. that are increasingly characterized by rising income inequality. This means that as the top 10 percent of income earners move apart from the rest of the population, their political power is likely to increase. This increase may well thwart attempts by the government to raise the very taxes that will be needed to actually make higher education free. This is likely to happen at the same time when, in the face of rising inequality, authorities most need tax revenues to assist those in genuine financial need from falling even further behind.

Given the now well-documented story of rising income inequality in the U.S., the contention that the children of the very wealthy ought not to be receiving free higher education is no less moral than the contention which holds that the rationale for making higher education free is primarily a moral one.

All said and done, there is no doubt that higher education in the U.S. needs to be more affordable. But that is a very different argument than the one which asserts that higher education should be free.


DISCLAIMER! The views and opinions expressed here are those of the author and do not necessarily reflect the editorial position of The College Post.

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