Over the past three decades, college tuition in the United States has increased almost threefold and reached an all-time high. For the 2015-2016 academic year, private institutions cost, on average, $45,370 per year while public institutions cost $20,090 per year (1). Compared to $16,213 per year (for private institutions) and $7,833 per year (for public institutions) in 1975-1976 (1)*, this increase is definitely overwhelming; students now graduate with student debt more than three times than those in the 1990s (2).
In recent years, there have been many arguments for free college tuition, such as helping those people who can’t afford college, helping students to focus on their education rather than worrying about whether they can afford their education next academic year, and to make the young generations in America more educated (3). However, free college can raise taxes substantially and be detrimental to the health of the U.S. labor market in the long run. Instead of making colleges free, educational institutions need to polish their system in order to make going to college more affordable.
First, let’s look at the economic impact of tuition-free college. According to the data from PolitiFact, 70% of Americans don’t have a college degree (4). If the U.S. government suddenly decides to cover the costs of higher education of all Americans, it will cause a huge surge in the number of applicants and this huge increase in demand means that colleges have to provide more classrooms, hire more faculty members, and much more. This also means that the government will have to charge higher taxes to cover the cost — you can’t expect the government to just print the money.
For example, let’s look at the recent proposal by democratic presidential candidate Bernie Sanders. Mr. Sanders said that free public education would cost $750 billion over ten years and he wants Wall Street to pay for it (5). Specifically, Sanders would impose a 0.5% fee on stock trades, an average 0.5% fee on bonds, and a 0.05% fee on derivatives. However, a report from Tax Policy Center conveys that this plan would only raise $51 billion annually, a far cry from the cost of $75 billion per year (6).
Furthermore, free college proposal would hurt the job market as well. With a rising number of college graduates, more and more students will apply for jobs. Because of this, the supply of labor in the labor market will substantially increase. The law of supply and demand will play its magic hand here. The more we have something, the less value we will impose on something. With a surplus of labor, firms will have incentives to lower their wages to the college graduates. This is certainly not the consequence we had anticipated. With free college, our bachelor’s degree would, down the road, be viewed the same as the high school diploma of today.
Although the idea of free college may be a rotten one, universities can make college more affordable for the students by getting them to graduate faster. This is important because only 60% of American college students graduate within six years (7). If the students aren’t able to graduate and end up dropping out of the university, not only are they wasting their time and money, but also the government’s and school’s financial aid, which can be used to help other students.
Universities also need to acknowledge that education also happens outside of the classroom through work experience (7). If institutions are willing to give college credits for internships and work experience, students will able to spend less time and pay less money in college and eventually graduate faster.
Moreover, if educational institutions in the United States can improve the quality of K-12 education, more students are going to be college ready when they enter university. Statistics shows, that if all college undergraduates were college ready when they enter university, there would be additional 300,000 degrees above the two million degrees the country has today (7).
There is a reason why 53 out of the top 100 universities in the world are located in the United States. The tuition that students pay helps universities to advance in their research, hire brilliant faculty members, build school facilities, and many more qualities that eventually improve the overall quality of education in the United States. There are feasible ways that institutions can operate in order to make college less expensive without crippling what makes U.S. education great in the first place.
*Dollars have been adjusted to 2015 dollars
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1. “Tuition and Fees and Room and Board over Time, 1976-77 to 2016-17, Selected Years.” Tuition and Fees and Room and Board over Time, 1976-77 to 2016-17, Selected Years - Trends in Higher Education - The College Board, College Board, trends.collegeboard.org/college-pricing/figures-tables/tuition-and-fees-and-room-and-board-over-time-1976-77_2016-17-selected-years.
2. Fry, Richard. “The Growth in Student Debt.” Pew Research Center's Social &Amp; Demographic Trends Project, 7 Oct. 2014, www.pewsocialtrends.org/2014/10/07/the-growth-in-student-debt/.
3. Redd, Luke. “Should College Be Free? Pros, Cons, and Alternatives.” Should College Be Free? Pros, Cons, and Alternatives, Beelineweb, www.trade-schools.net/articles/should-college-be-free.asp.
4. Fiedler, Katharina. “70% Of Americans Don't Have College Degree, Rick Santorum Says.” @Politifact, Politifact, 8 Apr. 2015,
5. Carroll, Lauren. “Bernie Sanders Says Wall Street Tax Would Pay for His Free Tuition Plan.” @Politifact, Politifact, 4 Apr. 2016, www.politifact.com/truth-o-meter/statements/2016/apr/04/bernie-s/bernie-sanders-says-wall-street-tax-would-pay-his-/.
6. Luhby, Tami. “Free College and Healthcare for All.” CNNMoney, Cable News Network, 14 Jan. 2016, money.cnn.com/2015/10/16/news/economy/sanders-taxes-spending/.
7.Cota, Adam et al. “5 Ways to Make College Much More Affordable for All Americans.” The Atlantic, Atlantic Media Company, 24 Feb. 2012, www.theatlantic.com/business/archive/2012/02/5-ways-to-make-college-much-more-affordable-for-all-americans/253564/.