The WaPo’s Charles Lane looks at the economics of Bernie Sanders’s “free” college plan:
Sanders’s solution, which he says would cost the Treasury $47 billion in its first year, amounts to a single-payer system for higher ed — with pros and cons analogous to those of such a system for health care. There’s a certain appeal in replacing the current, convoluted array of grants and loans, funneled through individuals, with just one revenue stream directed at institutions. (Well, 1½: Sanders would have Washington pay two-thirds of the funding and state governments the rest.) Setting a single out-of-pocket price — zero — would indeed make it easier to attend school. Over time, however, the Sanders plan might make U.S. higher education more accessible but less excellent. Having ruled out price as a means of allocating scarce educational resources, his plan would have to rely on aggressive administrative controls, lest students flood the system and drive up costs — requiring further federal subsidies.
Lane goes on to examine how “free” college is working in Germany.
Centralized budgeting by state education authorities is key to that country’s system. Alas, as University of Albany higher-ed policy analyst Ben Wildavsky explains, “Government funds become spread too thin. That reduces quality and often limits capacity. As a result, well-off students, who tend to be better prepared academically, are more likely to get scarce spaces.” Overall, German institutions are considered good, not great; few show up on global “top 50” lists, for what that’s worth.
Germany also rations access to higher ed through tracking — selecting a college-bound minority at an early age while putting everyone else on course to less-exalted training. This is one reason that fewer German youth finish college than do American youth, despite not having to pay tuition. At the same time, Germany tends to accumulate “eternal students”; its now-abandoned recent experiment with charging tuition was an attempt to make them either graduate or leave.
But these “free” college plans aren’t really about economics. They’re about anti-economics, the belief that incentives don’t matter, that somehow simply putting more money into higher education without any reform will somehow result in a better system. “Scarcity?” “Prices?” Feh. Just cut a check. How should education best deliver knowledge and credentials in the 21st century? “Free” college provides no answers. Makes for a catchy campaign idea, I guess.
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