Americans Used to Pay for College; Moves Toward Making It Free Are Not Progress

Americans Used to Pay for College; Moves Toward Making It Free Are Not Progress

I published the following commentary on the web site for the John W. Pope Center for Higher Education Policy.

Please feel free to read it on the Pope Center web site, but I reproduce it below for your convenience.

Americans used to save for college; moves toward making it free are
not progress

By Vic Brown

January 23, 2015

President Obama is proposing that two years of community college education be provided by
federal and state governments free to students who are enrolled at least half time and
maintain a 2.5 GPA.

Reaction has been swift and predictable. Those who operate and are employed by community
colleges think this is a dandy idea. Those who see another loosely managed entitlement
regard it as more wasteful government spending.

My immediate reaction was somewhat different. I began thinking about how we pay for
higher education from my own personal history — as a college student, a parent of three
college graduates, a business professional, and (more recently) as a college instructor.

I know that I came of age with the dinosaurs, but life after high school was pretty simple in
those days. If you had the grades to go to college and were fortunate enough that your
family could afford it, you went to the high school guidance office, read through some college
catalogs, picked a school that appealed to you and then sent in an application.

Application fees were expensive, so no applying to a dozen or more schools, and no campus
visits. My first view of my alma mater, DeSales University, occurred when I arrived for the
first day of classes.

That was in 1966, and when I graduated four years later, U.S. Census data indicates that
only 11% of the adult population had college degrees. Trade schools, military service and
labor markets beckoned, and students all seemed to find their way after high school
graduation.

For those of us intending to go to college, we worked hard to earn the opportunity. The space
race with the Soviet Union was in full swing, and it was drummed into us that our academic
transcripts and standardized test scores had to show that we could handle the challenges of
college work, especially in math and the sciences.

Our involvement in extracurricular and community activities was almost parenthetical in the
application. Today, many schools have gone so far as to eliminate the need to supply
standardized test scores, and at least one has given applicants the option of sending a video
in place of high school transcripts and teacher recommendation letters.

I don’t recall financial aid being addressed in the college brochures of that time. It may have
been available for specific cases, but certainly was not prominently advertised in the
literature. As Joel and Eric Best noted in their book The Student Loan Mess, back in the
1960s and earlier, Americans saved for college and very few considered aid other than
scholarships because they didn’t think it was appropriate to borrow for education.

By the time my three kids reached college age, the application process had become much
more complex. The percentage of Americans with four-year degrees had almost tripled to 32
percent. The Internet had appeared, providing much richer views of each school and what it
offered. Slickly packaged content enticed us to make campus visits.

Tuition costs had risen substantially, so financial aid packages were prominently featured in
college brochures.

Of course, my wife and I had known when each of our kids was born that, some 18 years
later we might be looking at college expenses. So we lived within our means and saved for
them.

But many of our friends, who lived in the same area and had incomes similar to ours, chose
to play it differently. They did not save, did not have the cash on hand to pay the tuition, and
so were given grants and low-interest loans that were financed in part by “full pay” students.

I remember hearing at the time that 15 percent of the tuition we paid went for assistance to
other students.

If those students were bright, hardworking and needy, I was all for it. But I knew many of
those students from the neighborhood. Their parents bought them cars, financed spring
break trips to Cancun, and the like — all the while accepting student aid. Financial aid was
getting easier and easier to obtain, from multiple sources.

As a result, students and their parents had less “skin in the game,” which may be part of the
reason why approximately half of all college students nationwide fail to graduate within six
years.

During my years as a college instructor, I noticed that there was a 10-80-10 bell curve in
most of my classes: 10 percent of the students were the brightest of the bright, highly
motivated and working hard to learn as much as they could, preparing for their careers. The
most outstanding of these students were the ones who were also working long hours to help
pay for their college education. They wanted maximum value for their money.

Another 80 percent of the students were in college because that was the next logical step for
them. Their course engagement was a little less intense, however, possibly because a portion
of their college costs were in the forms of grants and loans, with those loans coming due at
some distant point in the future.

Sadly, the last 10 percent were unmotivated. I believe that few of them would have enrolled
if it weren’t for all the financial aid. Frankly, they were wasting somebody’s money.

But whose money, exactly? At the college where I taught, virtually every student was getting
grants of some type, reducing the cost of tuition by upwards of $20,000 per year. These
grants are simply baked into the net revenue, the cost of competing for students in the
college arms race.

With net revenue down and student expectations for expensive facilities and services
increasing all the time, schools have increasingly looked to reduce instructional costs. Hence
the 50 percent reduction in tenured and tenure-track faculty over the last thirty years, the
increased use of low-cost contract and part-time instructors, and the enormous efforts
devoted to institutional fund raising.

For the vast majority of schools, cost cutting and fundraising are not sufficient.

Enter the federal government, whose backing of student loans provides an infusion of cash,
while making it increasingly easy for students to not have to repay them fully. This stream of
government financing is important for four-year college students, but is perhaps even more
so at lower-cost community colleges.

At a community college near us, annual tuition and fees for a full-time, in-county student at
Montgomery County Community College are $4,740. Pell Grants alone can supply a student
with up to $5,500 per year in grants, and the college lists seven other categories of possible
aid on its website. Many recent articles have made the case that the relatively bargain basement
costs of a community college can be completely covered by existing programs for
students who truly need the help.

So where would Obama’s proposed additional money go? To the students for living expenses?
If so, they have even less skin in the game. Perhaps the colleges will take the opportunity to
eliminate their own aid programs and spend that money in other ways. In that case,
additional federal and state money would go to the institutions, not to the students it’s
supposed to help.

Even though community college is affordable for almost everyone, Obama apparently thinks
it still costs too much and should be free.

Where will this end? If paying for a student’s two-year college is good, then paying for a fouryear
college is even better. Since many four-year programs (pre-med, pre-law and many of
the hard sciences) are preparatory for graduate and professional schools, then…well, you can
see where this will lead.

I am strongly committed to higher education, especially in the sciences and math where we
are lagging other countries. I also understand that there are students of limited means, and
they need a hand up in life. But we seem to no longer draw rational lines between serious
students who need assistance, and the many non-serious students who squander it.

The Obama proposal should serve to turn the question around. Let’s move from “How much
more can the government provide?” to the question “Who really deserves financial assistance
and how can we deliver it only to them?”