Bernie Sanders: Destroying Your Degree?

In Colleges and Universities, Economics, Election 2016, Finance and Budget, Life, People, Politics by Kyle Jorstad0 Comments

With the 2016 Presidential primaries almost over and a Sanders campaign increasingly dependent on the youth vote, affordable public college education is a key selling point for Bernie Sanders. The Sanders plan to “Make College Tuition-Free and Debt-Free” proposes offering free tuition at public colleges and universities, lowering interest rates on current and future student loans, meeting 100 percent of low-income students’ financial needs, and tripling the federal work-study program. As with most government handouts, the Sanders plan will likely cost more and deliver less than it promises.

Let’s start with the cost estimates for free public higher education. Virtually every advocate of free tuition references an article in The Atlantic from January 2014, which estimates the cost at roughly $62.6 billion. Sanders, factoring in his additional proposals, predicts closer to $75 billion. Two-thirds of his plan would be federally funded via new taxes on Wall Street speculators, with states contributing the remainder.

The problem with these calculations is that they are based on static projections for tuition costs. If this assumption proves faulty, the actual cost of implementing the Sanders plan will balloon for three reasons.

First, history suggests that tuition will continue to rise. Tuition rates have been gradually increasing over past decades, with students now paying 3.22 times more than in 1985 [See Figure 6, p. 18]. The Sanders plan will likely exacerbate this trend because it will remove any incentive for public institutions to slow tuition increases.

Second, any reduction in current revenue sources would require increases in tuition rates to cover the shortfall. For example, a large portion of public college budgets is governmentally funded through appropriations, grants, tax benefits, and work-study programs. In FY 2013, state aid and local taxes cumulatively contributed $78.8 billion to public higher education. Cuts to state or local budgets could result in less revenue for public colleges and universities, which would have to be offset by higher tuition rates.

Most public institutions also depend on revenue from hospitals, auxiliary enterprises, private gifts, investment income, and other educational activities. These sources contributed $80 billion—or one-third of total revenue—to public institutions (four-year, two-year, and less than two-year) in 2012. Although these programs are generally self-sustaining, the amount of revenue they generate is not guaranteed. Unexpected revenue deficits in these areas could also result in tuition hikes, costs ultimately saddled onto the taxpayer under the Sanders plan.

Third, the advent of free tuition will provide a powerful incentive for students to enroll in public colleges and universities. Whether motivating those who never before considered college to finally enroll, or incentivizing private college students to switch to the public sector, or a combination of both, the result will be the same—a significant increase in enrollment, and a cost of ‘free’ tuition well above estimates based on static enrollment at public institutions.

As faulty as Sanders’s cost estimates appear, perhaps the more troubling aspect of his plan is its false promise of eliminating student loan debt. The cost of college attendance includes far more than just tuition. In fact, fully half of public college students’ expenditures remains as room and board. The College Board reports the average published tuition rate for public four-year in-state students as $9,410, while the corresponding price of room and board is $10,138. Textbooks are another significant cost of attendance, with the average public undergraduate student paying $1,200 annually. Sanders may decrease the cost of a public education at the expense of the taxpayer, but fails to achieve his ultimate standard of “tuition free and debt free” college.

Admittedly, many public institution students attend a community college or commute, which minimizes room and board costs but does not eliminate them entirely. If only tuition is covered by government, students will still require loans to pay for their textbooks, room, and board, and many will remain weighed down by debt. While promising to provide a post-secondary panacea, Sanders merely increases government spending without lifting students’ financial burdens.

Although these financial obstacles could potentially be resolved–however unlikely–they are surpassed by the unavoidable practical disadvantages posed by a government-funded public system of higher education. These harms can be grouped as three different types of inflation: degree inflation, enrollment inflation, and grade inflation, each of which individually proves disastrous to systems of higher learning.

1)  Degree inflation follows the simple rules of supply and demand—an increase in the number of students holding degrees will be accompanied by a decrease in the overall value of and demand for these degree-holders. Further, unless increases in student enrollment are accompanied by stark job increases, there aren’t enough professional positions available for each new graduate, meaning a large percentage of these students will end up unemployed or with low-salary jobs in which Bachelor’s degrees are redundant.

This hurdle is complicated by Sanders’s pledge to increase the minimum wage to $15 per/hour. Historically, there is a direct positive correlation between minimum wage rate increases and unemployment growth. The Congressional Budget Office forecasts that even a modest minimum wage increase to $10.10 would cost 500,000 jobs. Sanders’s plan therefore not only creates innumerably more students with degrees from public institutions, but also shrinks the job market in which such degrees are useful.

Degree inflation is shadowed by education escalation—the less an undergraduate degree is worth, the more levels of education are required to stand out to potential employers. This further necessitates professional and specialty training programs, which ultimately increases the cost of a marketable education. Tuition increases come at the expense of the lower and middle classes; ultimately only the upper class can afford professional degrees (notably, after having their education subsidized along with everyone else’s) and thereby obtain employment in the diminished job market.

2)  Enrollment inflation is the concept that increased student applications to public institutions will be accompanied by corresponding decreases in institutional admission standards, resulting in net decreases of admissions quality. To grasp this idea, it is crucial to understand the foundations of the push for free higher education. Desire for federal funding of public tuition stems from the ideology that Americans are entitled to a college education, and therefore no one should be rejected from a university. Even if open admission standards are not adopted, institutions competing for even greater federal grants and funding will predictably lower their admission standards to inflate enrollment, displaying greater need for federal funds. These states aim for increased attendance without corresponding increases in spending, resulting in significantly less expenditure per student.

Additionally, the lower and middle classes, the groups supposedly helped by Sanders’s plan, are actually the groups most harmed. The plan details a system of dual funding whereby the federal government funds two-thirds of education costs, but state governments are required to fund the remainder. Historically, requiring direct state funding to higher education has been attained through cuts in need-based aid to low-income students, an effect seen most significantly in response to the recent 2008 stimulus package. In a system where education expenses are not fully government funded, low-income students remain disadvantaged relative to the student body. Only within a system of fully federally funded public higher education is this harm eliminated. Yet even in such a ‘free’ system, low-income students still fail to gain either a desirable job or marketable education.

3)  Grade inflation refers to the growing American fear of low grades. In the present education system, good grades reflect well on the school and state, which garners grants and federal funding. Poor grades, on the other hand, cut funding and incentivize families to transfer to new school districts. Coupled with desperate school finances, the pressure to demonstrate positive achievement has resulted in students’ receiving higher marks for equal or lesser quality work. Grade inflation becomes remarkably apparent when compared to SAT scores over the past decade; while SAT scores have remained relatively constant, overall student GPAs have steadily increased [CollegeBoard, page 5].

Aside from these three inflation impacts, free public higher education also holds significant negative ramifications for private institutions, which play a vital role in the American higher education system. As supported by Department of Education data, private institutions have higher graduation and job placement rates than public institutions. These universities and colleges, which usually have higher tuition, will be less able to compete with free (or nearly free) state degrees, regardless of their generally higher quality educational programs.

Transcending both the financial obstacles and practical disadvantages of free public college is the question of moral obligation. Sanders and others would entrench a sentiment of American entitlement to higher education funded by the people, regardless of what this degree earns the recipient in the long term. The fundamental truth is that America was founded not on equality of outcome, but on equality before the law. Americans are not entitled to a college education. They are, however, entitled to the equal application of all laws to all people, so that no law artificially advantages some over others in the quest for a college education.

Cumulatively, the practical and financial detriments of a free system of public higher education weigh heavily against the Sanders plan and its ilk. Before enacting a new federal entitlement, the American people deserve a more careful accounting of its costs. As currently written, the price tag of the Sanders plan is simply not as affordable as its proponents claim. College-aged voters would do well to look past the tirades against Wall Street speculators and demand more details—details such as exactly what services will be “free,” meticulous analysis of the plan’s financial assumptions, and specifics regarding how unexpected costs will be funded. They might be surprised to learn that the so-called free lunch they are being offered costs far more than suggested—and it doesn’t really taste that good, either.

Kyle Jorstad is a student at Grove City College studying political science with minors in Spanish and economics. Passionate for writing and educational discourse, Kyle plans enrolling in law school following graduation.

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