How The Government Could Make Public College Free For All Students

By Bryce Covert   

Tuition at public colleges came to $62.6 billion in 2012, according to the latest government data. That’s less than what the government already spends to subsidize the cost of college through grants, tax breaks, and work-study funds, which comes to about $69 billion. It spends another $107.4 billion on student loans.

That means that with the money it already spends to make college affordable, the government could instead subsidize public college tuition, thereby making it free for all students. This would not just mean anyone could attend a higher education institution without worrying about cost, but it could incentivize private ones to reduce their costs in order to compete with the free option.

It would also address the government’s current patchwork attempts to make college affordable, which isn’t working for many low- and middle-income families. Tax-based aid is mostly delivered to wealthy families, not the ones in need. Pell Grants, on the other hand, were cut in 2012, which meant students got less aid or kicked out altogether, after already covering the smallest percentage of college costs since the program was created. (House Republicans have had the program in their sights for even more cuts.)

The cost of college has been rising dramatically in recent years, with the price tag for attending a public four-year university climbing 27 percent and the cost of a private education rising by 13. At the same time, more and more students have been taking on debt to help finance their educations, with total debt now past the $1 trillion mark. This puts the burden of rising costs on them, which can sometimes be heavy. One in eight of those student borrowers is now in default.

There are other ways to address this growing problem. One would be to allow student debtors in dire straits to discharge their debts in bankruptcy, something that is nearly impossible to do now. Another, which could help stop the problem before it gets so bad, would be to automatically enroll children in college savings accounts at birth that get publicly matched, which would help families pay for college and would give low-income students better chances of enrolling.

President Obama has proposed a “pay for performance” system to help rein in costs, which would create a ratings system that measured college’s performance and tie aid to how they perform, eventually incentivizing them to improve on metrics like graduation rates and the debt their graduates carry. But the evidence from similar state-based efforts is mixed on how big of an impact it can have.