Why State Colleges Shouldn't Be Free (From a State College Grad)
New York Gov. Andrew Cuomo will announce a free tuition plan for SUNY schools today. Bad idea, especially in a state that's already overtaxed.
New York Gov. Andrew Cuomo is about to announce plans to gift tuition at State University of New York (SUNY) schools to members of in-state households that make less than $125,000. That hefty income level is the same one that Bernie Sanders and Hillary Clinton pledged to while running for president last year.
Who makes less than $125,000 in New York state? A vast majority of households, it turns out. Out of about 7.2 million units (circa 2015), around 5 million make less than that sum. Statewide, New York households have a median income of about $61,000, which is $5,000 higher than the national average.
Tuition at four-year state schools averages about $6,470 (far below most other states in the region) and less still for community colleges (room and board at the four year schools will tack on another $10,000 or so to annual costs). The New York Times reports that the program, which adds on to existing programs, will cost somewhere around $163 million a year, though "though the administration acknowledges that estimate could be too low — or too high — depending on participation." That's very…comforting, as is the funding for the program: "It was not immediately clear how the program would be paid for," writes the Times.
As it happens, New York already regularly tops most rankings of combined state and local tax burdens (the Tax Foundation figures the total bite at 12.7 percent of income while Wallethub says it's 13.12 percent). So while there is apparently no ready money for this program, perhaps New Yorkers won't notice or care when their tax bills go up a bit more.
So, why not make all in-state college tuition-free for kids unlucky enough to come from households making less than the 2X the median household income? I write as a SUNY-Buffalo grad (Ph.D. '96), who also has two other degrees from state schools (Temple and Rutgers, M.A. and B.A., respectively).
I can think of at least three immediate concerns. First, as long as you're redistributing income, that $125,000 income figure is way too high, as is plain from the income distribution to the right. There's no question that New York, particularly the closer you get to New York city, is more expensive to live in, but there's no rhyme or reason to naming a six-figure-plus income as the cut-off point (this is even more true in states with lower costs of living). New York doesn't need greater tax-supported burdens that ultimately are going to help middle and upper-middle-class people the most, which is how this will inevitably shake out. The sons and daughters of more-educated, more-remunerated folks are more likely to go to college in the first place and a lot more likely to graduate in four or six years. If we believe that helping the least-advantaged among us is a good thing, then it would be far better to narrow the focus of the program to, say, students coming from the bottom 20 percent of households by income and giving them the sorts of support (intellectual and social) that might help them make it all the way through. As it stands, only about 20 percent of students from the bottom fifth of households have a college degree by age 24. That's the same rate as in 1970. (And of course, educational reform should start at the K-12 level first and foremost, by making charter schools and vouchers more widely available to the students who would gain the most from them.) The fact is that middle-class (much less upper-class) kids do just fine, so if you're trying to increase opportunities for the least privileged among us, it makes sense to start with people who need the most help.
Here are at two other points to consider: All students, regardless of who their parents are, should always have skin in the game. A college diploma raises average lifetime earnings by between $250,000 and $1 million (depending on many factors and assumptions) and it makes sense to ask the person who will cash that premium to pay for at least some part of it, doesn't it? Even a small amount will also dissuade people who are not really committed to college, which is also a good thing. That leads to a larger point: Americans have been defining poverty upwards for at least a couple of decades now, all in a vain attempt to maintain the dysfunctional and unsustainable entitlement state and every loophole and carve-out for wealthier people. If you're in a household making $124,000 a year, you're in the top 16 percent of households and yet you need or deserve free college tuition, on top of non-means-testing of Social Security, Medicare, and whatever new entitlements will be created under a Republican government (the one, under George W. Bush, birthed Medicare prescription drugs after all)? Come on already.
If we agree that government is going to provide certain services and we also believe in limited government, it seems to me we should be narrowing the size and scope of the welfare state and the social safety net. The government should do less and cost less. Prices for everything, from education to health care to housing to retirement, would settle lower than where they are now and any assistance given to the needy would be far less-distorting than when everyone gets some level of free or heavily subsidized ride. This sort of plan obviously has little political backing at the moment, but it's exactly the sort of revolution in thinking that needs to take place if the United States is going to stop its slide toward a sclerotic, low-growth, European-style political economy.
In 2011, Reason TV offered up 3 Reasons We Shouldn't Bail Out Student-Loan Borrowers. Take a look: