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Education

Is free college the solution for ballooning student debt ?

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U.S. Department of Education
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Proposals for making college debt-free have become all but mandatory for Democratic candidates on the presidential primary campaign trail. Hillary Clinton rolled out her plan at a campaign stop in New Hampshire on Monday.  Called the “New College Compact,” the proposal would cost $350 billion over 10 years. Clinton would "pay for the plan by capping the value of itemized deductions that wealthy families can take on their tax returns," said a New York Times report.

Former Maryland Governor Martin O’Malley and Senator Bernie Sanders have also drafted tuition-free plans. The question of student loan reform is shaping up to be a defining issue for many on the left, as well as a galvanizing issue for young voters.

The cost of higher education has jumped more than 13-fold according to Bureau of Labor Statistics records dating back to 1978. The surging cost of tuition is occurring at the same time that enrollment is slowing and graduates struggle to land jobs, according to a study by the nonprofit National Student Clearinghouse Research Center.

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Credit U.S. Bureau of Labor Statistics
Tuition compared to Consumer Price Index

Student loans have increased by 84% since the recession (from 2008 to 2014) according to a study from Experian.  The analysis also finds that in total, a whopping $1.2 trillion in debt is bleeding students dry.

The White House unveiled a nationwide tuition-free community college plan back in January, called America’s College Promise. The President's plan would grant free tuition to any student with a family income under $200,000, and is enrolled at least halftime with a 2.5 grade-point average. The legislation currently lacks any Republican support and isn’t expected to go anywhere.

The concept of free community college is gaining momentum however. Proposals similar to the President's have already been passed in Oregon and Tennessee. Minnesota recently launched a pilot program for free technical college. City-specific community college programs have also emerged at the City Colleges of Chicago, the Community College of Philadelphia, and Washington, D.C.  Webb Institute is one of only a handful of colleges in the US that offers a tuition-free four-year education.

The plans are generally designed to funnel money to the state/city (in the form of federal Pell grants) by increasing community college enrollment and student applications for financial aid. The Obama administration has said it wants to encourage a broad shift in the way state and local lawmakers, business leaders and the general public view community college. Given increasing demand for workers with at least a certificate or associate degree, the administration’s goal is to expand public funding to cover a K-14 education that is open to all.

But, Education Secretary Arne Duncan cautioned in a recent interview with Vox that the push to cut student debt, first and foremost, must not damage student outcomes.

"If all we’re doing is making cheaper or free a system in which the failure rate is so high, that doesn’t get the country where we need to go," Duncan said.

The problem, in Duncan’s opinion, isn't only student debt; but whether students can leverage their degree into a high-paying job.

Duncan argues that debt-free college on its own is not a sufficient agenda.

"If that’s all we’re talking about, if that’s all the nation is talking about, it is insufficient," he said. "Yes, it needs to become more affordable. Yes, we need to reduce debt. Those are important pieces of the puzzle. Those aren’t the only pieces of the puzzle."

It's important to focus "not just on access but on quality," he said. In higher education, he said he'd define quality as "do these degrees have value in the marketplace?"

To some conservatives, free two-year programs smack of a government takeover of community college.

Tennessee’s Republican governor, Bill Haslam, who signed the Tennessee Promise into law, has argued that state, not federal, programs are the best way to improve outcomes for students.

Backing that call has been Senator Lamar Alexander, the Tennessee Republican who chairs the Senate’s education committee.

One thing that education experts do generally agree on is the fact that public college budgets remain decimated in many states since the recession.

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