Earlier this week, presidential candidate Hillary Clinton unveiled an ambitious new plan to make college more affordable for American students. The proposal would cost $350 billion over its first ten years (split between the federal government and participating states), and aims to reduce the cost of tuition at public schools, reform student loans, and provide grants to colleges that show improvement in graduation rates and other student outcomes.
On its surface, the plan sounds great. College is already too expensive, and an entire generation is now starting out life burdened with huge student loans. But will this plan help?
The crux of Secretary Clinton’s proposal seems based on two assumptions: first, that the cost of a college degree would stay the same even with more federal aid, and second, that student loans are the biggest problem facing students today. Let’s explore these assumptions…
First, research suggests that federal involvement in higher education is a major driver of college costs. Indeed, one recent Federal Reserve analysis shows that college tuition actually increases by 55 to 65 cents for every dollar of federal “aid.”
Based on that, Clinton’s $350 billion plan would drive up the cost of college even more than it already is, putting college out of reach for even more young Americans.
Second, the federal aid does nothing to solve a more systemic problem in American education: simply not enough students are academically prepared for college. Clinton herself acknowledges this in a fact sheet: “At 4-year public colleges, more than four out of every ten students do not graduate within six years. The statistics are even more depressing for 2-year institutions.”
It seems crazy to even have to make the point, but college preparedness is far more likely to produce better outcomes for students than simply giftwrapping free tuition to students who are not prepared for college.
As such, by enticing colleges with free money if they increase their graduation rates, we all know what’s going to happen under Clinton’s plan: they’re just going to lower the standards required to obtain a degree.
This perverse incentive only accelerates a vicious cycle of more debt, more expensive colleges, and more degrees that aren’t actually useful in the real world (looking at you Puppetry majors out there).
Yes, too many graduates struggle with massive student loans. But massive student loans are a result of a much bigger problem: colleges don’t actually prepare people with the skills to pursue a rewarding career.
What do you think? Should we focus first on the foundational problems in our secondary schools? Does the federal government do more harm than good in our education system? Give it some more thought at our Education and Role of Government pages.