Germany Just Eliminated Tuition. It Wouldn’t Be That Hard for Us to Do the Same—And Then Some

Every so often, a higher ed story from around the world will grab some attention stateside. A few years ago, it was students protesting in the U.K. over an increase in tuition price caps which would allow universities to charge up to £9,000. More recently, students in Chile took to the streets for the better part of two years to demand free, quality education in what had become a system increasingly segregated by class. And yesterday, an announcement by a lone holdout state in Germany has returned that country entirely to a system that charges no tuition at all.

You could forgive students on this side of the pond for being jealous and incredulous. Over here, tuition and fees have risen nearly five times the rate of inflation in the past thirty years. At public schools, they’ve more than doubled in the past twenty years. It would be sweet relief for U.S. college students just to see tuition stay stable for the years they’re in college, and beyond the pale to see tuition actually fall from one year to the next. Eliminating tuition entirely would be a unicorn.

But maybe not. Sure, rising tuition and student debt is just one of those things that people take as a given—like rising sea levels, or Justin Bieber—things that are too big to wrap your head around but cause anxiety nonetheless. But a system of high tuition and fees isn’t inevitable, and eliminating all or most of them at public schools may not even be unfeasible. Even without eliminating all tuition and fees, eliminating student debt at most colleges wouldn’t require the level of government resources that you might think.

Let’s examine. Public colleges and universities took in $62 billion in tuition in 2013. These are schools that educate three of four American college students, and eliminating that entirely—as Slate’s (formerly the Atlantic’s) Jordan Weissman and others have shown—could be done just by rearranging what we already spend on student financial aid.

It’s a good thought experiment and a pretty damning statistic. It might even be a better use of resources. But there are also some reasonable objections to just eliminating tuition. First, just ridding ourselves of public school tuition wouldn’t necessarily eliminate student debt at public schools, even if it most assuredly would reduce it. That’s because tuition and fees make up less than half of what it costs to go to college—after all, students have to live, eat, drive or take public transportation, and buy books and supplies.

That said, the federal government disbursed almost $31 billion in loans to undergraduate students at public schools in 2012-13.[1] Without wading into the issue of how much the government profits (or doesn’t profit) on student loans, that $31 billion in “borrowing need” could be entirely made up for by reforming what we spend on ineffective and regressive tax incentives for higher education each year.

A second objection is that community colleges—which educate the neediest students—might receive the smallest benefit. Tuition and overall borrowing rates at community colleges are low—even though over four in 10 associate’s degree recipients must borrow to receive the credential. In fact, eliminating tuition at community colleges would cost around $12.5 billion total.[2]

Instead of simply eliminating tuition, we could do so and provide community colleges with an additional boost in overall resources. Remember, these are institutions that have far fewer resources and are spending the same or less per-student than they were 10-15 years ago – a far cry from the caricature of colleges with lazy rivers and fancy wine cellars. Or, because borrowing at community colleges goes far more to living expenses than tuition, we could better target Federal Work Study money, and continue to provide Pell Grants to cover basic living expenses. The point is, it could be done, and at a lower cost to the federal government than the current system.

So why aren’t we already doing this? One reason is that our voucherized system of financial aid provides considerable federal funding to private schools (both non-profit and for-profit). There are some good reasons for this—after all, private non-profit colleges have a long history and are a source of national pride. In some parts of the country, notably New England, private schools are just as big a part of the fabric of communities as public schools.

But this also means that, because students can take money pretty much anywhere, some less-than-stellar programs, often at for-profit schools, end up receiving an outsized portion of what we have to spend on higher ed. To wit, for-profit schools enroll around one in 10 students, but hoover up one in five Pell Grant dollars, and over one in three GI Bill dollars to veterans.

Simply shifting federal grant aid and GI Bill funding from for-profit schools would almost entirely pay for free community college tuition last year.[3] Perhaps that's a trade-off worth making; perhaps we shouldn't put institutional sectors against each other for funding without a serious discussion of quality and capacity. Either way, the numbers we're talking about aren't astronomical.

But truthfully, eliminating tuition without adding additional costs to the government—which is a specious place to start, given that spending more on education is one of the best investments we can make as a country—would obviously require taking money from these schools. It should be done in a careful way that doesn’t eliminate quality options for students or put a damper on aspirations.

A final way of lowering costs to students would be to provide states with the funding to do so. At Demos we’ve just released The Affordable College Compact, a proposal to do just that, and create a federal matching program for states in return for a commitment to affordability, and ultimately debt-free higher education for low-income and middle-class students at public schools, while providing continuous incentives to re-invest to even higher levels of per-student funding. It would provide considerable flexibility, maintain federalism in higher education, and provide institutions and students with the funding that has been slashed dramatically over 30 years. Like everything else, it comes with a price tag. But, particularly given the benefit to students and society, that price tag—like the one attached to "free tuition," might be lower than you'd think.



[1] Excluding Parent PLUS loans made to parents of undergraduates.

[2] Calculated from The College Board’s Trends in Student Aid series. In 2011, community colleges enrolled over 4.2 million students (full-time equivalent). The average net tuition revenue at community colleges was $2,963 per student.

[3] Again, from The College Board (GI Bill estimates taken from the Department of Veterans Affairs). For the math on this: For-profit schools make up 37% of the $10.9 billion in Post-9/11 GI Bill benefits, 21% of the $32 billion in Pell Grant funding, 16% of the $734 million in Supplemental Education Opportunity Grant Funding, and 7% of the $978 million in Federal Work Study funding.

 

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