The cost of College tuition has been steadily rising over many years. Some say it has skyrocketed, putting it out of reach om many people.
On Wednesday, President Obama proposed a universal free community college for American students. At the same time, socialist Vermont Independent Senator Bernie Sanders took that thought a step further by suggesting completely free college. As always, the question is, who will pay for that?
People advocating free college say we need to make college affordable for everyone, especially lower-income students. Patrick Holland speaking for Economics21 at The Manhattan Institute, says this idea would give massive subsidies to wealthier Americans.
Sanders suggested one way to pay for this would be to add a small tax on stock market transactions. In a column at The Hill, Brent Budowsky, a former aide to former Sen. Lloyd Bentsen (D-Texas) and former Rep. Bill Alexander (D-Ark.), wrote “The suggestion by Sanders to finance this program through a small tax on Wall Street transactions would be fair, effective and is supported by a long list of Wall Street reformers and financial industry executives.”
Those who want to remove college costs rail against the skyrocketing cost of a college education. Holland says they are only looking at the dollar amounts, and their argument is “apocalyptic rhetoric.” Addressing the cost of college directly, he said, “Headlines have recently proclaimed that college costs have increased by 500 percent since 1985. But the statistic does not take inflation into account. The real cost of college has only doubled since 1985. In addition, the real cost of attending a public two-year college has actually dropped since 1992.”
Although some people do not agree, most say a college degree enhances job market opportunities for all graduates. Most of us who have been to college think that attending college has great value. Even people who have huge student loans hanging over their heads are still more employable than high school graduates. In fact, on average, college graduates earn 83 percent more than high school graduates.
One important question to ask is whether free community colleges dilute the job market to such a degree that a college diploma becomes irrelevant to many?
The truth is that even now, most college graduates don’t immediately land a high-paying job after leaving school. Plus, the figures show that the unemployment rate for new graduates is around 10 percent. What that means is that some with huge student loans face mounting penalties and are often forced to default.
We still have to ask if free tuition is a better answer to the growing student debt problem?
We can look around the world to see what has been done in other countries. Sweden already did what Bernie Sanders suggests, they abolished college tuition costs. Unfortunately, the result isn’t no student debt at all, because of the high cost of room and board. The Swedish government doesn’t cover that.
Another possibility is for public policy to focus instead on reducing student costs, rather than collecting more tax, so we can spend it on subsidies.
Those existing student costs have been driven higher due to the easy availability of government-sponsored student loans, a report from the Federal Reserve Bank of New York says.
Opponents to large subsidies would rather see a tightening of student loans, rather than a free ride through college at taxpayer expense for millions of students who shouldn’t be there in the first place.