Why Public Higher Education Should Be Free: How to Decrease Cost and Increase Quality at American Universities

Making All Public Higher Education Free

115 throughout this book, I have pointed out a series of counterintuitive paradoxes. It seems that the more money research universities spend, the higher their tuition and the lower their quality of instruction. One would think that raising the price would improve the education, but as I have shown, due to the lack of concern for instructional quality, that is not the case. Moreover, research universities now often function like investment banks, and one of their central concerns is to drive down labor costs while they increase the compensation of administrators and star faculty. I have also argued that one reason why students generally do not complain about the state of their education is that universities spend a great deal of money pleasing them outside of the classroom. Instead of simply bemoaning this situation, I want to discuss several of the ways we can improve the quality of education at universities as we control costs and increase access. Free Public Higher Education In the s only a small percentage of Finnish students completed high school, and Finland ranked in the middle of developed countries on international test scores. Forty years later, Finland had one of the highest percentages of high-school graduates in the world, and its students had the highest test scores in math and science. Many people have asked how Finland achieved this transformation, and can we apply this model to other systems of education. According to Pasi Sahlberg’s Finnish Lessons, there 9 making All Public Higher Education Free 116 WHy PUBlIC HIgHER EDUCAtIon SHoUlD BE FREE were five major components to Finland’s success: () all education became public and free; () teachers became well compensated and highly trained; () education became interactive and experienced based; () students at an early age received individual attention; and () in high school, students were able to choose if they wanted to pursue a vocational track or an academic track.1 It is my contention that we can apply to higher education in America many of the same educational reforms that were used in K– education in Finland. The first step in this process is to calculate how much it would cost to make all public higher education free in the United States. In –, there were . million full-time-equivalent undergraduate students enrolled in public universities and . million enrolled in community colleges.2 In –, the average cost of tuition, room, and board for undergraduates at public four-year institutions was $,; at two-year public colleges, it was $,.3 If we multiply the number of students in each segment of public higher education by the average total cost, we discover that the cost of making all public universities free would have been $ billion in –, with an annual cost of $ billion for all community colleges—or a total of $ billion. While $ billion seems like a large figure, we need to remember that in , the federal government spent $ billion on Pell grants and $ billion on student loans, while the states spent at least $ billion on financial aid for universities and colleges and another $ billion for direct support of higher education.4 Furthermore, looking at various state and federal tax breaks and deductions for tuition, it might be possible to make all public higher education free by just using current resources in a more effective manner. And as I have argued throughout this book, the cost for free public higher education could be greatly reduced by lowering the spending on administration, athletics, housing, dining, amenities, research, and graduate education.5 It is important to stress that the current tuition rates are inflated because schools increase their sticker price in order to subsidize institutional financial aid for low-income students and to provide merit aid for wealthy, high-scoring students. If we eliminated the current aid system and each school instead received a set amount of money for each student from the state and federal governments, we could significantly reduce the mAkIng All PUBlIC HIgHER EDUCAtIon FREE 117 cost of making public higher education free in America. Also, by eliminating the need for student loans, the government would save billions of dollars by avoiding the current cost of nonpayment of loans, servicing and subsidizing them, and borrowers’ defaults. Rather than directly funding public higher education institutions, state and federal governments have often relied on tax deductions and credits to support individual students. The tax code has been used to fund higher education because it is easier for...