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What Cuomo’s Free College Plan Won’t Fix

New York Governor Andrew Cuomo is winning high praise from progressives for taking a leaf out of Bernie Sanders’ book and proposing free college tuition for families earning less than $125,000 in the Empire State. The New York Times reports:

If Mr. Cuomo’s proposal goes forward, it will place New York at the forefront of such efforts; Tennessee and Oregon have programs to cover the costs of community college. The governor’s plan would include four-year schools, including dozens of campuses that are part of the state university system, as well as the city’s university system — a once-free network whose tuition has risen and reputation has fallen over the last decade.

Under the proposal, the state would complete students’ tuition payments by supplementing existing state and federal grant programs — essentially covering the balance, though administration officials said some students could have their entire four-year education covered.

Cuomo’s proposal is likely to be popular because it speaks to a real issue—the cost and quality of education and skill acquisition for middle-class families—that political elites in both parties have largely failed to address over the last generation. Nonetheless, there are reasons to worry that it will take a stagnant higher education system and make it even worse.

First, there is good evidence that government subsidies are helping to drive the rapid inflation in sticker prices for four-year colleges. If colleges know that students can get free money from the government, they face few constraints to jacking up tuition perpetually higher. Colleges already face fewer incentives to rein in costs than other industries; further subsidies would dull those incentives further. And most of the extra tuition dollars collected from the government will likely be pocketed by a growing population of higher education bureaucrats administrators, rather than in actually improving the quality of education.

Second, it is not clear that leading more students to get BA degrees will actually improve their job prospects or the overall state of the economy. Preston Cooper has pointed out that “only one-third of college enrollees end up in jobs requiring college degrees.” This is especially the case for graduates of lower-tier institutions. Because of degree inflation, many people are earning college degrees as a kind of ritual to signal their readiness to employers, even though they could get the requisite skills at much lower expense.

Finally, as we have noted before, directing more money to college subsidies could produce diminishing returns: “If 2 percent of the population is going to college, there can be very large gains if the rate of college attendance grows to 20 percent.” But “if 44 percent of the population is already graduating with an associate or bachelor’s degree, the chances are that the remaining 56 percent are going to benefit less from the experience—and it will cost a lot of money to get them to go.”

If it passes, Cuomo’s proposal will certainly help a number of students earn college degrees who could benefit from them and who wouldn’t have done so without the extra financial help. The question is whether the overall upward pressure on college cost and quality, on bureaucratic growth, and on the state budget will make the investment wise in the long run. Our sense is that it won’t, and that fundamentally rethinking and reforming the higher education system is a more promising path to improvement that throwing more money at a system that seems to be working less and less well.

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