Megan McArdle outlines some of the possible outcomes of President Obama’s proposal to subsidize community college tuition:
- Offer a subsidy to middle-class kids who don’t really need the money?
- Encourage middle-class families to transfer their kids to community college for the first two years of school, and thus help to moderate college costs?
- Encourage financially constrained students who might not have gone to college to enter the system en route to a degree?
- Encourage marginal students with a low chance of completing a career-enhancing degree to attend school, mostly wasting government money and their own time?
I can’t speculate as to which of those outcomes will take place or what combination of them will take place. However, there’s one outcome which the plan would definitely cause: community colleges would receive more money than they might otherwise. I think another reasonable follow-on effect is that it would tend to boost the wages of community college faculty and staff.
If the price of community college tuition rises at the same rate or more slowly than the subsidy, it will also reduce indebtedness. Otherwise, it might even increase indebtedness. That’s not so far-fetched. Our steadily increasing subsidies of higher education have been accompanied by increased student indebtedness for the better part of the last forty years.
If you think that’s something worth spending tax dollars on, you’ll support the program. Otherwise you might think there are better things it could be used for. Apprenticeships or wage subsidy programs, for example.
To me it sounds like another example of the cat and rat farm.
Update
It just occurred to me that one of the unforeseen consequences of the plan could be increased public pension indebtedness on the part of the states.
I feel that non-poor/working poor kids going to community college is a good thing. If you believe that too many people go to four-year colleges simply because it is the successful thing to do, then you should think that two-year programs built as alternatives to four-year colleges are good. Bringing in the middle class or whatever you want to call them will help to do that. If having the government pay for it makes it happen, then fine.
I have no objection to anyone going to college for any purpose whatever. For me the question is how are subsidy dollars best used? I don’t think that subsidizing colleges, particularly on behalf of kids from middle income families, is a good use of subsidy dollars for several reasons:
– I don’t think the facts support the narrative that a college education is the key to a secure economic future (I think that being in certain occupations is the key to a secure economic future)
– I think there’s better use of the subsidy dollars, e.g. subsidizing pre-school education for the children of the poor
– the very high rate of students presently requiring remediation (as high as 70% by some reckonings)
MM: “net tuition and fees at public two–year colleges ranged from $0 for students in the lower half of the income distribution to $2,051 for the highest-income group.†College Board That is, this is entirely a subsidy for those in households making more than $60,000, and those in households making over $100,000 will receive the greatest benefit.
PD–
I guess I don’t have a problem with subsidizing the middle-class. Overall, I would think that making community college more integrated is a good thing for everyone who goes there. And it’s also a good thing in trying to break the fantasy that four years spent getting a business degree at a fourth-tier college means automatic income post-university.
Also, the idea that community college (either a stepping stone to four-year colleges for people for whom a college degree would be useful or for learning something concrete in two-years) is totally free might be a positive inducement for students who think that any sort of education is too much to afford.
I should also confess that McCardle’s declaration that there’s nothing wrong about uneducated people and their lack of books really pissed me off. In no way does she intend it to be a compliment.
I’ve known plenty of people who did not have college educations who ended up very well read, just as I’ve known plenty of people who are proud top-tier college graduates, but struggle through tomes of self-help books. Personally, I despise sneering at actual intellectuals and poets as much as I hate praising the common man with his rudimentary knowledge of Proust and macroeconomics.
“It just occurred to me that one of the unforeseen consequences of the plan could be increased public pension indebtedness on the part of the states.”
I don’t think it’s a primary objective, but i seriously doubt it was unforeseen by the Obama Administration.
MM: I guess it depends on what you mean by “middle class.” The top two quintiles of household income start at $62,434. And the gradual phase-out of financial aid suggest that the cost of community college for that income level might be comparable to cab fare. This really sounds like negligible benefits at negligible costs with a regressive twist.
I suspect the success rate of community college would actually increase if there was at least _some_ cost paid by everyone. People who graduate from high school with middling academic backgrounds and uncertainty about what they might do, might be incentivized to start community college before the’re ready.
Isn’t the funding conditional on the full cost of tuition being covered for applicable students? My first fear on increasing subsidies is that tuition will rise to meet it. That doesn’t appear to be an issue here, though, so I’m not sure how it would increase student indebtedness.
I have mixed feelings about the plan as a whole, though. It doesn’t do much to attack overall costs. Though it could have the effect of downward pressure on pricing if there is a free or extremely low-cost alternative (which is how I feel about MOOCs if they mature).
I’m thinking of how the actual legislation will work. I seriously doubt that it will say “full cost of tuition”. That would never pass budgetary muster. It’s more likely to spell out actual numbers based on averages. If tuition rises to absorb available subsidies (or faster), the student would have to cover the difference between the amount in the statute and the actual tuition. That’s how student indebtedness would rise.
If it’s a fixed dollar amount, and there is no “full payment clause”, then you’re absolutely right. That’s just not my understanding of the plan. We’ll see, I suppose.
After some thought I think there are a lot of perverse incentives in this proposal based on the limited info available:
– Students must maintain a 2.5 GPA?
— Hello grade inflation!
– “Colleges must also adopt promising and evidence-based institutional reforms to improve student outcomes”
— Hello gaming the system!
– ” Federal funding will cover three-quarters of the average cost of community college. States that choose to participate will be expected to contribute the remaining funds necessary to eliminate community college tuition for eligible students. ”
–Sucks to be you, States with lousy balance sheets!
“States must also commit to continue existing investments in higher education; coordinate high schools, community colleges, and four-year institutions to reduce the need for remediation and repeated courses; and allocate a significant portion of funding based on performance, not enrollment alone.”
— Welcome to the wonderful world of federal regulation of State schools!
“The focus of the discretionary budget proposal would be to help high-potential, low-wage workers gain the skills to work into growing fields with significant numbers of middle-class jobs that local employers are trying to fill such as energy, IT, and advanced manufacturing. ”
–Significant numbers? Where are these jobs? How many are near or even in the same state as most Community Colleges? Did the staffers who wrote this proposal do the research to find out? Tennessee and Texas are cited, what about Michigan, Ohio and Illinois?
– “The investment would make two years of college “the norm,” policy adviser Cecelia Munoz said….”
— It confirms that community college is the new High School diploma, not exactly surprising.
Then there are a lot of add-on proposals in the White House fact sheet that essentially throw money at college education – more grands, more loans, more tax credits, more “analysis” and summits.
And all this comes without a price tag, but “experts” put it in the tens of billions of dollars. I don’t really consider it a serious proposal since there is no chance it could make it through the present Congress and the proposal is sweeping yet vague which means that the details will matter a heckuva lot.
Why not make it simple? Identify jobs/careers where there aren’t enough workers (The BLS already does this) and pay tuition for people willing to train to qualify for those positions.
Or block grants to the states for higher education?