Clinton's Free-Tuition Promise: What Would It Cost? How Would It Work?

Jul 28, 2016
Originally published on July 28, 2016 8:33 pm

At the Democratic National Convention this week, Bernie Sanders announced that his successful rival, Hillary Clinton, had adopted one of his most popular proposals: free tuition at public colleges.

"During the primary campaign, Secretary Clinton and I both focused on this issue but with different approaches," the Vermont senator noted. "Recently, however, we have come together on a proposal that will revolutionize higher education in America. It will guarantee that the children of any family [in] this country with an annual income of $125,000 a year or less — 83 percent of our population — will be able to go to a public college or university tuition-free. That proposal also substantially reduces student debt."

This proposal is novel. It's dramatic. It's a broadly scaled entitlement program for the middle class directed not at older Americans, like Social Security and Medicare, but for once, at younger Americans.

So let's unpack this idea a little bit.

First of all, what would it cost?

In fiscal year 2014, the most recent year available, four-year public institutions collected $58 billion in tuition. Since 2011, they've collected more in tuition and fees than from all state sources combined.

Currently, the federal government spends $31 billion on federal grants and work-study to all institutions, not just four-year public schools. So the cost of eliminating tuition would be around double that (maybe less, since some of that grant money already goes to tuition).

The Sanders campaign had previously estimated the cost of free college for all at $75 billion and proposed a tax on Wall Street transactions to pay for it.

But when you're talking about government subsidies for anything, the math isn't simple. States have relied on large annual tuition increases for decades. Tuition has risen 40 percent in the past 10 years at four-year public colleges and universities, as Hillary Clinton's campaign notes.

To avoid signing a federal blank check that rises each year, Clinton's platform talks about getting buy-in from colleges and states to rein in costs. The Department of Education might use accreditation or eligibility for federal financial aid as carrots or sticks to encourage states to keep tuition low.

The federal promise of free tuition is also complicated by the diversity of our public institutions. The University of Pittsburgh, the most expensive four-year university for in-state students, charged $18,192 in tuition last year.

At the other end of the spectrum, Bismarck State College in North Dakota charged $4,222.

That's a pretty wide range.

Would the federal subsidy be flat, like a student voucher, set somewhere in the middle? Would the deal allow colleges to raise extra revenue by charging a premium to out-of-state students, or by raising costs for room and board (adding perks to sweeten the deal)?

Those public colleges that have the prestige to market themselves are already using both of these strategies to get more cash. But they reinforce a dynamic of haves and have-nots, as detailed in the 2013 sociology book Paying for the Party. The majority of students are living off-campus and working their way through, while a privileged few living on campus have more free time to party, get involved in extracurriculars and make the social connections that will lead them to future opportunities.

Eliminating four-year college tuition would inevitably mean handing free money to some families that can afford to pay. That's already been seen in states like Georgia that created statewide scholarship programs with entrance requirements. Studies found that wealthier students were more likely to have the grades and family support to take advantage of free tuition.

On the other hand, the current means-tested financial aid program requires low-income students to jump through lots of hoops, like dealing with the daunting FAFSA form, to prove their status and maximize their aid. Many can't navigate the system and fall out along the way.

"Free tuition" is a simple promise that some researchers, like Sara Goldrick-Rab at Temple University, believe would motivate more working-class students to dream of college and actually make it through.

The maxim for generations of policy wonks is that "programs for the poor are poor programs," while those with more universal eligibility enjoy broader support. In embarking on a promise of free tuition for 83 percent of families, Clinton's campaign seems to be banking on the idea that the appeal to middle-class parents and millennials will outweigh the protests of other taxpayers who ask, "What's in it for me?"

But within Clinton's higher-ed proposals, there is a less dramatic, cheaper and more targeted alternative to free four-year tuition for all, and that's free community college.

Around half of America's college graduates spend some time at our public two-year colleges. Since the Obama administration first proposed the idea a few years ago, several states, including Tennessee, Oregon and Minnesota, have started free-community-college programs, and others are considering it.

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ROBERT SIEGEL, HOST:

And now how one of Bernie Sanders' biggest campaign promises was adapted to the Democratic Party's platform. Sanders campaigned for free tuition at public colleges. Hillary Clinton focused more on easing student debt. Well, when the Vermont senator addressed the Democratic National Convention this week, he described the compromise plan that the two had agreed on.

(SOUNDBITE OF ARCHIVED RECORDING)

BERNIE SANDERS: It will guarantee - guarantee - that the children of any family in this country with an annual income of a hundred and twenty-five thousand a year or less - 83 percent of our population will be able to go to a public college or university tuition-free.

SIEGEL: What's the proposal? How would it work? How much would it cost? Well, joining me to explore those questions is Anya Kamenetz of the NPR Ed Team. Hi.

ANYA KAMENETZ, BYLINE: Hi.

SIEGEL: This is a plan for in-state tuition, we should say, for families that make $85,000 a year or less at the beginning. That would eventually rise to a hundred twenty-five thousand dollars. How much would this cost the government?

KAMENETZ: Well, estimates range widely. The Sanders campaign had originally put out an estimate of $75 billion a year for free tuition across the board. If you look at what public colleges collect in tuition, it's about $58 billion a year. Wherever it would be, it would be more than twice as much what the federal government is currently spending on student aid.

SIEGEL: Public universities, of course, are run by states, in some cases cities, not by the federal government. Would this plan affect all public colleges and universities in the country?

KAMENETZ: Well, you're making a really important point, Robert, because unlike student debt proposals that Hillary had included in her campaign platform, you know, student debt is under the full purview of the federal government, the Department of Education. But tuition is something that colleges can decide on, and we have 50 state university systems in this country, and they're very heterogeneous. And they charge very different tuition.

SIEGEL: But it would be a state-by-state question. Is your state taking part in this program?

KAMENETZ: Well, I think so. I mean, at the extreme end, the federal government could say, you're not allowed to participate in Title IV student aid, unless you eliminate tuition. And that would be, you know, the extreme nuclear option. But, you know, with a negotiating process, you can certainly think of a situation just like with Obamacare - right? - where certain states decide not to participate, even though they're leaving federal money on the table.

SIEGEL: The range is huge. I was looking up tuition costs at the Virginia Public University, the college of William and Mary - over $19,000 a year, at Eastern Kentucky University - under $8,000 a year. I mean, would the federal government tolerate those different ranges or would taxpayers want to see the same tuition rate?

KAMENETZ: Well, this is something that's extremely tricky about creating a subsidy program - right? - I mean, you can see it with Medicare. With Medicare, the federal government creates reimbursement rates, and they pretty much dictate them because they have a lot of market power. But this is a system that's been around for a very long time, and in creating a new one, there's a lot of dilemmas. I mean, would you create a voucher per student? And would it be the average of, you know, those two figures somewhere between $14,000, $18,000 and $8,000? I mean, that - it's a very difficult set of negotiations.

SIEGEL: What's been the reaction to the Democratic proposal among state leaders and people in higher education? Are they taking it seriously?

KAMENETZ: There's a lot of talk about free college tuition across the political spectrum, the policy world, you know, and states have a variety of different ways of collecting money for higher education. Some of them are more tuition-dependent than others. And so, you know, I don't see any states really rushing to be the first in line to abolish all public university tuition. And, in fact, the trend has been the opposite. Since 2011, states have been collecting more money in tuition from students than they actually directly subsidize their own university systems with.

SIEGEL: If enacting a free-tuition plan for public colleges and universities is at best, as I'm hearing from you, an uphill climb are there more promising fronts trying to address the cost of higher education?

KAMENETZ: Within Hillary Clinton's campaign platform is a pledge to continue free community college, and that was an initiative that was adopted originally by the Obama administration and actually has been getting quite a bit of traction on the state level. You know, paying for two years of college at the least expensive colleges in the state where more working class students go strikes people as being, you know, more practical, less expensive and also more targeted to the students that might really need the help.

SIEGEL: That's NPR's Anya Kamenetz. Anya, thanks.

KAMENETZ: Thank you, Robert. Transcript provided by NPR, Copyright NPR.