The cost of free education

Let me tell you two stories about two vehicles that end in two very different ways.

The first takes place my sophomore year of college. As I prepared to go back to school, my parents informed me that they were going to let me take their 2002 Buick Park Avenue to campus with me.

After a year of having to rely on my friends for a ride, I was thrilled. The fact that my parents were also still paying for the insurance and any maintenance issues made the whole deal even sweeter. I was only responsible for my gas… though my parents usually filled my tank up too when I would visit home.

This giddy freedom lasted about eight months, until the end of spring semester the next year. And then disaster struck. I was driving up a hill to campus when my acceleration died as smoke started pouring out of the hood. I managed to ease it over to the side of the road and called my grandfather, who lived nearby, for help. Once we limped it into the nearest auto shop for an examination, we were told that the engine had been destroyed because of a lack of oil. I’d seen the “low oil” warning flash on my dashboard for weeks previously, but I’d ignored it, figuring my parents would take care of it when I made my next visit home. Now my car was beyond repair.

On to the second story. A few months ago, I bought a 2003 Kawasaki Vulcan. I took out my very first loan to purchase it, and I started my first ever insurance plan. This bike is beautiful—and I’m obsessively careful with it. I despair if I even scratch the paint. When I’m not riding it, you can be sure it’s tucked safely in the garage.

So what’s the difference between the two? It’s simple: with the first vehicle, my parents gave it to me with no strings attached. It was free. I took it for granted. With the second, I plunked down my own hard-earned money for it, and I’m still paying for it today. A lot is tied up in this motorcycle, and I want to be able to enjoy it for years to come.

This mentality is true with almost anything: you appreciate something more when you work for it yourself. And that’s why I think there are some major flaws with President Obama’s proposal to offer free community college to any interested students.

The president unveiled his plan during January’s State of the Union address, promising that it would save about nine million students an average of $3,800 in tuition every year. This tuition would be covered by the federal and state governments instead (funding 75 percent and 25 percent, respectively), to the tune of $60 billion during the next 10 years.

There are some caveats: Students must maintain at least a 2.5 grade-point average and also attend school at least half-time. There would be certain quality benchmarks in place, and credits would have to be transferable to a four-year college or result in a two-year professional certification down the road.

Still, making sure you get a C+ on that history test seems like a pretty sweet deal for thousands of dollars in tuition every year. (It’s even sweeter if you can combine the deal with Pell Grant dollars, which are totally need-based.)

I can sympathize with our president’s concern. There have been countless news articles about the lack of skilled workforce in the country. And “skilled trades” like welders and plumbers are even more lacking. So on the face of things, it makes great sense to encourage our youth to head to community colleges to learn useful trades—especially when a plumber can snatch up a $30,000/year job right after graduation, while English majors and history majors might struggle for months in a stagnant job market.

I’m all for encouraging people to check out “alternative” educational paths—but the president’s plan isn’t the best way to do it.

For one, it’s costly. We all know that “free” isn’t really “free.” Someone’s going to be paying for this. While the president divides the funding between federal and state levels, in the end it’s still regular taxpayers who are going to be footing the $60 billion bill. With a country that’s already $18 trillion in debt, do we really want to add another $6 billion every year?

For another, this isn’t the federal government’s area of concern. Besides the fact that the tenth amendment of the U.S. Constitution hands power over to the states unless it’s specifically given to the federal government, all-encompassing government-run programs rarely work out. From Social Security to Medicare, nation-wide entitlement programs end up billions (if not trillions) of dollars over budget. While a statewide initiative offering free community college tuition, such as the initiative started by Tennessee Governor Bill Haslam, might work, a countrywide effort is too big to function. There are too many variables across state lines.

One other thing to consider is how much community colleges might inflate their prices if they know the government will cover the tuition. Remember how housing prices skyrocketed once huge loans became available to anyone, regardless of their risk factor? Even traditional four-year colleges have inflated their costs 27 percent beyond inflation over the past five years, thanks in part to the fact that federal loans make tuition money readily available. It’s easy to charge exorbitant prices if you know someone will pay them.

But I think the biggest reason this plan is doomed to fail is because people don’t value what they don’t have to work for. When I attended my four-year college, I worked my way through thanks to six jobs (not counting the summer jobs) and several scholarships—and I worked hard. I wanted to make the most of the credits I was paying for. But if you’re handed credits on a silver platter, will you even care? When it comes to community college students now, only 25 percent who don’t transfer to 4-year colleges graduate. Of the students who do transfer to four-year colleges, only 40 percent graduate within six years of enrolling. Do we really think the numbers will improve if we make it a free-for-all where there are no financial ramifications for dropping out?

My guess is people will treat their free credits like I treated my parent’s Buick—and this time, it’ll be us taxpayers stuck with a $60 billion repair bill.

Grace Webb

Grace Webb

A former Editor of Connect Business Magazine

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