One state finally pulled the trigger. Tennessee will make community college free to all of its residents. Earlier this year, New York state made a four-year college degree free for its residents, albeit with some serious caveats.
Naturally, the instant reaction is that such moves are simply wonderful. I tell you, though, it’s a really bad idea. Sorry, I know that makes me a horrible person, but allow me to explain.
First, let’s start with a quick visual economics lesson. Imagine you’re holding a water balloon in one hand. Now, take the thumb and middle finger from your free hand and wrap it around the balloon and squeeze. You moved the water from the middle of the balloon, right? Did the water disappear or was it just moved to the top and bottom of the balloon, distorting its shape? Congratulations, you just learned how government intervention wreaks havoc upon and distorts the free market.
Now, let’s look at how this program will affect the higher education industry and cause far more problems than it cures (like just about every government intervention into the marketplace). First, what always happens when something of value is suddenly given away for ‘free’? Demand skyrockets, yes? In my home county, Luzerne County in Pennsylvania, our local community college has an enrollment of just over 6,000 students and the yearly tuition is about $3,500 for an in-county resident. When something with a value of $3,500 is suddenly offered for ‘free’, do you think demand will go up? One cannot even use the traditional marketing/economics formula of price elasticity to measure such a proposition. Can we agree that enrollment would double, especially when you throw in a segment of the population who would say, “Nothing else to do, so what the heck? Let’s go to college. It’s free, after all.” Let’s be conservative, though, and say the 6,000 students would turn into 10,000.
Since our local community college campus — currently 15 buildings — isn’t built or staffed to handle 10,000 students, what has to happen? The college will have to build and staff to accommodate. That means that county officials will have to raise taxes to build the new buildings and parking lots and hire additional faculty and staff. That means more than just paying for one-time construction costs (which will run over budget by millions, guaranteed). It would also need to fund ongoing maintenance of the buildings and grounds, as well as salaries, benefits and sweetheart pensions for the additional faculty and staff.
‘Free’ community college would also be a menace to four-year colleges and universities. Currently, most four-year colleges will accept most if not all credits earned at community colleges. Who wouldn’t then get those credits for ‘free’ and then transfer to a four-year college, rather than paying $40,000 for the first two years at a university? Therefore, four-year colleges in the future will do one of two things: stop accepting community college credits or raise tuition exponentially to compensate for the lost revenue from their ever-shrinking freshman and sophomore classes. Competition will most likely force them to continue to accept the credits, which means they will simply raise tuition. They will have no fear of doing so because they know the federal government will simply increase funding through grants and loans because it is political suicide not to give the education establishment whatever it wants. Anyone objecting to blindly increasing education spending year after year is always labeled as ‘anti-education’.
Let’s take a look at how else the free market gets distorted by this proposal. Today, there are roughly 7,000 trade and technical schools in the United States. While less expensive than colleges and universities, on average, trade and technical schools still generally cost more than your typical community college and will certainly cost much more when community colleges are ‘free’. So, what do you think will happen to all of the trade and technical schools when the ‘free’ community colleges begin offering the same courses and certifications? If you guessed they will go out of business, give yourself a gold star. And when all of those schools are gone and all of the education is being done by one institution — the ‘free’ community college — what will happen to the quality of the programs? The quality will inevitably suffer from the lack of competition.
The annual operating budget for Luzerne County Community College is $42 million. With future student enrollment ever increasing, that budget would easily swell to $70 million. Suddenly, the hottest job in every county is the presidency of the local community college. With all that new money flowing through a government agency, waste, corruption, nepotism and cronyism will inevitably follow. Do you think a good chunk of that new money might just end up in the pockets of the board members and administrators? Nah.
Former President Obama spoke of free community college in one of his state of the union speeches. His plan would have covered it nationwide. It had some dangerous fine print, though. The federal government, according to this proposal, would only kick in 75% of the cost of this program and demanded that states pick up the rest. State legislatures and governors would have been handed an unfunded mandate (classic political tactic) and be forced to raise taxes through no fault of their own in order to pay for the federal giveaway.
‘Free’ government programs are never free and they are never without consequences. Besides, reaching into taxpayers’ pockets to provide ‘free’ community college is a classic example of fixing something that isn’t broken. Is there a community college crisis out there that only the government can solve?
Thoughts That Escape Me 