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Andrew Kelly: Bernie Sanders and the High Cost of Free College

Sorry Bernie: There's little reason to think free college would boost America's educational performance. It's now an article of faith among progressives that public college should be free. Their logic is simple: Tuition is increasingly expensive, and high prices keep high school graduates from enrolling at all, cause some that do enroll to drop-out before earning a degree, and force students and families to take on student loan debt. Free college proponents argue that the only way out of this mess is via brute financial force: spend billions in federal and state money to lower tuition to zero.

One of their favorite rhetorical tools in this and other social policy debates is to compare America, land of high tuition, to other countries that have publicly-funded free tuition. In a Washington Post op-ed from October of last year, for instance, 2016 presidential candidate Sen. Bernie Sanders argued: "In Finland, Denmark, Ireland, Iceland, Norway, Sweden and Mexico, public colleges and universities remain tuition-free. They're free throughout Germany, too. ... Governments in these countries understand what an important investment they are making, not just in the individuals who are able to acquire knowledge and skills but for the societies these students will serve as teachers, architects, scientists, entrepreneurs and more."

In other words: these countries are prepared to eat America's lunch economically because they are enlightened enough to have free public higher education.

Rarely, though, are these arguments backed up by evidence showing that these free systems are superior to those that charge tuition on key indicators we tend to care about: access, completion, and educational attainment. Do countries with free college dominate the educational league tables?

The short answer is, it's a mixed bag. But in general it doesn't appear that free college countries are far ahead of those who charge tuition; and some free college countries lag behind. First, a caveat: Countries obviously differ dramatically in terms of the politics, public policies and culture, so isolating the effect of one policy isn't possible. But if the relationship between free college and educational outcomes doesn't run in the predicted direction, it at least encourages us to ask why.

Enrollment rates: Data from the Organisation for Economic Co-operation and Development indicate that the U.S. is tied for 12th out of 18 countries with available data when it comes to the share of citizens 25 and under that enroll in college, at 47 percent. Not so good, right? Especially compared to Denmark (56 percent) and Slovenia (68 percent) – two free college countries – that rank near the top. However, the countries nearest the U.S. – Germany (45 percent), Austria (47 percent) and Iceland (49 percent) – have free or very low tuition. And two countries at the bottom of the list – Sweden (40 percent) and Finland (41 percent) – offer free tuition. (The U.S. is ranked higher on the World Bank's measure of enrollment).

Graduation rates: What about college graduation rates? The U.S. does better here, coming in fifth out of 19 countries with data available and excluding international students (52 percent). Japan (68 percent) and New Zealand (56 percent), where students pay high tuition relative to the rest of the OECD, rank first and third. Denmark and Slovenia finish just ahead of the U.S., but other free college countries don't beat the OECD average (45 percent). Germany, Sweden, the Czech Republic, Norway and Finland don't crack 50 percent.

Attainment: Educational attainment tells a similar story. When it comes to the share of workers aged 25-34 who have finished tertiary education, the US is tied for eighth with Sweden, Switzerland and Israel at 46 percent. Korea (68 percent) and Canada (58), who both charge relatively high tuition, are at the top of the list. On the free college side, Ireland and Norway make the top six, but Finland, Iceland, Denmark, Germany and the Czech Republic finish behind America.

In other words, free college is hardly a surefire path to the top of the attainment race. A recent NPR article on the topic argued as much, saying "would getting rid of tuition at public colleges and universities, by itself, give the United States 'the most educated workforce in the world'? Probably not."

Why isn't it as simple as that? One explanation is that publicly-funded free tuition spreads scarce resources across all students, including students from wealthier families who could pay something and would likely attend and complete college even if they had to. The World Bank's education specialist Francisco Marmolejo has argued that free college "becomes regressive, especially in the case where richer students are mostly the ones with access to elite, publicly-funded tertiary education institutions."

Take Scotland's recent experience as an example. When the Scottish National Party took power in 2007, it eliminated tuition fees at public universities. As The Economist reported in October, though, getting rid of fees did not markedly increase access for graduates of public secondary schools or low-income students. Critics of the policy have pointed out that funding free tuition for all instead of, say, targeted need-based grants, provides a windfall to the affluent at the expense of the working class. One study found that the free tuition plan essentially redistributed 20 million pounds from poor students to rich ones.

Free college is not a panacea. Ironically, and contrary to much of the rhetoric on the left, cost-sharing across students and taxpayers is key to maintaining higher education access. Indeed, as OECD education analyst Andreas Schleicher has concluded, "those countries that share the costs of higher education between students and taxpayers in line with their respective benefits are most effective." The question for all nations, including the U.S., is what balance to strike.

Andrew P. Kelly is a resident scholar and director of the Center on Higher Education Reform at the American Entrprise Institute.

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Posted: February 23, 2016 Tuesday 12:30 PM