Make College Affordable, Not Free

A budget resolution that cleared the Senate last week sets the stage for one of President Joe Biden’s top campaign pledges — making a two-year community college education free for all Americans.

It’s a popular pitch, as a Pew Research Center survey conducted last month shows 63% of people support tuition-free enrollment in public colleges and universities. In an economic impact study, the Campaign for Free College Tuition and Rise say nearly 2 million more students would enroll.

“Make it free, and they will come,” Robert Shapiro, the study’s lead author, told CNBC.
Students will come, but it’s far less certain whether they’ll stick around long enough to graduate.

Most of us who attended public high schools can remember classmates who simply didn’t want to be there. They rarely turned in homework or completed projects, and some actively undermined others’ learning by causing class disruptions. Personal and family problems are often to blame, but behavioral economics may also be a factor.

In a market economy, the price of a good or service correlates with its value. We tend to appreciate what’s given to us less than what we’ve invested money or labor to obtain. Yet the zero price effect shows that making something free drives up demand because consumers see no downside.

A 2006 paper by Kristina Shampan’er, then a Massachusetts Institute of Technology doctoral student, and MIT behavioral economics professor Dan Ariely has amassed 596 citations, placing it in the top 1% of academic research. In one experiment, they found subjects more likely to choose a free $10 gift card over the option of paying $7 to receive a $20 gift card, even though they stand to benefit 30% more from the latter option.

Entrepreneurship guru Ramit Sethi says friends who asked him for free access to his online courses rarely or never logged in, and people who were already paying clients were five times more likely than prospects to open his company’s free email newsletters.

“Understand that people value what they pay for,” Sethi wrote in a June 2017 guest column for Business Insider. “You’re not doing them a disservice by charging them, you’re actually doing a profound service for the people who want to take action.”

A zero-dollar price tag is certain to swell college registrars’ rolls, but it’s a fair bet the free freshmen will be more likely to skip classes and ultimately drop out than alumni who paid for the privilege. Shampan’er and Ariely’s findings demonstrate that “people tend to ignore the opportunity cost associated with getting things for free.”

Community colleges, sometimes known as junior or technical colleges, are the best bargain in higher education. For students from low-income families, federal Pell grants already pay for tuition, books and fees. Some 3.2 million of the United States’ roughly 8 million community college students receive Pell grants, according to the Association of Community College Trustees.

Price is rarely a barrier for prospective two-year college students. Child care, transportation to and from the mostly nonresidential campuses and schedule conflicts between work and school are the main obstacles. Advertising free tuition in large neon letters will bring students through the door, but some will drop out when they realize what the opportunity costs.

Supporters of free public college tend to argue on emotional rather than empirical grounds.

Education should be open to all, they reason, because knowledge is an undisputed public good. Their mistake is using “education” as shorthand for the college and university system and then conflating their redefined term with the learning process itself.

Everyone with a library card and an internet connection has access to more information than any human being could learn in a lifetime. The world’s leading public intellectuals share their lectures on YouTube. Colleges themselves have gotten in on the act by offering free massive open online courses, or MOOCs. If there are open seats in the lab or lecture hall, many schools will even allow you to audit a class or two at no charge.

Students aren’t really paying for “education,” strictly speaking. They’re paying for college credits that accumulate toward an academic degree, which functions chiefly as an employment credential.

Congress could expand the Pell grant program or further subsidize community colleges to reduce costs, but “free college for all” is a simplistic solution that will create at least as many problems as it solves.

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