Monday, February 29, 2016

Should College Be Free For Americans?

Democratic Party socialist Bernie Sanders has inveigled sheep-like support from students with his campaign promise to make college free for every American.  Young people whoop every time Sanders trots out his line about how the U.S. needs to follow the lead of European nations.

Student enthusiasm for Sanders' Utopian plan is understandable.  The nation's student loan debt stands at $1.337 trillion dollars and is growing by an estimated $2,726.27 every second of every day. Some 40 million Americans are carrying student loans. 

Many students incur the debt without any consideration of how they will pay it back.  In fact, research from the Federal Reserve Bank of New York shows that only 37 percent of students who borrow money from the federal government are actually paying down their college debt.  

Against that background, it is easy to understand why students are starry-eyed over the prospect of free college. Although Sanders offers little details about his plan, he always cites Germany, Sweden, Norway and Finland as examples of countries with free higher education.

No one in the mainstream media ever challenges his claims about these countries.  That's because the facts would confirm what most Americans intuitively know: there is no such thing as "free" college. Someone, most likely taxpayers, must pick up the costs.  

Take Germany as an example.  Until recently, Germany charged low college tuition and fees. Last year, the government of 84 million people voted to offer "free" college to students.  To support the education initiative, Germans pay among the highest income taxes levied in developed countries.    

The average German (not just the wealthy) hands over 49.8 cents of every dollar in income taxes. That does not include additional taxes for higher education levied by German states. In every country that doles out free tuition and fees, that nation's income taxes are higher than the United States.  

Because college is free, German students are in no hurry to leave the cozy campus environment.  The European norm is for a student to graduate in three years.  In Germany, most students fail to leave in four years and the average graduate is 28 years old.  Why not linger longer when it is "free"?

It is a misnomer to call college "free" in Germany anyway.  Students must pay for a place to live, transportation, food, books and supplies. Those costs typically make up for more than half of the expense of going to a U.S. college.  Tuition and fees are less than 50 percent of the cost.

Here is another fact that Sanders never mentions.  Even with "free" college, Germany has a lower student enrollment than most western countries, including the U.S.  One reason is the German education system steers many young people to trade schools and business apprenticeships.

Of those who enroll, only 31 percent of German students actually graduate.  By comparison, nearly 40 percent of American students earn a degree. There are few incentives for Germans to graduate because they can stay as long as they want without paying tuition and fees.    

In Sweden, "free" college isn't free either.  The average Swede graduates with $19,000 in debt, compared to $33,000 in the United States.  The fact is 85 percent of Swedish students leave college owing money for their education, compared to 70 percent in the U.S. 

They borrow money because of the high cost of rent, food, transportation and other expenses in large cities where Swedish colleges are located.  Unlike the typical U.S. family, moms and dads in Sweden feel no obligation to help pay for their students' college costs.  Students are on their own.  

Like Germany, Sweden has higher income tax rates than America and college enrollment is significantly less than our country.  It is also harder for a student to gain entry into college. According to the latest annual figure, there were 403,000 college applicants, but only 36 per cent were accepted.

Colleges in Sweden and Germany are no-frills, spartan campuses with few amenities.  They do not have a smorgasbord of activities and courses found in most American colleges. For instance, there are no African-American, gender or recreational studies.

"Free" college simply does not exist anywhere in the world.  The problem in the United States is that students and parents are not sensitive to mushrooming costs associated with college.  As a result, more than one-half take more than four years to earn a degree.  

Making college "free" would only exacerbate the problem.  Students would stay longer.  Increasing numbers of unqualified young people would attend college.  Overcrowding would hike costs. And multi-millionaire university presidents would still have zero incentive to reduce expenses.

"Free" college would create another entitlement that the government could not afford without borrowing trillions of dollars.  The real issue is this:  Average published tuition and fees at U.S. public four-year universities surged 225 percent from 1985 to 2014.  

That's why today 7 in 10 students borrow money to attend college. Twenty years ago fewer than one half of U.S. graduates incurred college debt.  Unless America addresses the ballooning expense of college, making higher education "free" will create more problems than it will solve.  

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