Many Americans are understandably worried about the ever-increasing cost of college education. Recent proposals from politicians to offer free tuition at public universities makes calls for free community college seem reasonable in comparison.
However, subsidizing even two years of higher education can have harmful effects on both students and taxpayers.
If policymakers are considering further subsidizing the community college system and enabling all students to attend for free, we must first establish whether this is a wise investment.
For starters, low-income students who wish to pursue an associate's degree already have ample financing options. According to the College Board, Pell Grants cover nearly the entire cost of tuition at public two-year institutions, with the average Pell Grant award for these students amounting to $3,200 of the average in-state tuition of $3,440. Considering that the cost of community college is miniscule compared with that of a four-year degree, it is not surprising that only 17 percent of students participate in federal loan programs.
Yet, even though the financial burden of attending community college is relatively low, students still have trouble paying off their loans. Far more community college students default on their loans (38 percent) than students at four-year colleges and universities (10 percent).
Additionally, community college students graduate at shockingly low rates. While many experts have argued that this number is so low because many community college students transfer to four-year universities, it turns out that only two in 10 do so. Once transfers are accounted for, the Community College Research Center found that only 38.1 percent of students who enrolled in community college in 2009 earned a two- or four-year degree within six years.
Economists have noted in recent years that the more the federal government offers aid to students, the more universities are encouraged to raise their tuition prices, knowing that students won't feel the immediate impact of that increase. Last year a report from the Federal Reserve Bank of New York found that each dollar in Pell Grants alone leads to a tuition increase of 40 cents.
Policies that claim to offer free tuition, whether at a community college or a public four-year institution, put no downward pressure on prices. This shifts the ever increasing financial responsibility from the students to the taxpayers, and the true price of tuition will continue to increase exponentially.
A better option would be to rein in federal subsidies to drive down college prices and open up private lending in the marketplace so that more students can attend college at a reasonable price. Additionally, a more diverse market of alternative schooling models, such as vocational or online learning, could offer specific skill sets to students wishing to streamline their education at a lower cost.
By contrast, free community college will only lead to a financial bubble for future generations to solve. As the country considers ways to provide better options for our children, this proposal deserves a big fat F.
Mary Clare Reim is a research associate in education policy in The Heritage Foundation.
