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February 23, 2016

Louisiana Shows Why ‘Free’ College Education Doesn’t Work

The experiment has already been tried. The results aren’t rosy.

“Free” college education sounds easy enough. A few dollars shuffled here, a few tax raises there, and — voilà! — you’re set to earn a college degree without the burden of student loans. This mentality explains much of Bernie Sanders’ appeal, particularly among young Americans. On the Socialist’s own website is a section called “It’s Time to Make College Tuition Free and Debt Free,” in which he spells out a six-step plan to eliminate tuition costs. After all, he writes, “The University of California system offered free tuition at its schools until the 1980s,” and many foreign nations do so today; why not implement it full-scale in America?

Perhaps he never stopped to ponder why California made reforms. A 1982 New York Times article noted, “In hindsight, many educators say, the system was allowed to grow too large in the 1960’s and is now having difficulty adapting to the falling birth rate, a state fiscal crisis and changing demands from students.” But California isn’t the only state whose experiment with the idea has gone awry. In a new Daily Signal article, Norbert Michel outlines the problems that plague Louisiana’s tuition-free plan — Taylor Opportunity Program for Students (TOPS).

What began as a program to subsidize state residents with low income in the 1980s went entirely mainstream in 1997, when income caps were nixed entirely. All students had to do was maintain a C average. But while college participation rose, so did the financial problems. “A person receiving ‘free’ tuition may not see it (or even care), but subsides actually raise the total cost of an education,” writes Michel. “The core problem is that they remove the paying customer — in this case the student — from the equation. Without the subsidy, the paying customer receives the direct benefit for the service and bears the direct cost. If that person doesn’t think the cost is worth it, they don’t pay.” The other problem? “When the influx of students hits … it strains universities’ existing resources. So the transfer of money has the natural tendency to lead to expanded facilities, faculty, and staff. But these increases call for a permanently higher level of funding, and all of these effects tend to reinforce each other. That is, school officials have a built in reason to ask for larger transfers, and politicians have a built in excuse to raise taxes.” Sound anything like ObamaCare?

It all has a compound effect. State budget shortfalls affect school finances. And in Louisiana’s case, it’s small institutions along with out-of-state and non-TOPS eligible students that get particularly hammered. Sanders posits that tuition-free systems work both here and abroad. They don’t. And the evidence is there for anyone willing to to do a little homework and familiarize themselves with Econ 101.

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