Initiatives to provide tuition-free college have been cropping up across the country since President Obama’s administration and especially since the 2016 election. But is free college practical and sustainable?
National financial aid expert Mark Kantrowitz, publisher and vice president of strategy for college search and scholarship site Cappex.com, thinks so.
“There is no better financial investment for the federal government," says Kantrowitz, who has analyzed many aspects of free college and penned a white paper on the subject a couple of years ago titled, “Proposal for Free College Tuition & Required Fees and Free Textbooks.”
People who have bachelor’s degrees pay more than twice the federal income tax than individuals with just a high school diploma, he says, because they’re earning higher income. This increase in federal income tax revenue will get more people to the bachelor’s degree “finish line,” he says, and the payback period is about 10 years. “Most people work for 40 to 45 years, so we’re talking at least 30 years of pure profit to the federal government,” he says.
According to Kantrowitz, this is equivalent to about a 14 percent annual return on investment to the federal government, throughout an individual’s work life. “If you told me that you had an investment that would pay 14 percent annualized returns for 40 years, I’d ask you if your last name was Madoff,” he says.
Making post-secondary education more obtainable could potentially lead to “a new renaissance, a new era of entrepreneurship and invention,” adds Kantrowitz. He notes that seven million jobs are unfulfilled for want of people who hold the right education credentials. If millions of additional college graduates join the work force, he says, “it could potentially lead to tax cuts, and not insignificant ones.”
Offering tuition-free college could ultimately provide many other secondary benefits. For example, he says that people with college degrees tend to live longer and are healthier, are more likely to vote, volunteer more and are less likely to be involved in crime. “It’s cheaper to educate than to incarcerate,” says Kantrowitz.
The Associated Press recently reported that based on California’s new budget, it’ll soon be $2,000 more expensive to house an inmate in that state for a year ($75,560) than send a student to Harvard University for a year (including tuition and fees, room and board, and other expenses).
Tuition-free college can send a very powerful message to low-income students, says Kantrowitz, potentially boosting their enrollment by an average of 10 percent to 15 percent. Currently, many qualify for free tuition but don’t realize it, so they don’t apply.
Congress is already helping make college more affordable for middle-income families through American Opportunity Tax Credits. But families often don’t realize the credit's college link because they don’t receive a detailed breakdown with their tax refunds, he says. He favors reassigning these education tax benefits, which he says are "incredibly confusing,” and making them part of a free tuition proposal so Congress will get credit for what it’s already doing.