Free college might look different in the US because of the extensive network of private institutions. We could limit free tuition to public universities and let private schools such as Harvard and smaller liberal arts colleges continue to charge fees. In some ways that would make the education system better — odds are many private colleges, especially the low-value ones, would close because fewer students would be willing to pay fees when they have a free option.

The only private universities that would survive would have to offer very high value or have very large endowments. But fewer colleges leaves fewer spots for students overall, and even more competition for the few places available at high-quality state schools — especially for students who are barely qualifying now, but end up benefiting from their education through much higher lifetime earnings. When it comes to completion and getting some value out of education, Dynarski points out that the quality of the school is what matters. Yet free college undermines quality because it means less spending per student and doesn’t necessarily lead to higher completion rates . 

Free college at public universities risks further entrenching inequality by worsening what is already a two-tier system in US higher education. Inequality will only be exacerbated if the high cost of free public education means there’s less government money to subsidize loans for lower-income students who want to attend good quality, private schools that still charge tuition.

One of the benefits of university for students from low-income families is the exposure they get to students from more privileged backgrounds . A more disparate two-tier system undermines that process and further segregates our economy and society.

The US higher education system, which charges fees and offers need-based aid and loans is clunky and often wasteful. There needs to be more scrutiny over needless spending, tuition inflation, how loans are structured and schools that offer no value.

But the current system largely works and is better than most other countries. The overwhelming majority of people who graduate from college are rewarded with higher lifetime earnings, and many Americans do go to college. Moving to free college would mean students would still have lots of debt to pay their living expenses and the quality of public education would decline. The better solution is to reform student loans and keep university fees.

Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.”

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