Free College Education? Ten Big Problems with Biden’s Plan

President-elect Joe Biden, likely due to pressure from candidates Bernie Sanders and Elizabeth Warren, promises to tackle higher education costs, by, among other proposals, making college free. But I see ten big problems with Biden’s free college education plan.

This is not a tit-for-tat fairness argument. I’m not saying I suffered paying for higher education, so you have to suffer too. No, I’m saying that his plan gets a lot of things right, but it skirts around the biggest problem with college – ironically, its cost.

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Biden’s Free College Plan – The Good Points

To be fair, there are a lot of good points to this plan that puts it above other free college plans. It skirts many of the problems that dog free college plans in many states. Dr. Jill Biden is an educator after all.

Biden’s plan provides free community college and free 4-year college for those from families making less than $125,000.

The plan offers two- and four-year college opportunities, because if only two-year colleges are free, students can be diverted from pursuing four-year opportunities. The plan is need-based, which prevents the money being diverted towards students from wealthy families. There’s an emphasis on encouraging community colleges to implement evidence-backed programs to increase retention and graduation. The program is a “first dollar” approach, which unlike a last dollar scholarship, obviates the need to borrow money for room and board and other expenses. It creates a partnership with employers and apprenticeships to ensure a better nexus between graduates and jobs.

Biden also hasn’t forgotten about those who have already graduated with major student loans. Biden will absolve federal loan payments for those making $25,000 or less per year and only require payment of 5% of one’s discretionary income for income over $25,000.

Ten Big Problems with Biden’s Higher Education Policy: Costs Keep Rising

Here are the problems I see with this plan:

It does nothing to curtail college costs.

1. The plan does not discuss lowering the costs of public schools. Costs are mentioned in the plan but only those that have to do with what the students’ costs are. The only time he mentions placing the burden on colleges to cut costs is when he discusses HBCUs.
2. The plan does nothing to help with the costs of attending private schools.
3. Graduates with parents who earn more than $125,000 would still face crazy high prices. In many high cost of living areas, like mine, an income of $125,000 is the median. That means half of families earn more. Further even if these families managed their wealth extremely well, college would be a stretch financially.
4. The tuition is time-limited to two-years in community college and (I assume) four-years in four-year schools, but many lower-income students do not graduate in these timeframes. If they don’t finish time, it’s going to be a sticker shock when they have to start paying, and it’s likely they’ll quit.
5. The plan does nothing for graduate school. Graduate schools enroll 15% of the students and account for 40% of student loans.
6. The cost of the program will be a huge taxpayer burden with the huge increase in programs and absolving students’ responsibility for paying back their loans.
7. It does nothing to make it easier for low-income families to understand financing, which is confusing and intimidating. Many low-income families hear that college is free but that’s like going to the doctor assuming the visit is free. Many will think it’s better to stay home rather than risk getting whacked with a huge bill later.

Ten Big Problems with Biden’s Higher Education Policy: Vision

It’s unclear how their goals for addressing underemployment will succeed.

1. It’s unclear how the partnerships with employers would work when nearly 1 in 5 four-year STEM graduates are still having trouble finding work 5 years after college.
2. There’s no pressure to modernize college curricula. For example, the gig economy is already 30-40% of the workforce and growing. Meanwhile universities are still trying to prepare students for full-time jobs. Colleges don’t even incorporate the gig economy into their curricula. Talk about the Ivory Tower, head in the clouds.
3. Biden’s plan does nothing to talk about the goals of college in building a meaningful, happy life. Are the kids going to jobs they’ll like and feel productive in or will they dread them? What are their passions? Maybe these are pie-in-the-sky problems, but with all the money we’re spending on programs and human capital, as a society it’s an important one.

The Real Problems with College

The dual problems I think we should be confronting are making college less expensive FOR EVERYONE, and making college valuable FOR EVERYONE. We wouldn’t be talking about free college at all if people graduated from college and earned enough money to pay back their loans. Or if people graduated from college and saw it as a pivotal inspiring moment in their lives. Instead, many students graduate demoralized and struggle to pay loans on a barista salary.

Biden’s plan only discusses the tuition for low- and some middle-income students attending public undergraduate schools. That leaves out students from other income brackets, those that attend private school, and those that attend graduate school. It doesn’t address how college is so outdated that its curricula is not useful to the modern adult. Rather than being a springboard for a future, college is a waste of time and money – whether it’s paid for by students’ families or the taxpayer.

If we addressed these issues first, the other issues would solve themselves. Make colleges compete for their students with a modern curricula and reasonable costs, and the problem solves itself. The way we do that is taking the government out of subsidizing college. Let colleges fend for themselves and give the power for the students. Colleges might not survive if we stop giving them taxpayer money, and maybe that’s an amazing thing.

The Tuition is Too Damn High

In my post Why College is Not Worth the Cost, I argue that the high cost and low value of college ensure that it’s a losing investment for most. Thus, it seems logical that college tuition should be free, right? Well, it may become free for some, but still astronomical for others.

This NYTimes article boasts that, as of right now, families earning $200,000/yr (these are families that would be unaffected by Biden’s plan) can get 1/3 knocked off the price of college education. That seems like a good deal – except that means paying $45/k for one year of tuition. Let’s say the student also has $15k in living expenses.

After taxes and maxed-out retirement contributions, a four-person family makes about $120k. If they spend $60,000 on junior’s college and $42,000 on a mortgage (very typical in my area), that leaves $18,000 for transportation/food/health insurance/personal care/other.

Ok, that likely won’t work.

The parents have to save ahead of time for this to work. But even if the parents diligently saved $6k/year from the day the kid was born, they would end up with $218,000 – still $22,000 shy of what they need for one kid in college. Yes they can cash-flow the rest of it. But for a family in the top 2% of income, that’s a huge burden and a lot of planning.

Perhaps you’re saying, poor rich kid. But that’s a huge problem when 18 years of solid planning still isn’t enough. Most families are not going to come close to affording this. And even if they cover 92% of tuition and let their kid take $22k in loans, that’s still a heavy burden to bear as a young graduate.

Let’s Talk About College Underemployment

Too many students graduate from college without good job prospects. One article notes,”43 percent of recent graduates had jobs that did not request a bachelor’s degree.” HOLY CRAP – nearly half of college graduates don’t get any immediate benefit from a college degree. Even more interesting to me, that same article notes:

No surprise, but engineers (29 percent) and computer scientists (30 percent) were least likely to be underemployed in their first job, followed at a significant distance by communication majors (39 percent) and mathematics majors (39 percent). More than half of graduates in nine categories of graduates (including those majoring in psychology, general studies, biology and education) were underemployed right out of college.

Further, 18% of engineering majors were underemployed in their first jobs AND their jobs five years after graduating.

The saying goes, we should all major in STEM, right? I didn’t major in math but 29% and 39% chances of being underemployed after college is not a comforting statistic, and nearly 1 in 5 STILL being underemployed five years on is terrifying. When 1 in 5 people put in 4 years of effort, 5 years of work, AND $120,000 tuition for 4 years, and haven’t improved their job prospects – that’s quite terrifying.

Yes, Biden’s plan said there’d be a partnership with employers to match graduates with the right skills. But these here are the success stories – the people doing the right major and still coming up short. It seems like Biden’s plan is trying to get lower-income community college students to exactly this point, and it’s a bottleneck. We need to work on this before we spend all this money to get even more graduates just so that they can meander around like their wealthier peers.

Private College Tuitions Are Unchanged

Private not-for-profit colleges serve a similar proportion of lower-income students as public colleges. It’s very possible that the lower-income will hear the message about free college and think it’s all free. Nope, just public institutions if you can get into them. The sticker shock at private schools remains the same.

Granted, many private schools offer tuition assistance to poorer students. But it’s got to be difficult for poorer students to navigate through so many applications not knowing how much they will have to pay, where they might get accepted. Students shouldn’t have to apply to 15 colleges so that they stand a reasonable chance of getting in and getting a good financial aid package. Applying to college is not cheap either. Something needs to be done about the whole process.

Solutions that Can Move the Needle

It’s so easy to critique the programs without offering solutions, right? Free college only solves one problem – tuition -for one population – the lower-income in public schools. Still, it ignores the myriad of problems in higher ed. Here are some solutions that perhaps aren’t a magic bullet, but will help to move the needle on the problems with higher ed.

Solution 1: Stop Guaranteeing Student Loans

There are so many methods to make college costs more manageable without making college free. For instance, the federal government can get out of the student loan-guarantee program.

The main problem right now with colleges is they have no skin in the game. They get paid whether their graduates learn anything or are employed.

Colleges would also have an interest in lowering prices to a reasonable level so that people would be able to pay them back. If colleges were fronting the cost of tuition for their students, the college stands to lose a lot if a student declares bankruptcy.

Solution 2: Advertise to Low-Income Applicants

One study found that sending mailers guaranteeing free college to high-achieving low-income students doubled enrollment at the University of Michigan. Wait, isn’t this the same as giving free college? Well no, because college was already free for these students – they just wanted to have the guarantee without going through the complicated paperwork.

Lower-income students are likely to see the listed tuition prices and get sticker shock (higher-income students as well). It’s better to give low-income families clear guidance with regard to expected costs and eligibility so that they can plan and feel secure.

Solution 3: Encourage Students to Forgo College

I’ve talked with many college graduates who performed all their studies admirably, did some internships during college, and then floundered for a bit by themselves until they figured out their career. College students still do this now. Alumni are on their own to figure out how to get a job or pursue a life.

I know a college student who wants to become a writer. She’s paying tens of thousands to attend an art school and is now doing an unpaid internship for a magazine. Though that’s the traditional way, that seems like a ridiculous waste of time and money when she could try freelancing right now, because that’s what she’ll be doing in the future.

If you want to learn to code (one of the top-paying college majors), you can do it for free online or pay for very reasonably priced courses online. If you want to be an actress or a musician, you can go straight to auditioning and get a part time job at Starbucks, Rover, Uber, etc.

The best part is that this encourages colleges to really up their game on their value. Once students realize they can make a good living doing gig work, colleges will have to compete for their eyeballs and their cash.

Step 4: Abolish College

Look I know college is ingrained and Biden is no innovator. But we shouldn’t give college a free handout based on tradition.

Imagine how great it would be if college was abolished. Without college degrees as proxies, employers would have to hire people and train them at their own expense. College sports would be too lucrative to get rid of – but they’d finally have to pay their athletes. High schools students would no longer have to stack their schedules full of extracurriculars. We would no longer define ourselves by our majors. Alumni foundations would stop hassling us for donations.

Frat boys disappear. The adjunct professor game would go bust. With the money that would have been spent buying their kids admission into school, the rich would have to put their names on museums. The money spent on college could be rerouted to secondary education.

Plus, grad students could get started a whole lot earlier. A friend told me that applying to neurosurgery residency was easier than he expected because so few women apply. That’s because if you graduate college at 22, medical school at 26, and then do a 7-year neurosurgery residency, you won’t get out until 33 at the earliest. That’s late to start a family. But if you cut out college and finish residency at 29, maybe we get more female neurosurgeons.

We’d probably have a ton more women in careers. Imagine if women put in 4 more years working before taking maternity leave. That’s four more years of seniority and job experience if they want to go back to work.

Conclusion – Free College Education? Ten Big Problems with Biden’s Plan

I support debt free college. So free college tuition is a step in the right direction, right? Not in my book if it doesn’t get to the heart of the problem, which is costs and meaning. College is a monopoly but it doesn’t have to be. Once we instill some competition in the game, and get colleges to compete for their value, I think our society will benefit from a much more educated and savvy citizenry.