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A new way to think about ‘free college’ — let private employers chip in

Making public college tuition-free is becoming a hot button issue for many Democratic politicians as student debt continues to grow to obscene levels. A new article from the James G. Martin Center for Academic Renewal argues that there needs to be a new way to think about “free college,” one that prefers private employers helping with the cost of college to public solutions.

Richard Vedder, professor of economics at Ohio University and visiting scholar at the American Enterprise Institute, observes that “the overwhelming majority of students at most four-year colleges and universities come from relatively affluent families.”

He continues:

Even at the fairly typical state university where I teach, Ohio University, the median family income is over $90,000 annually—well above state and national norms. It is much higher still at prestigious state flagship schools—$135,100 at the University of North Carolina at Chapel Hill and even higher ($155,500) at its rival to the north, the University of Virginia.

Poorer kids are less likely to complete high school, less likely to have good academic preparation, and thus less likely to attend schools with even minimally selective admissions.

Logically, Vedder argues, proposals to enact “free college” will largely benefit relatively affluent middle-class individuals:

Proposals, such as Senator Bernie Sanders’, for free college open to students at four-year state universities are almost certainly likely to primarily benefit students from moderately affluent families. Moreover, many really low-income families already get the equivalent of free or very low-cost tuition anyway, through school need-based scholarships and federal Pell Grants. Politicians are using proposed relief from high tuition costs resulting from dysfunctional federal student loan programs to promote their own re-election rather than truly help the poor.

A potential alternative solution? Private employers helping fund the cost of college for employees.

This is not a new idea. Private employers have helped to pay the costs of graduate school for employees for a long time. However, this has generally been focused on higher-paid employees. Now, companies like Starbucks and Walmart are beginning to provide tuition benefits for employees.

“I think it is related more to the very tight nature of the labor market,” Vedder writes. “Wages have been rising more for those with minimal education than for college graduates in recent years because big box stores and fast food restaurant chains are having trouble getting employees. Companies report that the prospects of a low-cost college education enormously increase the retention rate of new hires — critically important where labor shortages exist.”

He expresses skepticism as to how useful this education will actually be for students, describing colleges as “hedonistic finishing schools” that teach “little of consequence” for many students. But for Vedder, having private employers help fund the cost of college is far better than putting the cost on the taxpayer dime.

Read the full article.

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