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July 19 2016

Hillary’s Education Plan Is ObamaCare for Education

Patrice L. Onwuka

Free tuition will be Obamacare for college and even liberal media is picking up on this.

Former Secretary of State Hillary Clinton may say she has hit on a good idea to lower the cost of college. Clinton proposes that we should make tuition free and her plan includes even affluent families who use public institutions.

The problem is, the free-flow of federal funds, often unaccounted for, into higher education is a big driver behind the skyrocketing cost of college. We’re not just the ones saying it, even the New York Times has latched on to this argument.

Her plan would have the perverse effect of driving tuition costs higher. Last year, the Federal Reserve of New York came to the conclusion that for every additional dollar of federal subsidies, colleges increase tuition or cut their own financial aid packages by 60 cents. They pocket the extra money rather than reducing costs for themselves or their students as the New York Times explains:

In recent decades, the federal government has significantly expanded tuition subsidies, only to watch the cost of college climb even faster. Some experts see evidence that colleges have responded to past increases in federal subsidies by raising prices.

“The basic economics are pretty straightforward,” said Taylor Nadauld, a finance professor at Brigham Young University<http://topics.nytimes.com/top/reference/timestopics/organizations/b/brigham_young_university/index.html?inline=nyt-org> and a co-author of the study. “Colleges have the opportunity to extract money from the federal government, and they do it.”

 

Forget reigning in costs or accountability. While she claims schools would be held accountable for reigning in costs, she doesn’t explain how. It would be difficult (unless you’re adding another layer of bureaucracy) to monitor this and even then, creative math by institutions can shift costs from tuition to other areas.

The New York Times pin-points that Clinton’s plan is just ObamaCare for college:

Under Mrs. Clinton’s plan, most students would not feel the pain of tuition increases. The government would pay their bills regardless. But that could make it easier for colleges to raise prices, as they would not need to fear a loss of customers.

It would replicate the dynamic in the health care industry<http://www.nytimes.com/2015/07/04/us/health-insurance-companies-seek-big-rate-increases-for-2016.html>, where patients generally do not consider cost when seeking treatment, and doctors do not consider cost when providing treatment, because bills are paid by insurers or the government.


And here’s another reason the free-college banner once held high by Vermont Senator Bernie Sanders, is doomed: regional disparities in public education spending.


Her plan rests on states boosting higher education spending on public institutions. However, some states do a good job of containing costs currently, while costs are out of control in other states. Reckless states would benefit from a big bailout of federal funding, while those who have done a good job would be short-changed as a policy expert from the left-leaning New America think tank explainsin the New York Times:

Tuition isn’t the same everywhere. It varies greatly, largely based on how much states spend on making college affordable.

Mrs. Clinton says<https://www.hillaryclinton.com/briefing/factsheets/2016/07/06/hillary-clintons-commitment-a-debt-free-future-for-americas-graduates/> that under her plan “states will have to step up and meet their obligations” to keep college affordable. But replacing current tuition levels would be an enormous bailout for states that haven’t been meeting their obligations, while badly shortchanging those that have held the line on college costs during good economic times and bad. In exchange for decades of steadfast investment in public higher education, North Carolina students and taxpayers would get far less than people in states like Pennsylvania that haven’t made college a priority.

The alternative is to distribute federal money to states on a formula basis, giving each the same subsidy per student… But that would make it extraordinarily hard for states like Pennsylvania to make public college free. It would require states that have historically been least willing to raise taxes and spend money on affordable higher education to suddenly do the most.

Any way you slice it, the plan is ill-conceived and progressives know that. Clinton aims to give some families a free ride to college, public colleges a whopper injection of funds, and taxpayers a massive bill. There’s no accountability for how our tax dollars would be spent and no way to control the rising costs of college. This ObamaCare for college plans just adds up to another expensive boondoggle in the making.

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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