One of the most prominent rhetorical criticisms of “free-college” proposals is that they are a giveaway of money to people who don’t need it.

For those who find this criticism persuasive, let me introduce you to our current system as it operates in our four-year public higher education institutions. 

As illuminated by a new report by Stephen Burd for New America, the competition to enroll high achieving students across state lines as resulted in an expenditure of $32 billion on “merit aid,” money directed away from students who more immediately need the money to attend college.

The report calls this the “merit-aid arms race” and notes how the ongoing competition for these highly qualified students results in a steady “ratcheting up” of scholarships in order to stay ahead of other institutions.

This chase for prestige has been driven by the public disinvestment by states as schools attempted to compete on a national scale in order to draw out-of-state students who come coupled with more tuition revenue. Enrollment management was used to both identify the “best and brightest” students who would receive merit aid, and wealthy students who can pay full freight. For a time, this was viewed as a way to boost revenue.

But even as revenue was being (temporarily) boosted, in-state students were being crowded out. The University of Alabama has seen the number of non-resident freshman enrolling in the university more than quadruple over the last 15 years. During that same period the non-need aid offered by Alabama to students increased over $123 million. 

For institutions that are supposedly mission-driven, it’s hard to see how this aligns with the mission. 

Once engaged, the cycle has chewed through various levels of public higher ed ecosystem. Regional state colleges, which once relied on nearby student,s saw them being lured away by more prestigious institutions and had to get in on the action resulting in what I called a “discounting death spiral” even though they had fewer resources to spare. 

As the report shows, these regional state colleges now spend a higher proportion of their aid on less needy students than even public research or public flagship universities. The mission of institutions that are supposed to be dedicated to low-income and working-class students has been distorted by a system predicated on competition. 

Of course, it’s even more complicated than this. The New America report suggests that the merit aid is being transferred from the have nots to the have’s, but the reality is that it’s more like it’s going from the have not’s to the have not-enough’s. This is the story of how the cost of college has become a burden for just about everyone.

The federal government sets Pell Grant eligibility at household incomes below $50,000 per year. It’s likely that many of those above the threshold absolutely also need that aid money in order to attend college. If we’re talking about the difference between being able to attend and not attend, it’s difficult to even draw a distinction between those above and below the Pell threshold.

As is, college is unaffordable for all but the most wealthy. The Feds definition of “non-needy” as used by New America has not kept up with the times.

Recall just last year the news about parents who are quite wealthy according to their incomes nonetheless severing the guardianship of their children in order for their kids to become Pell Eligible. Even these folks say that they cannot afford college

The current system absolutely disadvantages the most financially needy students, as those higher up the ladder have access to resources to navigate the system not available to those lower down. The higher the rung, the more the resources. 

It may not be a system that gives its money to students who absolutely don’t need it, but it’s certainly a system that fails to provide opportunities for the students who most need it. 

Even worse, consider the costs and inefficiencies attached to enrollment management practices and the need to recruit out of state students. For those concerned about administrative bloat, perhaps we can start there. Think about all those students who must go out-of-state at inflated prices because their home institutions are chasing down and subsidizing students from other states.

Does this make any sense to anybody? Unfortunately, asking institutions to unilaterally disarm may result in an existential threat as state investment isn’t returning at nearly the necessary pace to make up for the longstanding declines.

By every possible measure free college proposals are not a giveaway to the rich, but instead reduce the existing advantage that wealthier students have in accessing and benefitting from the public higher ed system. 

Additionally, these proposals can come coupled with requirements for institutions to enroll certain percentages of in-state students, to guarantee that a dedicated percentage of funding goes directly to instruction, and – dare to dream – that instructional faculty are in full-time, reasonably paid and benefitted positions. It is a recipe for greater efficiency and more bang for the buck.

The current system is a Frankenstein’s monster of losers and bigger losers, where the chase for revenue from students simultaneously results in gradually degrading institutional budgets (relative to the cost of delivery)andincreasing student debt.

You wouldn’t think such a thing should be possible, but we’ve created the most inefficient, most exploitive system imaginable to make it so. 

How can we not be eager for a reset?


Inside Higher Ed