Economist Ludwig von Mises observed the reality that virtually every government action creates unintended consequences that cause problems greater than the ones that were meant to be solved.
But the Democratic Party that is now apparently fully on board with free college for everyone is clearly unaware of this truism. That’s not too surprising as it has to do with economics, history and rational thought — all areas largely abandoned by the modern Democratic Party.
So here are the almost assured consequences that will stem from such a policy (beyond the $7 trillion price tag) and each ends up conflicting directly with the goals of free college for everyone.
- Most people will not graduate. Right now, according the National Digest of Education Statistics, fewer than one in three enrollees in four-year institutions of higher learning with open enrollment policies graduate — even after six years. So even if it is free, statistically it is reasonable to predict that two-thirds of those who enter will not come out with a degree. That means it becomes both an enormous misallocation of resources and it squanders years in pursuit of a fruitless endeavor for most. Further, for all these young people, there will be no increase in salary because there is no college degree — only lost time and likely some college-related expenses.
- It will create skyrocketing costs. Is everyone accepted who wants to go? If it is guaranteed tuition payment to universities without academic requirements — which has been the Bernie Sanders’ rhetoric — it will mean that these institutions will have even less incentive to control costs. Right now, only health care costs have soared as fast as college costs over the past 30 years. Not coincidentally, both markets are deeply impacted by government. In the case of colleges, it is easily obtainable student loans backed by the federal government, along with Pell grants and other fundings. This guaranteed flow of federal money and the ongoing cultural push for kids to go to college regardless of the need for them to, has driven up college costs and created the debt issue. Making it ”free” would make it much more expensive for taxpayers.
- Government will further screw up the college market. The obvious hike in costs would force the political reality of having to control costs by limiting or even lowering tuition. (This is all very akin to the dynamics in the health care debate, except the option of rationing is the opposite of what free tuition is for, so that likely would not be an alternative.) How would universities hire more professors, instructors and add classroom buildings and dorms along with administrators if the government is capping or cutting tuition? Obviously the quality and value of a college degree would plummet.
- It wouldn’t accomplish the goal of everyone making more money. Assuming, however, that it does increase the number of college graduates, what does that accomplish? In the big picture, it would mean that a Bachelor’s Degree becomes the equivalent of a high school degree within about a half of a generation, except that the B.A. comes with a lot of debt while a high school degree does not. So the result is that the American people generationally are saddled with trillions more in debt without a discernible increase in the actual value of what the new wave of college graduates have.
And finally, this is becoming even more of a big deal for Democrats at the very time that the labor market is historically tight. Right now, the unemployment rate is about 3.8 percent — below what economists consider full employment.
Further, there are about six million unemployed Americans, while there are seven million job openings — the majority of which do not require a college degree. In truth, the nation and the economy actually do not need more college graduates, particularly in all the wrong fields, i.e. the soft sciences, the arts, literature, ethnic and cultural studies, communications and media.
Evidence? There are 13 million Americans with at least a four-year college degree working in jobs that do not require any college degree.
The push for free college for everyone is much worse than just being a $7 trillion budget buster. It also destroys the value of a college degree, high school degree and years in a young person’s life, all while not accomplishing its primary goals.
EDITORS NOTE: This Revolutionary Act column is republished with permission.