| 摘要 | Editor’s note: The next president is in for a rough welcome to the Oval Office given the list of immediate crises and slow-burning policy challenges, both foreign and domestic. What should Washington do? Why should the average American care? We’ve set out to clearly define US strategic interests and provide actionable policy solutions to help the new administration build a 2017 agenda that strengthens American leadership abroad while bolstering prosperity at home.
What to Do: Policy Recommendations for 2017 is an ongoing project from AEI. Click here for access to the complete series, which addresses a wide range of issues from rebuilding America’s military to higher education reform to helping people find work.
Last week, my colleague Andrew Kelly wrote a piece showing that many free-college countries lag behind the U.S. on key metrics, including enrollment, graduation and degree attainment rates. His point was a basic one: While free college may seem like a surefire way to increase access to higher education, the effect can well be the opposite if there are fewer seats available – due to limited public funding – than there are qualified students:
Kelly sums up: “Ironically, and contrary to much of the rhetoric on the left, cost-sharing across students and taxpayers is key to maintaining higher education access.”
This creates a bit of a puzzle: Charging tuition may expand access by ensuring institutions have sufficient funding to serve all students who can benefit. On the other hand, couldn’t charging tuition also inhibit access for those who can’t afford it?
Absent effective financing tools to help students cover those costs, yes. And this is one of the major problems with the current higher education financing system in the U.S. However, it is possible to build better financing tools than we have right now, thus allowing cost-sharing while not diminishing access for students who lack the money to pay out-of-pocket.
Other countries provide examples of how to do exactly this. Consider the United Kingdom, Australia and New Zealand, three countries that have moved away from the kind of free-tuition system that is getting so much attention here in this election cycle. In these countries, policymakers deliberately raised the cap on tuition in an attempt to move from a capacity-constrained public system to one that was more accessible to a larger fraction of population.
What about students who couldn’t afford to pay upfront? In tandem with increasing tuition, these countries also introduced well-designed income-based student loan systems through which students repaid any amounts borrowed as an affordable percentage of their post-school income. Such a system ensures manageable payments and virtually eliminates the risk of default. These systems were simple and intuitive from the start, using a paycheck deduction process that ensured that borrowers’ payments would adjust automatically with their income without any additional paperwork or documentation.
What happened? As the figure below shows, in the 10 years following the implementation of these reforms in Australia in 1989, college enrollment rates rose significantly across all income groups in that country:
The U.K. offers further evidence of the benefits of these reforms. In a paper summarizing the changes in his country, economist Nicholas Barr cites a 2010 report on enrollment rates by the Higher Education Funding Council for England:
As Barr notes, despite the new, higher tuition, “loans cover fees and most living costs, making higher education free, or largely free, at the point of use, in principle addressing student poverty. … [I]ncome-contingent repayments protect people with low [after-school earnings].”
In comparison, the U.S. financing system is far riskier for students. For decades federal student loan options featured fixed monthly payments over a fixed time frame, which offer few protections against default and delinquency. Starting in the 1990s, policymakers began adding a variety of income-driven repayment options to the federal student loan system; however, they are confusing and bureaucratic. As a result, the Department of Education estimates that – even with these protections – 25 percent of undergraduate loan dollars will go into default at some point during repayment.
These design flaws have come to the fore as the U.S. has backed into tuition increases over the past several decades, through a combination of state disinvestment and a lack of incentive for institutions to contain costs. Students have become increasingly reliant on this broken student loan system, and the predictable result has been a backlash against student debt and a strong temptation to move back in the direction of free or near-free public college.
This brings us full circle, however, to the risk that capping tuition at zero or very low amounts will actually limit access by constraining the number of seats available. Instead of falling into this trap, policymakers should follow the lead of these other countries who have successfully facilitated greater access through a combination of cost-sharing and well-designed income-based loans.
Specifically, students in the U.S. need better financing options – ones that offer stronger protections from the financial risk of making such a large and uncertain investment. Presidential candidates Jeb Bush and Marco Rubio both put forward ideas in this regard – offering students improved and much-simplified income-based financing options. Hillary Clinton’s college affordability plan would also take some steps in this direction by consolidating the existing income-driven plans available in the federal loan program, but would also impose tuition caps, with all the access risks therein.
To be sure, policymakers must take other steps to address continued tuition inflation in the U.S. They could start by imposing borrowing limits on student and parent loans (absent in parts of the current system), putting schools on the hook for some of the unpaid debt their students have taken on and engaging the private sector in a more meaningful way to help finance students.
But ultimately, providing students with access to effective financing tools is essential to ensuring access to higher education on a broad scale. While not as easy to fit on a bumper sticker as “free college,” these proposals are more likely to achieve the goal of equal access for all. |
