Free College Is a Gift to the Privileged Paid for by Ordinary Taxpayers

On Monday, Sen. Bernie Sanders released a radical education policy plan. Sanders, who seeks the 2020 Democratic nomination for president, proposes to forgive all outstanding student loan debt and make college free. The price tag for this munificence? A whopping $2.2 trillion over 10 years.Student loan forgiveness and free college are two increasingly popular political demands, especially among young people. Both are very bad ideas.Student loan forgiveness amounts to a transfer of wealth to those with relatively high levels of expected lifetime income, at the expense of those with relatively lower levels of expected lifetime income. This is because college graduates enjoy better job and earnings prospects than those without degrees. Don't be fooled by Sanders' promise to pay for this program with taxes on the wealthy. As anyone who has taken Econ 101 knows, you can't tax capital without also taxing labor. The rich who are taxed will invariably change their behavior in ways that shift some of the tax burden onto the non-rich. Try to soak Wall Street, and Main Street gets wet.There is a broader moral argument against student loan forgiveness as well: students who took on exorbitant debt knew, or reasonably should have known, what they'd gotten into. A simple Internet search could yield mountains of data on unemployment rates by college major, job prospects, and other information relevant to one's choice of studies, including whether to attend college at all. Voluntary exchange can indeed be ethically suspect when one party hides pertinent information from the other, but that simply isn't the case here. Caveat emptor. Students ought not to be able to shrug off their contractual obligations.How about free college? Mounting evidence suggests that college is less about building valuable human capital than about signaling one's pre-existent capabilities to the job market. In other words, going to college isn't about helping students develop job-related skills or learning to "think critically." What it's about is convincing employers that applicants are the kind of people who would be good in a white-collar environment. Making college free would mean forcing ordinary taxpayers, even those without degrees, to shoulder the cost of what is essentially an expensive and inefficient job precertification program. There is no compelling public interest being served here. It's just more benefits for those who are college-bound (who tend to come from the middle and upper-middle classes), paid for by those who aren't.Look past the public-spirited rhetoric and you can see Sanders' plan for what it is: class warfare waged by the pretty-well-off against everyone else. American politics is already bitterly divisive. We can't afford to institutionalize public acrimony by pitting coalitions of taxpayers against each other. There are many problems with higher-education policy in the United States today. But Sanders' plan would only make them worse.Alexander William Salter is an assistant business professor at Texas Tech University, a comparative economics research fellow at TTU's Free Market Institute, and a fellow with the American Institute for Economic Research's Sound Money Project. He wrote this column for The Dallas Morning News.   Continue reading...