Free College Education in America? This State Already Tried It.
Several politicians have recently been offering free goodies to voters. One of the most popular of these, oddly enough, is something that several state governments have already tackled: free college tuition.
Louisiana provides a great case study for advocates of similar federal policies. Louisiana just so happens to be in the news right now because the governor is threatening to suspend his state’s version of free college tuition for everyone.
Louisiana’s Tuition Program
Louisiana’s plan is called the Taylor Opportunity Program for Students, or, more commonly, TOPS. This extremely popular program uses tax dollars to pay full tuition (and some fees) at any of Louisiana’s public universities. Other than residency requirements, all high school students qualify as long as they have a C average (2.5 GPA) and at least an eighteen on the ACT.
How It Started
The program started out in the late 1980s as the brainchild of oil tycoon/philanthropist Patrick Taylor. The program, which wasn’t originally named for him, started out as a tuition assistance plan only for low-income individuals.
In 1997 the state removed the income caps. At that point, all Louisiana students, regardless of financial need, were made eligible for “free” tuition at any Louisiana public college. Once in college, students had to maintain a C average to keep their TOPS awards.
As of 2010, approximately 70 percent of Louisiana’s high school graduates headed to college within one year. That’s nearly 20 percent higher than the rate in 2000.
Who’s Paying for It?
It’s easy to call the program a success because of this increase, but it’s just as easy to point out that the program doesn’t really provide free education. In one way or another, someone pays for it.
The eventual implosion of the program was easy to predict back in 1997 for the same reasons that pretty much any similar subsidy is destined to fail. Subsidies don’t really lower the cost of products and services; they only lower the up-front price that some people pay.
(In 1997, this program inspired my very first public critique of a government policy. Back then, I thought it was a terrible idea.)
No Such Thing as Free Tuition
A person receiving “free” tuition may not see it (or even care), but subsides actually raise the total cost of an education. The core problem is that they remove the paying customer—in this case the student—from the equation.
Without the subsidy, the paying customer receives the direct benefit for the service and bears the direct cost. If that person doesn’t think the cost is worth it, they don’t pay.
Louisiana’s program replaces this paying customer with groups of government officials. These officials neither receive the direct benefit nor endure the direct cost of obtaining an education. These groups do, however, benefit a great deal from obtaining more of your tax dollars.
And they rarely bear any direct cost from either increasing your taxes or delivering a substandard education product. (The incumbency rate is fairly high for politicians.)
On a practical level, Louisiana’s program converts tuition payments into a state budget item. In other words, a large chunk of each school’s “tuition” becomes nothing more than revenue sent in by the state bureaucracy.
In Louisiana, four separate higher education systems—each its own bureaucracy—fight over these “tuition” payments. Smaller schools inevitably get the smallest shares, but that’s kind of another story.
A Burden on University Resources