Weissmann strikes again! The fail is strong in this one.
Our old pal Jordan Weissmann has published yet another completely wrong and easily disprovable blurb in the Atlantic (h/t miserlyoldman), this time making the claim that the US Federal government could make college tuition completely free for all students for what it is already spending in various aid programmes.
If that sounds both absurd and way too good to be true, that’s because it is.
Long-time readers may remember the last time Weissmann ventured into this territory, when he made an also-wrong but at least marginally sophisticated argument claiming that colleges were using their financial aid systems to bilk poor students and subsidize wealthy ones.
Apparently, he hasn’t gotten any better at reading government reports since then, and the sheer innumeracy reflected in this new piece is truly staggaring.
Weissmann essentially makes three main points in the blurb, all of which are simply factually incorrect:
1) The total amount of tuition and fees paid by students at public (4-year) universities totals approximately $62.6 billion per year.
2) The government spends $69 billion per year on federal student aid programmes.
3) If the federal government simply redirected this aid money directly to public universities, it would completely cover the cost of tuition for all students at these universities.
So, let’s take these claims in order.
1) Weissmann claims his $62.6 billion figure comes from this NCES report, which he even waves around in his updates like some kind of talisman that absolves him of having to answer to criticism. Well, the problem here is that, while the $62.6 billion figure is indeed in the report, it refers to the total tuition for private four-year colleges, not public ones. The correct number for public institutions is actually $52.9 billion. This is actually good news for Weissmann’s argument, since in theory it makes the whole enterprise even more affordable. It is not however, bode very well for Weissmann as a finance journalist (seriously! that is his job!) when he can’t read even the simplest of tables. [Edit: Weissmann has clarified in the comments below that he derived the figure from adding together tuition for all public institutions, not just 4-year colleges. This is unfortunately not clear in the original text.]
2) Weissmann gets the $69 billion figure for federal student aid from the New America Foundation. It is accompanied by this helpful chart:
Here you can see the actual breakdown of federal spending on student financial aid in 2013 (for both public and private institutions): $35.9 billion in grants, $32.6 billion in tax benefits, $0.93 billion in work-study, and a whopping $107.4 billion in federally backed loans. It is thus clear that Weissmann is deriving his $69 billion figure by adding the first three categories together while totally ignoring the amount spent on loans.
This is just shockingly, ridiculously, hair-pullingly, mind-bogglingly careless math. Where do you think all that loan money goes, Mr. Weissmann? I’ll give you a hint–it’s not for building giant robots to do battle in the skies over Tokyo.
I will reiterate that Weissmann actually put a copy this graphic in his own article, which presumably means he looked at it long enough to add those first three figures together without ever understanding that the fourth number undermines his entire argument. After all, if the government were actually committed to covering the full cost of tuition, a significant portion of these loans would have to be converted into grant money (costing even more money than their face value in the long term, as the government would also no longer be collecting interest on it).
3) These two things considered, the original argument about redirecting aid toward public school tuition fails miserably. Even assuming that every private school student pays 100% of their tuition with loans (which is certainly not the case), that’s still $44.8 billion dollars that need to be accounted for somehow.
Of course not all student loans go directly toward paying tuition and fees–the federal government requires only that they go toward “educational expenses,” which may include room and board, books, child care, or the purchase of a personal computer. With the information presented, it’s not possible to say exactly what percentage of federal loan dollars go directly toward tuition as opposed to other expenses, but it is at least worth noting that the maximum yearly loan allowances are lower than the annual tuition rates at nearly all public schools, so only students with federal grants or other forms of tuition remission would find themselves completely covered by federal dollars.
So how much would it actually cost to make public university tuition free?
This depends on a couple of factors. Weissmann seems to be advocating the idea that students abandon private universities entirely (or perhaps that they naturally would do so when faced with free tuition at public schools). In fact his whole argument relies on re-purposing federal aid directed toward private institutions in order to subsidize public ones.
This in itself, though, would not actually be enough to put the private universities out of business–that would require a change in the law and possibly massive federal buyouts in order to turn these institutions public (barring a major revolution, but, well, in that case this wouldn’t be quite so pressing a problem). Besides, the whole point of offering federal aid to students at private schools is to allow them to actually compete with their wealthier peers. Cutting this aid would just hasten a return to the days when elite private schools were the preserve students from wealthy and well-connected families, since attendance (if not admission) would be limited to those with the ability to pay, or those who were willing to take on incredible amounts of private loan debt).
Anyway, assuming that all these students begin attending public school, this means that we have to increase the figure for public school tuition presented in the NCES graph by one third (since currently approximately 25% of university students attend private institutions). So $52.9 billion becomes $70.36 billion.
Still a good deal, you say? But wait! That’s just tuition. The federal, state, and local governments would presumably also have to increase their other grants and funding to cover the additional burden on the system created by a 25% increase in the student population. This is a lot of money: currently annual expenditures on non-tuition grants and appropriations from government sources total about $93.8 billion for public four-year universities. Even assuming there can be some economies of scale (600-student lectures instead of 400-student lectures? Sign me up!), we’re still probably talking another $20-30 billion on top of the tuition-replacement money.
So what would it cost to make public university education tuition-free in the US? Based on these figures I’d guess somewhere between $90 and $100 billion per year, not counting initial expenses in setting up the system. That is indeed only about $30 billion more than current aid “expenditures,” assuming that in such a scheme all higher-education tax credits were actually eliminated and turned back into revenue (ha! fat chance!). So really it’s probably about $60 billion on top of current expenditures, which would require about a 43% increase to the federal education budget. For comparison that figure is equivalent to about 0.017% of total federal expenditures in 2012 and is slightly higher than the mean yearly cost of the war in Afghanistan to date.
Doable? Yes, in theory. But the costs would be vastly greater than Weissmann’s analysis makes them out to be. And let’s not forget, please, that free tuition doesn’t actually make education as accessible as people think, since there are so many other economic costs associated with pursuing a degree.
And this guy is a financial writer for a major publication? Sheesh.