As students and families from different income backgrounds continue to struggle with the cost of attending college, some lawmakers and higher education thought leaders have turned to the idea of tuition-free college as a way to ease the financial burden. But in some cases, simply erasing tuition fees with taxpayer dollars might actually work against the affordability cause, according to a new report.
The report – published by the Brookings Institution and authored by Judith Scott-Clayton, and British higher education experts Richard Murphy and Gillian Wyness – suggests the United States should look to lessons learned from England's move away from tuition-free higher education in the late 1990s. After public funding began to decline due to increased enrollments, some became concerned with a declining quality of education at England's public institutions. So over the next several years, England moved away from tuition-free college by first implementing a modest tuition fee, which eventually increased to more than £9,000, and restructuring its grant and loan systems.
During the time of free tuition in England, the researchers found that an increase in demand for college-educated workers caused a substantial increase in enrollments, putting a strain on government funding to keep pace with the growth. Funding per full-time student dropped by more than 25 percent between 1987 and 1994, they found. Those resources continued to decline even after the implementation of an enrollment cap. Additionally, the gap in degree attainment between low- and high-income families more than doubled, from 14 percent in 1981 to 37 percent in 1999.
"By charging tuition, progressives argued that the system could bring in more resources from students who could afford to pay, while enabling any given level of public subsidies to go further by targeting assistance to the neediest," the report said.
While progressives hoped that introducing a tuition fee would help improve quality, allow for higher enrollments, and reduce the attainment gap, critics feared that doing so would open the door for continual increases in tuition fees, and that public funding would continue to decline. However, the researchers found that overall, the quality of education – as measured by per-student funding – increased following the 1998 reforms, that enrollments continued to increase, and that socioeconomic attainment gaps "at least stabilized."
Part of the success came from the fact that English college students still today do not have to pay for anything up front, due to the structure of its government loans. The full tuition fee can be repaid after graduation through an income-contingent loan.
"Thus, while college is no longer free in England, it remains free at the point of entry," the report said.
American policymakers, the report argued, should shift their focus from solely addressing net price, to also thinking about net liquidity, or the amount of resources students have access to up front.
England's income-contingent loan system is also structured differently: the monthly repayments are calculated as a percentage of income above a certain level, and the payments are automatically deducted from borrowers' paychecks.
"No model is without its challenges," the report said. "But the English experience suggests that making college completely free is hardly the only path to increasing quantity, quality, and equity in higher education. Indeed, the story we tell here shows how a free system can sometimes work against these goals."
Publication Date: 5/3/2017