Clinton’s Free College Tuition Proposal Would Cost $65 Billion

US Presidential candidate Hillary Clinton has just proposed a free college tuition plan. Numbers on the cost of the proposal have not come with the announcement. But they are easy to estimate. I’ve run a quick calculation and find her plan would cost somewhere in the neighborhood of $65 billion per year.

We’ll see what the real experts come up with, but my guess is that’s the ballpark cost for what it will take to completely unburden students.

A nice overview of the plan written by Doug Lederman can be read at Inside Higher Ed. There is, for example, a means testing component. But it would benefit the vast majority of college students.

The bottom line is not really all that complicated. For a plan such as this to work for colleges it would, minimally, need to replace all of the tuition revenue they collect.

To arrive at my estimate I simply summed the amount of net tuition US public post-secondary institutions collected, using data in the IPEDs database. These are most of the < 2yr, 2yr, and 4+yr institutions. The number arrived at represents tuition revenue at just under 1900 public institutions across the US and territories that enroll students after high school, including community colleges. Collectively, they report net tuition revenue of $65.552 billion in 2014.

Net tuition is, basically, the tuition actually collected from students after various scholarships and discounts. Net tuition has been rising as states have slashed budgets, shifting higher proportions of their costs to students. The burden puts even public colleges out of reach for an increasing number of students. Those who do attend are saddled with higher levels of debt, a burden that becomes extreme for those who never graduate.

Meanwhile, public colleges–too frequently characterized as the bad actors– are victims of a sort, too. Their enrollment has been steadily declining as they lose the cost advantage they once enjoyed over private colleges. This worsens their fiscal position, and they are under threat of becoming trapped in a vicious cycle of chasing higher tuition rates while losing students.

Is free college tuition affordable?
Federal spending. Image from the National Priorities Project.
Federal spending. Image from the National Priorities Project.

The Federal budget of $3.8 trillion is broken into two pieces, about $2.5 trillion is mandatory spending. Since mandatory spending is mostly on social security and health care, think of it as the fixed insurance obligation of the federal government.

Another $1.1 trillion is discretionary spending, the second piece, which includes everything else the federal government does. Because over half of discretionary spending is on the military, Noble economist Paul Krugman dryly refers to the government as an insurance company with an army, navy and air force.

Education spending is within the relatively small slice of the budget that is not mandatory or military spending.

All things being equal, Secretary Clinton’s proposal would increase the education component of the budget to just under $170 billion, or from 3% to 4.3% of the overall budget.

That doesn’t strike me as a large amount of money given the overall spending matrix. Perhaps most importantly, if you set out to invest an additional 1.3% of your budget on something, it is hard to imagine how you’d get a better long term payoff than putting that into higher education.

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The Top 5 Reasons You Should Go to Graduate School

As costs of higher education continue to rise, countless articles and opinions have surfaced discouraging the pursuit of additional degrees.

While graduate school isn’t right for everyone, there are many tangible benefits to earning a higher degree that can often outweigh associated negatives.

Making a personal and financial investment in graduate school can yield significant returns for your career and your future.

Here are our top 5 reasons to go to graduate school:

 

1. Graduate school provides opportunities for highly increased lifetime financial earnings and more career advancement.

GSM earnings stat

In most professions, possessing a graduate degree allows for significantly higher earnings than just having a bachelor’s. In fields ranging from web design to finance, having a master’s degree can bump up salary growth from between 17-20% per year.

In some fields, those who hold a master’s degree reap even more benefit; biology and life science master’s students earn 70% more in those disciplines than those with bachelor’s degrees in the same field.

Many fields now require you to obtain a master’s degree; if not, a master’s is often highly encouraged. For example, while social work graduates with a bachelor’s degree are sometimes able to find employment, most government agencies and positions in clinical social work require a master’s degree to advance.

Even if your chosen field doesn’t require a master’s degree, the increased potential for lifetime earnings is a major incentive to pursue further education. Those holding master’s degrees will typically earn about $400,000 more than their bachelor’s degree counterparts over their lifespan.

 

2. Getting a graduate degree allows you to change career paths.

After a few years in the working world, many people realize that they have selected the wrong path and want to pursue a new career.

Graduate school is a great way to get the education necessary to switch career paths and gain experience in a field unrelated to your time as an undergrad.

MBAs are a particularly useful degree for those seeking to change career paths. An MBA offers students the ability to initially take a variety of courses in business before choosing a 2nd year specialization, as well as the chance to intern after the first year to gain experience and insight into their desired career path.

 

3. Graduate students can often receive a stipend in addition to a free education through teaching and assistantship positions.

Graduate school is expensive, but there are a lot of options to lessen the cost while still pursuing your goals and gaining valuable experience in your field.

Assistantships are programs that provide funding to students for their graduate program, while also having them work for their university in some capacity. Some assistantships even pay students on top of the cost of tuition.

Fellowships are another channel to pursue; there are a wide variety of graduate fellowships available in a multitude of disciplines that typically cover all costs associated with graduate school, ranging from tuition to housing.

 

4. Graduate school provides the chance to become a subject-matter expert in your chosen field.

A lot of bachelor’s degrees are very generalized; while undergraduate majors like marketing are broad and provide a solid overview of the field, a more specialized master’s degree makes you a marketable candidate with a more targeted skill set.

Gradschoolmatch has thousands of specialized graduate and doctoral programs to get connected with; you might even find speciality areas in your field or a related field that you’ve never even heard of that interests you.

 

5. Graduate school allows you to utilize the networks of both your professors and your peers.

When you go to graduate school, you have the opportunity to tap into the network of your professors. Whether it’s writing a letter of recommendation for a position, personally referring you to a doctorate program, or reaching out to their colleagues in industry on your behalf, your graduate school professors are a wealth of knowledge and resources.

Your peers are also a fantastic networking tool. If you have classmates that have previously been in industry, use them to learn more about job application processes and utilize their network to get introductions.

Get to know your classmates and stay in close contact after graduation; there’s a good chance one of them can use their network to help you land a job or introduce you to the right people at some point in your career.

Like this article? Sign up for Gradschoolmatch blog updates, and visit us at Gradschoolmatch.com to start matching with graduate programs for free.


 

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