Going to college was once a basic part of the American dream. The famous GI Bill (officially, "The Servicemen's Readjustment Act of 1944") remains one of the most efficient and effective government programs in the Republic's history. Millions of veterans took advantage of government funding to get an education, a degree, a skill, and a job. Many were able to move into the middle class and ensure that their families had new opportunities, too.
Moreover, the nation's commitment to providing affordable, high-quality postsecondary education served the postwar economy well and further strengthened our democracy by affording young people avenues of hope and opportunity for better lives and higher earnings. The 1960s and early 1970s saw an effort to double down on that 1944 public investment with a vastly expanded network of federal loan and grant programs. Essentially, anyone who wanted to go to a community college, college, university, or trade school and had the ability to benefit (e.g., a good high school record and a prospect of completing the study) could do so.
That scenario is no longer the case today. Postsecondary education costs between 1982 and 2012 have risen at a rate four times the rate of growth of the Consumer Price Index and twice the rate of growth in health care costs during the same period. While real median family income recently rose from $53,718 in 2014 to $56,516 in 2015, postsecondary education costs still take a relatively huge bite out of disposable family income - to such an extent that college now looks increasingly like a luxury good for many Americans. The college cost crisis provides perhaps yet another indication of the nation's growing inequality.
The unsustainable cost inflation has finally caught the nation's attention, especially since it is accompanied by rising student-loan default rates and some $1.3 trillion in outstanding student loan debt. For the first time since World War II, young people are questioning the cost-effectiveness of "investing" in postsecondary education, especially when lackluster economic growth means scarce employment opportunities. Their reluctance to make these human-capital investments will have enormous consequences for our future economic growth, productivity, and security.
These developments have also become a notable part of the 2016 presidential campaign. Donald Trump has not (yet) made postsecondary education a major part of his platform, but Hillary Clinton and Bernie Sanders unveiled bold plans that would, in essence, make public colleges free for middle class students below a certain income level, while also promising to make the postsecondary experience "debt free" for all American students.
While these approaches are understandable reactions to the current postsecondary-education crisis, they are also ill-advised, unaffordable, and unlikely to be enacted. We are rapidly approaching a national debt of $20 trillion, with annual budget deficits projected to head back soon into the $1 trillion range. Before the Congress enacts yet another open-ended, unaffordable, middle-class entitlement program, doesn't it first make sense to understand and tackle the structural issues that led to today's high college costs, high student debt, and growing default rates before we spend more money that would only prolong the underlying structural flaws by accommodating them?
Until relatively recently, the national debate about postsecondary education was focused mostly on access and financing. Then, in the George H.W. Bush administration, Secretary of Education Lauro F. Cavazos introduced into the discussion questions concerning "access to what?" For the first time, important questions about the quality of postsecondary learning began to emerge. Even then, we were seeing relatively low college completion rates - a fact that cost time (for students) and public and private money (for students, parents, and taxpayers). Today's unsustainable cost trajectory has riveted national attention to issues such as cost, quality, and outcomes.
Making public colleges free entails two fundamental problems. First, it accommodates the existing pricing and business model (which is unsustainable), and, by doing so, papers over the need for structural reform. It's like taking Percocet for a broken bone: the pain may be reduced, but the bone still needs resetting. Second, it entails a massive cost-shift to American taxpayers, thereby relieving university boards and administrators of the responsibility to rethink how their institutions are governed and how their resources might be used more productively and efficiently.
There is an ongoing debate about the drivers of college cost inflation during the last three decades. Some observers cite the availability of federal student loans and grants as enablers. Others point to declining state funding, the inability of colleges to increase their productivity, prestige pricing by some schools, and a bricks-and-mortar business model that encourages nonstop fundraising accompanied by ever-escalating spending - all to ensure higher rankings.
Several factors, undoubtedly, have combined to create today's perfect storm. But whatever the explanation, it remains true that a confluence of factors -- cost, competition, and technology -- are driving change, upending existing business models everywhere, and opening new approaches and technologies associated with enhanced learning. The rest of the world is still experiencing deflation in many areas, and perhaps a little price deflation - tuition rollback -- in America's postsecondary sector would bring some welcome relief to today's students and parents, while also helping drive structural reform.
It is always easier to throw money at a problem. Far too often, that approach has become the American way. It is much harder to attack the underlying causes and determine how to implement the necessary structural reforms that can stop runaway costs. Making public colleges and universities free only perpetuates the problem and relieves the pressure to make necessary reforms. It's a facile answer to a complex question.
Charles Kolb served as Deputy Assistant to the President for Domestic Policy from 1990-1992 in the George H.W. Bush White House. He was president of the French-American Foundation--United States from 2012-2014 and president of the Committee for Economic Development from 1997-2012. He is currently president of Partners 4 Affordable Excellence @EDU.