US Education Policy

The Presidential Election: Who Pays for and Benefits from College Education?

September 8, 2016  • Josh Wyner & Keith Witham

Key Points

  • Presidential campaign proposals related to higher education make clear that college affordability is a major national concern.
  • Debates over policy measures for increasing affordability and reducing student debt overshadow deeper questions about the value we as a nation place on a college education and its individual and societal benefits.
  • State and federal policymakers and institutional leaders must be partners in ensuring and demonstrating not only college affordability but the value of higher education to students and taxpayers.

(Photo Credit: istockphoto)

(Photo Credit: istockphoto)

College affordability has emerged as a core issue of the 2016 election campaign, with both candidates speaking about the need to ease student debt loads. Former State Department Secretary Hillary Clinton wants to make public college tuition free (or at least “debt” free) to students through a combination of federal and state investments. While less specific, one of Donald Trump’s education advisers has suggested that the candidate would aim to make colleges and universities accountable when students fail to repay their loans.

Though they differ in their perspective and the specificity of their policy proposals, the candidates’ positions center on an enduring and thorny policy question: Who should bear the cost of college education in America?

Secretary Clinton’s policies reveal her view: Taxpayers should shoulder a greater burden than they do today. Why? Average state investment in public higher education has gradually decreased over time -with more dramatic decreases in some states – resulting in a shift of the burden of paying for college from taxpayers to students and their families. While in 1990 tuition accounted for 25 percent of total higher education revenue, that proportion reached a high of 48 percent in 2013 and is likely to exceed 50 percent in the next economic downturn, according to the State Higher Education Executive Officers Association. Not surprisingly, that shift has resulted in higher levels of student debt, which now exceed one trillion dollars nationally and stand second only to home mortgages in aggregate consumer borrowing.

This trend is troubling. Increasing public awareness of high debt loads required to finance a college education may discourage low- and moderate- income students from going to college at a time when the demand for and value of a college education has never been greater. According to recent reports from the Georgetown University Center on Education and the Workforce, Over 95 percent of jobs created in the wake of the recent recession have gone to those with a college education, and college degree holders continue to have a significant lifetime earning advantage compared to those with just a high school diploma.

And the country needs more college-educated workers. By the end of the next president’s first term, two-thirds of jobs will require some form of postsecondary credential, but today just over 40 percent of Americans have a college degree or certificate. Underlying Secretary Clinton’s debt-free college proposal is the idea that increasing public investment in college education would benefit not just individuals but our national economy and our country as a whole.

Other than the conservative critique that the price tag – about $75 billion over 10 years – is way too expensive for taxpayers, one of the biggest objections Trump’s adviser, Sam Clovis, expressed about the free college idea is that it fails to create incentives for colleges and universities to become more affordable or efficient. He has a point. College tuition has consistently increased at a rate outstripping inflation, and tuition at public institutions is hardly ever reduced, even when states restore investments in public higher education.

In essence, Trump’s campaign argues that colleges themselves should have skin in the game. The theory behind this type of accountability (which is not new in the public higher education sector) is one of both consumer protection and market competition. Indeed, there is a growing sense among state policymakers that colleges should be held accountable for the labor market outcomes of their graduates and the return on investment (both by individuals and the state) those outcomes offer. And the U.S. Department of Education’s Gainful Employment regulation is designed to ensure that students avoid using federal loans to finance low-return college programs in career and technical fields. The Trump campaign proposals extend these accountability measures by suggesting that colleges should share directly in the risk associated with consumer borrowing.

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The differences in the candidates’ proposals highlight critical questions about not only college affordability but who is responsible for higher education in our country. What is the right mix of public versus individual investment in higher education and, on the public side, between the federal and state governments? Should public investments in higher education be narrowly targeted at students who can least afford to go or be designed to promote the idea of truly universal college access, as was done in the 20th century for U.S. high school education? What is the optimal role of the federal government as a funder and regulator in higher education?

Perhaps equally fundamental to the discussion are questions about the value we as a nation will place on higher education in coming generations. Debates about finance policy tend to obscure questions about the value of higher education not just in economic terms, but also for the good of America. These discussions need to be held in tandem to ensure that policy decisions do not have unintended negative consequences for our democracy. For example, would accountability for the ability of students to repay student loans lead colleges to emphasize professional programs over others that have less clear or immediately lucrative employment outcomes but are nonetheless vital to our society? Would programs that prepare teachers, social workers, and child and elderly care-givers be in jeopardy? What would such policies do to programs in the liberal arts, which may offer weak short-term but strong long-term employment opportunities for graduates? And if liberal arts programs shrink, how would that impact the critical thinking and communications skills needed to sustain a thriving democracy?

It is unclear whether debt-free college or college accountability for student loan repayment are politically feasible ideas. Many campaign promises aren’t. But the convergence of the candidates’ proposals around the issue of affordability makes clear that the opportunity to access and benefit from higher education are central concerns among Americans. Colleges and universities—and their leaders and boards—should take note of these trends and take proactive steps to demonstrate their value in both economic and non-economic terms.

Several initiatives of the Aspen Institute’s College Excellence Program are focused on helping colleges engage in transformational change efforts to meet the 21st century demand for more credentials of higher quality at a lower cost to a more diverse student body. Through the Aspen Prize for Community College Excellence, for example, we identify community colleges that achieve strong and equitable student outcomes—including in learning and labor market success—and share knowledge with the field about the practices that lead to those outcomes. Through the Siemens Scholars Program we are extending that work to replicate high-quality programs in middle-skill STEM professions such as information technology, health care, energy and manufacturing. And through the new Aspen Presidential Fellowship, the Aspen College Excellence Program is working to expand, diversify, and enrich a cohort of exceptional emerging community college presidents who are prepared to lead institutions that meet the needs of their students, regions, and states through high-quality, affordable programs aligned to labor market needs.

Depending on who wins, the presidential election is likely to alter who pays for college in the U.S. Let’s hope that the next president’s leadership goes even further. He or she should strengthen the capacity of our nation’s colleges and universities to ensure not only greater affordability, but also the talent needed for state and national economic growth, social mobility, and the sustenance of our democracy.