Does Free College Work? Lessons from Europe

By Emily Hoofnagle, Columnist

The United States spends more on college than almost any other country in the world. Yet, it is also among the one-third of developed nations that do not offer cheap or free college. In the U.S., the student debt crisis has reached $1.73 trillion, forcing many young adults to delay marriage, children and buying their first house. Given these circumstances, free college seems like a viable alternative, which fortunately has already been put into practice. Several European countries have offered free college, and their experiences can inform American policymakers if they seriously consider revolutionizing how the U.S. pays for higher education. An analysis of a few European countries with free college — Germany, Denmark, Norway and Sweden — teaches us that such a system reduces student debt and may improve university graduation rates. However, there are downsides to such systems that the U.S. should study when implementing its own plan.

First, and perhaps most obviously, free college alleviates student debt — but it does not eliminate debt entirely. A free college system only guarantees no tuition, so undergraduates in these countries must pay for housing, meals and transportation while attending school full- or part-time. Many European students still have to get part-time jobs. In Sweden, 85% of students graduate with debt, and the average student debt is around $19,000 — 30% less than the debt of the average American graduate.

Another advantage is higher graduation rates. In Germany and Denmark, tertiary graduation rates are the highest among OECD nations, possibly because students are less likely to drop out for financial reasons. While financial concerns are not keeping young Americans from attending college, they keep low-income students from attending top universities. A free college system may assist low-income students in attending and attaining degrees from their dream schools.

One disadvantage is that income taxes are much higher in countries with free college than in the U.S. Countries that prioritize social programs to improve the wellbeing of all citizens are more likely to implement tuition-free college. As a result, taxes in these countries are higher to afford the costs of such programs and industries. The income tax rate in Denmark, for instance, is 56%. Following the implementation of a free college system, taxes increase even more. For example, when Germany re-introduced free college in 2014, taxes to pay for higher education increased 37%. If the U.S. were to implement free college, federal income taxes would certainly increase.

One of the failures of free college systems is that they may not improve social mobility among low-income adults. In Denmark, Norway and Germany, young adults whose parents did not attend college are just as unlikely to go to college. However, this may be because blue-collar occupations in these countries pay enough to keep their workers in the middle class. Middle-class comfort could discourage European teenagers from getting degrees and taking on debt.

Finally, some governments with free college have needed to lower admission rates. When the U.K. instituted free college in 1962, the system worked well for a few decades. However, due to the increased demand for college-educated workers in the 1980s, higher admission rates strained the government’s ability to pay for every student. As a result, Parliament placed a cap on public university admissions, and in 1988, members of Parliament on the left and the right agreed to set a tuition rate for public universities in exchange for removing the cap on admissions.

When considering free college, it is crucial to learn from the countries that tried it first. Many factors play into what worked and what did not for each country discussed previously. It is also necessary to consider why the U.S. should switch to a free or cheaper college system. 

The benefits of free college are obvious. Less student debt means young professionals have more disposable income and can afford to have families earlier, both of which would benefit the economy. There is also the potential for greater social mobility. Even though evidence from other countries demonstrates that free college is not enough to get more low-income young adults to earn a degree, a study conducted in Milwaukee found that students who were guaranteed free community college were more likely to obtain an associate’s degree, increasing the community college graduation rate by 25%.

Recent job market and educational trends also heighten the necessity of free or cheaper college. A Georgetown study found that in the 2020s, over 47% of jobs will require at least an associate’s degree. This is a consequence of the increasing specialization of American jobs. Yet, in 2020, higher education enrollment rates dropped significantly due to the pandemic, with an estimated 500,000 Americans choosing not to attend college when they ordinarily would have. Such events can lead to lasting trends: 18-year-olds may follow their immediate predecessors and decide that college is not worth the cost.

The U.S. government may need to intervene soon if not enough Americans are earning college degrees. One idea that has proven successful is the Promise program, a state-level free community college guarantee in Tennessee and Rhode Island. Students that receive Promise aid graduate community college at higher rates than their peers. Promises of free tuition might soon be necessary at the national level to increase the number of college graduates and keep the job market afloat.

Featured Image by Vasily Koloda on Unsplash.

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