I’m usually bored by conversations that involve arguments about whether things are progressive or they are not, but I have to admit that I’m at least a little interested in the debate over free college and college loan forgiveness. In this specific piece, I’m temperamentally inclined to call bullshit when a complaint is lodged against a college plan because it doesn’t provide money for people who aren’t going to go to college. Why would a college plan redistribute a bunch of money for things that don’t involve college?
Yet, you can turn things around. Elizabeth Warren wants to pay for her college plan “exclusively from a wealth tax on those with more than $50 million in assets.” That’s a large redistributive policy, and she won’t get multiple bites at that apple. If she could actually succeed in extracting a giant pile of money from the super-wealthy then it’s legitimate to ask whether the fairest way for her to redistribute it is to give it only to people who have the wherewithal to go to college. That would leave a lot of people without a slice of pie.
The problem here is less with the overall debate than the age-old apples and oranges error. One side wants a college plan and the other side wants a broader societal plan that would include college as only one component. The college plan could be progressive in the sense that it’s redistributive, but the decision to spend the money on a college plan instead of some other plan could be comparatively regressive and fundamentally unfair.
I don’t like debates where people talk past each other.
Yet, even within the confines of Warren’s plan, there are still some regressive elements. It’s a problem the free college plans all seem to share:
But in general, the plans make up the difference between financial aid — such as the Pell Grant and need-based aid provided by states — and the published price of public colleges. This means the largest rewards go to students who do not qualify for financial aid. In plans that include four-year colleges, the largest benefits go to students at the most expensive four-year institutions. Such schools enroll a greater proportion of well-heeled students, who have had better opportunities at the K-12 level than their peers at either two-year colleges or less-selective four-year schools.
This probably won’t surprise you, but the more money a family has, the more money they’re willing to spend on college. The result is that there is a big difference in the average tuition costs that people pay depending on which income bracket their parents are in, and this means that any system that covers that net cost of tuition is going to dole out the money in a highly regressive way.
There’s obviously something to be said for designing redistributive policies in a way that benefits the middle class and even some of the upper middle class. It’s important that you have a lot of people who benefit so you’ll have a lot of people who will complain and punish politicians who try to undo your reforms. It’s not necessarily a flaw that a social welfare program is inefficient in getting aid to the people who need it the most. But it’s reasonably to haggle over these kinds of details. You’re effectively asking how much you’re willing to lose in inefficiency costs in order to launch and sustain the program at all.
Generally speaking, the progressive critique of these free college plans is that they are far too inefficient and they take a very scarce resource (rich people’s money) and give way too much of it to people who really can get by without it. In the bargain, you get a decent deal for people who are going to college but you do nothing for people on lower rungs of the economy.
You can design a college tuition plan that is narrower and more tied to family income (ability to pay) but that won’t necessarily have the political support you need to get it enacted. And it won’t be anything but a college tuition plan. It won’t be a plan for helping people who are high school dropouts or going into the economy without a higher education.
The important debate isn’t over what is progressive and what is not. The important debate is over how to get scarce resources and then over how to reallocate them if you succeed. One thing to always keep in mind, however, is that nothing will come of this debate if you don’t get the money. Failure to get the money is not progressive. Failing to get the money because you’re an ideological hard-ass is not progressive.
So, first you figure out a plan for extracting wealth from people with over $50 million in assets. If that plan includes free college tuition or massive loan forgiveness, then it’s probably going to have to have some pretty big regressive inefficiencies. If it involves some plan that doesn’t include the middle class at all? Well, then you’ve done something that no politicians before you could accomplish. You’re a real progressive hero!
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