Making college more affordable sounds good…

But beware of disruptive unintended consequences

AMERICA’S HIGHER EDUCATION system is mired in crisis. Colleges are increasingly unaffordable for lower- and middle-class students, and student debt is now at record levels. As Massachusetts prepares to vote in next month’s Democratic presidential primary, potential solutions to this crisis are at the center of the debate.

Democratic presidential candidates, including the current frontrunner, Sen. Bernie Sanders, and our home state contender, Sen. Elizabeth Warren, have proposed high-profile solutions seeking to address this crisis: the cancellation of existing student debt and the promise of tuition-free public college. Their more moderate rivals have put out plans, such as free community college and targeted tuition assistance, that would make changes within the existing system rather than overturning it.

While Sanders and Warren are right to think big when addressing this urgent issue, we need to ensure that in putting out one fire, we do not make other ones bigger. Solutions to the student debt crisis must look at the higher education system as a whole.

Let’s talk about the first elephant in the room: It would be short-sighted to forgive existing student debt without eliminating the conditions that have forced students to borrow. If existing student debt is wiped away, but current and future students are still forced to pile on more debt, we will create the perfect recipe for students over-borrowing and not repaying, hoping that they too will receive loan forgiveness one day. Clearly, student debt forgiveness must be accompanied by more widespread change.

To address the future need for borrowing, Sanders and Warren propose expanding federal financial support for states that choose to eliminate tuition and fees at public college campuses. But what happens to the 30 percent of students who attend private nonprofit colleges, or those in states that don’t make their colleges tuition-free, or those who pursue graduate degrees? Students at those institutions will still need to borrow, and the bubble will start to grow again.

That leads us to the second elephant in the room: If college is free or almost free at public institutions, what will happen to the private non-profit schools? Declining enrollment has already led to higher rates of college closures and mergers, especially in New England, with the annual number of closures nationally growing from 50 in 2009 to a peak of 448 in 2016.

The Georgetown University Center on Education and the Workforce currently projects that free public college would result in an estimated 9 to 22 percent increase in enrollment at public colleges and universities, with a large majority of the increase coming from a decline in private college enrollment. Many private non-profit schools would not survive such a major drop in enrollment. Massachusetts will be especially affected, as 66 percent of our higher education enrollment is in the private nonprofit sector.

You might say, why care? Let them close! But it’s not just colleges that are hurt when they close; it’s the students who attend them and the communities where they are located.

Research shows that 47 percent of students who attended colleges that closed did not complete their degree. Others take on even more debt hoping to graduate elsewhere. Students attending financially vulnerable colleges also tend to be more vulnerable themselves, and thus less able to rebound if their program is terminated. The Chronicle of Higher Education reports that college closures disproportionately hit low-income students. Nearly 70 percent of students from closed campuses were on Pell Grants, and about 57 percent of displaced students are racial minorities.

Moreover, contrary to commonly held beliefs, nonprofit schools enroll low-income students at a similar rate as the public sector: 8 percent at non-profits versus 9 percent at public universities and colleges. While students attending private nonprofit schools graduate with an average of $4,600 more in debt, that may be a small price to pay if students graduate earlier and enter the workforce at a faster rate. Some 65 percent of students attending private nonprofit schools graduate in four years or less, compared to just 46 percent of students attending public four-year campuses. Historically black colleges and universities, many of which are private nonprofit schools, play an especially important role in higher education equity, with historically black college and university graduates making up 15 percent of all bachelor’s degrees earned by black students in 2015, despite comprising less than 2 percent of all college enrollment.

There are ways to increase the affordability of our public colleges and universities that will not result in large enrollment shifts detrimental to the nonprofit sector. We could simply adequately fund existing need-based financial aid programs to truly cover unmet need, which would avoid incentivizing those who can afford private nonprofit colleges to change their enrollment choice.

If wiping out existing debt is the priority, then we must simultaneously eliminate the need for future loans by creating a truly debt-free college system, as Sen. Brian Schatz and Rep. Mark Pocan propose in the federal Debt-Free College Act. The legislation would offer both public and private nonprofit colleges enough funding to eliminate loans from their financial aid award letters.

College affordability proposals must take into consideration the historic fabric of US higher education, which has been a mix of public and private colleges and universities. Drastically changing the rules of the game without allowing the various sectors to adjust would result in grave disruptions.

Meet the Author

Bahar Akman Imboden

Managing director, Hildreth Institute
Meet the Author

Bob Hildreth

Founder, Hildreth Institute
It’s time to go beyond simple slogans and take a holistic approach to fixing our higher education system.

Bahar Akman Imboden is the managing director of the Hildreth Institute, a nonprofit research and policy center dedicated to restoring the promise of higher education as an engine of upward mobility for all. Bob Hildreth is the founder of the Hildreth Institute and other nonprofit organizations with complementary missions to get low-income students to college.