Free Tuition Isn't the Answer

Like her former rival, Vermont Sen. Bernie Sanders, Democratic presidential nominee Hillary Clinton has based her higher education platform around the idea of tuition-free college.

But making college free won't solve the underlying problems, argue policy analysts in a new report from Third Way, a nonpartisan policy think tank in Washington. In fact, they found that net price has "no relationship whatsoever" to graduation rate at public colleges and universities.

The report, which analyzed data from the Department of Education, found that a first-time, full-time student who enrolls at a four-year public college has less than a 50 percent chance of earning a degree from that institution within six years.

In fact, at only 80 schools -- about 15 percent of four-year public colleges in the U.S. -- did more than two-thirds of first-time, full-time students manage to earn a degree within six years, the report found. And the graduation rates of the remaining 455 schools are so low that if they were high schools instead of colleges, they would be flagged as "dropout factories."

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"Free tuition when more than half of students fail to graduate will do little to fix the larger problem," wrote Tamara Hiler, an education policy adviser at Third Way and lead author of the report. "While addressing the rising costs of college is a worthwhile discussion, students deserve a better guarantee that if they enroll in college they will get a return on their investment of both time and money."

The new report is the second in a series looking at the value of different types of colleges.

The findings mirror the first report published in May, which focused exclusively on private colleges and universities and found that only 55 percent of first-time, full-time students who take out federal loans graduate within six years and 415, or 41 percent, of the private colleges half or fewer students earn a degree

The Obama administration has spent the last seven years urging students to earn a college degree and focusing on ways to increase access and affordability, especially for low-income students and students of color.

And for good reason: The unemployment rate for college graduates stands at 2.6 percent compared to 5.4 percent for those with only a high school diploma, the report notes. Estimates show that people with a bachelor's degree will earn an average of $1 million more in wages over the course of a lifetime compared to those without a degree.

But the pair of reports serves to point out that even public and private colleges and universities deserve closer scrutiny when it comes to the value they provide for students, especially low-income students who borrow money to attend. Such scrutiny has typically been reserved for for-profit schools.

That's especially true due to the number of students who attend public schools, more than 6.8 million students or nearly two-thirds of the entire bachelor's degree-seeking population in the U.S.

Close to two-thirds of those students also take out loans in order to finance their education, the report notes, with the average loan-holding student finding themselves more than $20,000 in debt four years later.

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In the report, Hiler and co-authors urged policymakers to shift their conversation to focus on the value an institution is providing students rather than the sticker price since, as the report found, some of the schools providing the best value in terms of graduation rates, earnings and loan repayment rates actually cost the least.

The report shows that the average top-quartile school – as in those with good outcomes for students – charges $600 less then the average bottom-quartile school, or those with the worst outcomes for students.

"While so much of the conversation on college over the last decade has focused on cost, the analysis of outcomes data provided both here and in our previous report on the private, non-profit institutions highlights the need to have a much more honest conversation about which colleges are in fact providing value to students," Hiler wrote