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August 12, 2015

Hillary Clinton's Higher Ed Plan A Pandora's Box Like Obamacare, Expert Says

IPI expert referenced: Merrill Matthews | In The News | Media Hit

By M.D. Kittle

Hillary Clinton’s big higher education idea is “debt-free” tuition for students attending public colleges and universities.

But taxpayers would have to pick up the tab for the federal government’s ever-expanding role in post-secondary education.

The former secretary of state and the Democratic Party’s near-anointed 2016 presidential nominee this week proposed a massive, $350 billion, 10-year plan that would, as the Wall Street Journal put it, “fundamentally reshape the federal government’s role in higher education.”

In rolling out the plan in New Hampshire, the first primary state in the presidential nomination sweepstakes, Clinton sounded like she was reading a press release from an Obamacare pitch — just replacing “health care” with “education.”

“We need to make a quality education affordable and available to everyone willing to work for it without saddling them with decades of debt,” Clinton said. “I want every parent to know that his or her child can get a degree or you can get one yourself.”

Clinton’s proposal, which would be paid for in part by taxing wealthier Americans and demands states pick up a greater share of higher ed costs, has many of the same trappings as Obamacare, according to Merrill Matthews, resident scholar with the Institute for Policy Innovation.

In a column headlined, “Hillary Wants to Do to Higher Education What Obama Did to Health Care,” Matthews warns, buyer beware.

“By now, nearly everyone knows that Obamacare has achieved just the opposite of what Obama promised the Affordable Care Act would do, and we can expect the same from Clinton education ‘reset,’” Matthews wrote.  “Maybe she should call it the Affordable College Act, just to highlight the similarities.”

Many of the details are unsettled, but Clinton’s “New College Compact” would require that states kick in more money for state-run colleges and universities, and the federal government would determine just how much tuition a family could afford without having to borrow for the costs. Students also would have to work 10 hours a week.

Federal spending on higher education over the past 20 years has exploded, according tofederal data analyzed by the Pew Charitable Trusts.

Federal tax expenditures on higher education climbed from about $2.5 billion annually in the 1990s to north of $35 billion in 2012, although it has declined somewhat in the past few years.

Federally sponsored lending meanwhile soared between 1994 and 2012, from about $20 billion a year to around $110 billion. That does not include state spending.

In fiscal 2011, according to Pew, state spending on higher education topped $170.4 billion, or 10.1 percent of total state spending.

All of that spending has done nothing to check the skyrocketing cost of tuition.

“Despite increased state spending and federal initiatives to make higher education more affordable, tuition and fees at many four-year public institutions continue a rapid rise,” according to the National Association of State Budget Officers.

Tuition has significantly increased in several states. New Hampshire, which holds the distinction of having the highest tuition in the United States, saw average rates climb from $10,170 in 2004-05 to $14,712 in 2014-15, according to the College Board. The cheapest tuition nationally was in Wyoming, with rates going up from $4,079 annually to $4,646 over the same period. There was a lot of upward movement in between.

There is no doubt that student debt has exploded, hitting $1.2 trillion in the first three months of this year, according to the New York Federal Reserve. Around 43 million Americans now owe student debt, according to the Pew Research Center. Student debt for people younger than 40 rose from 22 percent in 2001 to 37 percent in 2010.

But is it the government’s responsibility to absorb student debt?

“It seems now that Hillary Clinton doesn’t think you can go to college unless the government pays for it,” Matthews told Watchdog.

Clinton’s plan might be popular with millennials and it might give her the kind of government-is-the-answer centerpiece proposal that will help her court the far-left vote. But, like Obamacare, the Clinton tuition plan is loaded with potential unintended consequences, Matthews said.

“Of course, taxpayers are going to ultimately pay for this,” he said.


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