Politics & Policy

Hillary’s College Plan: A Jigger’s Worth of Good Ideas, a Keg’s Worth of Bad Ones

(Darren McCollester/Getty)

It is oft-remarked that the Democratic party is less an ideological enterprise than a mere coalition of interest groups. This is certainly true when it comes to higher-education reform, which Democrats reliably approach from the perspective of giving more money to college students, more money to college graduates, and more money to colleges themselves — all three groups, of course, leaning to the left.

The college plan Hillary Clinton announced today is not quite as bad as typical attempts, since it incorporates a few decent ideas from the right and center that did not make it into President Obama’s community-college plan. But it’s not much better.

Clinton’s offer is less aggressive than that offered by her opponents Senator Bernie Sanders and Governor Martin O’Malley: It promises, instead of their four years of free college, two free years of community college and four debt-free years at an in-state public university. But the fundamental structure is the same, and it is the same structure that has helped push college costs to the incredible levels where they are today.

Hillary’s plan is almost entirely silent on controlling the total cost of college.

A study released in July by the Federal Reserve Bank of New York was only the latest piece of evidence of what conservatives have long knew: Increasing public support for college tuition, especially in the form of federal tuition subsidies, has inflated its total cost. The obscene total cost of college education is far from the only reason why Americans do not graduate from college, but it is one of them. Yet Hillary’s plan is almost entirely silent on controlling total costs, and, by increasing the supply of low-cost loans, the level of funding from state governments, and increasing other subsidies, proposes to lower out-of-pocket costs in the way that we’ve already seen will backfire.

There are half-hearted proposals in here to help mitigate the iron law of what subsidies do to prices, and most of them are bad: A requirement that colleges spend a certain share of their budgets on instruction, for instance, is appealing but hamfisted, recalling Obamacare’s “medical-loss ratio” requirement. Revealing even more of Clinton’s political aims are new rules aimed only at for-profit colleges, which should be allowed to innovate and compete with nonprofit institutions on even ground. Schools need to be held accountable for their performance, but spending more federal dollars on higher education and trying to micromanage the results from Washington risks bringing us the same pricey, mediocre results we have from our K–12 system.

#related#The better parts of the plan: The federal government will require colleges and universities, in exchange for the ever-more-generous support they get, to be more transparent about dropout rates, salaries earned by graduates, etc. Clinton also endorses a bipartisan bill that toughens penalties for colleges with high default rates (though there are better ways to hold them accountable). She hints at accreditation reform, which is essential to helping new, innovative schools compete with existing institutions for federal funding. Unfortunately, these ideas would be much better standing on their own, unaccompanied by tens of billions of dollars in new giveaways. And if Clinton’s plan ever were to come close to becoming law, we suspect the carrots would multiply and the sticks would be whittled down.

In a more blatant payoff, Clinton proposes not only offering new subsidies for those who are going off to college, but also new subsidies for those who already left. But “refinancing” student loans and offering more generous income-based repayment plans will do absolutely nothing to improve education attainment or economic competitiveness. It is simply a transfer from the federal fisc to Americans with above-average educations and incomes. Income-based repayment is not a bad idea per se, but Clinton’s plan includes forgiveness after 20 years, which is a huge payoff for those with the biggest loan balances. A more responsible version of this part of Clinton’s plan, in fact, has been introduced in the Senate by Marco Rubio, and has bipartisan support.

Republicans should draw a few lessons from Clinton’s proposal. Their opponent is amassing a number of superficially appealing, politically shrewd policy proposals on the issues of the day. They need to recognize this, and offer new, superior ideas of their own. Given the quality of the ideas the Clinton shop is churning out, this shouldn’t be difficult.


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