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05 April 2016

College for free

Abolishing college tuition fees is one of Bernie Sanders’s main proposals, and it’s no surprise that he’s popular among millennials, with student loan debt accelerating to staggering levels. Many can’t manage to repay it, and many who do keep up the payments can’t afford other things like a mortgage or rent or a child.

In several Western European countries, college, graduate school and vocational training programs are free. Denmark’s package is probably one of the most generous. Students get stipends while they study, beginning at 18, when their parents no longer qualify for a child allowance (the equivalent of a tax deduction for a dependent). They’re eligible for student loans on favorable terms, too, although they don’t accumulate crippling amounts. If that weren’t enough, if they don’t get a job as soon as they graduate, they’re eligible for unemployment benefits, even though they haven’t even begun paying the quarterly premiums. (The unemployment system works like a voluntary insurance policy, although most of benefits are subsidized by the state. Graduates are exempt from the normal requirements of a certain number of months of employment and up-to-date premiums.)

Too much of a good thing
How do Danish youth feel about this system? Do they appreciate the advantages they’re getting? Well, they tend to stay in school longer than the rest of the world. The average age when they finish professional training is around 28. They start elementary school one year later than in most countries, at seven, and many take an extra year, tenth grade, often at a boarding school, before starting gymnasium (the equivalent of a college prep high school program). After gymnasium, most now take a “sabbatical year” or two because they’re skoletræt (“school-tired”), and few complete university on schedule.

Some people argue that this leisurely approach is good because it gives them time to find out what they really want to do, and there’s some truth to that. But it can also encourage complacency. A couple of years ago a journalist found a character who became a sort of anti–folk hero and nicknamed “Lazy Robert”. He was about 40, and he’d managed to stay in university his entire adult life by switching to a new program whenever he was almost finished with one. He admitted that he didn’t want to work and was taking advantage of the system. A little while later he was apparently shamed out of his racket and got a spot on a reality show.

Pressures of student life
Danish students are loathe to lose any of their entitlements. In a recent reform intended to speed them up, the number of years they can receive the stipend was reduced slightly and the annual progress they must make to stay eligible was made more stringent. For example, if you fail or don’t complete a course, you have to complete in the subsequent semester along with the regular courseload scheduled for that semester. This caused an outcry, especially from those who work part-time and have trouble managing a full-time courseload. They say they’re going down from stress, or they have to quit their jobs and can’t pay the rent any longer. 

The latest cut came in a reform of the unemployment program last October, when new graduates’ benefits were reduced from about 82% of the full amount to 73% (except if they happen to have a child – Danish rules are precise and complicated, with exceptions to exceptions). They freaked out again.

Overcrowding 
They have a legitimate complaint about the difficulty of finding affordable rental housing in Copenhagen. Students don’t normally live on campus in dormitories; universities don’t have them. There are some run by private organizations that often aren’t in the vicinity of the schools, and their waiting lists are long. Rental apartments are scarce in Denmark generally, and rents in the city have risen sharply since the financial crisis.

But that difficulty is owing partly to the sharp increase in university attendance in recent years, which in itself could be a greater problem. The institutions are happy to have the business because they get funding by their headcount (the so-called “taxi meter” system). But an increasing number of university graduates are unemployed, while industry associations are warning of an acute shortage of plumbers, electricians and other tradespeople. Also increasing are professors’ complaints about the students’ lack of preparation, motivation and sound study habits. There’s rampant grade inflation and lax discipline for failing students; apparently they’re often given second and third chances to pass exams by review committees that include students.

Final grade
Despite Denmark’s participation in the general dumbing down of the affluent society, the educational system functions tolerably well. The attrition rate of about 30% may seem high but is not historically. When most students finish, they’re generally competent enough to do a professional job. They don’t often need to take service jobs for menial wages or start over afterward at coding bootcamp. They’re not saddled with onerous debt, so they can live on their own instead of with their parents, form a family, and prevent the population from shrinking.

Why not also in America?
So if this system works better than the one in United States, should the latter adopt it? I have to say no. Too many people attend college in the US already. The attrition rate is far higher than in Denmark. And according to several reports, the skills of many with bachelor’s degrees are scandalously poor, and the number who end up working at jobs that require only a high school diploma is scandalously high. Free tuition would only encourage more people to attend and result in a waste of resources. 

If the change were to be funded by reforming the tax structure, presumably by tapping the infamous one percent, it would have a wrenching and unpredictable effect on fiscal policy. Such a large cost should have more certain benefits, especially when the deficit and national debt are already far too high. There are other questions as well. The runaway rise in college costs is apparently owing largely to the growth in administrative positions and also to luxurious accommodations and facilities for students. What kind of incentives would subsidized tuition and virtually open enrollment give to college administrators?

Don't bet on it
So in this case, I don’t think the European system should or can be transplanted in America. I also think the scope of the entitlement in Denmark should be reduced. College in the US should be made more affordable by reforms; the student debt problem needs to be addressed; and perhaps competition with MOOCs and other innovative channels can make higher education more efficient. But for now, if American students want to avoid heavy debt, they could consider studying in Europe, where there are several English-language programs that are also free for foreigners or charge less than American colleges.

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