Will “Free” Tuition Make College Cost More?

By Thomas Tullis

On July 17, Governor Kate Brown signed Senate Bill 81, the “Oregon Promise” legislation that allocates $10 million to a “free” community college tuition program for Oregon students. With college tuition having increased ten-fold over the last three decades, Oregon lawmakers clearly have good intentions, but that doesn’t make the Oregon Promise legislation good policy. Unfortunately, Oregon Promise will do little to solve the problem of tuition affordability. In the long run, it could actually cause education costs for students to increase because government-subsidized tuition is a major reason why tuition costs are so high in the first place.

Essentially, “free” education actually ends up costing more. It doesn’t just affect the student directly. Tuition costs don’t go down; instead, it only diverts the cost from the student to the taxpayers. Rather than making college more affordable, Oregon Promise will encourage colleges to increase tuition. Government loans and grants enable a guaranteed demand for services that ensures colleges can raise tuition and increase their spending. The government even admits to these unintended consequences with a recent Federal Reserve study that showed that government grants and loans have caused a 65% increase in tuition.

With Oregon boasting the lowest high school graduation rates in the country, lawmakers should focus on allowing a free market to exist for education providers to compete on quality and price. The real solution to tuition affordability would be freeing the education market from government intrusion.

Thomas Tullis is a research associate at Cascade Policy Institute, Oregon’s free market think tank. He is a student at the University of Oregon, where he is studying Journalism and Political Science.