• Free college tuition is not really free

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    Atty. Dodo Dulay

    Atty. Dodo Dulay

    “There ain’t no such thing as a free lunch.” This famous adage embodies the core economic principle that it is impossible for a man to get something for nothing. No resource is free because no resource is limitless.

    If the government hands out cash to a so-called poor household, it’s free for that household but it’s not free for everyone else – Filipino taxpayers had to pay for that dole out. If a toothpaste company gives out free samples, it’s free to those are lucky enough to get one but it’s the consumer who ends up carrying the cost of that marketing gimmick. Nothing is free.

    If a person takes free vocational courses in TESDA, there’s the cost of the lessons, which once again is shouldered by the taxpayers. It’s free, but not really free. The taxpayers pay for it because it is supposed to uplift our less fortunate countrymen and communities.

    But some of our senators seem to ignore this No Free Lunch principle. They seem to believe that the country’s money and educational resources are limitless.

    One of them, Senator Bam Aquino – chair of the committee on education – authored the “Free Higher Education for All Act,” which aims to provide free college education to Filipinos by having the government fully subsidize the tuition at state universities and colleges (SUCs).

    Aquino’s bill is one of five other similar bills pending before the Senate: Senator Francis Pangilinan’s Tuition Free Higher Education Act of 2016, the Free Higher Education Act of Senator Sherwin Gatchalian, Senator JV Ejercito’s Tuition-Free Higher Education Act of 2016, One Family, One Graduate Act of Senator Sonny Angara, and Senate Minority Leader Ralph Recto’s Free Public College Tuition Act of 2016 – all of which propose to give free higher education to Filipinos.

    These proposals are definitely popular among many young Filipinos. And with the youth constituting some 40 percent (or around 20 million) of the 52 million registered voters in the country, these “tuition-free” bills – if passed – are a golden ticket to re-election. Aquino, Pangilinan, Gatchalian, Ejercito, Angara and Recto are clearly pandering to the youth vote – and populist sentiment.

    But free higher education at SUCs is essentially bad public policy. The analysis “There Is No Such Thing as a Free College Education,” written by Christopher Denhart of the Center for College Affordability and Productivity (CCAP) – an education think tank in the US – and published in Forbes magazine, explains why. Here are some excerpts:

    “In a typical economic model for financing higher education, the consumer (student) would pay for the goods that it consumes (education) and the research that researchers do would lead to innovations that have positive economic impact on society, therefore paying for themselves.

    “We have departed from this free market, “sustainable,” model globally, and rely heavily on federal subsidies to keep universities afloat…It is clear in the United States, with annual tuition fees in the $40,000s or $50,000s and millionaire university presidents, that federal subsidies have led to outrageous increases in university spending, as universities, administrators, and faculty enjoy the benefits of captured student loan and grant moneys.

    “Sooner or later this ‘free’ higher education will feel less and less free as increasing taxes will likely drive the most educated, highest earning, most able [citizens]away from [their country]and into societies where they can take home a greater percentage of their pay.

    “Third-party payments [also]lead to many unintended negative consequences…” The problem arises from the “moral hazard” associated with not paying for services. Because students are not sensitive to the costs associated with an additional year of higher education they will consume more of it.

    “Of the 60 percent of students who graduate from public schools in the US, over half take longer than four years to graduate…If everyone decided to take an extra year to graduate, because it was free, the burden of higher education on the public coffers would increase by 33 percent…Graduation rates are already a problem in [tuition-free] Germany, which is known for its “dauerstudenten” or “eternal students.”

    Another unintended negative consequence of this free tuition scheme is that the influx of students will definitely strain the resources of our SUCs. This increased enrolment has to be met with expanded facilities, faculty and staff, which in turn, requires a higher level of funding. Without adequate funding, the result is sub-standard education and poorly educated graduates, defeating the laudable objective of the tuition-free scheme, which is to provide higher education for the most number of Filipinos.

    But where would we get the money to fund the SUCs? Again, from taxpayers like you and me, of course.

    The free tuition scheme has already been tried by the State of Louisiana in the US with disastrous consequences. In February this year, Louisiana’s governor stopped the payment for its Taylor Opportunity Program for Students (TOPS) program – the pseudo-scholarship program that uses tax dollars to pay full tuition at any of Louisiana’s public universities – because of the state’s massive budget deficit. Louisiana simply ran out of money to subsidize its free college education program.

    The stoppage has left thousands of Louisiana students in the lurch, with some 50,000 TOPS beneficiaries suddenly finding themselves without a complete education and not enough means to get one.

    As an American NGO summed up the paradox of this free-tuition scheme: “Let’s remember, calling something free doesn’t make it free. Nothing in life is free. It’s simply a matter of who pays the costs. Free college tuition plans merely shift the costs of education from one group of taxpayers to all taxpayers.”

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    4 Comments

    1. The author forgot that France and Germany offer free education to its government-owned universities and they are okay with it? Again, interpretation of something will base on where you are leaning for. If you are for apple, no matter how a pineapple is advertise, you’ll always prefer an apple compared to pineapple. Biases, biases, biases.

    2. The Philippine legislature has degenerated into a family-business enterprise wherein ONLY members of a few families get elected into. And the one word I would use to describe that chamber – STUPID!

    3. Instead of criticizing the senators who are thinking of how to help improve our educational system you should come up with a better idea. Like your ways in the karambola program all you think of is to have fun at the expense of those who are trying to do something beneficial for the country.

    4. Like the free high school education on government schools. Where did they get the money to subsidize it? The real state tax was doubled with the item SEF (Special Education Fund) included. These good senators should find the money first. Well, let the poor students get it at the expense of landowners. Now sirs, where will you get funds? Easy way to get re-elected. May your soul rest in peace.