Should College Be Free? The Economic Impact of Free College | (2023)

Should College Be Free? The Economic Impact of Free College | (1) by Imed Bouchrika, Phd
Chief Data Scientist & Head of Content

Education face countless issues. On top of the now popular, Safe Space Movement is the never-ending issue of student loan debt. In 2020, 45 million borrowers owed a staggering $1.56 trillion in student loan debt (Friedman, 2020) with 1.5 million US students graduating with debt four years prior (Goldy-Brown, 2019). Student debt is the second largest category of consumer debt in the country next to mortgage debt. However, because the cost of a college education is skyrocketing, students have no choice but to borrow money to pay for their studies.

As a fundamental right, the debate on whether free college education should be a public priority continues. Advocates of free college insist that it would significantly contribute to the economy, and, therefore, secure the nation’s future. But opponents think otherwise, for them, free college is a flawed policy that would eventually failwhy should college be free if it creates inequality in attainment and completion? Those in favor of paying for college propose that money raised from tuition fees could actually be used in helping poor students, while at the same time creating a vital source of income for universities (Adams, 2017).

Should college be free for everyone? In this article, we revisit the main arguments that are at the core of the debate on free college. While the debt burden among students is a major concern, providing loans and grants might not be the only solution that could fix this pressing issue.

Should college be free? Table of Contents

  1. Five Issues in the Debate
  2. Main Arguments Advocating Free College
  3. Main Arguments Against Free College

Five Issues in the Debate

While there are affordable online colleges and universities for early education, nursing, and other degrees, there remain five main themes at the center of the debate on why should college be free. There is the issue of inequality, the debt burden that it creates among students, the direct effect on the future workforce, the overall impact of having postsecondary education on society, and the significance of an educated populace in ensuring economic growth.

The economic impact of free college has become more important now that countries are reeling from the effects of the COVID-19 pandemic. With the availability of free college in Europe and other regions, this has proven to ease the burden on many students. This is especially because college education has the potential to drive major change by equipping students with lifelong learning skills and competencies. A recently published report by the World Economic Forum (WEF) highlights the crucial role of post-secondary education in global upskilling. The report suggests that wide-scale investment in upskilling has the potential to increase the global domestic product (GDP) by$6.5 trillion by 2030 and create 5.3 million new jobs globally (WEF, 2021).

(Video) Should College Be Free?

Perna and Finney (2014) developed a framework from a cross-case analysis of the relationship between policy and educational attainment. They identified that the characteristics of existing policies, thestate’s historical, demographic, economic, and political context, and thequalities of its higher education systemwill determine the state policies that are needed to improve educational attainment and close gaps. Simply put, offering free college is not a silver bullet that could solve this higher education crisis.

Source: College Board Research

Main Arguments Advocating Free College

Increasing educational attainment is the main goal of free college. Economic evidence suggests that education fuels economic growth and global competitiveness (Valero and Van Reenen, 2016). Falling enrollment and inequality in higher education access are just two of the concerns frequently cited by the free college movement. The supporters of free college believe higher education benefits not only the individual but the society. In this section, the gains of providing free post-secondary education will be identified.

Free College Would Decrease Inequality

Social inequality is one of the major arguments as to why college should be free. Students who choose to pursue college eventually graduate with an average of $32,731 in debt (Friedman, 2020). Students from low-income families are usually held back by the possibility of incurring huge amounts of debt, and opt not to pursue college. Between 1979 and 2012, the inflation-adjusted earnings gap between two-earner households, one with high school diploma and one with college diploma increased by about $28,000 (Pew Research, 2014). This cycle of inequality is expected to continue unless free college becomes a policy.

Free college would also lessen undermatching, which occurs when students select colleges and universities based on financial needs (Lopez, 2019). While these students could opt to pursue post-secondary education in more selective institutions as their academic achievement and credentials predict, their choice of less selective colleges eventually affects earnings and work opportunities, which negatively impacts their contribution to communities. Offering free college will promote equal opportunity to all students.

Free College Would Eliminate Debt Burden

Not all students and families can afford college. It is widely accepted that while college is increasingly necessary, it is also increasingly unaffordable. Lopez (2019) studied the detrimental effects of the high cost of college education and concluded that financial factors affect the persistence of students of lower socioeconomic status. Student debt likewise takes a toll on mental health and is cited as one of the reasons why college should be free. One study found that 9 out of 10 borrowers experience significant anxiety due to their loan burden (Gravier, 2021). Eliminating the debt burden through free college would encourage students to pursue post-secondary education, which is essential to the post-industrial, creative economy.

(Video) An argument against free community college tuition

Free College Would Produce a Strong Workforce

The benefits of a more educated populace cannot be stressed enough. College education helps people “learn how to learn”. The Covid-19 pandemic has highlighted the need to have this ability to re-skill and upskill in times of rapid change. The expanded performance standards and new learning networks in the post-industrial economy will require workers with both broader and deeper knowledge, skills and abilities for entry-level jobs, and to keep up with the accelerated pace of lifelong learning (WEF, 2021).

Computer technology may have the capability to automate processes, but it also requires a higher level of cognitive and non-cognitive competencies to optimally deliver services. College is believed to be the perfect training ground for all these skills to become embedded in the individual who would eventually join the workforce.

Free College Would Reduce Social Problems

Education plays an important role in a nation’s evolution. Studies reveal that those without college degrees are disproportionately afflicted with falling marriage rates, increases in single parenthood, rising mortality, and opioid addiction, to name a few (Deming, 2019). The critical thinking and deeper learning skills that post-secondary education inculcates have a significant effect on human capital. College education decreases crime and increases civic participation. It has also been established that increases in the quality and quantity of schooling directly increase productivity (Johnes, 2017).

Free College Would Drive Economic Growth

The increase in post-secondary education is the key that propels the economic development of nations (Deming, 2019). In different types of economies, as college students graduate without debt, this would give them the ability to earn, save and spend immediately, which could stimulate the economy. This spending will create more demand and more employment opportunities, a significant economic impact of free college as claimed by free tuition advocates. A recent study of students beginning at a four-year public university in Texas by Denning, Marx and Turner (2019) found that free college facilitates led to an increase in degree completion and postgraduate earnings.

Although advances in technology have increased productivity, and, thus, reduced the demand for manufacturing workers, the growing importance of technology to the overall economy has upsurged the demand for educated workers. Overall production output encompasses innovation in work processes that result in increased value. This upturn in demand for highly educated workers that can harness the power of technology and its possibilities has been the defining feature of our post-industrial economy.

Should College Be Free? The Economic Impact of Free College | (2)

Main Arguments Against Free College

In 2020, the total number of student borrowers in the U.S. was 44.7 million, with a loan debt of $1.56 trillion. Horn (2015) argues that free college policies are misguided because they don’t address the root cause of why post-secondary education costs so much. The goal is to increase enrollment, access, and equality, but free college education policies have failed to deliver. This section will present the main arguments against free college.

(Video) Why this former education secretary believes community college should be free

Free College Would Deepen Inequality

While free college is perceived to be the mechanism that could level the playing field, an opposing view argues that free college education would further drive inequality due to the wealth concentration among the top 1% of society (Deming, 2019). Students that belong to the upper socioeconomic status could also avail themselves of free college, and since this group has a starting advantage in terms of basic education, it would widen the earnings gap, thus, strengthening social inequality. A free college program would be regressive because students from poor families are less likely to attend college while their wealthier peers can even choose to study in selective universities.

Free College Would Negatively Affect the Quality of Education

Cutting spending on other areas, such as education research and development to accommodate more students could also compromise the quality of teaching. Proponents of education becoming a commodity through free college argue that making education more accessible makes it less valuable. England’s experience with free college revealed that over time, education quality declined. Caplan in his book The Case Against Education: Why the Education System is a Waste of Time and Money insists that the “college-for-all mentality” delivers little lasting value other than a “credentialist arms race”.

Free College Would Not Ensure High Completion Rates

There is no guarantee that free college will benefit all students because some might not even want to go to college. Lochner and Monge-Naranjo (2012) found that the return to college for marginal students is low. The least-prepared students would struggle to succeed. There are long-run factors, such as family environment, that have a significant effect on determining college attainment (Cameron and Heckman, 2001).

Free college recipients are not as motivated to study as those who pay for it. In Denmark, these type of students are referred to as ‘eternity students,’ or those who stay in college for six years or more without any plans of finishing a program. Having free education affords these students to continually transfer from one study program to another. In contrast, paying college students showed greater perseverance in studying and finishing a program.

Free College Would Not Lead to a Well-Educated Workforce

Factors such as the quality of faculty as well as the readiness of students are crucial if post-secondary education is to deliver its perceived benefits. The infusion of money may benefit students by lessening the financial burden of going to college, but it does not ensure quality at all levels. Making college accessible could lead to compromising the quality of education, which would defeat the purpose of policies that seek to provide free college for the benefit of society. London is the most educated city in the world and sits atop the list of having the most talented workforce, but in this city, college education is not free.

Free College Is Not Directly Linked to Economic Growth

While education is a key driver of economic development, free college alone would not ensure growth. Education raises creativity and productivity, requiring substantial investments in institutions. Since the provision of free college could affect the quality of education, free access for all to postsecondary education might not be able to provide the competencies and skills needed to produce a strong workforce. The government has many competing priorities and free college requires high education subsidies. Unless spending is well-targeted, there is a high possibility of failure in the long-run (Deming, 2019).

Indeed, a study by Perna et al (2020) on college promise programs as published by the American Educational Research Association revealed that efficient use of resources is at the root of the debate on free college. Their work, “Is a College Promise Program an Effective Use of Resources?” published in the American Educational Research Association, states that “promise programs may advance vertical equity by investing resources in a financial award that reduces costs of attendance for low-income students and creating eligibility requirements that permit students from underserved groups to receive program resources. Programs may advance equity and efficiency by investing in personnel and other supports that enable students from underserved groups to meet eligibility requirements, enroll, persist, transfer, and complete.”

(Video) Why College Is So Expensive In America

Should College Be Free? The Economic Impact of Free College | (3)

Increasing Attainment Through Leadership

Economic barriers are not the only reason why postsecondary completion rates have remained low. As these arguments reflect, there is a deeper problem that can be traced to state policy leadership. Perna and Finney (2014) concluded in their research that “improving attainment is expected to require state policy leadership that sets shared statewide goals for attainment and steers the state’s colleges and universities to achieve these goals.” The state, as well as the educational institutions, should work together by formulating policies that would give students access to high-quality post-secondary education.

The arguments presented on why should college be free are to some extent valid, but other crucial factors still need to be addressed. It is interesting to note that the counter-arguments highlighting the weaknesses of the free college policy also underscore the need for the state and the institutions to work hand in hand to increase attainment and reduce inequality.

Expanding access to higher education should be a national priority to equip the future workforce for the post-industrial economy. Critical thinking skills, abstract problem-solving, serious consideration of values and ethics are just some of the skills and competencies that college education teaches.Free college education may have a large short-run cost, but it will provide significant benefits in the long run. Policies that increase college attainment can pay for themselves because college graduates have been proven to earn higher wages, and, therefore, have the capacity to pay higher taxes (Deming, 2019).

Having a well-designed free college plan is crucial to eliminating low rates of degree completion and minimizing overcrowded and underfunded institutions.While those who advocate and those who oppose free college differ in their perspectives, both agree that the economic impact of free college cannot be overstated for its potential to shape a well-equipped workforce. Awell-educated workforce is an important ingredient in the stability of economies and in the overall advancement of societies.


  1. Adams, R. (2017), Tuition fees should be scrapped, says architect of fees‘ Andrew Adonis,
  2. Akers, B. (2020),Don’t Ruin College by Making It Free, Education Next,
  3. Barshay, J. (2019),Economists find free community college can backfire,
  4. Berman, J. (2021),Biden’s free-college proposals could boost economy by $160 billion — but it may still be a tough sell in Congress,
  5. Brown, S. G. (2019), Student Loan Debt Statistics, Student Debt Relief,
  6. Cameron, Stephen V., and James J. Heckman. “The dynamics of educational attainment for black, hispanic, and white males.” Journal of Political Economy 109.3 (2001): 455-499.
  7. Caplan, B. (2018) The Case Against Education: Why the Education System is a Waste of time and Money, Princeton University Press, ISBN-10 0691174652
  8. Deming, D. J. (2019), The Economics of Free College, Economics for Inclusive Prosperity,
  9. Denning, Jeffrey T., Benjamin M. Marx, and Lesley J. Turner. ProPelled: The effects of grants on graduation, earnings, and welfare. No. w23860. National Bureau of Economic Research, 2017
  10. Friedman, Z. (2020), Student Loan Debt Statistics in 2020: A Record $1.6 Trillion,,
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  12. Gravier, E. (2021), Remind yourself of what makes you happy: Blogger shres her advice about debt and depression,,
  13. Horn, M.B. (2019),Five Reasons Why Free College Doesn’t Make The Grade,
  14. Lochner, Lance, and Alexander Monge-Naranjo. “Credit constraints in education.” Annu. Rev. Econ. 4.1 (2012): 225-256.
  15. Lopez, C.C. (2018), Measuring College Value, Journal of Multidisciplinary Research, Vol. 10, No. 1-2, Spring-Summer 2018, 159-172
  16. Ma, J., Pender, M. and Libassi, c.J. (2020), Trends in College Pricing and Student Aid 2020, New York: College Board,Trends in Student Aid 2020 (
  17. National Center for Education Statistics (2021), Loans for Undergraduate Students,
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How would free college impact the economy? ›

Free College Would Drive Economic Growth

In different types of economies, as college students graduate without debt, this would give them the ability to earn, save and spend immediately, which could stimulate the economy.

Why should college should be free? ›

Key Takeaways. Research shows that free tuition programs encourage more students to attend college and increase graduation rates, which creates a better-educated workforce and higher-earning consumers who can help boost the economy.

How would free college improve society? ›

Free college tuition programs have proved effective in helping mitigate the system's current inequities by increasing college enrollment, lowering dependence on student loan debt and improving completion rates, especially among students of color and lower-income students who are often the first in their family to ...

Why is college important to economy? ›

Graduates with the right knowledge and skills have the ability to demand higher salaries, as they are equipped to make significant contributions to the revenue and growth of the companies they work for.

What would happen if all college was free? ›

If we made college free for everyone we would be subsidizing the rich. Families that have the money to pay for some or all of the cost of a college education might choose instead to take advantage of free college at a public institution. In effect, the government – and taxpayers – would be subsidizing the rich.

Why college Should not Be Free 6 Reasons? ›

Completion rates will decrease. Property taxes will increase. Persistence among college students will decrease. Private colleges will suffer enrollment declines and financial hardships.

Should college be free or charged? ›

Yes – College should be free for everyone:

When college education is free, the number of graduates will drastically increase. At present, many people do not have access to higher education. So many students are not joining colleges due to the financial status of their parents.

What are the disadvantages of free education? ›

The disadvantage of free education is that it will lead to people being less likely to value education and will lead to more people being less educated. Another disadvantage of free education is that it will lead to people being more likely to go into debt in order to get an education.

Who would benefit most from free college? ›

Free college programs benefit higher-income students the most. 2. Most free college programs don't address the real costs of college. There are better ways to spend taxpayer dollars and improve college affordability, especially for those who need it most.

What does economic mean in college? ›

Economics is the study of scarcity and its implications for the use of resources, production of goods and services, growth of production and welfare over time, and a great variety of other complex issues of vital concern to society.

What are 3 benefits of college? ›

10 Benefits of a College Degree
  • Earn more money, experience less unemployment. ...
  • Raise your voice! ...
  • Call the shots—be your own boss. ...
  • Transform your family tree. ...
  • Invest in and shape our democracy. ...
  • Never stop evolving. ...
  • Pay it forward. ...
  • Bring your ideas to fruition.
Feb 28, 2022

What are the 3 main benefits of a college education? ›

5 benefits of a college degree.
  • You will be more marketable. ...
  • Access to more job opportunities. ...
  • Higher earning potential. ...
  • Opportunity to change industries. ...
  • Greater job stability.
May 6, 2020

Are free colleges actually free? ›

Some schools don't charge tuition. Want to go to college but wish you could avoid paying tuition? It's possible. Schools scattered across the country offer free tuition to admitted students.

Why college should not be free in America? ›

Free college will not only worsen the quality of American universities, currently the best in the world, and mean fewer resources for students, it would also be more regressive and would deepen inequality compared with a system where students pay or take out debt.

Should university education be free? ›

The existence of free university education is extremely beneficial for students. There are countries that have implemented this system. They charge extra taxes to finance university education and thus, provide it for free. This will be beneficial for students but it will increase the tax burden on society.

What are the cons of paying for college? ›

3 Reasons Why College Is Not Worth It
  • You Likely Will Graduate With Student Loan Debt. ...
  • High-Paying Jobs Aren't Guaranteed. ...
  • It Can Take More Than Four Years to Graduate.
Jun 21, 2022

Why parents should not pay for college? ›

Here are some reasons parents shouldn't help pay for college: Students learn more responsibility and gain more real life skills. Students remain more focused on education rather than party life. Students learn the value of money and are therefore more prepared when they hit the “real world”

Do the benefits of college still outweigh the costs? ›

A study from the New York Federal Reserve finds that even after factoring in rising tuition costs and student debt, a college degree still pays off.

Does free college increase taxes? ›

Free college would cost on average three times what federal tax dollars pay for now.

What are the pros and cons of college? ›

Pros and cons of going to college
  • Gain a better education: College is a tool for you to use to further your education. ...
  • More job opportunities. ...
  • New experiences. ...
  • Get outside of your comfort zone/boundaries. ...
  • Debt/Student loans. ...
  • Stress. ...
  • Jobs don't require college education. ...
  • Famous/rich people without college education.
Jan 10, 2018

What happens if parents don't contribute to college? ›

If your parents or guardians refuse to pay for college, your best options may be to file the FAFSA as an independent. Independent filers are not required to include information about their parents' income or assets. As a result, your EFC will be very low and you will probably get a generous financial aid offer.

Are parents responsible for paying for college? ›

Should Parents Pay for College? Parents aren't legally obligated to pay for their child's college education unless it is stipulated in a divorce degree that a parent will cover costs.

Why do college students struggle financially? ›

The Ohio State University's National Student Financial Wellness Study found that 72 percent of college students experience financial stress stemming from the fear of being unable to meet tuition costs (60 percent) and meet monthly expenses (50 percent).


1. San Antonio, Texas tackles education inequality with free or reduced college tuition
(PBS NewsHour)
2. Would free tuition boost success at community colleges?
(PBS NewsHour)
3. Jill Biden: 'I Was Disappointed' Free Community College Was Removed From Build Back Better
(NBC News)
4. Growing Number Of Americans Questioning The Value Of College Degree
(NBC News)
5. What's behind the steep rise in college tuition?
(CBS News)
6. How Public Universities Became So Expensive | WSJ
(Wall Street Journal)
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