No, Public Spending on Higher Education Isn't Regressive

Some argue that taxpayers shouldn't spend more on higher education because college students skew wealthy. But they haven't looked carefully at who's on campus these days. 


To a certain kind of liberal, it's self-evident that the government should spend more money on universities. Cheap higher education for all has been a standard item on the left's wish list for decades. Since a degree is the only sure ticket to the middle class, the thinking goes, the government should do its best to make education accessible.

But is it possible that the left has gotten things upside down? Could it be that by more heavily subsidizing public colleges, we would inadvertently be taking state tax money from the poor and giving it to the rich? A few writers say that's the case. Our own Conor Friedersdorf called the idea of universal free college a "regressive scandal." Atlantic contributor Matt Bruenig has essentially argued the same.

This line of argument rests largely (though not entirely) on the idea that students who attend four-year state colleges skew wealthy. This sounds like a common sense point. Affluent children fare better in high school, are more likely to graduate, and usually have parents who themselves pursued higher education. And if we look at the population we typically think of as traditional college students (as Bruenig does in his analysis), it seems true enough. Just under a third of dependent college students—dependent meaning that their parents are technically expected to help pay for school—come from families earning more than $104,096 a year, putting them in the richest 20 percent of U.S. households. Barely more than a third come from the bottom half of all households.

So is that case closed? Is State U. overfull of upper-income kids? Well, not quite.

The trouble is that a huge chunk of college goers aren't actually 18-year-olds living off an allowance from mom and dad. At four-year public institutions, about 36 percent of students are considered financially "independent," which is a catch-all category for people who break the typical undergraduate mold. How so? You can qualify as independent a few ways, including if you're married, over the age of 24, an orphan, are a military veteran, or have your own children. But the key part is this: Everyone assumes you'll be paying your own way through school (and as a result, you might receive more financial aid).

Do all of these students really survive solely on the strength of their own bank accounts? Not at all. There are surely many veterans attending college with help from their families. Same goes for 26-year-olds, and even some single parents. And therein lies the trouble with figuring out how wealthy independent students actually are: since nobody asks how much their parents earn, we don't truly know how much of a financial cushion they have to rely on.

But there are some things we do know about them. First, they skew low-income, at least based on their own earnings. Almost half of them support their own dependents, like spouses and children. Compared to traditional students, they're more likely to have delayed going to college after high school, or to have dropped out and earned a GED; their parents are less likely to have graduated college (or high school, for that matter); they're more likely to be black or hispanic; and they very frequently go to school part-time (presumably while working).

The point is, we're not exactly talking about trust-fund kids here. It's not clear how many have access to family help at all. And by ignoring them, we'd be discounting an enormous and crucial piece of today's student body.

So what happens when we add independent students into the picture? Suddenly, our public college campuses start to look like a near mirror image of the country, economically at least. The middle class is slightly under-represented, the top 20 percent are just a tad over-represented, and the poorest 20 percent are very overrepresented.

Now, the fact that these campuses are economically diverse doesn't prove that our system for funding higher education is fair.* Some states shower too many resources on elite research universities, which really do skew rich, compared to the colleges that handle lower-income students. Others fund schools at least partly through regressive tax codes that penalize the poor. Moreover, just because families of all stripes could benefit from more college spending doesn't mean we should necessarily make it a priority. Many conservatives would argue, for instance, that higher education now benefits individuals more than society at large, and so individuals should bear more of the burden paying for it.

But the idea that increasing college funding would just be a gift to the rich? Forget about it.

*This also doesn't settle the extremely hypothetical debate about whether the government should make college free, instead of just cheaper. No matter how many low-income students might benefit from ending tuition altogether, high-income students would probably save more from such a policy shift, since they usually receive less financial aid in the current system. Beyond that, there are practical reasons, such as the potential for over-enrollment at open-admissions schools, to object to making public colleges entirely free, even though, as I've written, the federal government could theoretically do it with the money it now spends on various aid programs.