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Another Voice: Cost of higher education needs a market-based solution

By Michael Hahn

Hillary Clinton recently completed her effort of co-opting Bernie Sanders and the new millennial base of the Democratic Party with her proposal for tuition-free enrollment at in-state colleges for families presently earning up to $85,000, and $125,000 by 2021. Bernie Sanders rewarded her leftward push with his endorsement, something that eluded Clinton for the past month.

In a healthy two-party system, Clinton would be tacking to the middle on higher education – for both political and policy reasons – fearing triangulation by Republicans. However, as the last several years have demonstrated, the Republican Party is no longer a center-right party that is capable of generating market-based solutions to the problems of today as opposed to the problems of 1980. 

Tuition at public and private colleges has tripled since 1980, after adjusting for inflation. Outstanding student loan debt is a staggering $1.3 trillion. Default rates continue to plague the system. Worse yet, this trend exacerbates college accessibility for low-income families.

How is it that the Republican Party has largely abandoned this issue, which affects a wide swath of voters, has significant public import and lends itself to a market-based solution? The answer begins with the role of the Republican Party in health care reform. While there is much to dislike about Obamacare, it was derived from market reforms proposed by the conservative Heritage Foundation in 1989.

These proposals were once championed by Republicans as sensible market-based alternatives to left-leaning ideas. Yet, when the opportunity came to make the legislation better by relying less on government tax subsidies for employers and including a broader market with more options and lower prices, Republicans reflexively declined to work with the president or propose any alternative.  

That the internal politics of the Republican Party permitted only obstructionism in the debate over health care, rather than any market-based solution, left the party bereft of both the political space and the intellectual capital needed to address other market failures, such as exist in higher education. 

Sadly, Hillary Clinton’s proposal does little to alter these fundamental aspects of higher education market failure. If anything, making more money available to colleges and universities, without creating a more effective market for students and their parents to impose price discipline on colleges, will not decrease excessive levels of tuition; it only shifts who pays for it.

A center-right party is needed to propose fundamental market-based reforms in higher education and bring the Democratic Party back to the middle on this issue. 


Michael Hahn is an attorney and a frequent commentator on legal and policy issues.

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