Would Free College Tuition Work in the U.S.?

Sprechen sie Deutsch?

In case you haven’t heard the news, college tuition is now free throughout Germany—and not just for Germans. But before you pack your bags for Berlin, you might want to consider what those who’ve made it through the process and lived to tell the tale have to say about that.

Native-language proficiency is a must because, well, the lectures, textbooks and exams aren’t likely to be in English. Excellent high school grades and strong SAT scores are also necessary. And, different from how it is in the U.S., German curricula are discipline-specific from the get-go: Incoming freshmen don’t have the luxury of “finding themselves” a year or two later. They’re required to declare their major upfront as part of the application process.

American students will also find several other areas of stark contrast.

Students are responsible for their own living arrangements and amenities. There are no dormitories, concierge-level sports facilities or student unions equipped with pool tables and flat-screen TVs. Students are also on the hook for the cost of their food, textbooks and health insurance, too.

In other words, higher education is serious business in Germany. Not only are students expected to be disciplined and determined as they approach their studies, they’re also supposed to learn how to lead independent lives as a byproduct of their university experience.

As you may have guessed, taxation makes this all possible in Germany—corporate, personal, value-added and other forms—which, given the current political climate, makes this approach a nonstarter here.

That’s too bad, because the ugly truth is that higher education in the U.S. is fast becoming a losing-value proposition.

Tuition-price increases consistently outpace the rate of personal-income growth, which explains why education-debt levels are not just rising—they’ve reached the point where student loan payments are crowding out life for many borrowers. What’s more, as some schools choose to relax their admission standards in favor of filling otherwise empty seats, higher education’s roughly 50% completion rate is destined to decline even further.

That doesn’t bode well for those who leave school with lots of debt and no degree to show for it.

What Would It Take to Do This Here?

Turning around this miserable situation, however, won’t be easy. But it’s not impossible, either. A good place to start would be to wring out the system’s excesses.

Simply put, there are too many schools situated too close to one another, spending too much money on too many of the same things. For example, consider a moderate-size state, like my own, where there are a half-dozen private colleges and universities roughly the same size. Sure, each may have its own areas of specialty, but collectively they also have a half-dozen presidents, provosts, chief financial officers and back-end administrative functions—lots of redundancies within a fairly compact geography.

This assemblage represents a made-to-order opportunity for consolidation. But that’s not going to happen because entrenched administrations and compliant boards don’t have to do anything they don’t want. At some point, though, there won’t be enough students who can afford to pay enough to keep things spinning, and the so-called non-operating revenues the schools count on to bridge that gap will fall short because of shrinking endowments and faltering fundraising activities.

And what about the critical need for upgraded educational content and the technology to deliver it? The German approach to higher education is pure: It’s all about the learning. By contrast, U.S. schools have become education/hospitality/entertainment conglomerates, where the profits from one area are used to offset another with each competing for investment capital that’s grown scarce.

The good news is the money that’s needed for these improvements in the U.S. is literally under foot.

Dormitories could be sold to investors and real estate developers so that they may be turned into free-standing apartments. Likewise, buildings that house campus cafeterias could be retrofitted to accommodate privately-owned restaurants, bistros and supermarkets. Sports and fitness centers can become membership-sponsored health clubs that are also open to the surrounding community, and so forth. Not only would the capital that flows from these transactions pay down existing mortgages and other related debts, a portion would also become available to revitalize the institution’s core mission: the delivery of high-quality education.

As for tuition prices, the schools can lease the land upon which these structures stand and enhance those revenues with savings that would come from discontinued debt payments and maintenance expenditures. Colleges that choose to share administrative functions and, perhaps, technology would become even more affordable (and competitive).

The Other Big Issues

Scaling back the depth and breadth of the U.S. higher education experience would yield another benefit: Our kids will learn how to transition to independent adulthood. That is, as long as they’re able to qualify for the jobs they need to pay the bills.

There’s been a lot of talk about turning out students who are “career ready,” particularly in light of the chronic rate of underemployment for recent grads. But career readiness is more than a catch-phrase for promotional brochures and banners that are draped along the sides of campus buildings for parents and students to see. It requires a teaching staff that can effectively translate academic theories into on-the-job practicability.

If you think that goes without saying, consider the results of a recent Gallup/Lumina poll that found that only 11% of business leaders strongly believe that college grads are indeed career-ready, and compare that to an Inside Higher Ed survey of college provosts in which 96% believe their institutions are doing a good job at that.

Finally—and this goes to the heart of engendering post-graduation success—the schools must address outcomes. Time is running out for that as the government zeroes in on dropout rates and the student-loan defaults that are likely to follow (because non-grads earn less than college grads). Schools that stubbornly cling to the shortsighted—if not immoral—practice of filling seats and watering down curricula instead of selecting students who can do higher-level work are headed for trouble.

Germany’s taxpayer-supported approach to higher education may not work for us here. But there are elements of it that should inspire serious consideration — at the very least for the sake of an increasingly unsustainable system that’s teetering on the edge of insignificance.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.