Analysis: Biden’s Free College Plan Would Pay For Itself In 10 Years
A new report analyzing Joe Biden’s free college plan released last week by Georgetown University’s Center on Education and the Workforce found that the plan would likely pay for itself, owing to the fact that college graduates earn more and pay more in taxes.
- Forbes reported that the Democratic presidential candidate’s plan involves making public colleges and universities, along with private Historically Black Colleges and Universities, tuition free for students from families earning less than $125,000 per year.
- Biden’s plan also would make community colleges free for everyone, regardless of income status.
- Such a plan would come with a hefty price tag initially, according to the new analysis:
The Georgetown report estimates that Biden’s plan would cost $49.6 billion in its first year, with $33.1 billion of that from the federal government and the rest from states. If the income limit did not exist, that would increase the cost $8.6 billion. After ten years, it is estimated that due to increased enrollment in public higher education the cost of Biden’s plan would also increase.
- But this is not the end of the story, as “the report also estimates that the plan would bring in tax money,” Forbes wrote.
Because eliminating tuition would increase college attainment there would be “substantial societal benefits,” with an estimated $371.4 billion in federal and state tax revenue. Additionally, Biden’s plan would yield an additional $866.7 billion in private after-tax earnings gains. In fact, the estimates show that the benefits far outweigh the costs of making tuition free.
This should come as no surprise though. College graduates earn more, on average, and therefore pay more in taxes. Previous research estimated that increasing the number of college graduates by just 107,400 in one year alone would yield an increase of more than $90 billion in tax revenue over their lifetimes. College graduates are also less likely be unemployed, less likely to live in poverty, and live longer on average.