Wednesday, June 28, 2006

Pawlenty HOPEs free tuition helps 

"So," I'm asked this morning, "what do you think of Pawlenty free tuition plan?" "Feh. In the short run it's a middle class tax cut. In the long run, it's a disaster." "Wow, I thought you liked Pawlenty."

I do, but this is a bad plan. The STrib reporters make the link to Georgia's HOPE scholarship started in 1993. But researchers at the University of Georgia have not found the program to be very useful. Alex Tabarrok at Marginal Revolution summarized these findings last year:
Predictably, high-school GPAs increased markedly after 1993 with a pronounced spike at B. SAT scores, however, did not increase so grade inflation, not academic improvement, appears to be the cause. Once in college students must maintain a B average to keep their scholarship - the program is rather lax on how many or what courses must be taken however. The result is that scholarship students take fewer classes, take easier classes and when the going gets tough they withdraw more often. Apparently HOPE comes at the expense of fortitude.

HOPE increases the number of students enrolled in GA colleges only modestly and the bulk of the increase comes from students who are induced by the cash to stay in GA, instead of going to school in another state, rather than from students who, without HOPE, would never have gone to college. What do the students do with the cash they save on tuition? Cornwell and Mustard (2002) find that car registrations increase significantly with county scholarships!
Here's the research of Cornwell and Mustard. I end up agreeing with David Strom (this happens quite often) that "we're just making a flat-out subsidy for kids who could go to college anyway and most of whom would be able to afford it." It also has had the effect of increasing tuitions at Georgia schools, so much that the state had to cap the tuition payments to remove the incentive. Like in Georgia, this will most likely make it harder for students to get into the University of Minnesota. Here's the plan Pawlenty has laid out.

It's at least only for two years -- unless you go into math and science, where you get all four years, but where it's much harder to get a B average. Cornwell and Mustard have a newer paper showing an increase in enrollments in colleges of education by HOPE scholarship recipients. On that one, Governor, you got it right.