Obama blames high tuition costs on Medicaid, prisons
President Barack Obama blamed the rising cost of college tuition on profligate state legislators Wednesday, accusing them of cutting higher education funding to pay for prisons and Medicaid.
“What happened, around the ‘80s and ‘90s was state legislators started saying we’ve got to build more prisons. In fairness to them, they also started feeling more pressure because of Medicaid spending, because health care costs were going up,” Obama explained at a town hall meeting in Indiana Wednesday. “And so they started cutting higher education budgets. And they made up for it with higher tuition.”
“It used to be that most state universities were heavily subsidized by the state, so they kept tuition really, really low.”
Notably, given his claim that increasing Medicaid costs crowded out education funding, Obama’s own signature legislative initiative, the Affordable Care Act (Obamacare), only exacerbated the problem by pressuring states to accept a significant expansion of their Medicaid programs.
The federal government enticed 28 states to opt-in by offering to cover the full cost of the expansion, though only until 2017, after which the states will assume a gradually increasing share of the new Medicaid costs.
Obama then continued to rail on America’s prison system, accrediting soaring tuition rates almost exclusively to the high costs of maintaining prisons.
“College costs started going up because the public university system, which used to be generously funded by state governments so that tuition was low, suddenly state governments were spending more money on prisons than they were on universities, which meant tuition went up,” he said.
Obama then called for more government subsidies to cut the costs of tuition, reflecting back on the glory days when government spending “kept tuition really, really low.”
“The broader issue of financing education, as I mentioned, the reason that college is so much more expensive for this generation as it was for my generation and even better for the previous generation really had to do with government spending,” he argued. “It used to be that most state universities were heavily subsidized by the state, so they kept tuition really, really low.”
Some data, however, suggests quite the contrary—that more government subsidies for tuition actually benefit the wealthy more than those in poverty.
The Brookings Institute, for instance, released a report earlier this year suggesting that proposals for free college tuition would disproportionately benefit those in higher incomes brackets.
“Under the Sanders free college proposal, families from the top half of the income distribution would receive 24 percent more in dollar value from eliminating tuition than students from the lower half of the income distribution,” the report explains.
The report goes on to note that free college tuition proposals neglect to address student living expenses, which in most cases are actually higher than the base cost of tuition.
“The non-tuition costs of attending college, including living expenses, are larger than the costs of tuition and fees for most students,” it explains, and finds that “free college, which does not address these expenses, leaves families from the bottom half of the income distribution with nearly $18 billion in annual out-of-pocket college costs that would not be covered by existing federal, state, and institutional grant programs.”
Another report, released in January by New York City’s nonpartisan budget agency, estimated that applying Obama’s free community college proposal to just the City Universities of New York system would cost between $138 million and $232 million annually.
Yet Obama continued to advocate for his free community college proposal Wednesday in Indiana, even proclaiming that it is already succeeding in some states and cities that have implemented versions of the idea.
“And for some people who decide they don’t need a four-year college education, they want to be a graphic designer, they want to go into a trade, now they can get the training they need without incurring any debt,” he said. “There’s some states and cities that already are doing this … free community college proposal and it’s working and it’s really helping to reduce costs.”
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