An Expert Explains the Potential Problems with Hillary Clinton's Debt-Free College Plan

This is the first in a series of articles looking at some of Hillary Clinton's most important policy proposals. This week: her plan for debt-free college.

As the election approaches, we get closer to the unavoidable reality that either Hillary Clinton or Donald Trump will be the next president. But at the same time, the news cycle is being consumed more and more with scandals and micro-scandals, polls and speeches.

The natural focus on the give-and-take of the battle between the two campaigns means that less attention is paid to some of the nitty-gritty of what either would do when and if they took over the Oval Office. In Trump's case, predicting his presidency is tricky, given his well-documented penchant for changing his mind about various issues. But say what you will about Clinton, she has plenty of things she wants to do, even if the details are unclear.

One of the furthest-reaching of Clinton's plans is her proposal to, by 2021, make tuition at four-year state universities free for students whose families earn under $125,000 a year. (Announced in July, this is widely seen as an adoption of Bernie Sanders's position on tuition in response to its popularity.) If enacted, it could change the education landscape just as Obamacare changed the healthcare landscape.

To sort through the implications of her plan—and what might be missing from it—I called up Jason D Delisle, a higher education expert at the American Enterprise Institute, a conservative think tank. He told me why it would be complicated for Clinton to implement her plan across all 50 states, and how her position has changed since the start of her primary contest against Sanders.

VICE: Can you explain to me how Hillary's debt-free college would work in practice? Her website is very vague.
Jason D Delisle: Well, there might not be an answer, which is why [it's vague]. This is a sort-of cat-and-mouse game around these campaign proposals. They're light on details for a variety of reasons. One is that they may not know, or they haven't really figured it out themselves. Or they might have some ideas on how it may work but haven't really vetted them, so they don't want to put out details and find out, "Oh, that is a bad way to do it. We would rather do it this way instead." That's kinda what they're up against. I guess the Trump campaign is sort of doing a similar approach, right? With absolutely nothing. Not just light on specifics, but light on even vagaries.

When Hillary talks about debt-free college, how does she get the federally collected money to college students? Through the schools themselves or is it a grant system?
So what they would do, or my general understanding, is that these would be block grants to states or some sort of formula grants to them, who would then make their payments in their annual appropriations to the schools. So that's the general idea, I think.

If it's through the states, won't Republican governors simply refuse to take the money like they did with the Medicaid money that came with Obamacare?
Maybe. Depending on the details, the Democratic governors may not want it, either. It may be that the Clinton's plan [supposes] that every state's higher-ed system is the same. I'm not an expert on how each state does their higher-ed policy, but some have a lot of control over what the tuition is at their universities and some have very little control by design. They could change that, I suppose, by legislation. Or maybe they can't––maybe it's constitutional. So the Clinton plan is kind of contemplating that they all have some sort of self-control, and that may not be the case. So a Democratic governor, speaking hypothetically, might have to radically change things that they're doing in order to take the money. It may not be a partisan thing, it may just be a state thing where they don't want to do that.

Right, that was my main point of confusion, how she can say something could definitely happen when there's so many different moving parts in 50 states.
Exactly. And it would require states to spend more money than they're doing now.

I recently spoke to someone who argued that debt-free college would make tuition costs rise, because universities have a history of spending every penny they get. Is that what you mean?
Well, generally the way the Democrats are generally thinking about these plans is that the underlying theme is the federal government provides money and the states provide money too. So, you could have a state—Republican or Democratic—that might not be in the greatest fiscal shape, and they might say they can't do it. They might have to make cuts elsewhere, which they just can't do, or they might have to raise taxes elsewhere, which they might not be willing to do. Look at Louisiana, it's no cakewalk to maintain the system they have now, but under the Clinton plan, they'd have to significantly increase funding.

So Clinton isn't just saying that the federal government should provide money, she's likely asking the states to chip is as well?
So the concept here is that the state universities, in exchange for accepting money from the federal government, would have to make tuition zero. In order to do that, they either have to radically cut costs, which I just don't think they're going to do, or the legislatures would have appropriate significantly more money and pass that on to make up for the lost tuition revenue. And a lot of that would come from the state, and some would come from the federal government as well. The amazing part is that Clinton criticized Sanders in one of those debates on this very point, then she adopted [his plan].

How did Clinton's plan change to be more like what Sanders was proposing?
Here's what they did. Her original plan debt-free college. And so what that meant was really just messing with the federal needs analysis formula. Basically, what your can family pay toward college. It was kind of like an income test. So if you made $50,000 a year, you contribute X. And what Clinton was saying is that universities cannot charge more than X. They can charge, just not what is more than affordable for anyone given their circumstances. That would be debt-free, right. If I make $50,000 a year and this formula says what I can afford is $5,000 a year for my kid to go to school, and the university only charges me $5,000, in theory, that's debt-free because the formula says I can cough up five grand. It's kind of like a different price for everybody, but one that's affordable. But states would still have to increase their funding.

That's also what's kind of crazy about Hillary's dig on Sanders's plan, is that Hillary's is the same thing. What she changed was that she's no longer talking about an affordable price, but a price of zero. That is the difference.

This interview has been edited and condensed for clarity.

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