Free college will end up costing more


So the bill for free college education at state universities and colleges was signed into law by President Rodrigo Duterte. Many Filipinos are rejoicing for yet another freebie for the people. We have free contraceptives and now we have free college education (among other freebies). But what does “free college” really mean? Does it mean that professors and school staff won’t get paid anymore? Does this mean that the power, water, telephone, internet and other utility companies won’t get to bill the schools? If we think about it this notion of “free college” is really a non sequitur. How can college be free if operating universities and colleges costs money?

The free college program has been estimated by Duterte’s economic advisors to cost 100 billion pesos a year (approx. $2 Billion). Even one of the authors of the bill, Congressman Salvador Belaro, estimates that the program could go up to 500 billion a year by 2022. For a country struggling to fit expenditures into a limited budget such a magnitude of freebie would be a huge bite. What other essentials, earmarks, or entitlements need to be cut in order to accommodate these freebies like free college, free housing and free contraceptives? The government cannot just print money, you know?

But we’ve heard advocates say that this free college education is a good investment. Really? What do the facts say? An article by Philippine Star’s Boo Chanco offers an interesting insight. Here are some interesting facts back in 2015:

• 22.2 percent of our unemployed are college graduates
• 12.6 percent are folks who had some college education but did not graduate
34.8 percent of unemployed went to college
• 33.3 percent are high school graduates
• A little over 68 percent of unemployed Filipinos had some college or high school education
• The total of unemployed Filipinos = 2.68 million

Doing the math, the 34.8 percent equates to close to 1 million unemployed people (out of the 2.68 million in total). We’re not even including underemployment into the equation here yet (the condition in which people in a labor force are employed at less than full-time or regular jobs or at jobs inadequate with respect to their training or economic needs). But if we look at things in perspective, there just aren’t enough jobs out there for our college educated kids. As Chanco claims of the resources spent on high school graduates: “Resources were wasted on their education and these are resources we simply cannot afford to waste.”

The problem with subsidized education is that much like a lot of subsidized programs the cost will tend to increase. Why? It is because universities and colleges know that the government is mandated to pay for whatever cost it takes to provide the freebie. Even in America if we look at the comparison between college education inflation rate and consumer price index it can be seen that college tuitions soared each year, advancing far in excess of the national inflation rate. The overall inflation rate since 1986 increased by 115.06%, which is why Americans pay more than double for everything they buy. On the other hand, during the same time, tuition increased a whopping 498.31%. This is because a lot of the college education was subsidized through government guaranteed student loans. During former POTUS Obama’s term student loan debt has increased by 463%.

With more government subsidies for free college education, more demand for this freebie results. Who doesn’t like free stuff? But in a previous article, I raised an argument against subsidizing college education for everyone. If the government continues to pump in more college education subsidies how exactly can the government prevent its increasing cost? With more demand for college education, given a finite and limited number of state universities and colleges, is it any wonder why the cost of post-secondary education is continually rising? Hello?! Inflation? Law of supply and demand, anyone?

The thing is we need to change the way we think about the necessity of a college degree. A college diploma is not the only way to escape poverty. Not all students are college material. We need to abandon the idea that everyone should get a college degree. What we actually need is to have the skills to do the job that is available. Otherwise we will just continue churning out diplomas that would not necessarily result to jobs. With quantity there is also a risk for a compromised quality. How many times will Filipinos be outraged by condescension of people from other countries looking down at “diplomas at some med school in the Philippines”? There will always be a strong demand for skilled labor like plumbing, electrical, welding and construction management. These really don’t need a college degree but vocational or technical studies (and I would argue that a lot of college programs like Hotel and Restaurant Management don’t really need to be degree programs). It is unfortunate that these skills and careers are looked down upon, sometimes even by the poor!

Having the skills is only half the equation. The other half is about job availability. Opening up the market for competition and ensuring that we have adequate infrastructure to promote businesses that would provide employment are necessary. Duterte’s “Build, Build, Build” socioeconomic agenda is a move to the right direction. However, college education freebie is not exactly a good investment given the lack of jobs available. Investment in infrastructure will yield better returns as more people and businesses will benefit from it. It will facilitate and enhance business growth and ultimately the creation of well-paying jobs. Isn’t that what we think college education is aimed for?

(Image from bulatlat.com)

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Post Author: Hector Gamboa

Calling a spade, a spade…

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35 Comments on "Free college will end up costing more"

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vanquisher32
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The whole issue about demands for free education highlights a common problem with the Filipino mentality. Apparently, Filipinos love to spend money that doesn’t exist yet. I for one believe that education is a right but only to the extent that it is financially viable and sustainable. It is something justifiable in first-world countries where majority of people are responsible enough to pay their taxes, but for a country where lots of people want everything for free but are not willing to do their share in terms of contributing to the national treasury, such a policy could mean national bankruptcy… Read more »
Hector Gamboa
Guest

Hi vanquisher,

Good points. While I disagree on the (college) education part being a right, I agree that we should be mindful on our situation compared with other countries.

Thanks for reading!

Robert Haighton
Member
Dear Mr. Gamboa, in my country education is subsidized. From Kindergarden uptill and including university. Does that mean that parents go to school for free? No. Parents have to pay tuition. Even for Kindergarden. Now why is that? Its actually 2-fold. The government is investing in its own people and will recoup that investment when those people have a job and pay reasonably high income taxes. The system is paying itself. On the other side by letting parents pay tuition (and pay for school books) it should give a signal/sign NOT to fuck like rabbits. And parents must be willing… Read more »
T
Guest

remember the old proverb “you get what you pay for”?
knowing how it is in public schools, apply that to the state uni systems
well, shit

T
Guest

but still, the state unis could just raise the bar for acceptance. like harder entrance exams, higher acceptance scores, steeper passing marks and maintained gwa’s.
not all people deserve to go to college.

Hector Gamboa
Guest

Hi T,

I think Sen. Lacson proposed a similar measure. He said this free college education should not be for the stupid and the bulakbuleros. 😊

Thanks for reading!

Hector Gamboa
Guest
Hi Bob, Couple of things… 1. How does your country compare with the Philippines in terms of college grads to available professional jobs ratio? 2. So are you again saying that the root cause of the problem is the Catholic faith of Filipinos since we tend to swallow the Christian tenet of “going forth and multiply”? Bob, don’t take this as an attack on your response but I just want to say how amazed I am on how you seem to oversimply all our problems to our Catholic/religious beliefs. I know you didn’t mention any religious angle in your response… Read more »
Robert Haighton
Member
Hi Tor, Everyone graduating from university will have a high end job. In university a student is educated and trained for decision making jobs. Unemployment among university graduates is low. Nationwide uneployment is, I believe , 5,6% at the moment. I dont think I mentioned religion anywhere but procreating (like rabbits) will NOT help the economy. In fact, if you would wipe the poor 25% of the PH population of the face of the earth, the PH GDP will not even change. Free education is like: when you pay peanuts, you get monkeys. I dont think – based on own… Read more »
Robert Haighton
Member
Hector, just to add, unlike the Philippinnes, we dont have private schools. All schools are public schools. We do have schools with a religious ‘signature’ but the government guarantees that the curriculum is as good as non-religious schools in my country. The curriculum must be and is of high quality. And you just cant become a teacher overnight. What I think Duterte should have done instead is to make sure that the Philippine curriculum is of world class material both in private and public PH schools. Secondly with the constantly increasing PH population, free education becomes unaffordable for the PH… Read more »
marius
Guest

hector: I think you forgot a couple of things:

1) Filipinos are taught nonsense in public schools and more nonsense at university. Making it free (i.e., funded by the 10-15% of the population who work hard and pay taxes) just means more people will have access to nonsense.

2) The government can, in fact, print money. That is actually one of the main functions of government. Didn’t you get a degree in economics? Perhaps this slip-up proves point 1).

Hector Gamboa
Guest

Hi marius,

A couple of things…

1. I am not an economist by trade or education

2. “Printing money” blurb was in the context of its effect on inflation.

Thanks for reading! 😊

Dale Gozar
Guest
Reason no. 1 Government will not approved FREE higher education w/out anticipating an INCREASE DEMAND for OFW/OCW or economic growth or construction boom (decentralization) around the country Example: Japan now is dying w/ increasing no. old people (material girls=no true love=no baby=no youth=no workforce) Probably the reason why 1. JICA is helping Philippines in INFRASTRUCTURE (engineering or loans) 2. Government approved FREE Higher Education – probably because of anticipatef increase demand for OFW/OCW (as loan payment to Japan (and to other countries) or in exchange to Subway & others Project. FREE HIGHER EDUCATION – a wise investment for Philippine Government… Read more »
marius
Guest
Hector – my apologies, I think I was getting you mixed up with the young economics graduate who had the same stance as you re. free contraception. Anyway, my point was that since the government CAN print money, and since Duterte is (by his own admission) innumerate and has no knowledge of economics, he will probably do exactly that to fund his mad schemes. He is at least smart enough to realise that most Filipinos have NO IDEA what effect this will have on the economy; he can therefore do it anyway, and then blame the results on the Americans.… Read more »
Niall R
Guest
I wonder if this is an example of Pres Duterte’s socialist economics. University graduates earn 25% more than the national average,so if everybody has a degree,everybody will earn 25% of the national average. On a more serious note, the problem arises that anything free is not valued and has inexhaustible demand. Has any preparation been made for lecturing staff, lecture theatres accommodation etc for the likely increase in student numbers? What is the benefit if the standard of education does not increase,as the economy cannot absorb the current numbers ? Will the additional students be taking courses that are actually… Read more »
Niall R
Guest

Rereading my post, the second sentence should of course read ‘everybody will earn 25% more than the national average’.

Teach me to check properly.

marius
Guest
@Niall: “anything free is not valued”. That’s precisely my take on the matter. I would go so far as to say something that is free has no value – in other words, whatever education people get, if they are not paying for it one way or another, it will be of very poor quality indeed. Of course, as someone else mentioned, the universities COULD raise the bar such that only very able students get in, and only very able teachers are hired. All the other dead wood could (as Hyden suggested) be sent on courses to learn how to please… Read more »
Hyden007Toro999.999
Guest
“Who will pay for this Free Education?”…answer: We the taxpayers with our hard earned taxpayers’ money, will pay for it… Most of those working as Filipino Seamen and Sea Women, have College Degrees. I met a Filipino cook, who has a degree in Political Science. I met a Filipino Sea Woman, who has a Law degree. She works , as cleaning woman for the rooms… Most of the Filipino Doctors, here in the U.S. and Canada, work , as nurses aids , and if they go to get a degree in Nursing. They work as Nurses. I met a Filipino… Read more »
Dale Gozar
Guest

@Hayden007Toro999.999

What you said is absolutely TRUE

But not because we have poor education but mainly because of DISCRIMINATION or EXPLOITATION which is normal anywhere or same with other nationalities since our workers (OFW/OCW) will be 2nd or 3rd class citizens of that country.

The main point is they have JOBS, dollar remittances that stabilize our economy and help make the world go round.

Hyden007Toro89898.99
Guest

@ Dale Gozar:

If we want to train OFWs…then, let these government run Colleges, have curriculums in : cleaning rooms; cleaning toilets; sweeping the floor; cooking; gardening;washing dishes; restaurant servers; nannying; driving cars in foreign countries; floral gardening;being servants; pleasuring your foreign masters; etc…not a College degree…we don’t need these degrees…

colbey
Guest

nothing is FREE

Ronan Paul
Guest
Message to Hon. Rodrigo Roa Duterte (President of the Sovereign Republic of the Philippines) It’s already time to look deeply at the flaws in our current PH 1987 Constitution, especially in the country’s economic policy which is “PROTECTIONIST ECONOMY”. An economic policy that need to be dismantled towards Free Competitive Open Market Economy or Liberalized Economy. This is in order for the country to be more attractive in driving in more Multinationals Foreign Direct Investments of different backgrounds that may not only generate huge income for the country but will also create decent-paying jobs to the millions of Jobless Filipino… Read more »
Dave
Guest

Why don’t they use the student loan system? Make students take responsibility for their own education by paying back a required amount from their income in the future, once they start earning above a certain level. Instead of encouraging dependence on government handouts or mama, papa and siblings.

Dale Gozar
Guest
@Hyden007toro999.999 This is just my observation….. I think it’s kinda balancing the world economics & role of each countries. Philippines role which the world intended us play obviously is a modern form of slavery – providing high quality (export/outsource) talents/skill/labor/service. It’s really sad our leaders fail to see or simply ignore how other countries exploit/abuse our people and our natural resources. US President Barack Obama has hailed Filipino-Americans “for the many ways they have enriched our society.” “They have been the artists who challenge us, the educators who keep us informed, and the laborers of our growing economy,” Obama said… Read more »
Robert Haighton
Member
Hi Dale, I read your comment and am wondering what your field of expertise is. I am not sure if I get the whole big picture but I guess/think that most OFWs are domestic helpers (aka nanies), sailors and maybe graduated doctors (well graduated in PH) but working in a foreign country as nurse. Now that are NOT the most prestigious jobs. So the general view about those jobs is : take it or leave it (for you 10 others). I also think that foreign employers know exactly why PH people apply for those jobs abroad It makes them very… Read more »
Hyden007Toro9999.999
Guest
@DALE GOZAR: Indeed, it is modern day slavery…only the slaves, like the OFW Filipinos, are paid barely to survive,and are free to leave, if they do not want their jobs. In the U.S. Southern Plantations, the Black Slaves, are bred and kept, in slave houses. They can be sold to other Slave Owners. They work in the Plantations, without pay. The Slave Owners take care of them… They were treated like animals, branded with the name of the Slave Owner on their backs. There is really a disturbing parallelism , between the Filipino OFWs, of today and the U.S. Southern… Read more »
interxavier01
Guest

Robert,

The problem isn’t limited to Filipinos but almost anyone who graduated from an institution outside of the EU, UK, or NA. As long as you are not a citizen, you should never expect your qualifications to be recognized in the same manner as domestic ones. This is why more students from non-developed countries are opting to acquire western degrees. Even then, it is still difficult to find a job after graduation because immigration policies are not at all friendly, especially in Europe.

Robert Haighton
Member
Interxavier01, Okay why dont you make it easier for yourself? Get a western degree and go back to your country so that you can help develop/rebuild/modernize your country into a first world country. No problems with immigration policies. A win-win situation. Not bec I dont want YOU to be here in my country. But bec of the probl;ems you described and that you can do much more (with your western degree) in your own copuntry. Actually in the same manner all OFWs could and should have done. Take everything (knowledge) with them from their host country and implement it in… Read more »
interxavier01
Guest
Robert, It’s actually my plan. I will do my master’s in NA or Europe and if I have no luck finding a job in my host country, then I’m going back to the Philippines to start a business or a startup as it’s fancily called nowadays. Some will call this technology transfer. It’s the system currently implemented in Germany where it attracts many foreign students because of their affordable tuition. With the final phase of the K-12 system set to be implemented this school year, I expect more Filipinos (at least those who can afford it and can get scholarships)… Read more »
Robert Haighton
Member
Interxavier01, Finishing and graduating from a Dutch high school will leave a person unemployment. Not since today but since ages. At best one can find work at minimum wage. And those kind of jobs are most easdily replaced by automation. Those jobs are also very drudgeries (Dutch: geestdodend). So, in order to get a “real” job, one really has to move up from HS to college (not sure how to translate college into a good proper dutch equivalent) and even university or higher professional education (HEAO, HTS). When you are here (in my country) you will quickly notice that school… Read more »
interxavier01
Guest

Robert,

To add: I have no plans on starting a family until my I have a reasonable amount of income as well as a stable source of it. No, I’m not bounded by religious dogma. I trust my own judgement to make decisions for myself.

Robert Haighton
Member

Interxavier01,
If you were considering “dating & courting” a western girl, pls put out of your head what you were taught in your own country. Girls here are way different. They are not the submissive types. But that is for you to find out yourself.

actjaxs3000
Guest
DESTRUCTION of the Phils will happen even faster due to the free education at the university level. 1. The poor will be further destroyed by this. 2. This will cause a great migration of people away from the Phils permanently. Examples of this, call center jobs in most countries only require a high school degree. Here in the Phils most call centers required people with a university degree, why? 2. When I retired in America and wanted to enjoy a stress free life. Many of my friends including Pinoys said move to the Phils I did it. I would often… Read more »
Dale Gozar
Guest
@Hyden007Toro999.999 I sense sarcasm on your reply Why don’t you try live or work abroad for 1-2 yrs or more, make sacrifices just like our OFW/OCW or immigrants and do real work. Our government intentionally makes things worst (our lives), in-order for us to voluntarily leave our own country, migrate and seek employment overseas. Eventually many Filipinos will do or have left and sacrificed being away from their family, friends & loveones. Either they end up being discriminated, exploited, raped, abused, jailed, killed, executed, and permanently separated or abandoned their family. @Robert Heighton I am Building Architect/Engineers (work in Japanese… Read more »
d_forsaken
Guest

The aim of a college education is to teach you to know a good man when you see one.

Robert Haighton
Member

d_forsaken,
I am sure you are joking, right?

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