If college were free, how many more people would have a degree?

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Although many Americans are under the impression that higher education is "free" most everywhere outside the US, the fact is only a handful of countries offer tuition-free college. Among large countries with more than ten million people, only France and Germany qualify as "tuition-free."1 Meanwhile, Japan, Australia, Britain, and Canada all require significant out-of-pocket payments from students. (Moreover, once we get into medium-income countries, it's important to consider the costs shown above with the local median income. In Mexico, for example, the $8,020 price tag shown here is more than 175% of the median income in Mexico.)

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But do lower college fees translate into higher graduation rates, and more education? Well, we find that the countries with higher proportions of college graduates tend to be countries with higher college costs for students. Japan, Canada, the US, and Britain are all among the most expensive countries in terms of net cost. Yet, these countries all have higher incidence of college completion among residents.
Meanwhile, in France and Germany, the countries with "free" education, the incidence of college completion is much lower

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But how can this be? After all, pundits and politicians often tell us that higher education is open to all in most of the "industrialized world," and at a very low price.

The problem with this reasoning — and a clue as to why college-completion is lower in the "no-tuition" countries — can be found in the inherent conflict between the two phrases "open to all" and "at a very low price."

In the real world, no scarce resource can be both open to all, and also very inexpensive. So, when it comes to higher education in places where institutions are mostly government-controlled, and ultra-low-tuition is mandated, the government must also intervene to restrict access to higher education, and to keep costs low through other means.

These methods include: Restrict access to higher education through testing and other gate-keeping strategies. Lower "customer service" quality with larger class sizes and fewer amenities.

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