Only 1.4% of Free College Spending Would Go to Children of Millionaires and Billionaires

Here’s an argument you hear often brought up against free college. “Instead of providing free college tuition for the children of millionaires and billionaires…”

Fair enough. But how much of the money spent on free public college tuition would actually go to the children of millionaires and billionaires? A lot, or a little? The rich are more likely to go to college than everyone else, but don’t they go to fancy private schools usually?

Lucky for us Raj Chetty’s Equality of Opportunity Project had a great paper about college and mobility using tax data, Mobility Report Cards: The Role of Colleges in Intergenerational Mobility (Chetty, Friedman, Saez, Turner, Yagan). They were kind enough put data aggregates by college online that anyone can access.

This data has a list of some 2,200 colleges, and for each college they have their tiered rankings, their number of students, the number of students whose parents are in the top 1 percent of incomes, and the sticker price of their tuition. This isn’t perfect, but with some quick multiplication we can make a guesstimate of how much of free college would benefit millionaires and billionaires.

(PRELIMINARY disclaimer: For those born in 1991, at college age their parents would make $630,500, so this data will include more rich people than just millionaires and billionaires. My working assumption is that this data undercounts public attendance. Both would bias in favor of over-representing millionaires and billionaires in the answer. I exclude for-profits, as I think many are missing and the rich are very unlikely to attend them in this data. Also exclude those not attending college. The data itself is slightly randomized since it is tax data, though their methods prevent randomized errors. Again, this is just a quick acid test.)

First, compared to the rest of the population, the rich are more likely to attend elite, private schools.

7.6 percent of students who are the children of millionaires and billionaires are off to Ivy League Plus schools, compared to just 0.75 percent of everyone else off to college. Since free public college doesn’t cover those schools, that’s not an issue to worry about.

What about from the institution side? Checking, if you look at the public schools and private schools they have data for, 1 percent of public higher education students come from the top 1 percent. Compare that to the 4.8 percent of private higher education students that come from the top 1 percent.

So what about spending? This isn’t an easy question, but to get a quick answer, I multiply the sticker price of tuition with the number of students at each public colleges to get total spending. I then do the same for the number of 1 percent students attending to get elite spending. I then divide the latter by the former. The answer is 1.4 percent.

1.4 percent of the total spending of free public higher education would benefit these students who parents are in the top 1 percent. That’s 98.6 percent for everyone else.

The entire cost of free college will be paid for by the rich, whether it’s Bernie Sanders’s financial transaction tax or Elizabeth Warren’s wealth tax or many other options. It is true that the rich will recoup 1.4 percent of that, but that seems like a worthwhile tradeoff.