What if College Were Free? Comparing the Danish and American systems of higher education

“Oh, SU? That’s just the money we get every month for being students,” Rasmus, a Roskilde University humanities student, explains to me nonchalantly at the StudenterHusset in Copenhagen. Both he and his friend Nicolaj are in their second year of university in Denmark, where, yes, they get money each month for being a student. Neither one of them can quite grasp how incredible I find this concept.

“Why, how much do you pay?” they ask me nonchalantly. So I tell them how much American University costs. Their eyes bug out, and they both burst out something unprintable.

I try to picture my life without student loans every time I get into a conversation about higher education with Danish students. Not being indebted to an increasingly complex combination of the government, my parents, my grandparents, and non-profits who provide scholarships. Not feeling like there is a small rodent burrowing deep into my gut every time I think of the nearly $200,000 I will have spent at American University by the time I graduate.

In fact, I try to go even further. I try to imagine being paid to go to school. A stipend that automatically gets put into my account every month simply because I am a student. A life without worry I won’t have enough money for my portion of the rent this month. Or the bone-crushing guilt I feel whenever my parents give me money.

I strain my brain, trying to imagine what I would be like without the worry and the guilt that I’m always trying not to think about. But, I can’t. Because I’ve grown up worrying about paying for school. Worry and guilt have been my reality for too long. Not having either sounds like a fantastical, carefree wonderland where all the students are there for the pure joy of learning and no one feels indebted to anyone at all.

But for Danish students, my wonderland is their reality. Kind of. Danish students are, according to the Danish State Education department, “entitled to public support for his or her further education — regardless of social standing.” The Danes are incredibly committed to this idea. Not only is tuition at all public and most private universities free, students are given support for their living costs in the form of a monthly grant called Statens Uddannelsesstøtte, or SU.

But both Rasmus and Nicolaj both politely disagree with me when I tell them how much I wish that my school were free, the way theirs is.

“Well, it’s not really free,” Nicolaj tries to tell me. “I mean, it is. But we pay taxes.” What he means though is that he and Rasmus will pay taxes eventually, after they have finished their education and gotten jobs. In fact, they’ll pay some of the highest taxes in the world. Paying these future taxes is how the Danes will pay for their current education. It’s a tradeoff.

They don’t describe any of the worry and the guilt I feel. But they do tell me that they are in school to get jobs. That they worry those jobs won’t necessarily make them as much as they’d like, while simultaneously worrying that they’ll end up in a job they hate which makes a lot of money. That they look at school as something they are doing now that they will pay for later.

They’re both surprised at the similarities as well. Nicolaj is visibly taken aback when I tell him that it’s pretty common for American students to skip class.

“Doesn’t each class cost you a lot of money?” he wants to know.

“Well…” I try to explain. Yes, each class costs me money. Yes, at the beginning of every semester I re-calculate how much each class costs and vow to myself that I will not skip a single one this semester. Yes I always end up skipping a few.

Rasmus and Nicolaj do the exact same thing. No, they don’t think about how much each class costs. But at the beginning of the semester, they always think about how other people’s taxes pay for them to be here and how they should not skip any classes. And they always end up skipping a few.

While at first glance, they seem like complete opposites, it turns out the American system does not feel that different than the Danish system. Both of them involve educating yourself and paying for it later. Both of them involve the government gaining revenue from the people it educates. Both involve a trade off.

There is a huge, stark, glaring difference though. The Danish system involves the government gaining revenue later from the people it educates now in a progressive way. The American system involves the government gaining revenue later from the people it educates now in a regressive way.

A progressive tax, according to Harvard economist Gregory Mankiw, is a tax where the high income earners pay a higher rate than the low income earners. A regressive tax, on the other hand, is a tax where the low income earners pay a higher rate than the high income earners.

The US system of funding higher education functions as a regressive tax. Yes, paying taxes isn’t the same thing as paying for school. But the systems end up feeling remarkably similar to the pocketbooks of those involved. High income students take out less, or no, student loans and have to pay back less interest. Low income students take out more loans and have to pay back more. And, according to the most recent CBO calculations, that earns the government $127 billion in revenue over the next ten years.

There are two main purposes of regressive taxes. The first is to assign tax distribution based on consumption, most commonly in the form of a sales tax. The more you buy, the more you pay. But that benefit doesn’t really exist for higher education — one student doesn’t usually consume more education than another if they are both getting bachelor’s degrees. The second is to foster desirable economic behavior, such as a tax on cigarettes or alcohol. But this benefit doesn’t exist for higher education either. Getting educated is a desirable economic behavior. Having money each month to spend on goods, instead of paying back the government, is also a desirable economic behavior.

The Danes, for the most part, look at their education the same way that Americans do: an investment for the future, a way to grow as a person, a way to ensure employment. But most of all, just like Americans, they don’t see their education as free.

If college were free, it wouldn’t really be free. As students, we would still pay for it later. But, as a society, we’d pay for it in a progressive way. A way that was fair and economically efficient.