I’m not sure what the effect may be, but this, from Melissa Korn in the Wall Street Journal, is certainly interesting in light of Democrat Governor Gina Raimondo’s vote-buying move to force Rhode Island taxpayers to cover two years of college in public institutions of higher education:
Small, private colleges have found a new place to troll for prospective students: At community colleges down the road, or even across the country.
Private colleges regularly discount listed tuition rates, often by more than 50%, to appeal to students, though extreme price cuts can lead to further financial stress. In shifting some aid money to transfer students who would otherwise go to public four-year schools, the private institutions are betting they can win over cost-conscious prospects and book at least a few years of enrollment at small margins, which they say is better than none at all.
One could suggest that government’s providing a free college option would drive down the prices of private-sector competitors, but one suspects the more-likely effect will be to drive them out of business. It isn’t easy to compete with “free.”
If I had to bet, I’d predict that moving higher education toward the public education near-monopoly approach we see in lower-order grades will, at first, put a lot of private schools out of business, preserving mainly those that serve as markers of social class for wealthy Americans or offer unique curricula. Then, down the road, as we’ve seen with elementary and secondary schools, as higher ed increasingly follows the government model (rather than being an area in which the government attempts to generally follow a private-sector model), the quality will collapse, and demand will increase to provide subsidies to private colleges and universities as a matter of equity.