Governments should offer a free university education to any student who has been admitted to a university but who cannot afford the tuition

The proposed policy, requiring governments to fully pay for college tuition for students that have been admitted and can’t financially afford it rotates around the idea that Education, especially higher education, plays a fundamental role in the long-term wealth of a country. A country that invests in its own young citizens and in the development of their skills is a country that invests in the development of its future supply of services with high profit margins. Surely, the cause is honorable and the obligation that a government would carry out by following the stated policy would be beneficial, but let’s not forget that resource constraint exist when implementing such radical decision.
There is no doubt that deserving students that have talent and want to cultivate it with dreams of a better life for themselves and their families must be helped by their own country. At the end of the day, that’s the reason why the field of economics exsts: to optimally manage resources in order to maximize the well-being of the actors of one economy. There have also been many examples of students with great talent but poor economic conditions. Ramanujan, a mathematical prodigy from India, was granted a scholarship to study and research Mathematics at Cabridge in the United Kingdom, because talent must be found and cultivated for the overall improvement of society.
It is also true that financial help from the government will inevitably create an implicit system of incentives for students to study and work hard to get into college, without having to think too much about the financial limits of his family, an extrinsic force that the student cannot fully control. Additionally, a government is free to monetize its budget deficit if that requires issuance of money to finance a surge in university entries from students uncapable of paying for their tuition.
On the other hand, it should be considered that this freedom of monetization of the government deficit finds limits itself. A country may find itself in a debt trap where it cannot afford further accretion of financial obligations. Furthermore, monetization through issuance of money from the national Central Bank may lead to serious problems of inflation in the long-run, assuming that the country is not already in that condition. The problem of being constraint in terms of resources increases whenever a country’s universities find themselves at the top of the global ranks. The U.S. provides some of the best services in terms of superior education with well-known universities such as Harvard, MIT, Princeton and many more. Such pool of successful colleges would not only attract domestic citizens but also international students, determining an impressive surge of demand at points where a government cannot face it through an increase in its fiscal balance.
In addition, each university has different entry requirements for students. Some are looser than others and it may cause a diversion of funds against students that because of superior talent or harder work succeeded in sequiring a position in a superior university where entry percentages remain below 4%. In that case a government may want to pose a limit to its financing abilities and further introduce a merit based process where both a student’s financial conditions and its skills are evaluated.
Lastly, a government may actually decide to not intervene directly but through the use of national banks and national providers of student loans which are better set to analyze the risk profile of each student when submitting a loan request. A government may kick in by subsidizing those loans in such a way that students will have to pay lower interest rates and will have flexibility in choosing refinancing programs.
In conclusion, allowing students with poor financial needs to pursue their dreams is inevitably a duty that a government must take on their shoulders but a system where the government unconditionally pays for college tuition for every student admitted in a university will result in inefficiencies and disincentives in the long-term. That’s way a merit based system should also be considered in the process because in reality each student will provide for a specific case that must be studied and evaluated on its own.