Is Free Education Really Free?

By Tisa Silver | July 23, 2010 AAA
Is Free Education Really Free?

According to the College Board, college costs in the United States are on the rise. From the 1999-2000 academic year to the 2009-2010 academic year, on average the published tuition and fees at public four-year colleges and universities increased by 4.9% each year above and beyond general inflation.

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For the 2009-2010 academic year, published in-state tuition and fees at public four-year institutions rose 6.5% from the previous academic year to $7,020. Tuition and fees for out-of-state students displayed a similar trend, rising approximately 6.2% to $18,548.

With stats like these, it may be hard to believe that in some countries you can still be educated for free. Countries offering a free education include Sweden, Cuba, Brazil, Argentina, Norway, Finland, Chile and Denmark.

In order for something as valuable as higher education to be provided for free, the cost has to be recovered from somewhere. Here are some of the potential drawbacks of having a free education.

Don't Forget the Other Costs
Some countries waive tuition, but have fees and other costs including books and materials, food, housing and transportation. For instance, in Ireland, tuition is free for undergraduate courses longer than two years, but average fees (registration, administrative, etc.) can be in the neighborhood of 1,500 euros.

In Argentina, many students have jobs, some full-time, while attending college to cover their other expenses. The jobs provide income and experience, but can also make for a difficult balancing act between education and work.

Sweden, on the other hand, actually provides students with a monthly allowance to cover such costs. (For some helpful tips for college budgeting, check out A Foolproof Budget Plan For Textbooks.)

High Taxes
When comparing tax rates by country (as calculated by total tax revenue as a percentage of GDP) it is no surprise that several of these countries are near the top of the list. In fact, Denmark, Sweden, Cuba, Finland and Norway are five of the top ten countries.

For instance, in Sweden, tax revenue funds studies at the university level. Estimates place the top income tax rate in Sweden at approximately 57%. According to the Swedish National Agency for Higher Education, in 2008, the higher education institutions brought in approximately SEK 50.1 billion in revenue.

Quality of Education
According to the Times Higher Education - QS World University Rankings, Ireland is the only nation on this list with a school that ranks within the top fifty universities. Trinity College of Dublin was the highest ranking university from a country that provides tuition free education; Trinity tied with Osaka University for the #43 spot on the annual list.

The top 16 spots are all held by schools in the United States and the United Kingdom, two of the most expensive countries when it comes to pursuing higher education. (For more, see Pay For College Without Selling A Kidney.)

Cost of Living
Oslo, Norway (home to the University of Oslo) has one of the world's highest costs of living, with an estimated cost of living index of 152.85. New York City is the base of the index, so Norway has a CPI that is 52.85% higher than that of New York City. Copenhagan, Denmark also ranks high with a CPI of 138.91, while Dublin, Ireland and Helsinki, Finland came in with CPIs of 120.79 and 113.91 respectively. (To learn more, see Economic Indicators: Consumer Price Index (CPI).)

The Bottom Line
The benefits of a free education are undeniable, but there is no such thing as a free lunch. Having the burden of tuition removed, is a huge benefit which may be offset by non-educational costs. Remember to consider other costs before heading abroad to further your education.

Catch up on your financial news; read Water Cooler Finance: Goldman Fined, Financial Fixes And Apple's "Apology".

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