Free College Sounds Good, But Is It the Best Idea? New Report Highlights Alternatives

Related Topics in the Ref Desk: Pell Grant

By Owen Daugherty, NASFAA Staff Reporter

While free college programs are proliferating across the country and President Joe Biden hopes to implement one at the federal level making community college tuition-free for all, a new report published from public policy-focused think tank Third Way suggests there are more viable alternatives to provide an affordable path to a higher education than the slogan-friendly free college concept.

Authors David Feldman, a professor of economics at William & Mary, and Christopher Marsicano, an assistant professor of educational studies and public policy at Davidson College, argue that free college creates a landscape of winners and losers among states based on their spending and investment in higher education — and policymakers should instead look to other avenues to support students. 

“Behind the bumper sticker, free college is rife with implementation, efficacy, and equity issues,” the report states. “Over time, free college programs may further erode the resources available to the nation’s most under-resourced institutions.”

The authors note that instead of a blanket free college proposal, giving states that invest in their own higher education systems a block grant and subsidizing nonprofit institutions that demonstrate a history of supporting low-income students will better reward those trying to ensure access and success for low-income students.

“A targeted, multi-faceted strategy has a greater chance of succeeding in politically volatile times, and offers future generations of students the nuanced, long-term college affordability compact they deserve,” the report adds.

One of President Biden’s higher education priorities is to make two years of community college tuition-free for all, regardless of income. His American Families Plan calls for $109 billion in funding for two years of free community college tuition to ensure “every student has the ability to obtain a degree or certificate” and $80 billion for the federal Pell Grant program to increase the maximum award by $1,400 from the current maximum of $6,495.

Further, the $1,400 increase to the maximum Pell Grant will serve as a “down payment” on Biden’s campaign commitment to double the maximum award.

The report from Third Way notes that while a free college program would finance higher education for all students, a more targeted approach through investing in the Pell Grant could be more effective since it expands access to higher education for those most in need without subsidizing a degree for wealthy students. 

“As a first-dollar program, any Pell money a student receives above tuition charged can be used to cover other costs of attendance—which include tuition, room and board charges, books, and other expenses,” the report states. “This is an especially important feature for low-income students who attend low-tuition community colleges and regional public universities and for whom non-tuition costs are often the main barrier to accessing the higher education system.”

Since a student’s Pell Grant is awarded to them and not the institution, the report argues it is a better option to fund as opposed to free college considering the limited resources available and the fraught politics surrounding free college proposals. 

“Because of these divides, building a coalition to pass a free college proposal out of Congress may require an impossible degree of bipartisanship,” the authors predict. 

Investing in the federal Pell Grant program has been far more palatable for members of Congress and is seen as an issue with bipartisan support, hence the report’s suggestion to instead target resources there. 

Additionally, the report calls for the federal government to establish partnerships with states that reward states that have invested in higher education.

Under a federal free college plan, factors such as demographics in each state and the varying degree to which states invest in higher education would create an uneven playing field of winners and losers. 

“A good federal-state partnership proposal would instead reward states that currently behave well, while encouraging those that currently put very few resources into public higher education to do more,” the report states.

The authors suggest creating a threshold of a certain amount appropriated per full-time student. If a state's funding of higher education reaches that marker, it would be eligible for a federal grant, with additional incentives made available by the federal government to help states transition from low appropriation levels to higher ones.

In any partnership program Congress develops to work with states, the report calls for including the following: a requirement that states that participate not reduce current higher education appropriations once the federal money is allocated; federal money in the form of block grants so states can determine the best use of the funds; and safe harbor provisions to allow states to temporarily set aside rules like the maintenance of effort provisions during times of economic downturn.

At the institutional level, the report notes the federal government could help under-resourced schools by offering a Pell Grant top-off subsidy that nonprofit institutions could add to their operating budgets. The subsidy would be based on the number of Pell dollars the school takes in — not the number of Pell students enrolled.

Lastly, with new federal money going to states and schools, the report highlights the need for accountability measures to be in place to ensure quality outcomes for students. Potential measures put forward in the report include increased risk-sharing so institutions are on the hook if a borrower who attended the school went into default on their loans, and restricting financial aid at institutions with low graduation rates and poor records of ensuring their students can repay loan balances once they graduate.

“Complex policy problems deserve nuanced solutions. While ‘free college’ may fit on a bumper sticker, the alternative proposals offered here represent a more progressive and efficient approach to addressing longstanding issues of access—and keep students with the greatest need at the center of the conversation on college affordability,” the report concludes. 


Publication Date: 7/28/2021

James C | 7/28/2021 8:31:26 AM

What percentage of community college students actually pay tuition and fees today? My guess is a minority of students, given the low tuition and high percentage of Pell recipients. This whole idea of free college stems from the loan indebtedness issue. Focus on reforming loans. 1) Increase stafford eligibility so students don't have to borrow as much from private loans 2) lower the current bloated interest rates on all stafford loans 3) Automatically enroll all students in an easy to understand income based repayment plan with forgiveness after xx number of years 4) Enforce sanctions for schools with high default rates, regardless of sector.

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