Instead of Tuition-Free Community College, Paper Calls for Outcome-Based Funding

By Owen Daugherty, NASFAA Staff Reporter

As Congress works to pass legislation that would make community college tuition free for all, some are taking issue with the funding mechanisms being used and the total price tag of such a plan, instead presenting other ideas to make community college more affordable and accessible.

In a recently published paper outlining a “better alternative” to free community college, Preston Cooper, a research fellow at the Foundation for Research on Equal Opportunity (FREOPP), argues the federal government should funnel money to community colleges that ensure students have positive outcomes.

Cooper points to the fact that — due the availability of federal, state, and institutional aid — tuition at community college is relatively inexpensive, with only about 1 in 5 students borrowing to attend and therefore “a blanket federal subsidy with little regard for quality differences between institutions and programs” makes little sense and is not the best allocation of resources.

“The scheme might improve access to community college — but if so many students fail to graduate or realize economic gains from their education, what is broader access really worth?” the paper asserts.

Currently, congressional Democrats are advancing a plan that would make community college tuition free through a federal-state partnership. Under the partnership, the federal government would foot the entire bill for the first year, with participating states being required to contribute 5% of the cost for each year until 2027-28, the last year of the program in the legislation, at which point the federal government will cover 80% of the grant and states will cover the remaining 20%.

The federal share of state grants would be determined on a per-student basis, based on full-time equivalent enrollment, equal to the nationwide median community college resident tuition and fees, not weighted for enrollment, for each eligible student enrolled in community college in that state, and would be increased annually based on the lesser of the estimated Consumer Price Index (CPI) increase or 3%.

The Democrats’ proposal advanced out of the House Committee on Education and Labor earlier this month and now moves on to the House Budget Committee for the next step in the reconciliation process.

Cooper suggests instead of a one-size-fits-all approach to tuition-free community college, in which certain states could opt-out entirely, the federal government should instead award community colleges funds directly depending on their students’ success after graduation.

For example, he recommends giving community colleges $6,600 for every one of their graduates who earns more than $45,000 three years after finishing school.

“The system would create a powerful financial incentive for community colleges to scale up those programs that show strong financial returns — and perhaps close ones which aren’t worth students’ time,” Cooper posits.

The $6,600 figure comes from an analysis from the Urban Institute that found the Democrats’ plan would give states roughly that much per student every two years to make community college free. The $45,000 threshold is used because it is about $10,000 above the median earnings of a young adult with only a high school degree, hence Cooper asserting that community colleges which help graduates achieve at least $45,000 in earnings are “almost certainly creating real economic value for their graduates” and therefore should be rewarded with federal funds.

The paper adds that community colleges, and in turn federal dollars, should be focused on programs that yield median earnings above $45,000, noting that most of those existing community college programs are in the health care sector.

“Modest tuition fees in exchange for an economic payoff is a much better deal than zero tuition for a program with no financial value,” Cooper concludes. “Broader access to community college means little unless the economic value of the education is assured.”


Publication Date: 9/23/2021

Jesse H | 9/24/2021 9:57:36 AM

This foolish proposal completely ignores a central challenge that community colleges face that gives us trouble up and down in higher education compared to our university counterparts: open admissions and our inability to "pick" our students. Some of America's brightest students start at community colleges, but we also have plenty who sign up for classes with good intentions but either their situation or their ability puts enormous hurdles in the way of their graduation. We take *everybody*, which is both the beautiful and the challenging part of this environment. Just as holding Local Community College to the same CDR rules as Yale and Harvard doesn't make sense, neither does this. The only thing this proposed system would incentivize is dishonest number-crunching and for community colleges to try to find some way to keep students who have lots of academic challenges out, which is completely antithetical to the function of affordable education and social uplift we are designed to champion.

David S | 9/23/2021 2:57:26 PM

Again, the value of education defined in monetary terms. Unacceptable. No college has any control whatsoever over the amount a graduate will make in their first job or any subsequent job (and is his $45K figure a starting salary, at which point most are at their lowest earning potential?). And no legit college promises alum will earn x dollars.

This paper displays a knowledge of cost without a knowledge of value. There are more important things in the world than money.

Raymond G | 9/23/2021 11:55:02 AM

Out come based funding is the right direction. Too many schools have programs that are only their to attract students. There to keep faculty employed. They do not translate in actual job attainment for the students. Thus students are left with debt, reached their Pell LEU and/or MTF. Having free college but allowing schools to continue offering programs that don't benefit the student and the community is irresponsible.

Linda S | 9/23/2021 9:57:56 AM

"Cooper suggests instead of a one-size-fits-all approach to tuition-free community college, in which certain states could opt-out entirely, the federal government should instead award community colleges funds directly depending on their students’ success after graduation."

DEFINE SUCCESS and POSITIVE OUTCOMES...Is it just graduating? Is it how much they ultimately will make in terms of income - as defined below? What data will be used to define these terms? Because, then there is (see comment below)...


"For example, he recommends giving community colleges $6,600 for every one of their graduates who earns more than $45,000 three years after finishing school."

See, this is not a well thought out plan (I read the article as well) because who will actually track the career progress of the students through the next three years? Will it be a new administrative office or position? How much will need to be spent? Do you only track the students who have the potential to make this type of money or do you track ALL graduates? What can CCs do to actually increase the grad number to obtain these funds (which so many CCS work hard to increase already)? What about those who transfer to a 4-year college (some will graduate and some transfer before that) - they probably won't be making ANY money for at least 2 years but may "succeed" in graduating elsewhere. What about p/t students who take longer to finish their program?

How about this suggestion - Focus on student goal creation and accomplishment (AKA success advising/mentoring) and financial literacy. In my experience, these are the real "success" killers - lack of financial education, lack of direction. And if making Community college free so that more students can have access to this advising/mentoring then all the better. These skills translate though life so communities will be better in the long run.

Just my HO.

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