Though the worst of the pandemic may be behind us, students and families are still feeling the financial burden when it comes to paying for college, as inflation has impacted the cost of groceries, rent, and other living expenses. Just this month, Federal Reserve Chairman Jerome Powell told Congress interest rates are “likely to be higher” than previously anticipated in order to curb rising inflation.
However, some are seeing relief as their institutions — in states from New Jersey to California — move forward with free tuition programs and other financial aid initiatives intended to reduce or eliminate unmet need for students from low-income families.
Stanford University announced in February that students whose annual family income is less than $100,000 won’t have to pay for tuition, room, or board. However, the university also announced that it was raising tuition by 7% for the upcoming academic year, bringing the total sticker price to $82,000 a year, including room and board. The university cited the effects of high inflation on the cost of university operations for the price increase.
Carlo Salerno, an education economist, said there hasn't been a nationwide effort to create institutional free tuition programs for low-income students, in part because programs like the one Stanford has are expensive.
“By the time low-income students get into college, just giving them the money to get into college isn't enough,” Salerno said. “The problem low-income students have is that they typically come from poor high schools and they typically come from places where they don't have as many technological resources. They need more to succeed than your typical wealthy students and they're expensive. So it's really hard for colleges to enroll lots of low-income students, because it's just simply more expensive to get them through the pipeline.”
Salerno notes that he wants more institutions to create free tuition programs, but it's hard for a lot of institutions to do so without support from the federal and state governments, such as allocated funding or doubling the maximum federal Pell Grant. Even so, several institutions in the last year have come forward with new initiatives to help reduce unmet need.
The University of Maryland in October announced the creation of the Terrapin Commitment, a $20 million annual grant program intended to reduce unmet need, and specifically to cover tuition and fees for Pell Grant-eligible in-state students who are attending full-time. As of January, the University of Maryland will pay the difference if an eligible student’s funding sources, including scholarships, grants, and the expected family contribution, fall below tuition and fees.
In New Jersey, Rutgers University announced last spring that its three campuses — Rutgers-New Brunswick, Rutgers-Newark and Rutgers-Camden — will offer undergraduate financial aid programs to guarantee free tuition and mandatory fees for students in families with an adjusted gross income below $65,000 and provide for significantly reduced tuition and fees for those in families that earn between $65,000 and $100,000.
Meanwhile, Princeton University in September last year announced an expansion to its financial aid program for low-income students. The new policy, which goes into effect in the fall, means most families whose annual income is less than $100,000 will pay nothing for tuition and room and board, which is up from the previous $65,000 annual income level. According to Princeton, around 1,500 undergraduates are expected to receive this level of aid, which is more than 25% of the undergraduate student body.
Despite the recent expansion of these types of programs, experts argue that they often don’t go far enough.
Edward Conroy, senior policy advisor at New America, in an article for Forbes argued that while Princeton University’s announcement is admirable, few students will benefit from the expanded aid since Princeton and other affluent schools are mainly made of students who have significant wealth.
As The New York Times reports, some Ivy League institutions — including Princeton, Dartmouth, Brown, Yale, and the University of Pennsylvania — enroll more students from the top 1% than the bottom 60%. However, other elite institutions do enroll a higher percentage of low- and middle-income students, such as the University of California, Los Angeles, Emory University, Barnard College, and more.
“Free tuition only helps if you can get in,” Danny Yagan, an assistant professor of economics at the University of California, Berkeley, said in the Times article.
In an interview with NASFAA, Conroy said it is great when an institution covers tuition, but most Ivy League schools do not have a student body that looks like a representative slice of the broader college-going population.
“I do think that if you're an institution that has the kind of resources where it's very achievable to make your institution free for students who come from families earning less than $60,000, $80,000, or $100,000, you also have a responsibility to work hard to bring in a class that looks like college students more broadly,” Conroy said. “And this is also very possible.”
Conroy notes that Ivy League institutions get a lot of media attention for their generous financial aid policies, which is why it's so important that those schools advocate for other institutions that don’t share the same amount of wealth and resources.
“I think it's incumbent upon institutions like that to do as much, if not more, than their public counterparts, their community college counterparts, their public regionals, who have very limited resources to advocate for more support for higher education,” Conroy said. “Princeton is going to be fine regardless of what happens to financial aid policies in this country. But there are plenty of institutions that really continue to have to stretch dollars to support students as much as they can when they enroll student bodies that look much more representative of college students overall.”
Salerno said free tuition programs can be funded differently depending on the institution. For example, private institutions like Princeton can fully fund such a program themselves, and students can use their federal aid, such as Pell Grants, to cover other expenses. But at public institutions, there is a mixed bag of support and it’s more often the case that the institution isn’t fully fronting the cost, but covering a gap in a student’s funding.
“It's a continual pattern that we've seen with institutions and states that try to make college more affordable — is that there's limited dollars,” Salerno said. “And so they have to figure out a way to stretch those dollars over as many people as possible, and in doing so may end up creating programs that feel free, because they're never really as comprehensive as we want them to be.”
Robert Kelchen, professor and head of the Department of Educational Leadership and Policy Studies at the University of Tennessee, Knoxville, said free tuition programs at private institutions are usually mostly funded through institutional funds, though some parts could be funded through federal and state aid.
“For public institutions, tuition is much lower and the maximum state grant plus the maximum Pell Grant often covers most of tuition and then they'll find resources to cover the rest,” Kelchen said. “For publics, it's a relatively low-cost thing for them to do for students who are also getting Pell Grants.”
Salerno notes that for most students, the big challenge in paying for college today isn't tuition and fees, but rather paying for living expenses. Low-income students need subsidies for basic needs, such as rent, utilities, car and transportation needs, food, and more, he adds.
“In-state public tuition can be remarkably affordable,” Salerno said. “And between the Pell Grant and between most state grant programs, the cost of tuition and fees can be driven down. … The real trick is how do you help a low-income student succeed in college, and how do you help them because they don't have the resources to not be employed while as a student?”
Salerno said ideally institutions would be able to fully fund free tuition programs for low-income students. However, like Conroy, he said that it simply isn’t possible for many schools.
“This is what we wish for,” Salerno said. “You find this balancing act where we have an ideal sense, but we just don't have enough Princetons in the world to do what we want to do.”
As for whether these institutional programs are effective in helping students graduate, it depends.
Kelchen said at Princeton University and other highly selective private institutions, those students are extremely likely to graduate anyway. He adds that for big public institutions, the ability to communicate to low-income students that their tuition may be covered through Pell Grants or other state and federal aid can help them enroll and graduate those students.
“It's really hard to say if they would be effective,” Kelchen said. “For the big public universities, I think there's a much higher likelihood of them being effective because in part this can help market the universities to students, so [students] know that it's affordable, even if it doesn't cost the university any money to do it.
Regardless, it’s unlikely that institutional free tuition programs are reaching enough students, Kelchen said.
“In this economic environment, it is challenging to get students to go to college,” Kelchen said. “And then it can also be difficult to spread that message of, if you get in, it's free. But as more big public universities go down this path, I'm hopeful that the message will get spread more.”
Publication Date: 3/20/2023