Statewide tuition-free college programs, also known as “college promise” programs, don’t necessarily help students from the lowest-income households complete college or cover its true cost when they are structured to pay only the tuition and fees that remain after state and federal aid has been applied, says The Hechinger Report. Most states’ free college efforts fall into this category of so-called ‘last-dollar’ scholarships.
Because Pell Grants typically cover the cost of community college—and because most promise programs cover only tuition and fees—many Pell Grant-recipients from low-income families end up ineligible to receive any money from last-dollar college promise programs.
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Advocates of the last-dollar approach say it spreads money to more people, especially students from middle- and high-income households who may be ineligible for federal and state grant aid, according to The Hechinger Report. However, because students from those income brackets are already more likely to attend college, last-dollar programs don’t increase college access, The Brookings Institution points out.
First-dollar models delivering more relief
A few states are now implementing ‘first-dollar’ programs, which allow low-income students to use the state promise funds to cover their tuition and fees, then apply Pell Grants and other federal aid for other college costs. Stacking need-based state and federal grants on top of first-dollar scholarships enables low-income students to cover not only tuition or fees but also living expenses, books, transportation, and other educational supplies, which account for about 80% of the cost of attending community college, according to researchers at the University of Wisconsin-Madison.
First-dollar programs are more equitable but are at least twice as expensive to implement as last-dollar scholarships, experts say. “All things being equal we prefer first-dollar programs” Ryan Morgan, chief executive of the Campaign for Free College Tuition, tells The Hechinger Report. However, last-dollar programs enjoy more bipartisan support, he says. “There are political realities to paying for students’ meals and housing.”
Exploring alternative models
The Hechinger Report notes that last fall, New Mexico launched a “middle-dollar” scholarship program called Opportunity Scholarship, described as one of the most generous such programs in the country. Utilizing a middle-dollar model, Opportunity Scholarships kick in before federal aid is applied but after other state aid is used. This approach allows students to stack federal financial aid on top of Opportunity Scholarships to cover basic needs beyond tuition and fees, officials say.
To better respond to the needs of low-income students, some states with last-dollar promise programs are now giving students who have already used their Pell Grants for tuition and fees an additional grant that helps them afford books and other necessities. Oregon, for example, awards eligible students a minimum scholarship of $2,000.