Georgetown report analyzes ‘dollars and sense’ of free-college plans

A new analysis from Georgetown University’s Center on Education and the Workforce (CEW) looks at the costs of several common free-college proposals, including the plan put forth by Democratic presidential nominee and Former Vice President Joe Biden, finding that Biden’s plan would pay for itself within a decade.

Seeking to remove financial obstacles to postsecondary education, at least 15 states and more than 200 localities have already launched some form of free college. The CEW notes that tuition and fees at public four-year colleges have far outpaced the median family income—growing 19 times faster—in the last four decades amid state and federal disinvestment in higher education.

By increasing college access, free college programs can help drive economic mobility, address persistent racial and economic inequalities, and reach populations who otherwise would have been too wary of debt to pursue a degree, the CEW says. In addition, clearing the path to college would increase the number of workers with college degrees, boosting earnings, and ultimately generating more tax revenue. 

Free college isn’t free—but it can pay for itself

The new report analyzes the relative costs and benefits of several free-college models, taking into account who would qualify, which expenses would be covered, and how that could increase the nation’s earnings and tax revenue.

For instance, under the free-college plan endorsed by Biden, all U.S. students could attend public community colleges and historically Black colleges and universities tuition-free. Other four-year public colleges and universities would be tuition-free for students whose families make less than $125,000 a year—about 80 percent of in-state undergraduate students.  

Notably, Biden’s plan is a “first-dollar” model, meaning that it would fully cover tuition before applying students’ other federal and state financial aid. Those aid dollars could then be used to cover expenses beyond tuition, known to account for 60–80 percent of the total cost of public college attendance.

CEW estimates that Biden’s proposal would cost $49.6 billion in its first year, with the federal government covering two-thirds of the cost, and the states paying the rest. CEW notes that a plan with no income cap at all would cost $8.6 billion more in the first year. 

Factoring in the implementation year and the subsequent decade, Biden’s plan would cost $683.1 billion. However, the amount of tax revenue associated with the increase in college attainment would exceed the program’s cost within 10 years—it would pay for itself, the CEW concludes.  

Comparing other models

CEW also looks at so-called “last-dollar” free-tuition programs, in which the government pays for any tuition that remains after applying students’ federal, state, and local financial aid. These tend to cost less than a first-dollar model and thus are more common. 

Related: Is the free college movement losing momentum? >

While noting that this approach may be “more politically or financially feasible,” at a cost of $27.8 billion in its first year, CEW points out that it “may not be sufficiently generous to adequately help low-income students who need additional funding to cover living costs during college.” 

Just 13 percent of funds in a last-dollar model would reach students whose families are in the bottom income quartile; under Biden’s first-dollar, income-capped plan, 29 percent of funds would go to the lowest-income students. Biden’s approach, CEW says, is “more generous and more likely to equitably benefit low-income students and students of color.” 

An even more generous model, CEW says, would have the federal and state funding cover all costs of attendance—including transportation, course materials, and room and board—allowing students to graduate without any loan debt. That “debt-free” model would cost around $75 billion in its first year, the researchers estimate. 

Not ‘whether’ or ‘when,’ but ‘what kind of program’

A postsecondary education is increasingly a prerequisite for having a “good” job and reaching the middle class, the CEW researchers say, declaring that “the time for free college has come.” “The question,” the researchers write, “may no longer be whether or when we should make college free, but what kind of free-college program we should adopt.”

In addition to considering which criteria to apply, and thus which students a program will support, policymakers will need to prioritize accountability and transparency. Meanwhile, public colleges and universities—which stand to see enrollment increase by 6-14 percent with free-college incentives—will need to expand their support staff and services. 

“The infrastructure that is needed to support any group of students is the constant work of an institution itself,” Dr. Berenecea Johnson Eanes, president of York College, a four-year institution in the City University of New York (CUNY) system, told Diverse Issues in Higher Education. “Based on your enrollment, based on how your demographics change, based on how your curriculum changes, it is an ever-changing piece of the work.”

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