The voices of Urban Institute's researchers and staff
January 22, 2015

Four important considerations regarding the free community college proposal

President Obama’s proposal to eliminate tuition for America’s community college students could be a case study in the messaging power of “free.” It has caught people’s attention in a way that prior efforts to lower the price of college have not. Googling “Obama free community college” returns a whopping 75 million results, compared with 92,500 for “Obama Pell Grant increase.”

This attention is much needed. Inequality in college attainment by family income is on the rise. States have been reducing their investment in higher education, shifting costs to students, and placing pressure on public institutions, which are asked to do more—and for more students—with less. Meanwhile, those who need financial assistance are often stymied by the complexity of the student aid system.

New federal dollars combined with a simple message about affordability could be a game-changer, but not without other complementary reforms. In particular, increasing college success is the real challenge—not just getting students in the door. It is also important to question the wisdom of a policy that excludes four-year colleges, and that creates a new system of accountability entirely separate from the rest of federal student aid. Here are four key issues to consider:

1. Messaging matters—but not all “free tuition” proposals are created equal.

Thanks to federal, state, and institutional grants, more than 5.5 million students (including nearly 40 percent of community college students) already attend college tuition-free, according to our analysis of 2012 data from the National Postsecondary Student Aid Study. But many students do not know how much these grants can help them. Messaging matters, and the president’s proposal nails this dimension.

Obama’s free tuition proposal is much more progressive than many other state, local, and private “free tuition” programs (including the Tennessee Promise upon which Obama’s proposal is based). Under the Obama proposal, low-income students could receive all their Pell Grant dollars as a refund. In contrast, other “free” programs rely on existing federal and state grant aid to do most of the work, waiving only any tuition not already covered and providing no extra funding to low-income students.

Obama’s proposal would be substantially more expensive than these other programs. But it would ensure that middle- and upper-income students aren’t the only ones to benefit. It would begin to address the real financial barriers to community college faced by low-income students, who struggle to cover books, transportation, childcare, and other basic necessities.

2. Supporting college success is a much bigger challenge than just getting students in the door.

Only about one-third of students who begin at a community college have a degree or certificate from any institution six years later. If we do not take steps to improve students’ odds of success, the program could do a disservice to students who still must invest time, effort, and forgone labor force earnings to pursue the “free” option.

The administration’s proposal restricts the types of programs that will qualify and mandates that colleges “adopt promising and evidence-based institutional reforms to improve student outcomes, such as the effective Accelerated Study in Associate Programs (ASAP).”

Supporting student success is essential, but it isn’t cheap. While ASAP appears to double graduation rates, it also costs 60 percent more per student. And its main cost isn’t the tuition waiver: an ongoing evaluation notes that few students had any tuition left to waive after existing grants were applied. Providing free monthly MetroCards, free textbooks, and enhancing student services were the program’s main costs.

It is not clear how much of the investment under Obama’s proposal will actually reach institutions to support the needed reforms and innovations. Some of the money will go to students in the form of reduced tuition payments or increased refunds; some is likely to be captured by states themselves, which may have incentives to reduce their own subsidies; and some could come at the expense of funding public four-year universities.

3. Restricting free tuition to students enrolling in community colleges could have unintended consequences.  

Many low-income students who aspire to four-year degrees enroll directly in four-year institutions. Conversely, a significant number of community college students are from middle- or upper-income backgrounds, and universal free tuition could cause that number to grow. Inducing students now attending four-year institutions to enroll instead in community college could reduce their chances of ever earning a bachelor’s degree. And, as a recent Washington Post essay points out, the proposed program could divert resources from broad-access public universities. Shifting freshman enrollments to community colleges could lead to rising tuition in the public four-year sector.

4. New accountability rules could add significant complexity and compliance challenges—and risk invalidating the promise of “free.”  

The administration’s proposal seeks to strengthen accountability by limiting aid to “responsible” students in “high-quality” programs. Students must maintain at least a 2.5 GPA and make progress toward their degrees. The reforms demanded of colleges are challenging and require considerable resources, both financial and human. But if only a fraction of students in a fraction of community college programs are eligible for the program, the alluring message of “free” no longer seems so simple.

The rules of the new program appear much stricter than the rules for Pell Grants and federal loans, which can be used for any program leading to a credential at any eligible accredited institution and typically require students to maintain a 2.0 GPA. Stricter accountability standards may well be needed, but inconsistency across programs would create administrative headaches for both students and institutions, all needing to navigate two sets of program rules.

Addressing the college affordability challenge requires thinking big—and thinking beyond just tuition. It’s all too easy to critique big ideas for being impractical or lacking details. Other equally ambitious, if less headline-grabbing, reform proposals should also be part of the conversation. Perhaps most important is the other component of the Obama proposal—which is getting much less attention—that would expand technical training for middle-class jobs. Unlike “free community college,” this proposal comes with specific suggestions for improving student outcomes. We have written a proposal to overhaul the Pell Grant Program, while others suggest major reforms to the student loan program.

Translating big ideas into workable legislation is a rare feat. Yet a bipartisan bill to radically simplify the student aid application, enable students to receive Pell Grants year-round, and streamline confusing loan repayment options (co-sponsored by Lamar Alexander of Tennessee and Michael Bennet of Colorado) has a legitimate shot at success in Congress this session. If Obama’s proposal creates pressure on Congress for meaningful aid reform, then it will have served a purpose even if it never gets written into law.

Photo: (AP Photo/George Widman)

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