Urban Wire Who really wins with free tuition for community college students?
Sandy Baum
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Michael McPherson contributed to this post.

Earlier this month, the Mississippi House of Representatives voted 115-4 to pass a bill that would pay community college tuition for recent Mississippi high school graduates who are not covered by other financial aid. Last week, the governor of Tennessee proposed a similar plan and Oregon is also considering the idea.

These proposals are well intentioned. They arise out of concern over rising college prices and the struggles students and families face to pay for postsecondary education. Targeting community colleges is appealing because these institutions disproportionately enroll students from low-income backgrounds.

But who will really be helped by free community college tuition?

Most community college students would not be eligible for this assistance because it is restricted to recent high school graduates.

According to government data, in 2011-12, only 38 percent of first-year community college students in the United States were age 20 or younger. The other 62 percent were older and returning to school to gain education and labor market skills. They would not benefit from these new programs.

The lowest-income recent high school graduates will not benefit from the new subsidies because their tuitions are generally covered by federal and state grant aid. Also, this program, unlike other aid programs, does not allow students to use the money for living expenses.

Tuition and fees for full-time students at community colleges nationwide average about $3,330. Oregon charges $4,440; Tennessee’s price is $3,760; and Mississippi’s is just $2,390.

Students who can’t afford to pay any part of their own educational expenses are already eligible for federal Pell Grants of $5,645 per year, and most states provide some funding for low-income students to supplement that federal funding. Some students receive smaller Pell Grants, but the students who are not Pell-eligible would reap the biggest benefit from the free tuition plans.

The dollars will flow to the more affluent students who enroll in community colleges—those for whom the relatively low tuition is generally not a significant barrier.

Could low-income students be hurt by this policy?

Will free tuition induce more students to begin their studies at community colleges instead of at four-year institutions? If the policy increases the enrollment of middle-income students, it could strain community college resources and enrollment capacity, and wind up harming lower-income students.

In addition, evidence suggests that students with similar family background and academic qualifications are more likely to earn a bachelor’s degree if they start at a four-year rather than a two-year college. If a bargain price for community college lures students away from four-year colleges as their starting point, the net result may be fewer bachelor’s degrees among students who have that goal.

Better ways to help low-income students

It’s great that states want to reduce the financial burden of college. The most obvious solution would be to prevent prices from rising so rapidly in the first place. Increasing state appropriations for higher education institutions is the simplest way to do this. But this approach is expensive and not targeted to the students who most need the help.

The proposed incentives in these programs spurring students to keep up their GPAs and enroll in enough classes to graduate in a timely matter are very important. And providing academic and other supports to students—as the Tennessee plan proposes—can make a very big difference. Pushing community college students to apply for the federal grant aid for which they are eligible can also have an impact. State need-based grant programs are targeted at low-income students.

States should provide the funds to the students who are struggling most financially. These are students from low-income families and adults who lack labor market skills.

Funding these efforts would be more constructive than making college tuition-free for those who can already afford it.

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Research Areas Education
Tags Higher education Financial knowledge and capability Community colleges
Policy Centers Center on Education Data and Policy