Free College

“Free college” has become a popular policy to many on the left, and even some on the right. Senator Bernie Sanders introduced his free college bill in 2015 and made it part of the national conversation in the Democratic presidential primary in 2016. Now, after action in a handful of states, some version of “free college” has become a prong of the policy platforms of at least eight Democratic Presidential candidates in the 2020 race. However, the details of the plans look very different. President Trump has not released a campaign platform related to college affordability.

To understand proposals for free college, it’s important to know how our higher education system is currently funded. What we have today is a mixture of public, for-profit, and private, non-profit institutions. Public institutions are state entities and are financed primarily by a combination of state (and sometimes local) appropriations, donations, and students paying tuition—through family savings, scholarships, grants, and loans. Non-profit institutions are reliant on donations and tuition revenue and for-profits are reliant on the latter. Federal funding for higher education is a voucher system with the federal government primarily providing loans and need-based grants in order to help cover students’ expenses. Grants like the Pell Grant are based on student need, not the price of a given institution. The federal government also provides benefits to veterans and active-duty military through the Department of Defense and the Department of Veterans Affairs. Free college policies writ large are ones that address tuition, and sometimes fees, at public institutions—technical schools, community colleges, and four-year colleges and universities.

The 2020 Democratic Presidential Primary and the policy conversation writ large offer “free college” plans that fall into two main categories: free two-year college and free two- and four-year college. Each of these has its own benefits and drawbacks. Here is what you need to know about free college and how each candidate's plan stacks up.

One of the first design considerations of a free college plan is if it is a first- or last-dollar benefit. A last-dollar approach means that a plan would eliminate tuition after all scholarships and grants. This is the approach many states have chosen which has meant they cover the gap for students and make tuition free. So a student who receives outside scholarships or a Pell Grant would have any remaining tuition covered by the government. A first-dollar approach would eliminate tuition before all grants and scholarships and allow students to use those dollars to pay for books, living expenses, and more. Many criticize last-dollar plans as regressive because they provide more benefit to people who do not qualify for need-based aid programs like the Pell Grant.

What started as an initiative in the red state of Tennessee, free community college—also referred to as free public two-year—has become increasingly popular in states and with many in Congress. House Democrats recently included a version in their bill to revamp higher education with the support of Speaker Nancy Pelosi. It is also an idea President Obama championed while in office. Some view this as the more affordable approach and realistic compared to making all college tuition-free. Others see it as universally needed as an extension of high school because 65 percent of jobs will require some education beyond high school, though not all require a four-year degree.

Presidential hopefuls Senator Amy Klobuchar and former Vice President Joe Biden have proposed plans to make tuition-free community college. Klobuchar pitches her plan as “many paths to success” citing numbers showing some of the fastest-growing occupations only require a one-year certificate or a two-year degree. She previously said free four-year college was aspirational, but she wasn’t a genie that could give it to everyone. Biden, whose wife is a community college professor, has been a champion of tuition-free community college since his time in the White House. Biden’s plan also pointed to the large number of quality jobs that pay a good salary, but don’t require a bachelor’s degree. Unlike in Tennessee, both of these plans are first-dollar, allowing low-income students to use Pell Grants for living expenses. Structuring the plan this way is much more beneficial to those students because at community colleges, where tuition is often much lower, Pell Grant recipients often pay little to no tuition at all. While they do not have detailed plans, Senator Cory Booker (no longer a candidate) and Andrew Yang both called for making community colleges tuition-free (or at least nearly-free in Yang’s case).

There are some that express concern with these plans. Community colleges are historically underfunded where appropriations and tuition revenue do not allow for needed supports or cause them to be overly reliant on adjunct faculty. There is a worry that if overall funding isn’t addressed then there will be capacity issues and a risk of schools not being able to support students and ensure they succeed. Some critics say this approach creates an even more stratified system of higher education, where those who can afford a four-year degree will end up with a degree that, on average, pays significantly more than a two-year degree and those who need the most affordable education will end up in lower-paying jobs. Others point to “diversion” effects where those who would otherwise attend a four-year institution are diverted to a community college. Possibly due to the troubles of transferring, research has shown those students are 18 percentage points less likely to end up with a bachelor’s degree than if they enrolled in a four-year from the start—even though that was their original goal. However, many plans say they will work to ensure transferring is made easier.

Other presidential candidates have gone a step further and have said all two- and four-year public colleges and universities should be tuition-free. Senators Elizabeth Warren and Bernie Sanders released detailed proposals and would eliminate tuition and fees for up to a bachelor’s degree at a public institution. Mayor Pete Buttigieg proposed something similar, making public institutions tuition-free for families earning up to $100,000—approximately 80 percent of American families. He would subsidize the tuition of those families making up to $150,000 and would require states to improve affordability for all students. Other candidates have yet to layout details, but have shown support for the policy. Businessman Tom Steyer says everyone should have the “right to a free, quality, public education from universal pre-kindergarten through higher education.” Senator Kamala Harris (no longer a candidate) says she will make community college free and four-year public college debt-free—a phrase usually meaning she would apply income restrictions so that those who can afford to pay without loans will do so. In addition to free community college, Senator Booker (no longer a candidate) says he will create a path to debt-free college. Congresswoman Tulsi Gabbard points to the legislation she co-sponsored in 2017—led by Sanders in the Senate—to make community colleges tuition-free and public four-year schools tuition from for “working- and middle-class students.” (Gabbard also co-sponsored the 2019 House version of the bill, but her website does not mention it.)

The vast majority of Historically Black Colleges and Universities (HBCUs) and Minority-Serving Institutions (MSIs) are public institutions and would be included in college affordability plans for public institutions. However, HBCUs and MSIs are historically under-resourced compared to their predominantly White counterparts and while eliminating tuition help students, it doesn’t always address the funding issues that limit the schools’ ability to serve students. In this cycle, a number of candidates provide significant investments to all HBCUs and MSIs. Warren and Buttigieg both call for a $50 billion investment over the next decade. Warren’s investment would allow the private institutions to be included in her tuition-free plan as well to help shore up per-student funding at these institutions. Buttigeg’s investment could be used for student aid, capital and instructional costs, and strategies to support student needs and college completion. Sanders proposed $1.3 billion per year—$13 billion over the decade—to private, non-profit HBCUs and MSIs to “eliminate or significantly reduce tuition and fees for low-income students.” Klobuchar would also direct funding to HBCUs and MSIs to eliminate tuition for the first two years for low-income students. Biden would invest $18 million in grants to them—equal to about two years of tuition per low-income and middle class student—to lower cost, improve graduation rates, and more.

Plans to address college affordability should consider the full cost of higher education if they are to be effective. Fifty-two percent of the cost of a four-year degree at a public institution is in living costs, not tuition and fees. At community colleges, those living expenses account for 70 percent of cost. That’s why eliminating tuition alone does not guarantee a debt-free education. Of the candidates that have released free college plans—regardless of two- or four-year—all have proposed them as first-dollar plans allowing low-income students to use their Pell Grants to cover at least some of those costs. Additionally, many of the candidates have called for increasing the Pell Grant. Buttigieg called for a $120 billion increase over the next ten years, increasing the maximum grant by $1,000 and tying the grants to inflation. Klobuchar and Biden both specifically called for doubling the maximum amount and expanding who would be eligible. Warren proposed an additional $100 billion over the next decade to increase the maximum award, as well as who would qualify. Sanders says he would continue to provide Pell Grants for living expenses but would require states and tribes to cover the remaining gap for low-income students. Booker (no longer a candidate) has another plan called “Baby Bonds” that would essentially create a savings account at birth, with yearly contributions based on family income for people to use to pay for different expenses, including higher education.

While eliminating tuition sounds easy on its face, it is more complicated than that. An important component of all federal proposals to make public college tuition-free is the interaction of the federal government with the different states, given that eligible schools are state institutions. Each of the detailed plans put forth by candidates calls for a type of federal-state partnership where the federal government would provide a portion of funds to states to reduce or eliminate tuition. These plans would make federal funding contingent on continued—and in some cases increased—support from the states. Most plans provide few details on how this funding structure would work, but those details are important to ensuring the success and sustainability of such plans. The details that exist outline how much the federal share of costs would be. For example, Biden says the federal government would provide 75 percent of the cost generally and 95 percent for tribes with community colleges serving low-income students—important given the financial struggles of many tribes. Klobuchar would provide $3 for ever $1 from the state.

While it’s not unusual for presidential candidates to have plans without the minute details, if implemented these details will be critical for the success of any tuition-free college. One of the largest drivers of the increase in college tuition is the disinvestment by many states in higher education. Funding cuts have largely been associated with rising costs in states, particularly in the areas of corrections, pension obligations, and in Medicaid. Higher education is one of the largest sources of discretionary spending in state budgets, which has made it more vulnerable to cuts. When these costs increased, they crowded out state spending on higher education. Higher education funding is also unique in that they can easily be passed on to consumers—students and families—through tuition and fees, which they can usually cover from federally backed grants and loans.

To be successful, the federal-state partnership must also take into account the ebbs and flows of the economy. During the Great Recession, states were forced to cut budgets and higher education suffered. Not only did tuition increase, but more people enrolled in college. Some were right out of high school, but others were those who lost jobs and enrolled due to the poor job market. Colleges raised tuition, but many were still stretched too thin and were unable to provide or expand needed support services—some were forced to cut them. That’s why a federal-state partnership must have a stabilizer provision in times of a recession to ensure states, especially those that are cash-strapped, can afford to participate.

Of course, no matter who is elected these plans will have to go through Congress to seek their final approval. House Democrats just approved a version of free community college in committee, but that is the farthest any free college proposal has ever gotten in Congress. If elected, any president will have to decide how much they prioritize making free college a reality. Any plan will have to ensure it is designed to improve student outcomes and guarantee its sustainability.