New York Isn’t the Only Free College Proposal with a Catch

New York state is set to become the first state to promise free two- and four-year college to state residents making under $125,000 a year. But there is a catch. Graduates will have to work in state for up to four years or the grant converts to a loan. This sort of bait and switch risks undermining the primary benefit of free college programs: the straightforward messaging that higher education is financially attainable for all.  

In that light, it is worth asking if New York’s plan is really free after all.

And New York is not alone. Twenty-nine states have introduced bills to create free college programs at one time or another, according to Education Commission of the States. While most of these bills never come close to becoming law, the number of these statewide promise program proposals shows that the idea of free college has an enduring appeal.

While some states’ plans are well-designed, others could be difficult to implement, or even risk creating more problems than they solve. In fact, the diversity of state free college bills is enough to raise questions about what “free” really means. If state policymakers hope to increase access, they’ll need to weigh trade-offs on how to pay for it, what to pay for, and who is eligible.  

Who pays for it. Given states’ limited budgets, all of the proposed plans build on students’ existing aid eligibility to make at least tuition free. This structure is known as a last-dollar scholarship and it means current federal funding will cover a substantial portion of students’ costs. A last-dollar approach is more palatable to state legislatures because it allows scarce state resources to go further. And the message of free college can encourage more students to fill out the FAFSA and access the federal benefits to which they are entitled. But this structure also means many students, particularly low-income students, won’t receive any additional aid.

In addition, some bills are explicit about how much they are willing to spend on their free college promises. In Montana, the bill caps funding at $1 million a year, regardless of whether this would cover all eligible students. It also explicitly gives the Board of Regents permission to prioritize funding for students based on financial need and how recently they graduated from high school. This undercuts one of the explicit appeals of “free college”  -- that students know what to expect. If high school students meet certain criteria, they should be able to count on tuition-free community college when they graduate. But building in exceptions like the one in Montana leaves students to wonder what the promise of free really means.

What they cover. Most of the proposals pay for a two-year degree or certification from a community or technical college. Others would pay for the first two years at a two-year or a four-year college (like Rhode Island and Wisconsin). And a few (like Hawaii, Massachusetts, Minnesota, New York, Vermont, and Texas) propose free college for all two- and four-year public colleges. Allowing students to use their promise scholarship at a two- or a four- year school gives students more choice and doesn’t force them to transfer if they want to pursue a bachelor’s degree. It can also prevent enrollment declines at four-year public schools, building institutional support for the scholarship across public higher education. But paying for a four-year degree also costs the state more because public universities tend to charge higher tuition than community colleges and many more students would be eligible if the program. Targeting community and technical college students has the added benefit of directing new funding to those least likely to attend school without the additional financial support.

Most of the plans are limited to tuition-expenses, but some also give students additional funds for other educational expenses or things like room and board. Several states like Hawaii, New York, and Washington provide students with financial need a stipend of around $1,000 to use for education related expenses. This feature originally appeared in the Oregon Promise program. Offering a small stipend is one way to ensure that low-income students receive additional resources, even if Pell covers their entire tuition bill. Some programs are even more generous. A Massachusetts bill would contribute to housing and books, but only for students with an income less than the state average. And the Wisconsin Promise bill, which failed last session, would have covered up to the state’s average cost of attendance for everyone.

Covering more of the cost of attending college for low-income students can be a good way to ensure that free college benefits them as much as their higher-income peers. Free college programs covering only tuition tend to subsidize upper-income students at higher rates, because lower-income students are eligible for more federal funding. Adding additional funds towards the entire cost of attendance for low-income students can close some of this gap, but comes at additional cost to the state.

Another feature inspired by Oregon Promise is the $50 per semester “copay” for students. Legislators worried that if the education was entirely free students wouldn’t appreciate it. So they required that students pay $50 per term. Legislation in Montana, New York, and Oklahoma replicate this requirement. Such a small amount of money will unlikely have a big impact on students feeling responsible for their education, but it could cause some harm. For instance, small fees have been shown to discourage low-income students from applying to school.

Who is eligible. With the exceptions of programs that cover a bachelor's degree, most proposals have no income requirements. Even those with income requirements, tend to have high caps. In Minnesota, the program would limit eligibility to those with an income below $125,000 a year for the family of a dependent student and $75,000 for an independent student. In Vermont, families at different income levels would have to contribute to their education on a sliding scale with anyone making over $150,000 a year no longer eligible. Massachusetts would cap eligibility at $200,000 a year. In Texas, only those at 400 percent of the poverty level would be eligible. Well structured income caps can better target free college programs to low-income students, but they also make them more complicated and risk reducing much-needed political support among middle-income voters.

Many of the proposals would also impose additional requirements on students. They may have to do community service or maintain a minimum GPA (typically around 2.5) to be eligible. Many of the bills sometimes explicitly condition eligibility on having recently graduated from high school to the exclusion of adult students. Furthermore, at least three programs (Arkansas, whose bill has become state law, New York, and Wisconsin) would require students to work in the state after graduation or have their grant convert to a loan. Some states’ programs would only support certain programs of study.  In Arkansas, for example, students have to study a science, technology, engineering, or math major to be eligible for the scholarship. The Mississippi legislation would also require students to be enrolled in particular technical majors. All of these types of requirements make free college needlessly complicated, and indeed, strain the definition of what free college is.

Variation and experimentation in states is exciting. It can customize solutions for that state. But all of this variation should challenge the field to create a definition of what “free college” really means. When are these programs no longer promising free college, and are instead just another scholarship program on top of the already complex financial aid infrastructure?

Authors:

Iris Palmer is a senior policy analyst with the Education Policy program at New America. She was previously a senior policy analyst at the National Governors Association.

Kim Dancy is a senior policy analyst with the Education Policy program at New America. She works with the higher education team, where she conducts original research and data analysis on higher education issues, including federal funding for education programs.