When free college benefits go to those who need it least


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Free tuition at public colleges and universities has been a popular topic during the 2020 presidential campaign, and President Biden has proposed to make community college tuition free as part of his American Family Plan. But depending on how the program is designed, it could end up helping those students who need it the least.

A number of states and localities already offer this benefit, including the state of Tennessee and Kalamzoo, Michigan, which have some of the oldest programs. In all, about fifteen states And one around 350 localities now have a version of a free college program while many others are considering one.

the Georgetown University Center on Education and the Workforce (CEW) examined these models and analyzed how the benefits might manifest at the national level. He revealed that a ‘last dollar in’ program, where the government pays any remaining tuition fees after the scholarship is applied to students, would be the least expensive – but most of the money would go to students. of the upper and upper middle quartile – quartile households in the first year. Students from low-income households would get only 13% of the funds.

the Notes from the Peter G. Peterson Foundation that this imbalance is due to the fact that low-income students receive more aid than other income groups – which means the government would have lower tuition fees to cover. “However, since last dollar programs require that students first use their financial aid before the government pays the remaining tuition fees,” he writes, “some students might still struggle to cover their costs. remaining university fees, such as room and board “.

Conversely, a low-income first dollar program benefits low-income students the most. A “first dollar” program means that the government would pay the tuition fee before applying for a grant and the student can use that aid to cover other tuition costs. For its model, AI limited eligibility for four-year schools to families earning less than $ 125,000 per year.

In this scenario, half of the money would go to students in lower quartile and lower middle quartile households. Only 11% of funds would go to students from upper quartile households. However, it would cost the government almost twice as much – $ 50 billion – in the first year compared to a last dollar program.

However, there are long-term economic benefits of free college that come into play and are difficult to measure. The free college has been shown to increase college enrollment, graduation, and income for program recipients. An analysis of the Kalamazoo Promise program of the Upjohn Institute found that for every $ 1 paid in benefits, the average qualifying student can expect to earn more than an additional $ 4.

Data show that program design plays a central role in cost and beneficiaries. In short, giving more money to those who need it costs the government more. A significant consideration given the current state of the national debt. But the societal benefits and increased economic output could be worth it. But there is no guarantee.

“As the national conversation continues on how much the United States wants to invest in higher education,” the Peterson Foundation noted, “policymakers should recognize the costs, benefits, and distributive impacts of free college programs when ‘they are considering such policies’.

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Julio V. Miller

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