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State Investment in Higher Ed: Free College and Promise Programs in 2019

March 21, 2019 Teri Lyn Hinds NASPA

State budgets represent the foundation of how our government invests in creating an informed and educated citizenry and workforce. Tuition prices in many states are often set by the state legislature and decisions about institutional funding allocations can work either to exacerbate or alleviate state-level educational opportunity gaps. As our national economy continues to recover, albeit slowly, from the 2008 recession, state budgets are shifting toward a greater investment in education. According to recent analysis by the Pew Charitable Trusts, at least 15 states now cover college tuition for at least some students. The “free college” conversation continues, with 81 pieces of legislation across 29 states[1] currently included on the Education Commission of the States’ State Policy Watchlist

Map from the Education Commission of the States showing states considering free college legislation in 2019, as of 2/5/19.

The policies vary and almost none are truly open to all students for all institutions, but states are actively taking up the charge to address college costs and, in some cases, increase access for low-income and historically underrepresented groups. This post reviews some key terms and considerations of the policies for student affairs professionals as well as provides a brief overview of equity considerations in free college proposals. Student affairs professionals in states considering free college programs can reach out to their legislators to advocate for proposals that will better serve all students by offering concrete suggestions for improving the policies or even by providing examples of how the proposals would impact students they work with. 

Key Terms & Considerations

Free college vs. college promise program vs. debt-free college. Programs that offer free college to some residents of a state have existed for quite some time – at least since the 1990s according to the Pew Charitable Trusts report noted above – but the term “free college” has only recently started to appear. As a political messaging tool, “free college” has a lot of cache, but in practice, the differences between free college, college promise programs, or debt-free college proposals lies in decisions policymakers make in establishing program eligibility criteria. Still, the labels are useful for differentiating among some of the more common choices, so it’s helpful to review a few key terms.

  • College promise programs are generally a type of scholarship for students who sign up and maintain good grades in high school. They frequently target students in 8th grade and are designed to be incentives – both for the students to finish high school and attend college and for the student to stay in-state for their college education. Per a June 2018 report by Jen Mishory for the Century Foundation, 19 states currently structure at least one statewide student aid program as a promise program.
  • Free college programs are typically across-the-board programs, covering, for instance, all tuition for in-state students attending some or all in-state public institutions. Many are limited just to students who graduate from a high school within the state. Many will cover costs only at 2-year institutions within a state, or up to what it would cost a student to work toward an associates degree. Many programs cover only tuition expenses, not including fees, textbook costs, or living expenses. Many free college programs are universal, with very clear – and often simple – requirements for participation, which is an easy message to use in building and sustaining political support.
  • Debt-free college programs focus on targeting aid to those students who need it most by addressing the unmet financial need a student has following application of any grant and scholarship costs. They are generally a response to the increasing amount of debt that students are accumulating in order to afford college attendance.

First dollar vs. last dollar benefits. When establishing a college promise, free college, or debt-free college proposal, some key decisions influence whether the proposals are likely to reduce equity and opportunity gaps within a state or widen them. One of the largest determinants of whether a free college proposal will close equity gaps is whether it provides for “first dollar” or “last dollar” benefits.

  • First dollar programs cover a set portion of tuition up front, at amounts that do not change even if the student is awarded other financial aid. These programs leave a student’s other grant-based aid available to cover any remaining tuition and fees or other expenses, such as books, housing, or food. These programs tend to be more generous but may also therefore be more expensive when considered in isolation depending on the needs of the state population. When taking into account potential future savings and increased tax revenues, however, the investment in first dollar programs may be budget neutral or even a net positive. Indeed, House Democrats on the Education and Labor Committee noted recently that for every $1 a state invest in higher education, they receive $4.50 in return.
  • Last dollar programs cover any tuition expense remaining after all a student’s other financial aid has been applied. These programs require students to exhaust all their financial aid to cover tuition expenses, and generally do not extend program dollars to cover non-tuition expenses, leaving students to potentially take out loans or need to work additional hours to cover their costs of living while attending school. For low-income students attending institutions with traditionally low tuition, such as public community or technical colleges, where their federal grant aid may entirely cover their tuition and fees, these last dollar programs offer no additional support. Middle income students, however, choosing to attend more expensive programs or schools, may see significant assistance from last dollar programs.
Equity Considerations

While working to address and dismantle historical inequity is undoubtedly reason enough to support broad access to historically underrepresented populations, many policymakers, and the middle-income voters they represent, find it difficult to prioritize a general call for equity with the possibility of receiving fewer personal benefits. However, at a time when we need more workers with at least some postsecondary education to keep our national knowledge-based economy competitive, the question of addressing equity in free college policy design is more than just “the right thing to do.” In order to meet our workforce demands, we need more people from low-income and historically underrepresented populations to attend and complete postsecondary educational opportunities. In addition to our student bodies becoming more diverse, college is becoming more and more expensive – disproportionately so for low-income families. Using free college programs to intentionally address and correct for this disparity in financial burden is one way to both close equity and opportunity gaps and provide needed workers to ensure national economic growth.

A 2018 review of existing and proposed free college policies by the Education Trust found that 9 of the 15 programs they reviewed and 10 of the 16 proposals offered "last dollar" assistance to students.  The Ed Trust found that in states with last dollar free college programs, more resources were provided to upper-middle-income students and families than more needy students and families. Around the same time, an analysis by the Institute for Higher Education Policy found that Tennessee’s College Promise program left over half of qualifying students with no additional aid, while students from families with annual incomes over $160,000 could receive greater than $1,400 in state-provided subsidies.

When combined with policy decisions related to first dollar vs. last dollar benefits, income restrictions on who can benefit from free college proposals can help target limited funds to those most in need. Data from the Education Trust found that in states without income caps on their free college program, low-income students were less likely to benefit than their higher income peers

We know that today’s now-traditional college students are more likely to be adults with family and financial responsibilities beyond those of past-traditional aged students. Today’s students include adults caring for their own young children or elderly parents while balancing a job and, increasingly, many adults shouldering responsibility for not only their own education, but also for that of their children. Some programs are designed only with past-traditional aged students, those who graduate from high school and immediately attend college full-time, in mind. These programs frequently require that students have graduated college, sometimes within a certain number of years, from the state in which they currently reside. Programs may also establish strict high school or college GPA requirements either to either establish or maintain benefit eligibility. Such restrictions exclude many of today’s students from receiving benefits, further hampering our ability to meet the workforce needs of our economy.

For a detailed discussion of more policy considerations that would work to close equity gaps, please see A Promise Fulfilled: A Framework for Equitable Free-College Programs by the Education Trust. Join the NASPA policy and advocacy team on Thursday, March 21 for a free, 30-minute live briefing on free college programs that will include examples of how some states have worked to balance equity in their free college programs.

Image / map credit: Education Commission of the States, last updated 2/5/2019. Since that time, legislation has been introduced in Arkansas, Iowa, Illinois, and Minnesota as well as other possible states.

[1] To filter the State Policy Watch List to show only Free College legislation, select Postsecondary Financial Aid under the Issue area and then Free College under the sub-issue. Click on any bill in the list below the map for additional information about the bill.