New Higher Ed Federalism

The president's free community college plan may change the balance between the federal government, states and colleges.

January 12, 2015

President Obama’s proposal to make community college free could rearrange the relationship between the federal government, states and colleges.

Behind the talk of a free two-year college education is a shift in the federal government's role. Conservatives are saying the president’s plan may go too far -- calling it a federal regulatory regime dressed up as a free tuition plan. For others, a federal government that spends more than $140 billion a year on higher education is justified in attempting to get the right bang for its buck. The White House said its effort would involve "restructuring the community college experience."

Under the president’s free community-college proposal, announced Friday, the federal government will pick up about 75 percent of the average cost of community college for qualifying students. The states would be required to pick up the other 25 percent. That requirement alone is a major change aimed at preventing states from divesting from public education.

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Gail O. Mellow, president of LaGuardia Community College, and Robert Kelchen, an expert on higher education finance, will discuss President Obama's proposal Friday on "This Week," Inside Higher Ed's free news podcast. Sign up here for notification of new "This Week" podcasts.

Other details remain unclear -- and whether the idea will ever become law is an open question -- but the White House is tying some strings to the money and asking states and their community colleges to be accountable directly to the federal government if they want to qualify for aid. 

Andrew Kelly, the director of the conservative American Enterprise Institute’s higher education center, wonders how involved the federal government could become.

“Does that mean that the feds now have 75 percent say over how community colleges operate?” he said.

Kelly worries the federal government will get as involved in higher education as it is in K-12 schools, an effort he views as unsuccessful.

Now, with few exceptions, most federal higher-ed spending goes to students and their families, mostly in the form of loans, grants and tax credits. Relatively little money goes directly to states or colleges themselves. 

More on the Obama Plan

  • Bipartisanship is on display as President Obama announces free community college plan in Tennessee, but proposal likely faces tough odds in Congress.
  • Two-year-college leaders like the plan, but some experts worry about details and whether the money could be more targeted.

“I am baffled by the idea the feds shouldn’t be involved, because they are involved, to the tune of $140 billion -- plus VA benefits, plus GI benefits,” said Amy Laitinen, who directs higher education work at the liberal New America Foundation and used to work on vocational and adult education policy in the Obama administration.

Christopher P. Loss, a Vanderbilt University professor and author of Between Citizens and the State: The Politics of American Higher Education in the 20th Century, said even though federal funding for higher ed has been indispensable, colleges have kept a good deal of autonomy. 

In part, that’s because many players don’t want to see a centralized system. He wonders if that will soon change.

“Is it just the beginning of a whole new way of imagining college-going in the country?" Loss asked. "Will four-year institutions be what happens in the next generation?”

The additional control, though, may appeal to those who have argued that the federal government picks up so much of higher education’s tab but asks little from colleges themselves in return.

“Federal monetary investment would be matched by federal power under this plan,” said Sara Goldrick-Rab, a professor of ed policy studies at University of Wisconsin at Madison.

Zakiya Smith, the Lumina Foundation’s director of strategy and a former senior education adviser to the Obama administration, said a variety of people acknowledge the current higher education system is not getting enough students through college at an affordable price. 

The White House has already tried a major market-driven approach, with its rating system, which is being designed to give students a clearer picture of colleges' outcomes.

Now, the community college plan is about more directly influencing affordability.

"Over the years, there's always been these proposals to have a more robust federal-state partnership," Smith said.

The federal government exerts a variety of powerful controls over a host of its spending, often through strings attached to money that flows to states and often in ways that may not seem obvious. For example, states raised the drinking age to 21 because of a law that allowed the federal government to withhold money for road construction from states that did not.

While there are a handful of federal programs that give money directly to colleges, including research spending and grants to minority-serving institutions, they give the federal government little control over colleges.

There are also long-term questions about any new federal spending program. Among the government's few direct-to-institution programs is one sponsored by Medicare to provide residencies for doctors. While the high-level workforce program is credited with helping expand the pool of doctors in the country over the past few decades, it has lately been blamed for failing to keep up spending even as demand for doctors is expected to rise.

Kelly wonders what might happen down the road if a community college or state qualified for the federal program and then, for some reason, no longer did.

"Do they kick it out and start to charge students tuition? That would be one hell of a fight,” he said.



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