Missing Part of Free-College Push

A proposal for a federal matching grant underlines the connection between per-student spending by institutions and degree attainment.

May 1, 2017
David Deming

Even after the November elections put hopes of a national free-college plan on ice, states and local entities have continued to pursue such proposals.

The development of those plans has been motivated by the idea that making college tuition-free to all will level the playing field in the modern economy where everyone needs some higher education. Some of those proposals -- most notably New York State's -- have come under fire as middle-class giveaways.

Harvard University’s David Deming argued in a recent paper that despite free college’s positive impact on relieving the financial burden on students and families, it has another serious limitation -- the open-access and minimally selective colleges most often attended by low-income students are also the institutions with the fewest resources to help those students complete their degrees.

Deming argues that there is a degree-completion crisis in higher ed that has persisted even as federal aid has tripled over the last 20 years.

“That’s extremely troubling, and it’s also, at least to me, kind of confusing,” he said at the Brookings Institution last week.

One possible explanation for that persistence, Deming said, is the relationship between average per-student spending levels at institutions and the share of students who complete their degree. The colleges and universities enrolling the students who most need academic support, including community colleges and other open-access institutions, also have the fewest resources to provide that support. And the low-income students who would most benefit from free tuition are also most likely to enroll in those low-resource institutions.

Deming said he is concerned that if the free-college movement does not take into account that relationship, it could create a “race to the bottom,” where more students enroll but institutions do not spend more on key support services to keep up.

To address the impact of lower institutional support on student completion, Deming proposes a one-to-one federal match for the first $5,000 in state spending per student at institutions that commit to making tuition free. Those federal matching funds would be restricted to core spending on instruction and academic support. A pilot program included in the proposal would make an even higher match to specific programs at colleges proven to help students graduate.

If every state adopted a free plan for two-year colleges, the cost of such a matching grant nationally would be between $10 billion and $14 billion. For four-year colleges, the cost would be between $19 billion and $29 billion, Deming said.

He argues that that amount would only be a small slice of federal spending on higher education. And a matching grant would have two important benefits, Deming said -- it would disproportionately affect low-income students and would make sure expanded enrollment under free college would not reduce quality.

There are already a number of proposals in the higher ed policy realm for federal matching plans. And the chances of Congress approving billions in new higher ed funding -- even if it would represent only a small part of current spending -- are small in the current political environment. But Judith Scott-Clayton, an associate professor of economics and education at Teachers College, Columbia University, said the proposal was valuable because it highlighted the kind of education students receive as well as the interaction of funding decisions at the state and federal levels.

“It is really focused on this idea that a key problem in higher ed right now is insufficient resources, not just the cost that students are facing but actually the quality of the education that they’re getting once they get in,” she said.

Scott-Clayton said attempts to address resources for students have been absent from many free-college proposals, although some, like the Tennessee plan, dedicate funding directly to advising and mentoring.

Simply directing more money to institutions won't necessarily lead to higher completion without targeting effective student support programs, said Iris Palmer, a senior policy analyst with the Education Policy Program at New America. Palmer and New America colleagues have also found that many institutions have responded to cuts in state funding by raising tuition on students enough to offset those losses.

Tiffany Jones, director of higher education policy at the Education Trust, said that potential response by institutions is why it is important that Deming's matching grant proposal is tied to state-level free-college programs -- it would boost institutional support after states enact a program to keep tuition free. It would also give the federal government additional leverage when it comes to accountability for student outcomes at those institutions, she said.

Most critiques of free-college programs focus on institutional capacity -- whether colleges will be able to deal with potential increases in enrollment -- and costs of living not covered by free tuition.

"This proposal gets at the first issue well. It doesn't address the second issue," Jones said.

Ed Trust New York released a policy brief addressing the New York free-college proposal in March in response to the plan that emphasized the challenge of low completion rates for students who already pay heavily discounted tuition rates. Crafting an agenda to address completion at the state level is an essential complement to tackling college affordability, the brief said.

Jones said she was also concerned that its exclusion of students who already hold degrees would leave out associate's degree holders transferring to four-year colleges, among the students who would most benefit from the proposal. But Jones said the proposal is significant because it helps pivot the conversation on free college to institutional investment as opposed to just giving money directly to students.

"This proposal helps reframe our thinking around the importance of directly investing in institutions," she said. "We've got to figure out how the quality doesn't go down with free college -- we've got to invest in institutions in order to do that."

Ben Miller, senior director for postsecondary education at the Center for American Progress, said the federal matching grant proposal adds to a chorus of similar ideas to encourage states to spend more money on higher ed.

“Proposals like this are important for laying the groundwork for the next set of ideas about what to do for state spending on higher ed,” Miller said. “Is it free college? Is it a matching grant? Is it something else? It's important to have a lot of ideas out there or different ways to tackle the problem.”


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