Paper Questions Effectiveness of Free Tuition

January 20, 2017

A new Brookings Institution paper by Judith Scott-Clayton questions whether free tuition is the most effective use of additional funds for higher education.

The paper comes on the heels of New York Governor Andrew Cuomo's plan to make public college tuition-free for most students in the state. The Excelsior Scholarship would ensure free tuition at New York's public two- and four-year institutions to families that make up to $125,000 a year. The program would cost the state about $163 million annually once it's fully implemented.

Scott-Clayton uses a recent study from researchers at Harvard University and the University of California, Berkeley, who examined a national database of state funding levels, tuition policies, institutional expenditures and student outcomes over time to answer whether reducing the price of tuition had more of an impact on enrollment and completion than increasing institutional expenditures.

"Tellingly, the authors find large effects when state funds are used to increase institutional expenditures but virtually no effect when they are used for across-the-board reductions in sticker price," Scott-Clayton stated.

The Berkley researchers found that a 10 percent increase in institutional spending per student leads to a 3 percent increase in enrollment and larger percentage increases in degree completion up to three years later. However, sticker prices have no measurable effect on enrollment or attainment.

In the Brookings paper, Scott-Clayton states that the "free" message may have an impact beyond the dollar amount, but in order to move forward with the debate, there have to be reasonable cost estimates and lower income caps should be considered, as well as increased support for institutions.

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