Should Policymakers Make College Free Or Better Support Institutions?

from Brookings

Making public higher education tuition-free has gone from a fringe idea to the platform of the Democratic Party in a short period of time. President Obama proposed making community college free in early 2015. Hillary Clinton has augmented that proposal to include four-year colleges for families making up to $125,000.[i] Many Democrats will push for federal action to make college free when the new Congress convenes in 2017, and they will have a powerful supporter in Clinton if she wins the presidency.

The Clinton campaign estimates that her higher education plan will increase federal spending on higher education by an average of $50 billion per year, or about $4,700 per undergraduate student.[ii] The question facing policymakers and the public is not whether eliminating tuition at public colleges for most families will have a positive effect, but whether it is the best use of a large new federal investment in higher education.

An often-discussed alternative to free college is providing even more generous benefits but to a more carefully targeted group of students with financial need. In a previous contribution to this series, I estimated the large subsidies that Senator Bernie Sanders’s free college policy would direct to relatively affluent families. Clinton’s plan would provide fewer benefits to high-income families, but would still eliminate tuition for more than three-quarters of families.[iii] A more targeted plan could instead eliminate tuition for low- and middle-income students, and do more to cover the living costs of the neediest students.[iv]

A less-discussed alternative to free college is to invest directly in colleges, especially those that serve low-income students, with the goal of increasing quality rather than only reducing price. Spending at many historically under-resourced institutions has been largely flat in recent years, despite increases in tuition driven by declining state support. For example, per-student expenditures at community colleges increased by less than $400, from $8,910 to $9,300, between 2003-04 and 2013-14.[v]

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