States expand ‘free community college’ subsidies as higher education costs rise, enrollment drops

More states are moving to subsidize community college tuition and fees with tax dollars, reducing — or eliminating — altogether costs for students as enrollment in higher education plunges.

Thirty states currently subsidize two-year college expenses through “first-dollar” payments that pick up the whole tab or “last-dollar” programs that pay for whatever federal grants don’t cover, according to the Campaign for Free College Tuition. They include Arkansas, California, Indiana, Maryland, New York and Virginia.

Pandemic-era enrollment declines at four-year universities are driving states to expand the programs as rising costs scare off high school graduates, according to the American Association of Community Colleges.

The Washington, D.C.-based association said the subsidies ensure higher earning potential for more adults, reducing long-term dependence on government-funded social services.

“We support these programs that eliminate cost as a barrier to completion and know that these programs will pay dividends in a more educated citizenry and a robust workforce pipeline at the local level and beyond,” Walter G. Bumphus, AACC president and CEO, told The Washington Times.

Detractors say the programs create an unfair entitlement and add to the tax burdens on Americans.

Promoting “free community college” increases those burdens by incentivizing more people to apply for degrees they don’t need, said Walter Block, an economist at Loyola University New Orleans.

He compared it to a government offering “free carrots,” causing more people to eat them and higher subsidies to cover the surge.

“In common sense terms, we shall be, paradoxically, poorer than before this free carrot program was instituted,” Mr. Block said.

Lawmakers in several blue states have recently acted to expand existing subsidies:

— Massachusetts Gov. Maura Healey, a Democrat, included $20 million in her proposed 2024 budget to extend a “last-dollar” program to residents over 25 without a college degree. State legislative leaders have added the idea to their budget proposals, suggesting a surtax on the wealthy to fund it.

— In Minnesota, Democratic Gov. Tim Waltz recently signed a law making public two- and four-year colleges free to state residents from families earning less than $80,000 a year. The law, which takes effect in 2024-25, includes illegal immigrants enrolled in public schools who apply to colleges in the University of Minnesota or Minnesota State systems.

— Illinois Gov. J.B. Pritzker, a Democrat, has proposed a $100 million expansion to the state’s Monetary Awards Program, which covers tuition and fees for students at approved public colleges. According to Mr. Pritzker, the program cost taxpayers $401 million in 2019 and now sits at $701.

— Colorado enacted a law this year that expands a limited free college tuition program for health care workers and several other high-demand professions.

Most states pay for the programs through a “millionaire tax” on upper-class residents. Others rely on alternate funding methods — including New Mexico, which uses the state lottery to offer “first-dollar” tuition payments to students.

Expanded community college subsidies are an attempt to juice interest in higher education as rising costs price more families out of four-year degrees, said political scientist Robert Heineman, a former department chair at Alfred University in New York.

“What we are witnessing is a significant adjustment in what kinds of higher education will survive,” Mr. Heineman said.

Enrollments across all higher education sectors fell by 0.5% from 17,246,157 in spring 2022 to 17,153,317 in spring 2023, the National Student Clearinghouse Research Center reported on May 24.

That’s down from a 3.1 % decrease from spring 2021 to spring 2022 and a 3.5% plunge from spring 2020 — when pandemic lockdowns shuttered campuses — to spring 2021. This spring’s final tally remained 1,309,284 students short of the 18,462,601 the nonprofit clearinghouse counted in the spring 2019 semester.

At the same time, community college enrollment grew by 0.5% from 4,097,987 in spring 2022 to 4,079,830 this spring, fueled by dual-enrolled high school students taking courses for college credit.

According to UCLA education professor Tyrone Howard, the concept of subsidized community college started in California in the 1960s, when politicians included it in a new master plan for the Sunshine State.

The idea was to give students access to higher education without significant cost, creating financially independent citizens who rely less on public welfare such as social services and food stamps.  

“It is my hope that the trend picks up at the university level,” said Mr. Howard, who specializes in racial equity. “Given the rising costs of higher education and the growing student loan debt crisis, we need to be creative about how we can incentivize education without saddling people with crushing debt.”

Traditionally, Republicans have been more hesitant than Democrats to subsidize community college. But some red states have also launched limited “free college” programs.

One example is Tennessee’s “last-dollar” grants, which pay for whatever federal Pell Grants don’t cover. The state requires qualifying students to maintain a 2.0 GPA and finish eight hours of community service each semester.

In Kansas, a 2021 law signed by Republican Gov. Laura Kelly offered $10 million in community college grants to students in four high-demand majors: information technology and security; mental and physical health care; advanced manufacturing and building trades; and early childhood education and development.

The subsidies have attracted more students and calls for expansion, leaving taxpayers with a growing bill to pay at a time when inflation has eaten into their savings, said Michael Austin, a former economic adviser to two Republican governors in Kansas.

“When politicians promise ‘free’ community college education in public policy, it means shifting the costs from students and their families to taxpayers who have no direct connection to the college,” said Mr. Austin, an emerging poverty scholar at the American Enterprise Institute. “In Kansas, this would amount to over $300 million for taxpayer subsidies replacing tuition fees at 18 community colleges.”

In a national survey of 20,324 high school students released last week, the Washington, D.C.-based education consulting firm EAB found that 20% of those opting out of higher education said “college isn’t worth the cost,” making it their top reason for not going.

Since pandemic lockdowns shuttered campuses in March 2020, funding and tuition for public colleges have increased while enrollment has fallen.

State funding for public universities grew 4.9% without adjusting for inflation last year and surpassed pre-recession spending per student for the first time since 2008, the State Higher Education Executive Officers Association reported on May 25.

Net tuition revenue per student declined by 7.4% at two-year colleges and 0.2% at four-year colleges, the report found. Overall, net tuition revenue fell 5.8% over five years, reversing a long-term trend of growth dating back to 1980.

According to the College Board, which does not adjust its numbers for inflation, the average tuition for in-state students at a four-year public university rose 1.8% from $10,740 in fall 2021 to $10,950 in fall 2022. For out-of-state students, public college tuition rose 2.2% from $27,560 to $28,240 over the same period.

Among students who enrolled at two-year colleges in 2020, only about 60% were still studying two years later, according to the National Student Clearinghouse Research Center.

One problem with “free community college” is it attracts unmotivated high school students who don’t belong there, said Peter Wood, president of the conservative National Association of Scholars.

“Students who don’t care about learning while in school seldom discover that they have college-level talents and ambitions in hiding that will miraculously emerge if offered tuition-free programs at the local community college,” said Mr. Wood, a former associate provost at Boston University.