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

More states are moving to subsidize community college tuition and fees by reducing or eliminating costs for students as enrollment in higher education plunges.

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

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

The Washington-based association said the subsidies ensure higher earning potential for more adults, which reduces 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 unfair entitlements and add to tax burdens on Americans.

Promoting “free community college” incentivizes 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,” resulting in more consumption of carrots 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 Democratic-led states have acted to expand subsidies:

• Massachusetts Gov. Maura Healey, a Democrat, included $20 million in her proposed 2024 budget to extend a “last-dollar” program to residents older than 25 without college degrees. State legislative leaders have added the idea to their budget proposals and suggested a surtax on wealthier residents to fund it.

• Minnesota Gov. Tim Walz, a Democrat, recently signed a bill to eliminate costs at public two- and four-year colleges for state residents from families earning less than $80,000 a year. The law, which takes effect for the 2024-2025 academic year, 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 Award Program, which covers tuition and fees for students at approved public colleges. Mr. Pritzker said the cost to taxpayers was $401 million in 2019 and now is $701.

• Colorado enacted a law this year that expands a limited free college tuition program for students pursuing degrees in health care and several other high-demand areas of knowledge.

Most states pay for the programs through a “millionaire tax” on upper-class residents. New Mexico uses the state lottery to offer “first-dollar” tuition payments.

Expanded community college subsidies 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 was 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 whom the nonprofit clearinghouse counted in the spring 2019 semester.

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

Tyrone Howard, an education professor at the University of California, Los Angeles, said the concept of subsidized community college started in California in the 1960s, when politicians included it in a master plan for the 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.”

A 2021 Kansas bill signed by Gov. Laura Kelly, a Democrat, 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.

Republicans traditionally have been more hesitant than Democrats to subsidize community college, but some Republican-led states have launched limited “free college” programs.

Tennessee’s “last-dollar” grants cover what federal Pell Grants don’t. The state requires qualifying students to maintain a 2.0 GPA and finish eight hours of community service each semester.

The subsidies have attracted more students and calls for expansion, leaving taxpayers with growing bills to pay while inflation eats into their savings, said Michael Austin, a former economic adviser to two Kansas governors.

“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-based education consulting firm EAB found that 20% of those opting out of higher education said “college isn’t worth the cost.” That was the top reason.

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.