The cost of higher education in the US remains a key issue for students across the country. This report looks into the current and prospective free college programs alongside their main beneficiaries.
- By using less than 1% of the annual federal budget ($6.27 trillion), college could be made free-for-all in the US.
- A last-dollar tuition-free program (tuition after applying grant aid) in the US would use the lowest government contributions – $28 billion in the initial year.
- A first-dollar tuition-free program (tuition before applying grant aid) in the US would use higher government contributions – $58 billion in the initial year.
- A debt-free tuition-free program (full cost of college) in the US would use the highest government contributions – $75 billion in the initial year.
- Free public college is favored by 63% of US adults and strongly favored by 37%.
- Through general spending, states contribute an estimated 9% towards higher education.
- The US is ranked within the top three most expensive countries to attend college.
- However, there are several states offering college promise programs to cover tuition at 4-year public colleges or community colleges.
- At the post-secondary level, the US spends $33,180 on each full-time student.
- Some form of financial aid is received by 86% of US college students.
Free College Programs
When it comes to free college programs, a range of different approaches can be taken to reduce costs. Resulting from this, the total cost of free college programs can vary greatly.
- In terms of total costs, the least expensive programs to implement are last-dollar programs.
- Through these programs, the government would pay the remaining tuition fees after grant aid has been applied.
- First-dollar programs come at an increased cost.
- Under these programs, the government would pay the full cost of tuition before grant aid has been applied, allowing grant aid to be used on different expenses.
- The most expensive programs to implement are debt-free programs.
- Under these programs, the full cost of college would be covered by the government, including tuition, room and board, and other selected expenses.
Last-dollar programs
Last-dollar programs are recognized for being able to closely identify how much financial aid is required for each student.
- Under last-dollar programs, the government would pay the remaining tuition fees after grant aid has been applied.
- Last-dollar programs do not cover the cost of room and board.
- For example, if tuition fees totaled $10,000 and grant aid covered $4,000 of this, the government would pay the remaining $6,000.
- In the US, the majority of tuition-free programs implemented are last-dollar programs.
- It would cost the government $28 billion to implement last-dollar programs country-wide during the initial year.
- Over the course of 11 years, this would total $415 billion.
- Last-dollar programs need a great level of administrative effort during implementation.
First-dollar programs
First-dollar programs can award greater sums for tuition fees to each student but are less accurate at identifying each student’s financial need.
- Under these programs, the government would pay the full cost of tuition before grant aid has been applied.
- This allows grant aid to be used on different expenses.
- For example, if tuition fees totaled $10,000, the fee would be paid in full by the government.
- Additional grant aid could then instead contribute towards a student’s room and board expenses.
- It would cost the government $58 billion to implement first-dollar programs country-wide during the initial year.
- Over the course of 11 years, this would total $800 billion.
- First-dollar programs are known to be quicker and easier to implement, requiring less administrative effort.
Debt-free programs
Through much higher government contributions, debt-free programs also cover the cost of room and board, alongside other selected expenses.
- Under these programs, the full cost of college would be covered by the government.
- It would also include extra contributions such as the construction and renovation of higher education facilities.
- For example, if tuition fees totaled $10,000 and room and board totaled $15,000, both fees would be paid in full by the government.
- It would cost the government $75 billion to implement debt-free programs country-wide during the initial year.
A graph is given below to compare the first-year implementation costs for free college programs in the US:
Beneficiaries of free college
In the US, the majority of free college beneficiaries would be white, but programs would also be expected to have a significant impact on minority communities.
- For free college programs, estimates suggest that:
- White students would receive 53% of total first-year funding.
- Hispanic students would receive 21% of total first-year funding.
- Black students would receive 14% of total first-year funding.
- Asian students would receive 6% of total first-year funding.
- Students of more than 1 race would receive 4% of total first-year funding.
- Students of other races would receive 2% of total first-year funding.
- In addition, free college may benefit lower-income students over wealthier students, depending on the program implemented.
A graph is given below to compare the first-year distribution of funds if tuition was free by race:
Cost of free higher education FAQ
What is the College For All Act?
- The College For All Act was originally endorsed by Bernie Sanders and Pramila Jayapal and aimed to enable free college tuition for all:
- Community colleges.
- Public 4-year colleges.
- Tribal colleges.
- Its goal was to remove tuition fees for students whose families earned under $125,000.
- The College for All Act also aimed to double the maximum Pell Grant to $12,990.
- This would enable students to use it to pay for room and board.
- The proposed funding for the plan was intended to come from the federal government (75%) and state/Indian governments (25%).
What is the American Family Plan?
- The American Family Plan was originally endorsed by the Joe Biden administration and aimed to enable free college tuition at:
- Community colleges.
- Historically black colleges.
- Tribal colleges.
- Other minority-serving institutions.
- Additionally, it proposed to increase the maximum Pell Grant award by $1,400.
- The proposed funding for the plan was intended to come from a federal, state, and Indian tribal partnership.
- 29% of its funds would be intended to go to students representing the bottom quartile of family income.
What is America’s College Promise Act?
- America’s College Promise Act was originally endorsed by Barack Obama’s administration and aimed to award grants to states based on evidence.
- The act would enable the creation of the Student Success Fund (SSF).
- Although funding would start at $100 billion annually, it would be expected to rise to $2.52 trillion annually after 2031.
- The proposed funding for the plan was intended to come from the federal government (75%) and state/Indian governments (25%).