More States are Offering Free College Tuition – But Does It Work?

Brian O'ConnellBy Brian O'ConnellBy Savingforcollege.com

As of December 2018, 20 U.S states provide free tuition programs for low- and middle-income families who want to send their sons and daughters to college. Most of these free tuition programs are limited to community colleges.

But there are catches and caveats to such programs, and parents and students should know that “free” really doesn’t mean free, in many cases.

Here’s a look at the free college tuition issue and why the term “buyer beware” may be a term students and parents should get to know.

The Skinny on Free College Tuition

It’s worth stating - but hardly a surprise - that Americans love the idea of free tuition, at least at first glance.

Data from FreeCollegeNow.org, a free tuition advocacy group, shows that overall support among U.S. adults is 81%, while 51% show “strong support.” Even many Republicans, well known for their fiscal thrift, are on board for free tuition, with 35% supporting it in general and 65% supporting it for “academically qualified students.”

Again, that’s no surprise, given the escalating cost of student loan debt. According to the Federal Reserve, total outstanding student loan debt stood at $1.521 trillion as of the first quarter of 2018. That’s up from $600 billion only 10 years ago.

Clearly, staggering student debt loads, which bury the nation’s college graduates under a mountain of debt, is a borderline national tragedy, and is the biggest single factor leading to the rising call for free college tuition.


The Case for Free College Tuition

There is no shortage of good reasons why free college tuition is an idea that’s come to fruition:

States recognize the student loan debt problem – and want to help fix it. Through the end of 2018, 10 U.S. states have already enacted free college tuition plans, while 20 states have green-lit so-called free tuition plans or “Promise” college aid programs (which promise to pay the first two-years of community college) either in place or about to be passed as legislation.

Another 10 states have extensive scholarship programs already in place, according to the Campaign for Free College Tuition.

There is some general evidence that free college programs work. Of the college students who started in Tennessee’s “Tennessee Promise” tuition aid program in 2015, 52.2% have either graduated, transferred to another college, or are still at community college.

American businesses need skilled labor, and free tuition does add up to more skilled workers. Much of the demand for skilled labor comes from U.S. companies who require trained labor with a college degree for the vocational and technical jobs that college grads with more advanced degrees are turning their backs on, as the economy leaves many of them flush with job offers.

Community college and vocational college graduates are needed to fill the void, and advocates hope that free tuition fills that pipeline.


The Case against Free College Tuition

While an increase in skilled labor is no doubt welcome by the Chamber of Commerce crowd, there are several downsides to free college tuition programs, and then there’s the issue of free tuition not being “free”, after all:

Major financial aid caveats. Most state free college tuition programs aren’t so free when you check under the hood.

  • Most plans only pay for tuition, and don’t help out of on expensive hidden costs of college, like books, fees, meals and transportation, which all represent substantial costs for community college students. Free tuition doesn't cover living expenses, either.
  • Most free college tuition programs are designed as “last dollar” programs – meaning recipient must first exhaust other aid sources like Federal Pell Grants and scholarships, before the states step in with a check to cover remaining tuition costs.
  • Many state programs only provide financial aid for academically-qualified students. Or, they limit state tuition contributions to students who study in select fields, like science, healthcare or engineering. Consequently, if you don’t get the grades or aren’t studying in the right fields, then you don’t get paid. Students may also have to agree to work in the state for a number of years after graduation.
  • They’re expensive. States have to dig deep to pay for free tuition programs. New Jersey is funding its free college tuition program by hiking its top income tax rates from 8.97% to 10.75%, while also boosting its state sales tax. Meanwhile, Oregon quadrupled funding for its free tuition program from $10 million to $40 million – and was still short $8 million to pay for the program. Tennessee is funding its free college program with a $300 million endowment funded by state lottery revenues.
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