why college should be free research paper

The Power of Certainty: Experimental Evidence on the Effective Design of Free Tuition Programs

Proposed “free college” policies vary widely in design. The simplest set tuition to zero for everyone. More targeted approaches limit free tuition to those who demonstrate need through an application process. We experimentally test the effects of these two models on the schooling decisions of low-income students. An unconditional free tuition offer from a large public university substantially increases application and enrollment rates. A free tuition offer contingent on proof of need has a much smaller effect on application and none on enrollment. These results are consistent with students placing a high value on financial certainty when making schooling decisions.

This project would not have been possible without our collaborators at the University of Michigan Office of Enrollment Management, particularly Kedra Ishop, Steve Lonn, Paul Robinson, and Betsy Brown. We are grateful to the Michigan Department of Education (MDE) and Michigan’s Center for Educational Performance and Information (CEPI) for providing data. Seminar participants at the University of Michigan, Columbia Teachers College, Washington University in St. Louis, and the University of Wisconsin provided helpful comments. Sarah Cohodes, Joshua Goodman, CJ Libassi, and Matt Notowidigdo generously read initial drafts. The Institute of Education Sciences of the US Department of Education (through grants R305B1170015), the Smith Richardson Foundation, and the Andrew Carnegie Fellows Program funded this research. This project was approved by the University of Michigan’s Health Sciences and Behavioral Sciences Institutional Review Board (under study research ID HUM00096289); Harvard University’s Institutional Review Board (IRB21-1221); and Colby College’s Institutional Review Board (2021-093). This study is registered at the randomized trial registry of the American Economic Association under RCT ID AEARCTR-0001831, with 10.1257/rct.1831-3.0. A pre-analysis plan was filed in August 2019 (Dynarski et al., 2019). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

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College & Careers

Tuition-free college is critical to our economy

Morley Winograd and Max Lubin

November 2, 2020, 13 comments.

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To rebuild America’s economy in a way that offers everyone an equal chance to get ahead, federal support for free college tuition should be a priority in any economic recovery plan in 2021.

Research shows that the private and public economic benefit of free community college tuition would outweigh the cost. That’s why half of the states in the country already have some form of free college tuition.

The Democratic Party 2020 platform calls for making two years of community college tuition free for all students with a federal/state partnership similar to the Obama administration’s 2015 plan .

It envisions a program as universal and free as K-12 education is today, with all the sustainable benefits such programs (including Social Security and Medicare) enjoy. It also calls for making four years of public college tuition free, again in partnership with states, for students from families making less than $125,000 per year.

The Republican Party didn’t adopt a platform for the 2020 election, deferring to President Trump’s policies, which among other things, stand in opposition to free college. Congressional Republicans, unlike many of their state counterparts, also have not supported free college tuition in the past.

However, it should be noted that the very first state free college tuition program was initiated in 2015 by former Tennessee Gov. Bill Haslam, a Republican. Subsequently, such deep red states with Republican majorities in their state legislature such as West Virginia, Kentucky and Arkansas have adopted similar programs.

Establishing free college tuition benefits for more Americans would be the 21st-century equivalent of the Depression-era Works Progress Administration initiative.

That program not only created immediate work for the unemployed, but also offered skills training for nearly 8 million unskilled workers in the 1930s. Just as we did in the 20th century, by laying the foundation for our current system of universal free high school education and rewarding our World War II veterans with free college tuition to help ease their way back into the workforce, the 21st century system of higher education we build must include the opportunity to attend college tuition-free.

California already has taken big steps to make its community college system, the largest in the nation, tuition free by fully funding its California Promise grant program. But community college is not yet free to all students. Tuition costs — just more than $1,500 for a full course load — are waived for low-income students. Colleges don’t have to spend the Promise funds to cover tuition costs for other students so, at many colleges, students still have to pay tuition.

At the state’s four-year universities, about 60% of students at the California State University and the same share of in-state undergraduates at the 10-campus University of California, attend tuition-free as well, as a result of Cal grants , federal Pell grants and other forms of financial aid.

But making the CSU and UC systems tuition-free for even more students will require funding on a scale that only the federal government is capable of supporting, even if the benefit is only available to students from families that makes less than $125,000 a year.

It is estimated that even without this family income limitation, eliminating tuition for four years at all public colleges and universities for all students would cost taxpayers $79 billion a year, according to U.S. Department of Education data . Consider, however, that the federal government  spent $91 billion  in 2016 on policies that subsidized college attendance. At least some of that could be used to help make public higher education institutions tuition-free in partnership with the states.

Free college tuition programs have proved effective in helping mitigate the system’s current inequities by increasing college enrollment, lowering dependence on student loan debt and improving completion rates , especially among students of color and lower-income students who are often the first in their family to attend college.

In the first year of the TN Promise , community college enrollment in Tennessee increased by 24.7%, causing 4,000 more students to enroll. The percentage of Black students in that state’s community college population increased from 14% to 19% and the proportion of Hispanic students increased from 4% to 5%.

Students who attend community college tuition-free also graduate at higher rates. Tennessee’s first Promise student cohort had a 52.6% success rate compared to only a 38.9% success rate for their non-Promise peers. After two years of free college tuition, Rhode Island’s college-promise program saw its community college graduation rate triple and the graduation rate among students of color increase ninefold.

The impact on student debt is more obvious. Tennessee, for instance, saw its applications for student loans decrease by 17% in the first year of its program, with loan amounts decreasing by 12%. At the same time, Free Application for Federal Student Aid (FAFSA) applications soared, with 40% of the entire nation’s increase in applications originating in that state in the first year of their Promise program.

Wage inequality by education, already dreadful before the pandemic, is getting worse. In May, the unemployment rate among workers without a high school diploma was nearly triple the rate of workers with a bachelor’s degree. No matter what Congress does to provide support to those affected by the pandemic and the ensuing recession, employment prospects for far too many people in our workforce will remain bleak after the pandemic recedes. Today, the fastest growing sectors of the economy are in health care, computers and information technology. To have a real shot at a job in those sectors, workers need a college credential of some form such as an industry-recognized skills certificate or an associate’s or bachelor’s degree.

The surest way to make the proven benefits of higher education available to everyone is to make college tuition-free for low and middle-income students at public colleges, and the federal government should help make that happen.

Morley Winograd is president of the Campaign for Free College Tuition . Max Lubin is CEO of Rise , a student-led nonprofit organization advocating for free college.  

The opinions in this commentary are those of the author. Commentaries published on EdSource represent diverse viewpoints about California’s public education systems. If you would like to submit a commentary, please review our  guidelines  and  contact us .

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Genia Curtsinger 2 years ago 2 years ago

Making community college free to those who meet the admission requirements would help many people. First of all, it would make it easy for students and families, for instance; you go to college and have to pay thousands of dollars to get a college education, but if community college is free it would help so you could be saving money and get a college education for free, with no cost at all. It would make … Read More

Making community college free to those who meet the admission requirements would help many people. First of all, it would make it easy for students and families, for instance; you go to college and have to pay thousands of dollars to get a college education, but if community college is free it would help so you could be saving money and get a college education for free, with no cost at all. It would make it more affordable to the student and their families.

Therefore I think people should have free education for those who meet the admission requirements.

nothing 2 years ago 2 years ago

I feel like colleges shouldn’t be completely free, but a lot more affordable for people so everyone can have a chance to have a good college education.

Jaden Wendover 2 years ago 2 years ago

I think all colleges should be free, because why would you pay to learn?

Samantha Cole 2 years ago 2 years ago

I think college should be free because there are a lot of people that want to go to college but they can’t pay for it so they don’t go and end up in jail or working as a waitress or in a convenience store. I know I want to go to college but I can’t because my family doesn’t make enough money to send me to college but my family makes too much for financial aid.

Nick Gurrs 2 years ago 2 years ago

I feel like this subject has a lot of answers, For me personally, I believe tuition and college, in general, should be free because it will help students get out of debt and not have debt, and because it will help people who are struggling in life to get a job and make a living off a job.

NO 3 years ago 3 years ago

I think college tuition should be free. A lot of adults want to go to college and finish their education but can’t partly because they can’t afford to. Some teens need to work at a young age just so they can save money for college which I feel they shouldn’t have to. If people don’t want to go to college then they just can work and go on with their lives.

Not saying my name 3 years ago 3 years ago

I think college tuition should be free because people drop out because they can’t pay the tuition to get into college and then they can’t graduate and live a good life and they won’t get a job because it says they dropped out of school. So it would be harder to get a job and if the tuition wasn’t a thing, people would live an awesome life because of this.

Brisa 3 years ago 3 years ago

I’m not understanding. Are we not agreeing that college should be free, or are we?

m 2 years ago 2 years ago

it shouldnt

Trevor Everhart 3 years ago 3 years ago

What do you mean by there is no such thing as free tuition?

Olga Snichernacs 3 years ago 3 years ago

Nice! I enjoyed reading.

Anonymous Cat 3 years ago 3 years ago

Tuition-Free: Free tuition, or sometimes tuition free is a phrase you have heard probably a good number of times. … Therefore, free tuition to put it simply is the opportunity provide to students by select universities around the world to received a degree from their institution without paying any sum of money for the teaching.

Mister B 3 years ago 3 years ago

There is no such thing as tuition free.

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Should Higher Education Be Free?

• Vijay Govindarajan
• Jatin Desai

Disruptive new models offer an alternative to expensive tuition.

In the United States, our higher education system is broken. Since 1980, we’ve seen a 400% increase in the cost of higher education, after adjustment for inflation — a higher cost escalation than any other industry, even health care. We have recently passed the trillion dollar mark in student loan debt in the United States.

• Vijay Govindarajan is the Coxe Distinguished Professor at Dartmouth College’s Tuck School of Business, an executive fellow at Harvard Business School, and faculty partner at the Silicon Valley incubator Mach 49. He is a New York Times and Wall Street Journal bestselling author. His latest book is Fusion Strategy: How Real-Time Data and AI Will Power the Industrial Future . His Harvard Business Review articles “ Engineering Reverse Innovations ” and “ Stop the Innovation Wars ” won McKinsey Awards for best article published in HBR. His HBR articles “ How GE Is Disrupting Itself ” and “ The CEO’s Role in Business Model Reinvention ” are HBR all-time top-50 bestsellers. Follow him on LinkedIn . vgovindarajan
• JD Jatin Desai is co-founder and chief executive officer of The Desai Group and the author of  Innovation Engine: Driving Execution for Breakthrough Results .

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Expert Commentary

The pros and cons of ‘free college’ and ‘college promise’ programs: What the research says

We've gathered and summarized a sampling of research to help journalists understand the implications and impacts of “free college,” “tuition-free” and “college promise” programs.

Republish this article

This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License .

by Denise-Marie Ordway, The Journalist's Resource October 8, 2019

This <a target="_blank" href="https://journalistsresource.org/economics/free-college-promise-tuition-research/">article</a> first appeared on <a target="_blank" href="https://journalistsresource.org">The Journalist's Resource</a> and is republished here under a Creative Commons license.<img src="https://journalistsresource.org/wp-content/uploads/2020/11/cropped-jr-favicon-150x150.png" style="width:1em;height:1em;margin-left:10px;">

More than 19.9 million students are taking classes at colleges and universities across the United States this semester, up from 14.9 million two decades ago, according to the National Center for Education Statistics.

As enrollment has swelled, so has the price of college. The average combined cost of undergraduate tuition, fees, room and board at four-year schools has doubled since 2000 . The average cost of attendance for full-time students living on campus at an in-state, public college or university during the 2017-18 academic year totaled $24,320 . It totaled $50,338 at private institutions.

Heavy student debt loads created America’s student loan crisis. A recent report from the Federal Reserve Bank of St. Louis shows that outstanding student loan debt topped $1.6 trillion in the U.S. during the second quarter of 2019.

State and federal lawmakers and 2020 presidential candidates have put forward a range of plans aimed at reducing college costs to curb student debt and encourage more Americans to pursue degrees. Most programs and proposals focus on eliminating tuition at community colleges and state universities. But some also aim to cover educational costs such as mandatory student fees, which schools charge to help pay for student events, health services and other campus offerings.

These initiatives often are referred to as “free college” — even when they only cover tuition — and as “tuition-free” programs. A number of cities, counties and states have introduced “college promise” programs, which also pay students’ tuition and, sometimes, other expenses at two- and four-year institutions.

Recent research indicates there are hundreds of college promise programs in the U.S. Some are small, serving students in a city or public school district. Others are open to students across a state. In 2015, Tennessee became the first state in the country to offer free tuition at all of its community colleges and technical schools with its Tennessee Promise Scholarship . Earlier this month, officials in San Antonio announced AlamoPROMISE , which will allow students who graduate from one of 25 local high schools to receive 60 credits worth of free tuition at five area community colleges starting in fall 2020.

New York’s Excelsior Scholarship , launched in 2017, is the nation’s first statewide program to provide free tuition at state-funded two- and four-year colleges. The program is open to New York residents who have a household income of $125,000 or less and agree to live and work in New York for the same amount of time they receive the scholarship.

To help journalists understand the implications and impacts of these efforts, we’ve gathered and summarized a sampling of research on “free college,” “tuition-free” and “college promise” programs. Because most programs are relatively new, scholars are continuing to study them. We will add new research to this collection as it is published or released.

Also check out these five tips for reporting on free college and college promise programs from Laura Perna, an education professor at the University of Pennsylvania who’s also executive director of its Alliance for Higher Education and Democracy.

Merit Aid, College Quality, and College Completion: Massachusetts’ Adams Scholarship as an In-Kind Subsidy Cohodes, Sarah R; Goodman, Joshua S. American Economic Journal: Applied Economics , 2014.

This study examines a Massachusetts program that offers tuition waivers to high-achieving students who graduated from Massachusetts public high schools. The waivers, a key component of the John and Abigail Adams Scholarship Program , cover the cost of tuition for up to eight semesters at any Massachusetts state college or university.

The key takeaway: While the scholarship induced some of these students to remain in Massachusetts for college — a primary goal of the program — it reduced college completion rates, find the authors, Sarah Cohodes , an associate professor of economics and education at Teachers College, Columbia University, and Joshua Goodman , an associate professor of economics at Brandeis University. After the program started, about 200 fewer Massachusetts high school graduates per year earned college degrees.

Cohodes and Goodman find that each scholarship, valued at less than $7,000, encouraged students with high test scores to attend in-state public colleges and universities, which “were of lower quality than the average alternative available to such students.” Going to a lower quality school is associated with higher odds of dropping out, possibly because public institutions spend substantially less on instruction than private, non-profit colleges, the authors suggest. They analyzed a variety of data on Massachusetts students who graduated high school between 2005 and 2008, tracking them through 2012.

“The scholarship, though relatively small in monetary value, induced substantial changes in college choice,” Cohodes and Goodman write. “College completion rates decreased only for those subsets of students forgoing the opportunity to attend higher quality colleges when accepting the scholarship. We describe the magnitude of this response as remarkable because the value of the scholarship is dwarfed by estimates of the forgone earnings of attending a lower quality college or failing to graduate.”

Free Tuition and College Enrollment: Evidence from New York’s Excelsior Program Nguyen, Hieu. Education Economics , 2019.

New York’s Excelsior Scholarship — the nation’s first statewide “free college” initiative — has had a “negligible” effect on undergraduate enrollment in four-year colleges in the state, finds Hieu Nguyen , a researcher at the University of Tennessee, Knoxville.

Nguyen examined enrollment at public and private higher education institutions to gauge how students are responding to the initiative, launched in 2017 with the goal of helping more New York residents go to college. He looked at full-time undergraduate enrollment in the fall semesters between 2010 and 2017. He finds that even though students were offered free tuition, there was no statistically significant change in enrollment.

Nguyen indicates the program’s requirements might have discouraged some students from participating. “Apart from having to meet the state residency requirement to be eligible for the program, Excelsior recipients are expected to stay and work within the boundary of the state for the same number of years for which they receive the financial aid,” he explains in the paper. “While this constraint can be interpreted as fairly lax and reasonable by some, it might be viewed by others as too stringent, considering that New York has a high average cost of living relative to other states, and that Excelsior scholars are only awarded up to $5,500 per year after all other aid resources are exhausted.”

He notes that the Excelsior Scholarship is unlikely to change enrollment patterns among low-income students, whose tuition often is covered by other forms of financial aid such as federal Pell grants. Nguyen also notes the Excelsior program lacks a coaching component — unlike the Tennessee Promise program, which uses “community coaches” to help guide high school students toward graduation and immediately into college.

Understanding the Promise: A Typology of State and Local College Promise Programs Perna, Laura W.; Leigh, Elaine W. Educational Researcher , 2018.

This academic paper offers a detailed look at the characteristics of college promise programs and introduces a framework for classifying them. The researchers analyzed 289 programs operating in the U.S. in fall 2016 and found they varied in numerous ways, including in their eligibility requirements, the types of costs covered, the structure of financial awards, the length of time students can receive the awards, and the number and types of higher education institutions that participate in the program.

“Perhaps most importantly, the analyses underscore the need for policymakers, practitioners, and researchers to recognize the diversity of approaches that is masked by the college promise label before drawing conclusions about the transferability of findings about one college promise program to another,” write the researchers, Laura W. Perna and Elaine W. Leigh of the University of Pennsylvania.

Perna and Leigh find that college promise programs have these features in common:

• They aim to boost higher education attainment.
• They offer a financial award to eligible students.
• They have a place-based requirement such as residing in a specific city or state or attending a certain school or group of schools.
• They tend to target the traditional college-age population.

Some other findings:

• College promise programs exist nationwide, but the largest share of those that were analyzed — 37% — are in the South. A quarter are in the Midwest while 24% operate in the western U.S. and 14% are in the Northeast.
• Just over half of the college promise programs are state-sponsored. More than three-quarters of state-sponsored programs require award recipients to live in the state for a year. Most — 80% — allow students to attend a two-year or four-year school.
• Of those not sponsored by a state, 23% target students in a specific county, 24% target a school district and 11% target a city. More than half of programs that are not state-sponsored offer awards only to two-year colleges.
• Of the programs examined, 28% cover full tuition and take a “last dollar” approach, meaning they cover the amount of tuition left over after a student’s grants, scholarships and other financial aid money are applied. Meanwhile, 12% cover the full cost of tuition on a “first dollar” basis, meaning the award is applied first, allowing students to use other forms of financial aid to pay for other education-related expenses such as books, housing and food .

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Policy Brief 14

The Economics of Free College

David J. Deming

Despite growing public concern about the cost of college, higher education is still the best investment a young person can make. The American public understands that college is both increasingly necessary and increasingly unaffordable. This dynamic explains the growing public conversation around the idea of “free college”.

This policy brief discusses the economics of free college. An important cause of current levels of economic inequality is growing demand for college-level skills that began in the 1980s, combined with slow growth in the number of young people receiving degrees. A high-quality college education teaches critical thinking and abstract problem-solving, and also helps students think seriously about values and ethics. Technological change will make these skills more valuable than ever. Thus expanding access to higher education is an urgent national priority .

The short-run cost of expanding access to higher education is potentially large. Yet the long-run cost is much smaller. This is because education is an investment that requires up-front spending, but pays back benefits over time. Policies that increase college attainment can pay for themselves – or even yield net benefits to the taxpayer – because college-goers earn more after graduation and pay higher taxes.

All this means that free college policies should be designed to achieve the goal of universal college completion. Free college is a means to an end. A policy that pushes the U.S. toward universal college completion would pay for itself many times over.

Not all free college plans are well-designed to achieve this goal. In fact, a poorly designed free college plan could make the problem worse. For example, free tuition would do little to solve another important problem in higher education – low rates of degree completion. Lower prices do nothing to help overcrowded and underfunded public institutions.

A major concern is that states lowering tuition to zero will balance their budgets by cutting spending. Research suggests that this would lower graduation rates, making the completion problem worse. Thus the right path is a “grand bargain” that greatly increases funding in public postsecondary institutions , while also holding them accountable for graduation rates and labor market outcomes.

As I discuss below, one promising idea is a Federal matching grant. This would provide Federal funds to public institutions in states that commit to making college tuition-free.

Introduction

American higher education is facing a crisis of public legitimacy, and rising college costs are a key reason. The price of a four-year college education has risen faster than inflation for thirty consecutive years . A 2018 Pew survey found that 61 percent of US adults now think that “higher education is going in the wrong direction”. Of those, 84 percent identified rising tuition prices as a reason, higher than any other explanation by far.

Yet despite the growing economic burden of paying for college, attendance rates have continued to rise. This is because – despite all its faults – a college education is one of the best investments a young person can make. The economic return to a college degree is still near an all-time high of around 14 percent per year – double the long-term return on stocks. While student loan burdens are growing rapidly, debt is still low relative to the long-run economic payoff of a college degree (motivating some economists to call for a stronger income-based repayment system).

One reason college pays off is that the bottom has dropped out of earnings for the less-educated. In fact, rising economic inequality over the last several decades closely tracks the rising return to education. Since 1980, inflation-adjusted weekly earnings for US college graduates have grown by about 35 percent. In contrast, real wages have declined for workers with only a high school education. This basic pattern of widening earnings gaps by education holds for both men and women, for all racial groups, for immigrants as well as natives, and in nearly all countries in the developed world.

Popular attention has focused on wealth concentration among the “top 1 percent” as a source of rising inequality. Others have focused on globalization and the rise of multinational corporations. Yet few understand just how important education has been in contributing to rising inequality among the “ other 99 percent ”. The inflation-adjusted earnings gap between two-earner households with a high school education and a college education grew by about $28,000 between 1979 and 2012. This increase is four times larger than the redistribution of income that has occurred from the bottom 99 percent to the top 1 percent over the same period.

Looking beyond earnings, all of today’s most pressing social problems – from declining male labor force participation to falling marriage rates and increases in single parenthood to rising mortality and opioid addiction – disproportionately afflict people without college degrees.

The American public understands that college is both increasingly necessary and increasingly unaffordable. This dynamic has rapidly increased political support for “free college” plans. Eleven states have passed or pending “free college” legislation as of early 2019. Dozens of cities – ranging from Kalamazoo to Pittsburgh to New Haven – have enacted “college promise” programs, which offer free college tuition to students attending city public high schools. While most free college plans are restricted to community colleges and to full-time, traditional students, some states such as New York and Tennessee have expanded “college promise” plans to the four-year sector and to adult students. President Barack Obama proposed a national free college program in 2015, and this year Democratic presidential candidates such as Bernie Sanders , Elizabeth Warren and Joe Biden have followed with plans of their own.

The Economic Case for Investment in Higher Education

Economists primarily think of education as “human capital”.  Obtaining more education is like digging a hole with a bulldozer rather than a shovel. More education allows one to get more done in the same amount of time, increasing productivity and thus market wages.

Some economists argue that education doesn’t actually increase productivity – rather, it is a signaling mechanism that provides employers with information about your ability. However, the best evidence suggests that most of the economic return to education is human capital. A number of papers find that increases in the quantity and quality of schooling boost earnings, even when these increases are not observed by employers. One example is compulsory schooling reforms. In studies such as Angrist and Krueger (1991), Meghir and Palme (2005), Oreopoulos (2006) and Aryal, Bhuller and Lange (2019), young people are legally required to stay in school longer, and this increases their earnings years later even when it does not lead to increases in degree attainment. Another example comes from Arteaga (2018), who finds that a reduction in coursework requirements for economics and business degrees at a university in Colombia reduced wages. Since employers were not aware of this curricular reform and it did not affect selection into university or graduation rates, the earnings losses are almost certainly due to learning losses. Overall, there is strong evidence that education increases productivity directly.

Another important benefit of education is that it helps you “learn how to learn”, a skill that is especially helpful in times of rapid change. There is a wealth of historical evidence suggesting that education helps workers learn new technologies. The Industrial Revolutions in 19 th century England and early 20 th century America were fueled by rapid increases in formal schooling in both populations. New industrial processes were made possible by the diffusion of electricity, and they required workers with basic literacy and numeracy skills who could decode manuals and blueprints, solve formulas and communicate with highly skilled professionals. Educated farmers are more likely to adopt new technologies .

The information age – often dated to the introduction of the IBM-PC in 1981 – has also changed the labor market in ways that favor the highly skilled. Computers specialize in information processing and categorization tasks that were formerly the domain of payroll clerks, typists and other middle class workers. While computers replace humans in routine information processing tasks, the value of workers who use this information to make decisions and solve problems has dramatically increased.

Recent developments such as machine learning (ML) methods can be understood as a continuation of this trend. ML and Artificial Intelligence techniques use information to make predictions . Better predictions can be used to make better decisions and set priorities, but that requires an understanding of the technology and its limitations. A high-quality college education teaches critical thinking and abstract problem-solving, and also helps students think seriously about values and ethics. Technological change will make these skills more valuable than ever.

Other countries understand this, and have invested much more than the US in higher education. 41 percent of the baby boomer generation in the US (those ages 55-64 in 2014) has completed some tertiary education. This ranks 3 rd among OECD countries, behind only Israel and Canada. However, tertiary education rates have increased only 5 percentage points – to 46 percent – for young people age 25-34. In contrast, the average growth rate among other OECD nations over the same period was 16 percentage points. The US has fallen from 3 rd to 10 th among OECD nations in the last 30 years, and its tertiary education growth rate of 5 percentage points ranks 32 nd out of 35 countries.

Common Objections

Why should the government fund students to attend college.

If college is such a good investment, why don’t students finance a college education out of their own pockets? There are three broad reasons for the government to subsidize higher education. First, students and their families may not be able to afford college. In other private markets, the solution is to offer a loan where the item itself (e.g. a house, or a car) becomes collateral in the event of default. Unlike a house, investments in education have no obvious source of collateral since students cannot contractually commit to pay their future wages. Thus private lenders are reluctant to offer unsecured loans. This is why educational loans in the U.S. and many other countries are mostly offered (or at least guaranteed) by the government. Borrowing constraints have become quite important in the U.S. in recent years, and can affect the quality of school attended as well as the quantity (Lochner and Monge-Naranjo 2012, Sun and Yannelis 2016).

A second reason for government involvement is a lack of information about the costs and benefits of investment in higher education. Survey data consistently show that college-age youth and their parents are misinformed about the average returns to a college degree and to specific college majors (Betts 1996, Avery and Kane 2004, Grodsky and Jones 2007, Hoxby and Turner 2015, Wiswall and Zafar 2015). Students are unlikely to know with certainty whether college will benefit them until long after the investment decision is made. Thus risk aversion and misperceptions about the returns to education may prevent some youth from attending college.

A final reason for government intervention in higher education is that the benefits of a more educated populace are widely shared. Education increases civic participation and decreases crime, both of which have spillover impacts on one’s fellow citizens. Workers earn more when they live in cities with more college-educated workers, and employers that locate in these cities are more productive (Moretti 2004). A recent historical study found that increasing the number of universities in a country led to higher GDP growth (Valero and Van Reenen 2016).

What would happen if we expanded access to higher education? Wouldn’t the least-prepared students struggle to succeed?

The market for higher education may fail to work well on its own for a number of reasons. However, even if we solved the market failures described above, the impact of expanding college access might still be small. While many studies show that the average return to college is high, the return to college for marginal students could be lower. Cameron and Heckman (2001) estimate a structural model of educational choice and find that long-run factors such as family environment are more important than financial constraints in determining college attainment. Their results – and similar findings reviewed in Lochner and Monge-Naranjo (2012) – imply that the return to college for marginal students is low.

However, a number of recent quasi-experimental studies reach the opposite conclusion. Zimmerman (2014) compares applicants on either side of a test score cutoff for admission to a Florida public university. About a decade after high school completion, students who are barely admitted earn 22 percent more than those who are barely denied. Importantly, most of the students who are denied admission end up attending a local community college. Several other studies find high economic returns for students whose test scores barely exceed an admissions cutoff (Hoekstra 2009, Anelli 2018, Canaan and Mouganie 2018, Ost, Pan and Webber 2018).

This evidence is important because it answers an important policy question – “what would happen if we expanded the number of seats at a moderately selective public university?” Admissions cutoffs are designed with capacity constraints in mind. An obvious policy implication is that admitting more students by lowering the threshold for academic preparation would yield higher returns for marginal students – the opposite of what earlier research predicts.

Can we afford it?

The country has many competing priorities, and it could be very expensive for cash-strapped governments to increase higher education subsidies. However, a growing body of evidence suggests that well-targeted education spending can pay for itself and actually yield net benefits to citizens in the long-run. The reason is that education – unlike many transfer and social assistance programs – is an investment that yields returns later in life. Education seems expensive, because the costs are easy to measure and are paid up-front. The benefits of education, while large, are long-run and diffuse.

Using a discontinuous change in the Pell Grant funding formula, Denning, Marx and Turner (2019) find that financial aid significantly increases degree completion and postgraduate earnings for students beginning at a four-year public university in Texas. They estimate that a cumulative increase in financial aid of about $1,100 increases earnings by about $3,800 seven years after grant receipt. This increase in earnings leads to an increase in tax payments – which economists call a fiscal externality . According to the authors’ calculations, the fiscal externality impact of increasing college attainment through financial aid allows the government to completely recover its costs within 10 years and likely pays for itself many times over.

Most policy choices involve tradeoffs of some kind. Hendren and Sprung-Keyser (2019) conduct a comprehensive analysis of the welfare impacts of nearly 150 U.S. government programs. They use causal estimates of policy changes from existing studies to construct – for each class of policy – a statistic called the Marginal Value of Public Funds (MVPF). The MVPF starts with the value that beneficiaries place on the benefits of the policy, and then divides that value by the cost to the government of providing the benefit. An MVPF of one represents a pure transfer of money from taxpayers to an individual. The MVPF can be less than one if the policy changes behavior in a way that reduces revenue (for example, by causing individuals to work less). Conversely, the MVPF can be greater than one if spending a dollar on a program like financial aid increases earnings potential and thus tax revenues, as in the case of Pell Grant aid.

Hendren and Sprung-Keyser (2019) produce a striking finding – MVPFs are highest for policies that invest in the health or education of low-income children. This includes early childhood education, but also a number of policies that increase access to higher education. In many cases, the MVPF is infinite , which corresponds to the case above, where financial aid fully pays for itself. This is the rare example in economics of a “free lunch”.

In contrast, policies that target adults have MVPFs around 1, meaning they are transfers from taxpayers to different groups of beneficiaries. These transfers might still be desirable (for example, providing health insurance to low-income adults), but they do have tradeoffs.

The key insight is that unlike many other social policies, education is an investment in the future . Rather than asking whether we can afford to expand access to higher education, we should be asking whether we can afford NOT to do it.

Wouldn’t a free college program be regressive, because the wealthy are more likely to attend college?

In a narrow sense, yes. Students from poor families are less likely to attend college at all, and they also attend lower-priced colleges than their wealthier peers. Thus the benefits of free college in terms of lower tuition would be regressive, relative to a policy that distributes dollars equally across families.

Another concern with the design of most free college policies is that they are “last dollar” scholarships, meaning they cover unmet need only after accounting for other sources of financial aid such as the Pell grant. Thus students who qualify for need-based financial aid are often already attending public institutions tuition-free. Chingos (2017) and Baum and Tilsley (2019) calculate that the benefits of free college proposals – in terms of dollars saved – are greater for higher-income families, because they attend higher-priced institutions and do not receive Federal aid.

However, there are three reasons that free college is less regressive than it appears. First, the financing mechanism matters. Any free college plan that is paid for by taxing the rich – as in several of the plans put out by Democratic candidates for President – will probably be progressive. On the other hand, several states such as Georgia, Arkansas and West Virginia have “merit aid” scholarship programs that allow students meeting minimal academic qualifications to attend state universities tuition-free. These scholarships are funded through the state lottery, so they are transfer from lottery ticket purchasers to college-goers and are most likely regressive. The bottom line is that you can make any free college plan progressive or regressive depending on how you pay for it.

Second, the calculation of who benefits from tuition reduction assumes that that the population of college-goers stays fixed. But the goal of free college plans is to increase college attendance and completion, especially for poor students. If that were to happen, the impact of free college would become much more progressive. Wealthier students are already mostly going to college, and so free college might shift them from the private sector to the public sector. They would save a lot of money on tuition, but in either state of the world they would get a college education.

However, making college free could shift many more poor students into college in the first place. In that case, they wouldn’t save any money on tuition (it would be zero in both cases), but they would have much higher lifetime earnings. Since the value of even a small increase in lifetime earnings is much higher than the value of a few years of lower tuition, behavioral impacts of free college policies would likely make them much more progressive.

Third, part of the argument for free college is about the political economy of universal programs. Proponents rightly argue that programs such as Social Security and Medicare have had more staying power precisely because they are available to everyone. In a broader sense, judgments about a program’s progressivity are always relative to the status quo. One could imagine that the same argument was made about high school in the US 100 years ago, before we decided to publicly fund and universally provide K-12 education.

Design Principles for Free College Plans

Expanding college access could yield large economic benefits, both for individual students and for society. Moreover, such an expansion is unlikely to happen through individual action only – government intervention is necessary. Perhaps most importantly, policies that increase college attainment would be affordable in the short-term, and pay for themselves in the long-term.

Design Principle #1 – Increase college access

The ultimate goal of any free college policy should be to increase the number of students who complete a four-year college degree. Making college free is a means to an end. It is important to ease the financial burden of students who are already going to attend college. But lowering prices for students who already plan to attend should be secondary to the goal of getting more students through school.

Broadly speaking, the ideal policy should seek to generate the largest amount of educational attainment – including degree completion – per dollar spent . Some free college policies increase attainment by inducing students to go to college who would otherwise not enroll. Others mostly shift students across schools of different types (public vs. private, two-year vs. four-year).

“Merit Aid” is one example of a free college policy that mostly subsidizes inframarginal students. Merit aid programs offer free or reduced in-state tuition to students meeting broad eligibility criteria, including academic qualifications. Several studies have found small positive impacts of merit aid on initial enrollment, but weaker and inconsistent impacts on college completion (Dynarski 2000, Fitzpatrick and Jones 2012, Sjoquist and Winters 2012, Cohodes and Goodman 2014, Scott-Clayton and Zafar 2016). One reason is that most students who receive merit aid are already planning to attend college, and so the net impacts on college attainment are relatively small. Fitzpatrick and Jones (2012) argue that “nearly all of the spending on these programs is transferred to individuals who do not alter educational or migration behavior.”

The free college programs in most states apply only to the two-year sector. One concern with community college “promise” programs in states like Oregon and Tennessee is that students will be diverted away from higher-quality four-year colleges. Carruthers, Fox and Jepsen (2018) find that a pilot version of the Tennessee Promise program in Knox County, Tennessee increased associate’s degree attainment by about 10 percentage points while decreasing bachelor’s degree attainment by 6 percentage points. Given the large difference in mean earnings between AA and BA degree holders, the net impact of the policy on earnings is ambiguous.

The important point is that focusing on particular sectors or colleges subsidizes switching based on relative prices. A statewide – or nationwide – plan would lead to fewer distortions of this type.

How can we design free college policies so that they increase attendance? One way is to focus on underserved populations, and on students with fewer outside options. This includes students from rural areas and first generation college students.

Design Principle #2 – Focus on the supply side

The impact of any free college policy should not just be measured in terms of increased attendance, but also persistence and degree completion. College completion rates are relatively low in the US, especially for low-income students. In a cohort born between 1979 and 1982, only 9 percent of youth from the bottom quartile of the family income distribution completed a four-year college degree, compared to 54 percent of youth in the top family income quartile (Bailey and Dynarski 2012).

Increasing college completion rates will require more than just free tuition. Scholarships and tuition reduction address the financial burden of college attendance, but they do not directly increase the quality of the educational experience. In fact, lowering prices dramatically without allocating additional resources to colleges receiving an influx of students could lower college quality, perhaps substantially.

A larger concern with free college plans is that states will make college free by making it cheap – lowering the price to zero, but spending very little on the educational experience itself. For this reason, free college policies should provide tuition support as part of a broader package of reforms that directly address the funding and governance of public institutions .

Rates of degree completion are strongly correlated with per-student spending. Figure 1 shows the strong correlation between per-student spending and bachelor’s degree completion within six years, among less-selective four-year public institutions. [1] Recent research shows that students who attend colleges with higher rates of per-pupil spending are more likely to graduate (e.g. Cohodes and Goodman 2014, Goodman, Hurwitz and Smith 2017).

Figure 1: Bachelor‘s Degree Completion and Per-Student Spending.

There is also strong evidence that declines in college quality within institutions over time have led to lower rates of college completion. Degree attainment is lower – and takes longer – when states have larger cohorts of college students, suggesting that lower public subsidies per student negatively affect completion rates as well as time to degree (Bound and Turner 2006, Bound, Lovenheim and Turner 2012).

A few papers hone in specifically on the role of resources in college attainment. Bound, Lovenheim and Turner (2010) show that declines in resources per student – rather than changes in the academic preparation of students – have led to declining completion rates over time. Deming and Walters (2018) study the causal impact of changes in state appropriations on student enrollment and degree completion. They find that state higher education budget cuts have a large impact on postsecondary attainment.

Increased spending can boost degree completion if the money is wisely spent. Contrary to popular perception, most students attend public colleges and universities that are minimally selective and close to home. These schools are heavily reliant on state funding, which has declined markedly in recent years. The quality of students’ educational experiences reflects this belt-tightening. Due to budgetary restrictions, less-selective public institutions often have large classes and provide little in the way of academic counseling, mentoring and other student supports.

Programs that provide counseling, tutoring and other supports to students entering college have large impacts on persistence and degree completion (Angrist, Lang and Oreopoulos 2009, Carrell and Sacerdote 2017, Barrow et al 2014, Bettinger and Baker 2014, Scrivener et al 2015, Page, Castleman and Sahadewo 2016, Clotlfelter, Hemelt and Ladd 2018). One program – the CUNY Accelerated Study in Associate’s Program (ASAP) nearly doubled graduation rates by providing comprehensive academic and support service to students entering community colleges (Scrivener et al 2015).

The success of student support interventions is not surprising, because they essentially replicate the services provided by better-resourced colleges .

Design Principle #3 –Federal funding should flow directly to institutions, but with strings attached

Historically, public universities have been funded primarily through state legislative appropriations that are distributed directly to institutions. State and local funding allows public colleges and universities to provide education at a sticker price that is much lower than its true cost. In 1990, inflation-adjusted net tuition per student was $2,896 in public institutions, yet educational revenue per student totaled $11,583 (SHEEO, 2016). Nearly all U.S. public postsecondary institutions spend more – sometimes much more – per student than they charge in tuition. This “subsidy” allows colleges to provide a higher quality education at a lower price . This could be in the form of smaller classes, more qualified instructors, or additional tutoring and counseling services. When students receive a larger subsidy, they are getting a better deal.

Even though tuition prices have risen steadily, per-student state funding has declined. This means that students are paying higher prices, but getting a worse deal . In 1990, the subsidy in public institutions was $7.26 for every $1 paid in tuition. By 2014, that figure had fallen to $3.87 (Deming 2017).

State support for higher education is in long-term structural decline. However, the Federal role in higher education is growing. Unlike state money, Federal funding mostly flows directly to students. The Pell Grant, for example, is a voucher that gives low-income students a discount to attend a college of their choice. Subsidized loans and tax credits operate in the same way.

Price subsidies lower student costs, but have at least two problems. First, they do not address quality directly. In fact, price subsidies can create strong incentives for state institutions to spend less . For example, consider a public institution that is currently charging $5,000 per year in tuition and providing an additional $10,000 subsidy, for a total of $15,000 of per-student spending. Suppose that student receive a price subsidy in the form of a $2,000 financial aid grant, changing their net price to $3,000.

How do colleges respond to increases in financial aid? One way is by increasing tuition to capture some of the aid – this possibility was famously raised by former Secretary of Education William Bennett as a reason for rising college costs. However, tuition prices are very visible – both to the public and to state legislatures – and colleges are under a lot of pressure to keep prices low. An easier way to capture some of the increase in Federal dollars is to lower per-student subsidies, keeping tuition constant. In the example above, a college could still charge $5,000 in tuition, of which $3,000 is paid by the student, but could then save money by lowering per-student spending (say to $9,000). Concretely, this would mean laying off faculty (or not hiring replacements), replacing tenure line faculty with adjuncts, increasing class sizes, or increasing guidance counselor caseloads.

Free college programs – if poorly designed – could make this “race to the bottom” in spending worse . Requiring colleges to be tuition free eliminates one margin of adjustment. When state budgets get cut, all of the cut must happen on the spending side. In the example above, asking colleges to lower tuition from $5,000 to $0 without providing any additional resources would force them to balance their budgets by cutting per-student spending from $15,000 to $10,000. Many free college proposals provide additional resources for exactly this reason.

The second problem with price subsidies is that they are hard to embed into a system of accountability. Existing Federal regulations hold out eligibility to distribute Title IV financial aid (Pell Grants and Stafford Loans) as the main threat for violating performance standards. Withholding Title IV funds is effectively a death sentence for most colleges, and so sanctions are infrequently used. When money flows directly to institutions, performance standards can be much more flexible. For example, many states provide extra funding to colleges that meet benchmarks related to student graduation rates or postgraduate earnings.

The idea behind Pell Grants and other demand-side subsidies is that accountability is provided by the market. Colleges are supposed to compete for students – and thus funding – by improving quality. Yet the market for higher education is not very competitive. Most students attend nonselective public colleges that are very close to home and have few competitors. Elite colleges – which compete fiercely within a nationwide pool for the very best students – are an exception. But very few students attend these schools.

A clear example of the failure of market discipline in higher education is the rise of for-profit colleges . In principle, for-profit colleges can increase competition in higher education by responding nimbly to changing employer demands and better serving student needs. In practice, the for-profit sector has been overtaken by large, publicly-traded corporations who game the Federal financial aid system by socializing losses and privatizing profits. In 2012, the 23 largest for-profit colleges enrolled more than 1.1 million students and accounted for 20 percent of the growth in bachelor’s degrees over the previous decades. These programs charge very high tuition, enroll students almost exclusively online, and students who attend them have extremely poor postgraduate labor market outcomes (Deming et al 2016, Cellini and Turner 2019).

The term “for profit” disguises the fact that these institutions are almost entirely dependent on taxpayer funds for survival.  Federal Title IV grants and loans accounted for 71 percent of revenue at for-profit colleges in the 2016-2017 academic year. And these figures understate the important of Federal student aid to for-profits, because they do not include military benefits such as the post-9/11 GI bill. A Federal regulation capping Title IV funds at 90 percent of revenue for for-profits (the 90/10 rule) prevents their revenue share in taxpayer funds from being even higher.

The point is that price subsidies have not introduced market discipline into higher education. If we want to increase college attainment, we must greatly increasing spending levels – and quality – in public colleges and universities across America . This will require more resources, but also careful government regulation of the institutions receiving funds.

A Federal Matching Grant for States that Implement Free College

In a 2017 paper, I proposed a Federal matching grant for public institutions in states that implement “free college” proposals. The plan calls for a Federal match on the first $5,000 of net per-student spending in all public postsecondary institutions that commit to making college tuition-free. This means that the Federal government would pay public postsecondary institutions $1 (or more, some plans propose $2) for every $1 in state spending per full-time student, after subtracting any revenue from tuition and fees obtained from ineligible students. Cost estimates for the program range widely depending on the number of states that commit to making college tuition-free. Yet even if the program were adopted in all 50 states, the cost would be no more than one-third of current spending on Federal financial aid programs.

The purpose of a Federal matching grant is to increase the return on state investment in higher education, while also reigning in costs. The matching grant would be restricted to the core spending categories of instruction and academic support, and would also include a rule that restricts the growth of administrative spending to pre-program levels.

Unlike “last dollar” free college proposals, the design of this matching grant would disproportionately benefit low-income students. This is true because of the strong correlation between parental income and college selectivity (e.g. Carnevale and Stroh 2010, Greenstone, Looney, Patashnik and Yu 2013). Highly selective institutions already have high rates of per-student spending, and they disproportionately enroll wealthier students. Matching the first $5,000 would matter most for less-selective public institutions with low current levels of spending. Another big benefit of a Federal matching grant comes through fiscal stabilization. As the largest source of discretionary spending, higher education is often referred to as the “balance wheel” of state budgets (Delaney and Doyle 2011). The existence of a Federal matching grant would blunt legislators’ incentives to enact deep budget cuts to higher education during recessions.

This matching grant proposal share some common features with other plans released by Democratic members of Congress and candidates for President. Bernie Sanders’ proposed College for All Act would eliminate undergraduate tuition at four-year public institutions by providing two-thirds of the funds required to bring every school’s tuition from its current level down to zero. Elizabeth Warren recently released a plan that would make all public institutions tuition-free and would expand Pell Grant funding to cover the cost of college attendance (including housing, transportation and other expenses)

Closest to my proposal, Senator Brian Schatz (D-HI) and Representative Mark Pocan (D-WI) introduced a bill with 40 co-sponsors called the Debt Free College Act . This bill would establish a dollar-for-dollar Federal match to higher education appropriations in states that commit to helping students pay for the full cost of attendance without having to take on any debt. Finally, Senator Chris Murphy (D-CT) recently released a plan for Higher Education Act (HEA) reauthorization that focused on holding schools accountable for graduation rates and other outcomes.

While the design details can vary, a successful free college plan should have many of the features described above. This includes reaching students who would otherwise not attend college at all, a focus on completion as well as access, careful attention to increasing funding and quality in public institutions, and prudent regulation of colleges that receive Federal and state funds.

[1] Figure 1 presents a scatterplot of the relationship between the natural log of per-student spending and the share of an initial entry cohort in 2008 that completes a bachelor’s degree within 6 years. The sample is restricted to four-year public institutions, excluding the most selective universities (defined as either “Most Competitive” or “Highly Competitive” by the 2009 Barron’s Profile of American Colleges and Universities).

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What Does Free College Really Mean?

• Posted January 17, 2017
• By Casey Bayer

Free college sounds great as an idea, but how do states actually finance it?

Most states propose to fund free college plans as “last-dollar” scholarships. This means that the state commits to covering unmet financial aid after all other eligible funds — such as the federal Pell grant — are exhausted. Additionally, most plans cover tuition and fees but not additional expenses such as room and board or textbooks.

This “last-dollar” approach helps keeps program costs low, but it is only possible because of the generosity of existing financial aid programs.

Why is free college appealing from a state’s perspective?

College is expensive, and the process of applying for and receiving financial is complicated and stressful. Many families do not realize that they will likely pay only a fraction of the sticker price of college. In contrast to the byzantine system of federal and state financial aid programs, free college is a very easy concept to understand.

The political appeal is obvious as well. Nearly all families want their children to attend college, yet they are deeply concerned about whether they can afford it. Policymakers who commit to providing “free college” are easing the minds of their constituents, even those who have very young children and thus are many years away from the actual expense.

What are some of the concerns around free college tuition plans?

I support the goal of free college. More than ever, a college degree is a ticket to the middle class. The question is how to get there.

One concern — raised by others such as Matt Chingos at the Urban Institute — is that most of the benefits of free college plans accrue to higher-income families. The reason goes back again to the “last dollar” design. Low-income students already receive a lot of need-based financial aid from the federal government. Many states also already have need-based aid programs. The additional value of a last dollar scholarship is relatively low for these students — they are already paying close to zero in tuition and fees. In contrast, families that make too much money to be eligible for need-based programs will see a much larger price reduction from free college. This is not a bad thing! College is a financial burden for nearly every family. But it is worth clarifying that the biggest beneficiaries of free college plans are usually middle-class families.

A second more fundamental concern is about the single-minded focus on costs. The value of a college degree depends on its price, but also on the quality of the education itself — the benefits as well as the costs. My main concern with free college plans is that focusing solely on college costs will push us toward an outcome where college is cheap but also relatively low quality. If you lower the price of college to zero, you are going to get a lot more students enrolling. Absent significant increases in state funding for higher education, the same pool of resources will then be spread across many more students. This could lead to larger classes, less guidance and mentoring, and a generally lower quality experience. It is not at all clear that lower prices and lower levels of spending will be a good thing overall for students.

It sounds like you are saying that prices don’t matter.

Not at all. Lower prices are always better from the student’s perspective! On the other hand, state higher education budgets are under enormous pressure. My concern is that states will pay for “free college” by cutting the subsidies that they currently send directly to the public colleges in the state. This raises the question: Is it better to subsidize education on the supply side (by funding public institutions out of tax revenues) or on the demand side (by giving financial aid to students directly)?

Let me make this very specific. Every public college in the U.S. currently spends more on a student’s education than they charge in tuition. For example, a public university might charge $10,000 per year in tuition and fees but actually spend $20,000 per student. The difference comes mostly from subsidies — called appropriations — coming directly from state taxpayers through the legislature. Suppose an extra $1,000 per student suddenly becomes available. The university has two choices. First, they can pass that $1,000 on to the student as a price reduction — charging $9,000 per year and still spending $20,000. Alternatively, they can keep the price at $10,000 but now spend $21,000 per student, with the extra money going to things like smaller classes, more student advising and mentoring, or perhaps climbing walls and nap pods.

Which choice will do more to help a student complete their college degree? Free college — and most of the existing federal financial aid system — assumes that price reduction is most important. But a growing body of work — including a recent paper I’ve written with Chris Walters — suggests that spending may be a more important factor for degree attainment.

We see this is a recent study of the Adams scholarship in Massachusetts. The Adams scholarship provided four years of tuition and fees in a Massachusetts public college or university to students who met a minimum MCAS score standard. The study found that these students took up the offer of “free college,” opting to attend a Massachusetts public institution instead of a private college. Strikingly, the authors found that students who took up the Adams scholarship were less likely to graduate from college. They show persuasively that this is due to differences in college quality. The private colleges had higher levels of per-student spending and higher graduation rates, but students were lured to lower quality public institutions by the offer of “free college.”

I am not saying that “free college” plans will lower graduation rates. In particular, there are many more high-quality private institutions in Massachusetts than elsewhere in the U.S. But this study underscores the perils of a singular focus on lowering costs. College quality matters, and public policy ought to focus equally on improving and maintaining quality so that more students can ultimately earn a degree and go on to succeed in the labor market and in life.

The latest research, perspectives, and highlights from the Harvard Graduate School of Education

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The Argument for Tuition-Free College

Soaring tuitions and student loan debt are placing higher education beyond the reach of many American students. It’s time to make college free and accessible to all.

by Keith Ellison

April 14, 2016

(Shutterstock)

In 1862, President Abraham Lincoln signed the Land Grant College Act into law, laying the groundwork for the largest system of publicly funded universities in the world. Some of America's greatest colleges, including the University of Minnesota, were created by federal land grants, and were known as "democracy's colleges" or "people's colleges."

But that vision of a "people's college" seems awfully remote to a growing number of American students crushed under soaring tuitions and mounting debt. One hundred and fifty years after Lincoln made his pledge, it's time to make public colleges and universities free for every American.

This idea is easier than it looks. For most of our nation's history, public colleges and universities have been much more affordable than they are today, with lower tuition, and financial aid that covered a much larger portion of the costs . The first step in making college accessible again, and returning to an education system that serves every American, is addressing the student loan debt crisis.

The cost of attending a four-year college has increased by 1,122 percent since 1978 . Galloping tuition hikes have made attending college more expensive today than at any point in U.S. history. At the same time, debt from student loans has become the largest form of personal debt in America-bigger than credit card debt and auto loans. Last year, 38 million American students owed more than $1.3 trillion in student loans.

Once, a degree used to mean a brighter future for college graduates, access to the middle class, and economic stability.

Today, student loan debt increases inequality and makes it harder for low-income graduates, particularly those of color , to buy a house, open a business, and start a family.

The solution lies in federal investments to states to lower the overall cost of public colleges and universities. In exchange, states would commit to reinvesting state funds in higher education. Any public college or university that benefited from the reinvestment program would be required to limit tuition increases. This federal-state partnership would help lower tuition for all students. Schools that lowered tuition would receive additional federal grants based on the degree to which costs are lowered.

Reinvesting in higher education programs like Pell Grants and work-study would ensure that Pell and other forms of financial aid that students don't need to pay back would cover a greater portion of tuition costs for low-income students. In addition, states that participate in this partnership would ensure that low-income students who attend state colleges and universities could afford non-tuition expenses like textbooks and housing fees . This proposal is one way to ensure that no student graduates with loans to pay back.

If the nation can provide hundreds of billions of dollars in subsidies to the oil and gas industry and billions of dollars more to Wall Street , we can afford to pay for public higher education. A tax on financial transactions like derivatives and stock trades would cover the cost. Building a truly affordable higher education system is an investment that would pay off economically.

Eliminating student loan debt is the first step, but it's not the last. Once we ensure that student loan debt isn't a barrier to going to college, we should reframe how we think about higher education. College shouldn't just be debt free-it should be free. Period.

We all help pay for our local high schools and kindergartens, whether or not we send our kids to them. And all parents have the option of choosing public schools, even if they can afford private institutions. Free primary and secondary schooling is good for our economy, strengthens our democracy, and most importantly, is critical for our children's health and future. Educating our kids is one of our community's most important responsibilities, and it's a right that every one of us enjoys. So why not extend public schooling to higher education as well?

Some might object that average Americans should not have to pay for students from wealthy families to go to school. But certain things should be guaranteed to all Americans, poor or rich. It's not a coincidence that some of the most important social programs in our government's history have applied to all citizens, and not just to those struggling to make ends meet.

Universal programs are usually stronger and more stable over the long term, and they're less frequently targeted by budget cuts and partisan attacks. Public schools have stood the test of time-let's make sure public colleges and universities do, too.

The United States has long been committed to educating all its people, not only its elites.

This country is also the wealthiest in the history of the world. We can afford to make college an option for every American family.

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• Paying for College

Should College Be Free? The Pros and Cons

Types of Publicly Funded College Tuition Programs

Pros: why college should be free, cons: why college should not be free, what the free college debate means for students, how to cut your college costs now, frequently asked questions (faqs).

damircudic / Getty Images

Americans have been debating the wisdom of free college for decades, and more than 30 states now offer some type of free college program. But it wasn't until 2021 that a nationwide free college program came close to becoming reality, re-energizing a longstanding debate over whether or not free college is a good idea. 

And despite a setback for the free-college advocates, the idea is still in play. The Biden administration's free community college proposal was scrapped from the American Families Plan . But close observers say that similar proposals promoting free community college have drawn solid bipartisan support in the past. "Community colleges are one of the relatively few areas where there's support from both Republicans and Democrats," said Tulane economics professor Douglas N. Harris, who has previously consulted with the Biden administration on free college, in an interview with The Balance. 

To get a sense of the various arguments for and against free college, as well as the potential impacts on U.S. students and taxpayers, The Balance combed through studies investigating the design and implementation of publicly funded free tuition programs and spoke with several higher education policy experts. Here's what we learned about the current debate over free college in the U.S.—and more about how you can cut your college costs or even get free tuition through existing programs.

Key Takeaways

• Research shows free tuition programs encourage more students to attend college and increase graduation rates, which creates a better-educated workforce and higher-earning consumers who can help boost the economy. 
• Some programs are criticized for not paying students’ non-tuition expenses, not benefiting students who need assistance most, or steering students toward community college instead of four-year programs.  
• If you want to find out about free programs in your area, the University of Pennsylvania Graduate School of Education has a searchable database. You’ll find the link further down in this article. 

Before diving into the weeds of the free college debate, it's important to note that not all free college programs are alike. Most publicly funded tuition assistance programs are restricted to the first two years of study, typically at community colleges. Free college programs also vary widely in the ways they’re designed, funded, and structured:

• Last-dollar tuition-free programs : These programs cover any remaining tuition after a student has used up other financial aid , such as Pell Grants. Most state-run free college programs fall into this category. However, these programs don’t typically help with room and board or other expenses.
• First-dollar tuition-free programs : These programs pay for students' tuition upfront, although they’re much rarer than last-dollar programs. Any remaining financial aid that a student receives can then be applied to other expenses, such as books and fees. The California College Promise Grant is a first-dollar program because it waives enrollment fees for eligible students.
• Debt-free programs : These programs pay for all of a student's college expenses , including room and board, guaranteeing that they can graduate debt-free. But they’re also much less common, likely due to their expense.  

Proponents often argue that publicly funded college tuition programs eventually pay for themselves, in part by giving students the tools they need to find better jobs and earn higher incomes than they would with a high school education. The anticipated economic impact, they suggest, should help ease concerns about the costs of public financing education. Here’s a closer look at the arguments for free college programs.

A More Educated Workforce Benefits the Economy

Morley Winograd, President of the Campaign for Free College Tuition, points to the economic and tax benefits that result from the higher wages of college grads. "For government, it means more revenue," said Winograd in an interview with The Balance—the more a person earns, the more they will likely pay in taxes . In addition, "the country's economy gets better because the more skilled the workforce this country has, the better [it’s] able to compete globally." Similarly, local economies benefit from a more highly educated, better-paid workforce because higher earners have more to spend. "That's how the economy grows," Winograd explained, “by increasing disposable income."

According to Harris, the return on a government’s investment in free college can be substantial. "The additional finding of our analysis was that these things seem to consistently pass a cost-benefit analysis," he said. "The benefits seem to be at least double the cost in the long run when we look at the increased college attainment and the earnings that go along with that, relative to the cost and the additional funding and resources that go into them." 

Free College Programs Encourage More Students to Attend

Convincing students from underprivileged backgrounds to take a chance on college can be a challenge, particularly when students are worried about overextending themselves financially. But free college programs tend to have more success in persuading students to consider going, said Winograd, in part because they address students' fears that they can't afford higher education . "People who wouldn't otherwise think that they could go to college, or who think the reason they can't is [that] it's too expensive, [will] stop, pay attention, listen, decide it's an opportunity they want to take advantage of, and enroll," he said.

According to Harris, students also appear to like the certainty and simplicity of the free college message. "They didn't want to have to worry that next year they were not going to have enough money to pay their tuition bill," he said. "They don't know what their finances are going to look like a few months down the road, let alone next year, and it takes a while to get a degree. So that matters." 

Free college programs can also help send "a clear and tangible message" to students and their families that a college education is attainable for them, said Michelle Dimino, an Education Director with Third Way. This kind of messaging is especially important to first-generation and low-income students, she said. 

Free College Increases Graduation Rates and Financial Security

Free tuition programs appear to improve students’ chances of completing college. For example, Harris noted that his research found a meaningful link between free college tuition and higher graduation rates. "What we found is that it did increase college graduation at the two-year college level, so more students graduated than otherwise would have." 

Free college tuition programs also give people a better shot at living a richer, more comfortable life, say advocates. "It's almost an economic necessity to have some college education," noted Winograd. Similar to the way a high school diploma was viewed as crucial in the 20th century, employees are now learning that they need at least two years of college to compete in a global, information-driven economy. "Free community college is a way of making that happen quickly, effectively, and essentially," he explained. 

Free community college isn’t a universally popular idea. While many critics point to the potential costs of funding such programs, others identify issues with the effectiveness and fairness of current attempts to cover students’ college tuition. Here’s a closer look at the concerns about free college programs.

It Would Be Too Expensive

The idea of free community college has come under particular fire from critics who worry about the cost of social spending. Since community colleges aren't nearly as expensive as four-year colleges—often costing thousands of dollars a year—critics argue that individuals can often cover their costs using other forms of financial aid . But, they point out, community college costs would quickly add up when paid for in bulk through a free college program: Biden’s proposed free college plan would have cost $49.6 billion in its first year, according to an analysis from Georgetown University Center on Education and the Workforce. Some opponents argue that the funds could be put to better use in other ways, particularly by helping students complete their degrees.

Free College Isn't Really Free

One of the most consistent concerns that people have voiced about free college programs is that they don’t go far enough. Even if a program offers free tuition, students will need to find a way to pay for other college-related expenses , such as books, room and board, transportation, high-speed internet, and, potentially, child care. "Messaging is such a key part of this," said Dimino. Students "may apply or enroll in college, understanding it's going to be free, but then face other unexpected charges along the way." 

It's important for policymakers to consider these factors when designing future free college programs. Otherwise, Dimino and other observers fear that students could potentially wind up worse off if they enroll and invest in attending college and then are forced to drop out due to financial pressures. 

Free College Programs Don’t Help the Students Who Need Them Most

Critics point out that many free college programs are limited by a variety of quirks and restrictions, which can unintentionally shut out deserving students or reward wealthier ones. Most state-funded free college programs are last-dollar programs, which don’t kick in until students have applied financial aid to their tuition. That means these programs offer less support to low-income students who qualify for need-based aid—and more support for higher-income students who don’t.

Community College May Not Be the Best Path for All Students

Some critics also worry that all students will be encouraged to attend community college when some would have been better off at a four-year institution. Four-year colleges tend to have more resources than community colleges and can therefore offer more support to high-need students. 

In addition, some research has shown that students at community colleges are less likely to be academically successful than students at four-year colleges, said Dimino. "Statistically, the data show that there are poorer outcomes for students at community colleges […] such as lower graduation rates and sometimes low transfer rates from two- to four-year schools." 

With Congress focused on other priorities, a nationwide free college program is unlikely to happen anytime soon. However, some states and municipalities offer free tuition programs, so students may be able to access some form of free college, depending on where they live. A good resource is the University of Pennsylvania Graduate School of Education’s searchable database of Promise Programs , which lists more than 100 free community college programs, though the majority are limited to California residents.

In the meantime, school leaders and policymakers may shift their focus to other access and equity interventions for low-income students. For example, higher education experts Eileen Strempel and Stephen Handel published a book in 2021 titled "Beyond Free College: Making Higher Education Work for 21st Century Students." The book argues that policymakers should focus more strongly on college completion, not just college access. "There hasn't been enough laser-focus on how we actually get people to complete their degrees," noted Strempel in an interview with The Balance. 

Rather than just improving access for low-income college students, Strempel and Handel argue that decision-makers should instead look more closely at the social and economic issues that affect students , such as food and housing insecurity, child care, transportation, and personal technology. For example, "If you don't have a computer, you don't have access to your education anymore," said Strempel. "It's like today's pencil."

Saving money on college costs can be challenging, but you can take steps to reduce your cost of living. For example, if you're interested in a college but haven't yet enrolled, pay close attention to where it's located and how much residents typically pay for major expenses, such as housing, utilities, and food. If the college is located in a high-cost area, it could be tough to justify the living expenses you'll incur. Similarly, if you plan to commute, take the time to check gas or public transportation prices and calculate how much you'll likely have to spend per month to go to and from campus several times a week. 

Now that more colleges offer classes online, it may also be worth looking at lower-cost programs in areas that are farther from where you live, particularly if they allow you to graduate without setting foot on campus. Also, check out state and federal financial aid programs that can help you slim down your expenses, or, in some cases, pay for them completely. Finally, look into need-based and merit-based grants and scholarships that can help you cover even more of your expenses. Also, consider applying to no-loan colleges , which promise to help students graduate without going into debt.

Should community college be free?

It’s a big question with varying viewpoints. Supporters of free community college cite the economic contributions of a more educated workforce and the individual benefit of financial security, while critics caution against the potential expense and the inefficiency of last-dollar free college programs. 

What states offer free college?

More than 30 states offer some type of tuition-free college program, including Arkansas, California, Connecticut, Delaware, Hawaii, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Missouri, Montana, Michigan, Nevada, New York, Oklahoma, Oregon, Rhode Island, Tennessee, Virginia, and Washington State. The University of Pennsylvania Graduate School of Education lists over 100 last-dollar community college programs and 16 first-dollar community college programs, though the majority are limited to California residents.

Is there a free college?

There is no such thing as a truly free college education. But some colleges offer free tuition programs for students, and more than 30 states offer some type of tuition-free college program. In addition, students may also want to check out employer-based programs. A number of big employers now offer to pay for their employees' college tuition . Finally, some students may qualify for enough financial aid or scholarships to cover most of their college costs.

Scholarships360. " Which States Offer Tuition-Free Community College? "

The White House. “ Build Back Better Framework ,” see “Bringing Down Costs, Reducing Inflationary Pressures, and Strengthening the Middle Class.”

The White House. “ Fact Sheet: How the Build Back Better Plan Will Create a Better Future for Young Americans ,” see “Education and Workforce Opportunities.”

Coast Community College District. “ California College Promise Grant .”

Georgetown University Center on Education and the Workforce. “ The Dollars and Cents of Free College ,” see “Biden’s Free College Plan Would Pay for Itself Within 10 Years.”

Third Way. “ Why Free College Could Increase Inequality .”

Georgetown University Center on Education and the Workforce. “ The Dollars and Cents of Free College ,” see “Free-College Programs Have Different Effects on Race and Class Equity.”

University of Pennsylvania Graduate School of Education. “ College Promise Programs: A Comprehensive Catalog of College Promise Programs in the United States .”

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Why Public Higher Education Should Be Free

How to decrease cost and increase quality at american universities.

• Robert Samuels
• X / Twitter

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• Language: English
• Publisher: Rutgers University Press
• Copyright year: 2013
• Audience: General/trade;
• Main content: 192
• Keywords: higher education ; public school ; public university ; public college ; public education ; education ; college ; university ; free ; students ; educational quality ; rankings ; facilities ; extracurricular activities ; educational ; programs ; class ; professor ; teacher ; student ; university student ; athletics ; administration ; tuition ; cost ; undergraduate ; economy ; democracy ; prestige ; society ; free education
• Published: August 15, 2013
• ISBN: 9780813561257

Why Isn't Academic Research Free to Everyone?

Scholarly articles, filled with indubitable knowledge and analysis, only exist for the general public behind pricey paywalls. So one lecturer is advocating for them to be free of charge.

A blurb below the search bar on Google Scholar tells you to "stand on the shoulders of giants." The giants in question here are academic writers, and Google Scholar does provide searchable access to essays on a dizzying array of topics, from governance in post-genocide Rwanda to the ethics of using polygraph tests on juveniles. Except for one problem: Most of these articles are paywalled. You need to have university access to read them—or else pay what’s often a substantial fee. Martin Paul Eve , a lecturer at the University of Lincoln’s School of English & Journalism in the United Kingdom, wants to change that. In his book Open Access and the Humanities: Contexts, Controversies, and the Future , he explains why, and how, research in the humanities should be publicly available for free. Eve spoke to me about his recent book, copyright laws, and why plagiarism isn’t a major concern.

Noah Berlatsky: Why should academic articles be available for free? Why shouldn't academic writers have the same copyright protection as other writers?

Martin Paul Eve: We've spent a long time building mechanisms within the academy that aim to free researchers from the demands of market populism. In other words: Researchers are, in the theoretical ideal model (although the growth of precarious adjunct labor undermines it), paid a salary to produce work. They do not need to sell thousands of copies to earn a living.

This gives academics freedom of enquiry. They don't have to research things that will only sell. They can afford to (and they do) give away their work for free. The desire is to be read and valued so that one can get an academic post, get tenure, get promoted, etc. Copyright, on the other hand, is a time-limited monopoly on the right to sell the result of intellectual labor. Because academics do not need to sell their work, they also don't need the economic protections of copyright. Publishers do (if they sell work) but academics don't.

What academics want is reputational protection. They want to be cited. Open licensing provides a way in which academics can let others use their work more liberally than if it were covered totally by copyright but always with the demand for attribution, which fuels their systems of prestige, hiring, etc.

We designed a system to free academics from the market. We then came up with a model for research dissemination that entailed selling work (i.e., is market based).

Berlatsky: You point out that the sciences have many more free or un-paywalled journals than the humanities. Is that because there's more of a public and business interest in scientific research? And I guess more broadly, is there really enough interest outside the academy in humanities work to make free access much of an issue one way or the other? Eve: To the first question: perhaps. There's definitely a drive by center-right governments to open up scientific research so that it can be commercially exploited. It's far harder to envisage what such commercial exploitation of humanities research might look like (although the "cultural industries" are all sites of external value extraction).

On the second point: I think there is enough interest outside the academy, but that is only half of the story. For the public: We claim that the humanities have value in a democracy for the ability to spur critical thinking in the liberal humanist tradition. I can't see how the university can fulfill that role if people come to university for three years [or four years in the U.S.] and are then kicked out without access. [Large portions] of the population now have humanities degrees and enjoyed their time studying. There isn't ready exposure in the wider world to the work, though, for them to continue this at the moment. Even if you don't buy that line, though, open access is not just about the public. The cost of subscribing to all research journals needed has risen by 300 percent above inflation since 1986 while academic library budgets have only risen by 79 percent total. This means that even Harvard has cancelled subscriptions on the basis of price. Some publishers make a great deal of profit from this. So, going back to my original point, we now have a system where researchers are free to investigate what they like—independent of the market—but they disseminate through channels that frequently deny their fellow researchers access to material for market-based reasons.

Berlatsky: You talk about various methods for funding journals if paywalls are taken away, including having authors pay a substantial fee (which is done in the sciences, where the fees are usually paid for from the author's grants). I wonder though … why don't universities have more money to subsidize their presses? Tuition fees are skyrocketing, the use of cheaper adjunct faculty is on the rise. It seems like universities should have a ton of money. Are university presses just not a very big priority?

Eve: You are right (although this situation of tuition fees is not the case worldwide: Germany has just reverted to a fully state-funded solution, for instance). University presses are often not seen as a priority, though, from an administration point of view.

From their perspective the options look like this: 1) We can pile loads of money into our (new?) press to subsidize production while also paying for access to all the other work our researchers need or 2) We can not pay for the press and instead just pay for access to all the other work our researchers need.

In other words, it looks to administrators like an additional cost rather than part of a systematic attempt to change the culture and fix what is essentially an unsustainable system.

Some universities are very rich. It is a mistake, though, to universally categorize them as such. Many institutions worldwide—certainly in the U.K.—are balanced precariously and even if they understand the transformation that might be made by funding scholarly communications from the supply side, they struggle to find the cash-in-hand to fund enterprises like university presses that could change it.

Berlatsky: In your book you argue that academic articles and books should not just be free, but should be available for republication by anyone, or even available for partial reuse. What sort of reuse are you envisioning? And couldn't there be a problem with plagiarism?

Eve: The current system of fair use is being read in increasingly restricted terms. For instance, using an epigraph from another academic's work is now disallowed by some publishers.

We also cannot distribute repographically produced copies of work for teaching, even within the university, without a (paid-for) license. Likewise, we cannot re-write research articles and reproduce them on Wikipedia without extensive changes, lowering the public reach of our work. We cannot translate work into other languages, even where no commercial translation exists or will exist … The list goes on. I don't think that plagiarism is so much of a concern. Plagiarism specifically means passing off someone else's work as your own. All of the licenses that have been suggested explicitly state that re-used work must be credited to the original author (without implying endorsement). Beyond that, we also have institutional sanctions. If another academic re-used my work without citing me, he or she would likely lose his or her post.

Berlatsky: One way in which academics can make their work free is by sharing their expertise through blog posts, or for that matter through Twitter. If there are barriers to making academic papers available, would informal avenues be one way for academics to get their work and ideas out? Or what are the limitations of that option?

Eve: I am very much in favor of broader dissemination through blogging and social media. It's a great way to spread the word and the conversations that ensue are usually excellent. However, it doesn't come with the reputational returns that academics usually want and is seen as an "add-on" that has to be done amid an academic's already-busy schedule. In other words: The social structures of the academy don't reward it as an activity—and that's often very hard to change.

It's also worth saying that activities such as these do not help the academy fix the budgetary crisis of [its] libraries. To alter that, a more radical solution is needed.

Home — Essay Samples — Education — College Tuition — Why Should College Be Free: Overview of The Benefits

Why Should College Be Free: Overview of The Benefits

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Updated: 23 January, 2024

Words: 1583 | Pages: 3 | 8 min read

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Introduction, why college should be free, works cited.

• BBC. (2019, December 20). Greta Thunberg: Climate Crisis Activist Gets Comic Book Treatment. Retrieved from https://www.bbc.com/news/world-europe-50861907
• CNN. (2019, September 23). Greta Thunberg: 5 Fast Facts You Need to Know.
• Greta Thunberg’s official website. (n.d.). Retrieved from https://www.gretathunberg.org/
• Svenska Dagbladet. (2018, August 20). Greta Thunberg: “Skolstrejken för klimatet kan pågå i åratal” [Greta Thunberg: “The school strike for climate can go on for years”]. Retrieved from https://www.svd.se/greta-thunberg-skolstrejken-for-klimatet-kan-paga-i-aratal
• The Guardian. (2019, March 11). Greta Thunberg: The Fifteen-Year-Old Climate Activist Who Is Leading a Global Movement.

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Why Making Public Colleges Tuition Free Won’t Close the Enrollment Gap

March 15, 2021 • 7 min read.

College enrollment by low-income students hinges more on college preparedness than on financial constraints, new Wharton research finds.

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Financial constraints are widely seen as the reason why fewer students from low-income families make it to college than those that are better off. That reasoning has long prompted calls for tuition-free public college education. In fact, the inadequacy of college preparedness among low-income students is a bigger obstacle than financing tuition costs, Wharton doctoral student in finance Mehran Ebrahimian stated in a recent research paper titled, “ Student Loans and Social Mobility .”

Reducing inequalities in college enrollment by low-income students has long been a hot-button issue. In the graduating class of 2020 , low-income students made up 35% of college enrollment and high-income students accounted for 65%, according to a recent report by the National Student Clearinghouse. The COVID-19 pandemic has hit low-income students the hardest, with postsecondary enrollment by students from high poverty schools falling nearly 33% in 2020, compared to an overall decline of 22%.

The federal government’s outstanding student loans (totaling $1.5 trillion) and rising defaults have also raised calls for forgiveness. The Biden administration appears sympathetic to that plea, and in recent weeks has moved closer to that prospect than Biden was in his campaign.

In order to explore the effectiveness of policies aimed at reducing financial barriers for low-income students, Ebrahimian built a model using panel datasets covering 2.6 million high-school graduates and 1.6 million college students enrolled for the first time in the 2003–2004 academic year. The overriding finding of his research is that “the main reason why we see such a disparity in college education, and education inequalities, is not because paying for costs of college education is more difficult for low-income students.”

Instead, Ebrahimian’s research took him to “more fundamental” reasons. “Maybe low-income students didn’t attend good high schools and are not equally prepared for college. Or, think about the awareness of college opportunities and perceptions of the expected return on college education for lower-income students,” he said. Students that come from neighborhoods that don’t have high-quality high school education may get “conditioned” into believing that they wouldn’t be able to get much value from higher-quality and expensive colleges, he added. All those factors make up what his paper described as “fundamental factors,” as opposed to pure monetary reasons.

“Even if you apply the policy of tuition-free public colleges, the unequal pattern of education would prevail due to the heterogeneity in fundamental factors, or preparedness.” –Mehran Ebrahimian

For sure, students from low-income backgrounds without financial support from their families may find college tuition fees expensive. To make up for the lack of family support, students need to take out private loans, since federal loans are limited in size, Ebrahimian noted. However, even if private loans were a perfect alternative and a costless source of funding, students may still fail to secure admission to good colleges if they lack good test scores, because they didn’t receive a good high school education and/or their parents couldn’t afford to send them to “good test prep classes.”

Therefore, policy interventions like making all public colleges tuition free or expanding federal subsidized loans “would have limited impact” because they try to make changes only in the financial aspects and not in the fundamental factors.

Why Shouldn’t Public Colleges be Tuition -Free?

According to Ebrahimian, making public colleges tuition free “entails social inefficiencies and is a regressive policy.” He estimated the budget cost of making public colleges tuition free at around $57 billion a year, and the increase in the students’ well-being in dollar units at about $40 billion — about $17 billion less than what the government would pay as subsidy.

Furthermore, making public colleges tuition-free would disproportionately benefit wealthier students. “Even if you apply the policy of tuition-free public colleges, the unequal pattern of education would prevail due to the heterogeneity in fundamental factors, or preparedness,” he said. He estimated that students from families in the top income quartile receive around $15 billion more in tuition subsidy annually than those from the bottom income quartile.

Ebrahimian explained why that would be the case: “We observe in the status quo that higher-income students are more likely to go to four-year or expensive colleges. A simple accounting equation would show that if the government pays for the tuition at public colleges, then higher-income students get disproportionately more of that benefit.” He rejected the “common view” that if public colleges become tuition-free, then lower-income students would change their perceptions about college education and enroll in larger numbers.

Ebrahimian’s economic model predicted that unequal enrollment patterns would persist even if public colleges were made tuition free. “Higher-income students are more likely to enroll in expensive colleges and stay in college because of the heterogeneity in college preparedness between low- and high-income students,” he said, adding that they would therefore receive disproportionately more of any tuition subsidy.

Making public colleges tuition-free would be a flawed policy from an efficiency standpoint, too, since it would apply only to public colleges. “If a student in Philadelphia wants to go to Drexel or Penn, a tuition-free program will not cover the fees,” he said. “So in order to be eligible for the grant, the student needs to travel 200 miles away from home to enroll in Penn State, a public university. This inflexibility is a quantitatively sizable source of inefficiency.”

Students would be “much happier” if the government were to give out, say, $10,000 to each, and allow them to use that for tuition in a public college or maybe in a private college in their vicinity.

“The best policy would be to invest that money much earlier in families and neighborhoods to better prepare less-privileged students for college studies.” –Mehran Ebrahimian

Pointers for Policymakers

The model used for the research could help policymakers “evaluate higher education policies aimed at increasing access to investment in human capital,” the paper stated. One alternative to making public colleges tuition-free is to expand the federal Pell Grants. In the case of the 2003–2004 academic year that his paper studied, increasing the Pell Grant cap from its then level of $4,050 to $9,500 would have delivered the same benefit to students of the bottom family income quartile, while costing one-sixth for the federal government, he explained. Pell Grants are need-based and mainly determined by family income background; he described the grant as “a universal basic income for college enrollees.”

The advantages with using the Pell Grants are first, the government does not need to disproportionately subsidize wealthier students — this is a targeted need-based subsidy by definition; and second, students have the flexibility to use the grant to pay for tuition in a public college or in a nearby private college, or pay for living costs during their years in college. The maximum Pell Grant for the 2021–2022 award year is $6,495, according to an explainer by the U.S. Department of Education. Based on Ebrahimian’s findings, this cap could be increased to $15,000 per year to address today’s lower income students’ need at a much lower cost than making only public colleges tuition-free for everyone.

Ebrahimian believes his paper is significant because it boldly takes on conventional thinking about barriers to college education. It disproves the “common public view” that the only reason for education inequalities that contribute to economic immobility is that colleges are not tuition free, he said. By pointing to the need for policies that address the challenges from early childhood, the paper stimulates discussion on them “in a deeper and more fundamental way,” he said.

Although need-based flexible grants are better than tuition-free public colleges, Ebrahimian noted that “at the age of 18, it’s just too late to intervene in the market by changing financing for college. The best policy would be to invest that money much earlier in families and neighborhoods to better prepare less-privileged students for college studies.” Intervening at age 18 is “suboptimal, because the determinants of college preparedness are already made by then,” he said. “You could invest that money much earlier in neighborhoods for elementary school and high-school education, or just in terms of subsidies to families in early childhood stages .”

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Does It Really Matter Where You Go To College? Financially, It Does

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Stanford University

High school students and their parents are nothing short of obsessed with college decisions—concerns over students’ higher education prospects prompt parents to spend thousands of dollars on private school, tutoring, private college admissions consulting, competitive summer programs, and more. Though many invest huge amounts of time, money, and energy into the process, others often wonder: Does it really matter whether your student attends an Ivy League school or a state university?

From large state schools to small liberal arts colleges, students can find research opportunities, rigorous curricula, and vibrant campus communities at a wide array of colleges. In choosing where to apply, and later, where to attend college, students should be diligent in their research and discern what kind of school will best suit them. An Ivy League school is not the right choice for every student—needless to say, many students would not thrive in such rigorous academic environments. Further, Ivy League schools’ small campus sizes, cultures and locations may not be the best fit for some students. When it comes to student satisfaction and the potential to flourish, an Ivy League may not be the best option.

However, when it comes to future earning potential and career success, where you go to college matters greatly.

First and foremost, the caliber of a student’s alma mater can impact their likelihood of securing a job after graduation. Princeton, Harvard, and Yale all rank in the top 10 in the Times Higher Education 2023-2024 Global Employability University Ranking, alongside other top schools such as MIT, CalTech, and Stanford. Not only are graduates of these schools more likely to get a job, but a report from Opportunity Insights indicated further that attending a college in the Ivy plus category rather than a highly selective public institution triples a graduate’s chances of working at a prestigious firm.

This is due in large part to the networking opportunities afforded to students at world-renowned universities. While excelling in the classroom during one’s college years is an impressive feat, few employers will look at students’ GPAs or transcripts after graduation. They will care instead about the quality of their resumes and professional experiences. Ivy League and other top schools provide networks that will follow students throughout their careers, as graduates connect with one another through organizations such as the Harvard Club of New York City.

The significance of attending a top college manifests not only in one’s likelihood of getting a job, but also their average earnings. Graduates from Ivy League schools are reported to have higher average annual earnings than their peers who graduate in the top 10% of other colleges. According to U.S. News & World Report , Ivy League graduates with approximately three years of professional experience earned a median annual salary of $86,025 in 2022, compared to graduates of other schools who earned $58,643. The gap widens as time goes on—by mid-career (20 years of experience), Ivy League grads earn $161,888 on average, compared to other graduates who average $101,777. Additionally, graduates of Ivy League and other top schools are 60% more likely to reach the top 1% of the earnings distribution. It is no surprise, then, that every Ivy League school except for Brown appears on Forbes’ 2022 list of The 11 Most Popular Colleges Among America’s Richest. University of Pennsylvania topped that list, with 17 graduates appearing on Forbes’ 400 wealthiest American rankings.

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These statistics are even more significant in light of Ivy League schools’ financial aid packages. For instance, in 2022, Princeton announced that they would offer free tuition, room, and board for most students whose families made less than $100,000 annually. Programs such as these bring the average annual cost of attending an Ivy League education down to $23,234 —less than the average cost of ranked colleges outside of the Ivy League. These financial incentives contribute to the ROI of top schools, placing Princeton, Harvard, Yale, and Dartmouth in the top 10 in The Princeton Review ’s ranking of best value colleges.

Ultimately, students should seek to attend a school that aligns with their goals and passions while recognizing that their college decision will have lasting effects on their career and income. Investing in the necessary support to maximize your student’s chances of admission to Ivy League and other top schools is a strategic choice—and one that could have a positive impact for years to come.

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At Morehouse, Biden says dissent should be heard because democracy is 'still the way'

Stephen Fowler

Jeongyoon Han

President Biden speaks to graduating students at the Morehouse College commencement Sunday in Atlanta. Alex Brandon/AP hide caption

President Biden speaks to graduating students at the Morehouse College commencement Sunday in Atlanta.

President Biden told Morehouse College's graduating class of 2024 that he's committed to serving Black voters while defending freedom and democracy in the face of "extremist forces" that he says threaten the soul of the nation.

With just six months until the general election, the speech, which was filled with religious themes of struggle and resilience, also served as a continuation of Biden's warning to his supporters of what he thinks the country would look like if Donald Trump is elected again.

"They don't see you in the future of America, but they're wrong," he said. "To me, we make history, not erase it. We know Black history is American history."

The president's commencement address at Morehouse, a historically Black school in Atlanta, also comes as polling shows potentially lower support for his reelection efforts among Black voters and young voters, and as campus protests over conflict in Gaza have disrupted graduations around the country.

Biden said he understood angst over the direction of the country, acknowledged "dissent about America's role in the world" and said that those who have different views should have their voices heard in the name of democracy.

"That's my commitment to you," he said. "To show you: democracy, democracy democracy — it's still the way."

Graduating students at the Morehouse College commencement bow their heads Sunday in Atlanta. President Biden addressed the graduating class of 2024 and warned about "extremist forces" he says threaten the soul of the nation. Alex Brandon/AP hide caption

Graduating students at the Morehouse College commencement bow their heads Sunday in Atlanta. President Biden addressed the graduating class of 2024 and warned about "extremist forces" he says threaten the soul of the nation.

His speech is also one of many events on his recent trip aimed at speaking to Black voters, following events with plaintiffs in the historic Brown v. Board Supreme Court case, meetings with Black Greek Letter Organizations, often known as the Divine Nine, and before he headlines an NAACP dinner in Detroit.

For weeks, several college and university campuses around the country have been roiled with student protests and encampments expressing opposition against Biden and U.S. policies and involvement around conflict in Gaza.

Biden will cap off a week of outreach to Black Americans with Morehouse commencement

Biden is set for the Morehouse graduation. Students are divided

Morehouse has seen student demonstrations, but not occupation of campus spaces or clashes with law enforcement. Outside of the ceremony, a small number of protesters gathered while the commencement itself did not see any major disruptions.

Last week, Morehouse College President David Thomas said he would rather halt proceedings than have students escorted away for protesting.

"If my choice is 20 people being arrested on national TV on the Morehouse campus, taken away in zip ties during our commencement, before we would reach that point, I would conclude the ceremony," he said on NPR's Weekend Edition .

An attendee stands in protest with their back to President Biden as Biden speaks to graduating students at the Morehouse College commencement Sunday in Atlanta. John Bazemore/AP hide caption

An attendee stands in protest with their back to President Biden as Biden speaks to graduating students at the Morehouse College commencement Sunday in Atlanta.

Those concerns did not come to pass. Apart from the heightened security and increased media presence, Biden's speech was met with a similar response to a typical college graduation ceremony.

More than 400 graduating students walked across the stage Sunday, and during Biden's speech a handful of students, some wearing keffiyehs , turned their chairs around to face away from the president.

After the ceremony, Morehouse issued a statement praising the graduating class and their intentionally muted response to Biden.

"It is fitting that a moment of organized, peaceful activism would occur on our campus while the world is watching to continue a critical conversation," the statement reads. "We are proud of the resilient class of 2024's unity in silent protest, showing their intentionality in strategy, communication, and coordination as a 414-person unit."

DeAngelo Fletcher, Morehouse College's valedictorian, closed his address to his classmates by addressing global conflict, particularly the Israel-Hamas war.

"For the first time in our lives, we've heard the global community sing one harmonious song that transcends language and culture," he said. "It is my sense as a Morehouse Man, nay — as a human being — to call for an immediate and a permanent ceasefire in the Gaza Strip."

Biden's speech at Morehouse comes with intense scrutiny as many presidential horse race polls show the president lagging with young voters, Black voters and other nonwhite groups that helped propel him to a narrow victory against Trump in 2020.

Those polls — for now — signal a drop in support for Biden but not necessarily an equal shift toward Trump. There are also signs that some of the displeasure with Biden is more pronounced among people who aren't as likely to vote in November.

While facing a nominal challenge in the Democratic presidential primary, Biden's best-performing areas have often come in places with a large share of Black voters. For example, in Georgia's primary contest 95% of Black voters pulled a Democratic ballot, and Biden won 95% of the overall vote.

While some students, faculty and alumni expressed opposition to Biden's selection as the commencement speaker, reaction on campus during the graduation ceremony was largely positive.

Dr. Tiffany Johnson, a 50-year-old who came to the campus green at 4:30 a.m. to see her son graduate, was also excited to see Biden.

"He is the leader of the free world, the most important job in the world, and for him to come to speak to [Morehouse] graduates, to inspire them, is phenomenal," Johnson said.

Johnson said Black voters who might not support Biden are part of a "bandwagon" that do not understand what he has done for the community, and said his speech would be an ideal opportunity to share his accomplishments.

In the speech, Biden touted a track record that he says makes key investments in Black communities, including a record $16 billion funding package toward historically Black colleges and universities, protecting voting rights, and creating economic policies that strengthens Black businesses.

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Harrison Butker’s commencement speech: Wives should stay at home. His mom’s a medical physicist

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Harrison Butker is a three-time Super Bowl champion and one of the most accurate field-goal kickers in NFL history.

As such, the Kansas City Chiefs kicker was given a platform to express his views as the commencement speaker at Benedictine College .

The devout Christian used the opportunity to give some radical thoughts and controversial opinions during a 20-minute speech delivered at the ceremony honoring the 485 students graduating from the Catholic private liberal arts school in Atchison, Kan., on Saturday.

Butker took shots at gender roles, abortion, President Biden and Pride month during his Benedictine address. Now the NFL appears to be distancing itself from the 28-year-old.

“Harrison Butker gave a speech in his personal capacity,” Jonathan Beane, NFL senior vice president and chief diversity and inclusion officer, said in a statement emailed to The Times. “His views are not those of the NFL as an organization. The NFL is steadfast in our commitment to inclusion, which only makes our league stronger.”

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At Benedictine, Butker told the male graduates to “be unapologetic in your masculinity” and congratulated the female graduates on their “amazing accomplishment.” He went on to tell the women that he “would venture to guess that the majority of you are most excited about your marriage and the children you will bring into this world.”

Butker then told those women that “my beautiful wife, Isabelle, would be the first to say her life truly started when she began living her vocation as a wife and as a mother. I’m on this stage today and able to be the man I am because I have a wife who leans into her vocation.”

Butker — whose mother, Elizabeth Keller Butker, is a medical physicist at Emory University’s Winship Cancer Institute in Atlanta, where she’s worked since 1988 — then started getting choked up.

“I’m beyond blessed with the many talents God has given me,” Butker said, “but it cannot be overstated that all my success is made possible because a girl I met in band class back in middle school would convert to the faith, become my wife and embrace one of the most important titles of all: homemaker.”

That statement was met with 18 seconds of enthusiastic cheers and applause. Butker continued praising his wife and her role in their family.

“She’s the primary educator to our children. She’s the one who ensures I never let football or my business become a distraction from that of a husband and a father. She is the person that knows me best at my core and it is through our marriage that, Lord willing, we both will attain salvation.”

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During his opening remarks, Butker stated that “things like abortion , in vitro fertilization , surrogacy , euthanasia, as well as a growing support for the degenerate cultural values and media, all stem from the pervasiveness of disorder.”

He also said that Biden “has been so vocal in his support for the murder of innocent babies that I’m sure to many people it appears you can be both Catholic and pro-choice.”

At one point, Butker mentioned the word “pride” — then clarified that he wasn’t talking about “the deadly sins sort of Pride that has an entire month dedicated to it, but the true God-centered pride that is cooperating with the Holy Ghost to glorify Him.”

The comment, a jab at the LGBTQ+ community that celebrates Pride month every June, received a few chuckles from the audience.

When Butker finished his address, the crowd rose for an ovation. Susannah Leisegang , a former Benedictine track and field athlete who graduated Saturday with a degree in graphic design, said she was among the handful of people who did not stand.

“Some of us did boo — me and my roommate definitely did,” Leisegang said in a video she posted on TikTok . “There was a standing ovation from everyone in the room, except from me, my roommate and about 10 to 15 other women. You also have to keep in mind this was at a Catholic and conservative college, so a lot of the men were like, ‘F— yeah!’ They were excited. But it was horrible. Most of the women were looking back and forth at each other like, ‘What the f— is going on?’”

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Leisegang pointed out that she is 21 and has a job lined up in her field.

“Getting married and having kids is not my ideal situation right now,” she said. “So, yeah, it was definitely horrible and it definitely made graduation feel a little less special, knowing I had to sit through that and get told I’m nothing but a homemaker.”

Other members of the graduating class who participated in the ceremony have shared a variety of opinions on Butker’s speech. Elle Wilbers, 22, a future medical school student, told the Associated Press she thought Butker’s reference to the LGBTQ+ community was “horrible.”

“We should have compassion for the people who have been told all their life that the person they love is like, it’s not OK to love that person,” she said.

Kassidy Neuner, 22, who plans to teach for a year before going to law school, told the AP that being a stay-at-home parent is “a wonderful decision” but “it’s also not for everybody.”

“I think that he should have addressed more that it’s not always an option,” she said. “And, if it is your option in life, that’s amazing for you. But there’s also the option to be a mother and a career woman.”

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ValerieAnne Volpe, 20, who graduated with an art degree, told the AP she thought Butker said things that “people are scared to say.”

“You can just hear that he loves his wife,” Volpe said. “You can hear that he loves his family,” she said.

Butker has not commented publicly since the address. His previous social media posts are being used by people leaving comments both blasting and supporting his remarks. Heavy.com reports that all images of Isabelle Butker have been removed from her husband’s X and Instagram feeds in recent days.

Benedictine has not publicly addressed Butker’s controversial statements and did not immediately respond to multiple messages from The Times. The college’s social media feeds have been flooded with angry comments regarding Butker’s speech, and the comment section for the YouTube video of it has been disabled.

An article on Benedictine’s website about the commencement ceremony had initially referred to Butker’s speech as “inspiring.” The uncredited piece includes a reworked version of Butker’s “homemaker” quote that does not include that word, with no indication that the quote had been altered.

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The Chiefs did not respond to a request for comment from The Times. Tavia Hunt, wife of Chiefs owner Clark Hunt , appeared to express her support for Butker in a lengthy Instagram post Thursday.

“Countless highly educated women devote their lives to nurturing and guiding their children,” she wrote. “Someone disagreeing with you doesn’t make them hateful; it simply means they have a different opinion. Let’s celebrate families, motherhood and fatherhood.”

Gracie Hunt, 25, one of Clark and Tavia Hunt’s three children was asked about Butker’s speech Friday on “ Fox & Friends .”

“I can only speak from my own experience, which is I had the most incredible mom who had the ability to stay home and be with us as kids growing up,” Gracie Hunt said. “And I understand that there are many women out there who can’t make that decision but for me in my life, I know it was really formative in shaping me and my siblings to be who we are.”

Asked if she understood what Butker was talking about, Hunt said, “For sure, and I really respect Harrison and his Christian faith and what he’s accomplished on and off the field.”

A change.org petition calling for the team to release the kicker because of his comments has received more than 185,000 signatures. Eight petitions supporting Butker appear on the site as well. One has more than 11,000 signatures while the rest have fewer than 800 each.

The Chargers poked fun at Butker on Wednesday in their schedule-release video, which is modeled after “The Sims” video game. In the video, Butker’s likeness is shown baking a pie, scrubbing a kitchen counter and arranging flowers.

should we REALLY make our schedule release video in the sims? yes yes yesyes yesyes yes yes yes yes yes yes yes yes yes yesyes yes yes yes yesye yes yes yes yes yesyes pic.twitter.com/MXzfAPyhe8 — Los Angeles Chargers (@chargers) May 16, 2024

The official X account for Kansas City also appeared to attempt putting a humorous spin on the matter, posting a “reminder” that Butker lives in a different city Wednesday night before deleting it and posting an apology .

Earlier in the week on X, Kansas City Mayor Quinton Lucas appeared to defend Butker’s right to express his views .

Grown folks have opinions, even if they play sports. I disagree with many, but I recognize our right to different views. Nobody should have to stick to anything. Varied and shall I say—diverse—viewpoints help the world go round. — Mayor Q (@QuintonLucasKC) May 14, 2024

I think he holds a minority viewpoint, even in this state and the bordering one. I also believe more athletes, if freer to speak, would stand up for the voices of many marginalized communities. I hate “stick to sports” when used to muzzle Black athletes. I’m with consistency. — Mayor Q (@QuintonLucasKC) May 14, 2024

Last year, Butker gave the commencement address at his alma mater, Georgia Tech, advising the graduates to “ get married and start a family .”

The fight to move the Catholic Church in America to the right — and the little-known O.C. lawyer behind it

As Pope Francis nudges the Roman Catholic Church to the left globally, layman Tim Busch of Irvine is pushing American Catholicism to the right.

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Canucks vs. Oilers odds, line, time, Game 7 score prediction: 2024 NHL playoff picks from proven model

Sportsline's computer model has simulated vancouver canucks vs. edmonton oilers 10,000 times in their game 7 matchup in the 2024 nhl stanley cup playoffs.

The Vancouver Canucks host the Edmonton Oilers in what should be an exciting Game 7 matchup in the second round of the 2024 NHL Stanley Cup playoffs on Monday. Quinn Hughes and the Canucks held a 3-2 series league against their Pacific Division rivals, but were upended by Connor McDavid and the Oilers 5-1 at Rogers Place. McDavid and teammate Leon Draisaitl led the charge in that game as Edmonton got scoring from five different players. The winner of Monday's game will travel to Dallas to face the Stars in the Western Conference Final.

Opening faceoff at Rogers Arena is set for 9 p.m. ET. Edmonton is a -161 favorite (risk $161 to win $100) on the money line in the latest Canucks vs. Oilers odds from SportsLine consensus while Vancouver is a +136 underdog. The over/under for total goals scored is 5.5 and Edmonton is a -1.5 (+164) favorite on the puck line. Before making any Canucks vs. Oilers picks, you need to check out the NHL predictions from the SportsLine Projection Model .

SportsLine's model simulates every NHL game 10,000 times, taking into account factors like current form, individual matchups, injuries and short- and long-term trends when making  NHL picks . It entered the 2024 NHL playoffs on a 7-4 run on top-rated puck-line picks.     

Now, the model has set its sights on Canucks vs. Oilers  and just locked in its NHL picks and predictions. You can visit SportsLine now to see the picks . Here are the latest  NHL odds  and trends for Oilers vs. Canucks: 

• Canucks vs. Oilers money line: Edmonton -161, Vancouver +136
• Canucks vs. Oilers over/under: 5.5 goals
• Canucks vs. Oilers puck line: Edmonton -1.5 (+164)
• VAN: Swept Edmonton in the regular season
• EDM: McDavid leads all skaters with 19 assists this postseason
• Canucks vs. Oilers picks: See picks at SportsLine

Why you should back the Oilers

Every game in this second-round series was decided by a single goal until Edmonton broke that trend in Game 6. That game highlighted the Oilers' depth scoring as McDavid and Draisaitl played the set-up guys in what was probably Edmonton's most complete team effort in these playoffs. Look for the McDavid and Draisaitl duo to turn the energy up even higher with a Western Conference Final bid within reach. Vancouver should also be wary of Zach Hyman , who leads the playoffs with 10 goals, and Evander Kane , who has found the back of the net in each of his last two games.  See who to back at SportsLine . 

Why you should back the Canucks

The Canucks are expected to elevate their game back at Rogers Arena, especially since they have beaten the Oilers in four of their last five meetings there. The offense is also expected to rebound after registering just 15 shots on goal through a full 60 minutes in Game 6.

Hughes and the Canucks defense did a good job containing McDavid and Draisaitl in Game 1 and Game 5 in Vancouver, and they will have to regain that control to give rookie netminder Arturs Silovs a better chance of getting in the win column on Monday. The duo combined for five assists in Game 6, so keeping them from setting up Edmonton's depth scoring will be the key to Vancouver's success.  See NHL picks for Wednesday at SportsLine . 

How to make Canucks vs. Oilers picks

SportsLine's model is leaning Over on the total, projecting 5.9 combined goals. It also says one side of the money line is the better value.  You can only get the pick at SportsLine .

So who wins Canucks vs. Oilers, and which side of the money line is the better value? Visit SportsLine now to see which side of the Oilers vs. Canucks money line to jump on Monday , all from the advanced model that has simulated this matchup 10,000 times.

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The Possible Collapse of the U.S. Home Insurance System

A times investigation found climate change may now be a concern for every homeowner in the country..

This transcript was created using speech recognition software. While it has been reviewed by human transcribers, it may contain errors. Please review the episode audio before quoting from this transcript and email [email protected] with any questions.

From “The New York Times,” I’m Sabrina Tavernise. And this is “The Daily.”

[MUSIC PLAYING]

Today, my colleague, Christopher Flavelle, on a “Times” investigation into one of the least known and most consequential effects of climate change — insurance — and why it may now be a concern for every homeowner in the country.

It’s Wednesday, May 15.

So, Chris, you and I talked a while ago about how climate change was really wreaking havoc in the insurance market in Florida. You’ve just done an investigation that takes a look into the insurance markets more broadly and more deeply. Tell us about it.

Yeah, so I cover climate change, in particular the way climate shocks affect different parts of American life. And insurance has become a really big part of that coverage. And Florida is a great example. As hurricanes have gotten worse and more frequent, insurers are paying out more and more money to rebuild people’s homes. And that’s driving up insurance costs and ultimately driving up the cost of owning a home in Florida.

So we’re already seeing that climate impact on the housing market in Florida. My colleagues and I started to think, well, could it be that that kind of disruption is also happening in other states, not just in the obvious coastal states but maybe even through the middle of the US? So we set out to find out just how much it is happening, how much that Florida turmoil has, in fact, become really a contagion that is spreading across the country.

So how did you go about reporting this? I mean, where did you start?

All we knew at the start of this was that there was reason to think this might be a problem. If you just look at how the federal government tracks disasters around the country, there’s been a big increase almost every year in the number and severity of all kinds of disasters around the country. So we thought, OK, it’s worth trying to find out, what does that mean for insurers?

The problem is getting data on the insurance industry is actually really hard. There’s no federal regulation. There’s no government agency you can go to that holds this data. If you talk to the insurers directly, they tend to be a little reluctant to share information about what they’re going through. So we weren’t sure where to go until, finally, we realized the best people to ask are the people whose job it is to gauge the financial health of insurance companies.

Those are rating agencies. In particular, there’s one rating company called AM Best, whose whole purpose is to tell investors how healthy an insurance company is.

Whoa. So this is way down in the nuts and bolts of the US insurance industry.

Right. This is a part of the broader economy that most people would never experience. But we asked them to do something special for us. We said, hey, can you help us find the one number that would tell us reporters just how healthy or unhealthy this insurance market is state by state over time? And it turns out, there is just such a number. It’s called a combined ratio.

OK, plain English?

Plain English, it is the ratio of revenue to costs, how much money these guys take in for homeowner’s insurance and how much they pay out in costs and losses. You want your revenue to be higher than your costs. If not, you’re in trouble.

So what did you find out?

Well, we got that number for every state, going back more than a decade. And what it showed us was our suspicions were right. This market turmoil that we were seeing in Florida and California has indeed been spreading across the country. And in fact, it turns out that in 18 states, last year, the homeowner’s insurance market lost money. And that’s a big jump from 5 or 10 years ago and spells real trouble for insurance and for homeowners and for almost every part of the economy.

So the contagion was real.

Right. This is our first window showing us just how far that contagion had spread. And one of the really striking things about this data was it showed the contagion had spread to places that I wouldn’t have thought of as especially prone to climate shocks — for example, a lot of the Midwest, a lot of the Southeast. In fact, if you think of a map of the country, there was no state between Pennsylvania and the Dakotas that didn’t lose money on homeowner’s insurance last year.

So just huge parts of the middle of the US have become unprofitable for homeowner’s insurance. This market is starting to buckle under the cost of climate change.

And this is all happening really fast. When we did the Florida episode two years ago, it was a completely new phenomenon and really only in Florida. And now it’s everywhere.

Yeah. And that’s exactly what’s so striking here. The rate at which this is becoming, again, a contagion and spreading across the country is just demolishing the expectations of anyone I’ve spoken to. No one thought that this problem would affect so much of the US so quickly.

So in these states, these new places that the contagion has spread to, what exactly is happening that’s causing the insurance companies to fold up shop?

Yeah. Something really particular is happening in a lot of these states. And it’s worth noting how it’s surprised everyone. And what that is, is formally unimportant weather events, like hailstorms or windstorms, those didn’t used to be the kind of thing that would scare insurance companies. Obviously, a big problem if it destroys your home or damages your home. But for insurers, it wasn’t going to wipe them out financially.

Right. It wasn’t just a complete and utter wipeout that the company would then have to pony up a lot of money for.

Exactly. And insurers call them secondary perils, sort of a belittling term, something other than a big deal, like a hurricane.

These minor league weather events.

Right. But those are becoming so frequent and so much more intense that they can cause existential threats for insurance companies. And insurers are now fleeing states not because of hurricanes but because those former things that were small are now big. Hailstorms, wildfires in some places, previous annoyances are becoming real threats to insurers.

Chris, what’s the big picture on what insurers are actually facing? What’s happening out there numbers-wise?

This is a huge threat. In terms of the number of states where this industry is losing money, it’s more than doubled from 10 years ago to basically a third of the country. The amount they’re losing is enormous. In some states, insurers are paying out $1.25 or even $1.50 for every dollar they bring in, in revenue, which is totally unsustainable.

And the result is insurers are making changes. They are pulling back from these markets. They’re hiking premiums. And often, they’re just dropping customers. And that’s where this becomes real, not just for people who surf balance sheets and trade in the stock market. This is becoming real for homeowners around the country, who all of a sudden increasingly can’t get insurance.

So, Chris, what’s the actual implication? I mean, what happens when people in a state can’t get insurance for their homes?

Getting insurance for a home is crucial if you want to sell or buy a home. Most people can’t buy a home without a mortgage. And banks won’t issue a mortgage without home insurance. So if you’ve got a home that insurance company doesn’t want to cover, you got a real problem. You need to find insurance, or that home becomes very close to unsellable.

And as you get fewer buyers, the price goes down. So this doesn’t just hurt people who are paying for these insurance premiums. It hurts people who want to sell their homes. It even could hurt, at some point, whole local economies. If home values fall, governments take in less tax revenue. That means less money for schools and police. It also means people who get hit by disasters and have to rebuild their homes all of a sudden can’t, because their insurance isn’t available anymore. It’s hard to overstate just how big a deal this is.

And is that actually happening, Chris? I mean, are housing markets being dragged down because of this problem with the insurance markets right now?

Anecdotally, we’ve got reports that in places like Florida and Louisiana and maybe in parts of California, the difficulty of getting insurance, the crazy high cost of insurance is starting to depress demand because not everyone can afford to pay these really high costs, even if they have insurance. But what we wanted to focus on with this story was also, OK, we know where this goes eventually. But where is it beginning? What are the places that are just starting to feel these shocks from the insurance market?

And so I called around and asked insurance agents, who are the front lines of this. They’re the ones who are struggling to find insurance for homeowners. And I said, hey, is there one place that I should go if I want to understand what it looks like to homeowners when all of a sudden insurance becomes really expensive or you can’t even find it? And those insurance agents told me, if you want to see what this looks like in real life, go to a little town called Marshalltown in the middle of Iowa.

We’ll be right back.

So, Chris, you went to Marshalltown, Iowa. What did you find?

Even before I got to Marshalltown, I had some idea I was in the right spot. When I landed in Des Moines and went to rent a car, the nice woman at the desk who rented me a car, she said, what are you doing here? I said, I’m here to write a story about people in Iowa who can’t get insurance because of storms. She said, oh, yeah, I know all about that. That’s a big problem here.

Even the rental car lady.

Even the rental car lady knew something was going on. And so I got into my rental car and drove about an hour northeast of Des Moines, through some rolling hills, to this lovely little town of Marshalltown. Marshalltown is a really cute, little Midwestern town with old homes and a beautiful courthouse in the town square. And when I drove through, I couldn’t help noticing all the roofs looked new.

What does that tell you?

Turns out Marshalltown, despite being a pastoral image of Midwestern easy living, was hit by two really bad disasters in recent years — first, a devastating tornado in 2018 and then, in 2020, what’s called a derecho, a straight-line wind event that’s also just enormously damaging. And the result was lots of homes in this small town got severely damaged in a short period of time. And so when you drive down, you see all these new roofs that give you the sense that something’s going on.

So climate had come to Marshalltown?

Exactly. A place that had previously seemed maybe safe from climate change, if there is such a thing, all of a sudden was not. So I found an insurance agent in Marshalltown —

We talked to other agents but haven’t talked to many homeowners.

— named Bobby Shomo. And he invited me to his office early one morning and said, come meet some people. And so I parked on a quiet street outside of his office, across the street from the courthouse, which also had a new roof, and went into his conference room and met a procession of clients who all had versions of the same horror story.

It was more — well more of double.

A huge reduction in coverage with a huge price increase.

Some people had faced big premium hikes.

I’m just a little, small business owner. So every little bit I do feel.

They had so much trouble with their insurance company.

I was with IMT Insurance forever. And then when I moved in 2020, Bobby said they won’t insure a pool.

Some people had gotten dropped.

Where we used to see carriers canceling someone for frequency of three or four or five claims, it’s one or two now.

Some people couldn’t get the coverage they needed. But it was versions of the same tale, which is all of a sudden, having homeowner’s insurance in Marshalltown was really difficult. But I wanted to see if it was bigger than just Marshalltown. So the next day, I got back in my car and drove east to Cedar Rapids, where I met another person having a version of the same problem, a guy named Dave Langston.

Tell me about Dave.

Dave lives in a handsome, modest, little townhouse on a quiet cul-de-sac on a hill at the edge of Cedar Rapids. He’s the president of his homeowners association. There’s 17 homes on this little street. And this is just as far as you could get from a danger zone. It looks as safe as could be. But in January, they got a letter from the company that insures him and his neighbors, saying his policy was being canceled, even though it wasn’t as though they’d just been hit by some giant storm.

So then what was the reason they gave?

They didn’t give a reason. And I think people might not realize, insurers don’t have to give a reason. Insurance policies are year to year. And if your insurance company decides that you’re too much of a risk or your neighborhood is too much of a risk or your state is too much of a risk, they can just leave. They can send you a letter saying, forget it. We’re canceling your insurance. There’s almost no protection people have.

And in this case, the reason was that this insurance company was losing too much money in Iowa and didn’t want to keep on writing homeowner’s insurance in the state. That was the situation that Dave shared with tens of thousands of people across the state that were all getting similar letters.

What made Dave’s situation a little more challenging was that he couldn’t get new insurance. He tried for months through agent after agent after agent. And every company told him the same thing. We won’t cover you. Even though these homes are perfectly safe in a safe part of the state, nobody would say yes. And it took them until basically two days before their insurance policy was going to run out until they finally found new coverage that was far more expensive and far more bare-bones than what they’d had.

But at least it was something.

It was something. But the problem was it wasn’t that good. Under this new policy, if Dave’s street got hit by another big windstorm, the damage from that storm and fixing that damage would wipe out all the savings set aside by these homeowners. The deductible would be crushingly high — $120,000 — to replace those roofs if the worst happened because the insurance money just wouldn’t cover anywhere close to the cost of rebuilding.

He said to me, we didn’t do anything wrong. This is just what insurance looks like today. And today, it’s us in Cedar Rapids. Everyone, though, is going to face a situation like this eventually. And Dave is right. I talked to insurance agents around the country. And they confirmed for me that this kind of a shift towards a new type of insurance, insurance that’s more expensive and doesn’t cover as much and makes it harder to rebuild after a big disaster, it’s becoming more and more common around the country.

So, Chris, if Dave and the people you spoke to in Iowa were really evidence that your hunch was right, that the problem is spreading and rapidly, what are the possible fixes here?

The fix that people seem most hopeful about is this idea that, what if you could reduce the risk and cause there to be less damage in the first place? So what some states are doing is they’re trying to encourage homeowners to spend more money on hardening their home or adding a new roof or, if it’s a wildfire zone, cut back the vegetation, things that can reduce your risk of having really serious losses. And to help pay for that, they’re telling insurers, you’ve got to offer a discount to people who do that.

And everyone who works in this field says, in theory, that’s the right approach. The problem is, number one, hardening a home costs a fantastic amount of money. So doing this at scale is hugely expensive. Number two, it takes a long time to actually get enough homes hardened in this way that you can make a real dent for insurance companies. We’re talking about years or probably decades before that has a real effect, if it ever works.

OK. So that sounds not particularly realistic, given the urgency and the timeline we’re on here. So what else are people looking at?

Option number two is the government gets involved. And instead of most Americans buying home insurance from a private company, they start buying it from government programs that are designed to make sure that people, even in risky places, can still buy insurance. That would be just a gargantuan undertaking. The idea of the government providing homeowner’s insurance because private companies can’t or won’t would lead to one of the biggest government programs that exists, if we could even do it.

So huge change, like the federal government actually trying to write these markets by itself by providing homeowner’s insurance. But is that really feasible?

Well, in some areas, we’re actually already doing it. The government already provides flood insurance because for decades, most private insurers have not wanted to cover flood. It’s too risky. It’s too expensive. But that change, with governments taking over that role, creates a new problem of its own because the government providing flood insurance that you otherwise couldn’t get means people have been building and building in flood-prone areas because they know they can get that guaranteed flood insurance.

Interesting. So that’s a huge new downside. The government would be incentivizing people to move to places that they shouldn’t be.

That’s right. But there’s even one more problem with that approach of using the government to try to solve this problem, which is these costs keep growing. The number of billion-dollar disasters the US experiences every year keeps going up. And at some point, even if the government pays the cost through some sort of subsidized insurance, what happens when that cost is so great that we can no longer afford to pay it? That’s the really hard question that no official can answer.

So that’s pretty doomsday, Chris. Are we looking at the end of insurance?

I think it’s fair to say that we’re looking at the end of insurance as we know it, the end of insurance that means most Americans can rest assured that if they get hit by a disaster, their insurance company will provide enough money they can rebuild. That idea might be going away. And what it shows is maybe the threat of climate change isn’t quite what we thought.

Maybe instead of climate change wrecking communities in the form of a big storm or a wildfire or a flood, maybe even before those things happen, climate change can wreck communities by something as seemingly mundane and even boring as insurance. Maybe the harbinger of doom is not a giant storm but an anodyne letter from your insurance company, saying, we’re sorry to inform you we can no longer cover your home.

Maybe the future of climate change is best seen not by poring over weather data from NOAA but by poring over spreadsheets from rating firms, showing the profitability from insurance companies, and how bit by bit, that money that they’re losing around the country tells its own story. And the story is these shocks are actually already here.

Chris, as always, terrifying to talk to you.

Always a pleasure, Sabrina.

Here’s what else you should know today. On Tuesday, the United Nations has reclassified the number of women and children killed in Gaza, saying that it does not have enough identifying information to know exactly how many of the total dead are women and children. The UN now estimates that about 5,000 women and about 8,000 children have been killed, figures that are about half of what it was previously citing. The UN says the numbers dropped because it is using a more conservative estimate while waiting for information on about 10,000 other dead Gazans who have not yet been identified.

And Mike Johnson, the Speaker of the House, gave a press conference outside the court in Lower Manhattan, where Michael Cohen, the former fixer for Donald Trump, was testifying for a second day, answering questions from Trump’s lawyers. Trump is bound by a gag order. So Johnson joined other stand-ins for the former president to discredit the proceedings. Johnson, one of the most important Republicans in the country, attacked Cohen but also the trial itself, calling it a sham and political theater.

Today’s episode was produced by Nina Feldman, Shannon Lin, and Jessica Cheung. It was edited by MJ Davis Lin, with help from Michael Benoist, contains original music by Dan Powell, Marion Lozano, and Rowan Niemisto, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly.

That’s it for “The Daily.” I’m Sabrina Tavernise. See you tomorrow.

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• May 16, 2024   •   30:47 The Make-or-Break Testimony of Michael Cohen
• May 15, 2024   •   27:03 The Possible Collapse of the U.S. Home Insurance System
• May 14, 2024   •   35:20 Voters Want Change. In Our Poll, They See It in Trump.
• May 13, 2024   •   27:46 How Biden Adopted Trump’s Trade War With China
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Hosted by Sabrina Tavernise

Featuring Christopher Flavelle

Produced by Nina Feldman ,  Shannon M. Lin and Jessica Cheung

Edited by MJ Davis Lin

With Michael Benoist

Original music by Dan Powell ,  Marion Lozano and Rowan Niemisto

Engineered by Alyssa Moxley

Listen and follow The Daily Apple Podcasts | Spotify | Amazon Music | YouTube

Across the United States, more frequent extreme weather is starting to cause the home insurance market to buckle, even for those who have paid their premiums dutifully year after year.

Christopher Flavelle, a climate reporter, discusses a Times investigation into one of the most consequential effects of the changes.

On today’s episode

Christopher Flavelle , a climate change reporter for The New York Times.

Background reading

As American insurers bleed cash from climate shocks , homeowners lose.

See how the home insurance crunch affects the market in each state .

Here are four takeaways from The Times’s investigation.

There are a lot of ways to listen to The Daily. Here’s how.

We aim to make transcripts available the next workday after an episode’s publication. You can find them at the top of the page.

Christopher Flavelle contributed reporting.

The Daily is made by Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, Luke Vander Ploeg, M.J. Davis Lin, Dan Powell, Sydney Harper, Mike Benoist, Liz O. Baylen, Asthaa Chaturvedi, Rachelle Bonja, Diana Nguyen, Marion Lozano, Corey Schreppel, Rob Szypko, Elisheba Ittoop, Mooj Zadie, Patricia Willens, Rowan Niemisto, Jody Becker, Rikki Novetsky, John Ketchum, Nina Feldman, Will Reid, Carlos Prieto, Ben Calhoun, Susan Lee, Lexie Diao, Mary Wilson, Alex Stern, Dan Farrell, Sophia Lanman, Shannon Lin, Diane Wong, Devon Taylor, Alyssa Moxley, Summer Thomad, Olivia Natt, Daniel Ramirez and Brendan Klinkenberg.

Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly. Special thanks to Sam Dolnick, Paula Szuchman, Lisa Tobin, Larissa Anderson, Julia Simon, Sofia Milan, Mahima Chablani, Elizabeth Davis-Moorer, Jeffrey Miranda, Renan Borelli, Maddy Masiello, Isabella Anderson and Nina Lassam.

Christopher Flavelle is a Times reporter who writes about how the United States is trying to adapt to the effects of climate change. More about Christopher Flavelle

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