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Tution-free Community College Policies: Implications for New Jersey

Introduction

Ideas, proposals, and policies debating how public higher education should be funded is not a new topic of study in public policy. There have been many state and federal programs over the last several decades that sought to increase access to higher education for low-income students and minorities, and recent concerns about the rising cost of higher education and the growing student debt burden has a become a hot-button issue for policymakers across the county. The link between education attainment and economic outcomes has been the impetus behind many of these policies, and the need for college graduates in the workforce has led many states to adopt specific goals to increase postsecondary completion and attainment rates. State-wide tuition-free community college programs are a relatively new solution to these issues that has gained momentum since former President Obama’s “America’s College Promise” plan was proposed in 2015. Since most of these statewide programs have been adopted so recently, early forecasts and projections of enrollment numbers and funding levels are available, but reliable outcomes and numbers for most of the policies have not yet been determined. While the idea of free community college has become increasingly attractive to states, how to best implement these policies has not yet reached a consensus. Since the recently-elected governor of New Jersey Phil Murphy has made free community college a major part of his agenda, further research into these programs’ frameworks and rationale is needed to help guide New Jersey’s policymakers as they begin to craft their own state-wide program.

Though state funded higher education expenditures have remained historically low in the decade since the Great Recession (Mitchell et al, 2017), location-based promise programs have emerged in recent years as a a popular way for states to invest desperately needed funds into their higher education systems.   Since 2014, sixteen states have adopted some form of statewide promise programs (Campaign for Free College Tuition, n.d.).  Specific policy decisions concerning design and funding made by these states will ultimately play a major role in who benefits from these policies and how successful they are at achieving their stated goals. In order to understand the reasonings and rationale behind the adoption of these broad, ambitious policies, this paper will address the following questions:

  • What are the fundamental components and goals of the state-wide “tuition-free” community college policies of Tennessee, Oregon, and New York?
  •  What challenges can they illustrate to New Jersey’s own developing policy?

Methodology

Tennessee, Oregon, and New York, while not representative of all states with statewide tuition free community college policies, do offer some valuable insights into the development and designs of such initiatives.  All three are early adopters of location-based Promise programs and feature a variety of design choices and concepts to implement their policies.  Due to the newness of these programs, the limited amount of data available on their outcomes and results prevents a full policy evaluation from being undertaken.  However, choosing to analyze these policies in greater depth may allow a more thorough understanding of both the goals and solutions of each state to demonstrate where they align and differ and help illustrate the trends in higher education developing across the country.  Analyzing these policies will help to uncover the common themes associated with these types of programs, what policymakers are attempting to accomplish by creating them, and reveal what these states prioritize when it comes to higher education.  How these programs are created, whether shaped in state legislatures or attached to budget and funding bills, will also help shed light on the priorities of state-funded higher education.  While program components and outcomes may not be directly transferable or applicable to New Jersey’s policy because of differences in funding or demographic challenges, understanding the justification behind other states’ policies and their goals will be a useful tool for New Jersey as it determines the future of public higher education in the state.

Literature Review

Location-based Promise Programs

Carruthers and Fox (2016) analyze the outcomes of Tennessee’s Knox Achieves program, a predecessor to the state’s Tennessee Promise program, and evaluate the potential effect it had on college enrollment and college persistence. While this program was only available to Knox County residents and graduates, it, like Tennessee Promise, provided college coaching and last-dollar scholarships and aid to first-year community college students looking to make an immediate transition from high school to one of the state’s public two-year institutions. The authors used difference-in-differences analyses and propensity score matching estimators to mimic an experimental research design to determine whether the program’s goals were realized. Through their research, the authors found that Knox Achieves was strongly associated with an increased likelihood of graduating from high school and enrolling directly in college but cannot assert that aid was the only reason the program was successful. This is because enrollment numbers increased most for the program’s lowest income students who saw little to no aid from the program because their tuition and fees were covered by other grants and scholarships. With the programs basic structure expanding statewide with Tennessee Promise, evaluation of Knox Achieves provides valuable insight and background into Tennessee’s current higher education system and evolving student behavior patterns.

Muñoz et al (2016) produced a study that evaluates the Missouri A+ Schools Program, a merit scholarship program that provided scholarship support to eligible graduates from participating high schools to help them enroll in any in-state, public two-year college. The aim of the program was to increase enrollment for the state’s public two-year institutions and democratize higher education attainment throughout Missouri. The staggered adoption of the program allowed the authors to create a quasi-experimental research design by analyzing the school-level data collected by the Missouri Department of Elementary and Secondary Education (DESE) from 1992 to 2010. The study found that the program increased two-year college-going rates by 5.3 percentage points and decreased four-year college-going rates by 3.8 percentage points in participating schools overall. This program resulted in increased enrollment for Missouri’s community colleges, while simultaneously funneling enrollment away from the state’s four-year colleges. Therefore, this study acknowledges the potential negative consequence associated with such community college-based programs, since diverting students from a four-year to a two-year institution creates the added complication for students who will eventually look to transfer to a four-year institution to attain a bachelor’s degree.

Increasing College Access

While there is substantial research on the effect of lowered tuition on college enrollment, Denning (2017) specifically examines the effects of a decrease in community college price on community college enrollment specifically.  Though most prior literature has examined the effect of additional grant aid in decreasing the net price of college, Denning chooses to focus on reduction in the “sticker price” of college overall, which reduces the cost of college for a broader group of students, notably those who do not receive any financial aid or do not fulfill the requirements for financial aid. Using data from the Texas Education Research Center, the Texas Education Agency, the Texas Higher Education Coordinating Board, and the Texas Association of Community Colleges, the author tracked the variation in tuition prices at community colleges in Texas to show that enrollment in the first year after high school increased by 5.1 percentage points for each $1,000 decrease in tuition. Denning’s research also shows that community college price reduction does not result in students switching from four-year colleges to community colleges, but instead causes students who would otherwise not attend college to enroll. Overall, the author found that a $1,000 decrease in community college tuition leads to larger increases in enrollment than the same increase in financial aid more commonly used at four-year universities. These findings speak directly to the goals and proposed outcomes of state-wide tuition-free community college programs. This study seems to show that decreases in tuition will result in increased enrollment, though the estimated changes in degree completion remain roughly as colleges that have not experienced a tuition reduction.

Page and Scott-Clayton (2016) examine the various complex barriers to college access that incoming students encounter, and the numerous policy solutions that state and federal governments have crafted to combat these obstacles.  Special attention is paid to the cost of college and the different forms of financial aid, including traditional need-based aid, merit aid programs, location based “promise” programs, tax credits, and student loans, and how they may encourage or impede students looking to enroll in college.  The authors also discuss academic barriers like remedial coursework, and informational barriers like testing and financial aid applications and how these, along with financial barriers, are not mutually exclusive to one another and may compound for certain numbers of low-income students. The authors conclude that due to the complexity and interaction of these types of barriers, the best policy programs are ones that seek to address multiple barriers together, like comprehensive community college policies, rather than addressing singular barriers in isolation. This conclusion helps to support the ideas behind immersive free community college programs popping up around the United States, which can include college coaching, volunteer requirements, and financial assistance.

Statewide Tuition-Free Community College Policies

Tennessee Promise Program

In 2010, the Tennessee legislature passed the Complete College Tennessee Act (TCCA), which set ambitious educational attainment goals and sought to improve and transform the state’s higher education system.  This policy led to the adoption of Governor Bill Haslam’s “Drive to 55” initiative in 2013, which announced that Tennessee would strive to have 55 percent of working-age adults (between the ages of 24 and 65) attain a postsecondary degree or certificate by 2025 (Tennessee Higher Education Commission, 2015).  To achieve this goal, the Tennessee Higher Education Commission (THEC) and the Tennessee Student Assistance Corporation (TSAC) implemented various programs and initiatives to seek different methods for enrolling and graduating students and complement the goals of “Drive to 55.”  From this, the Tennessee Promise program, recognized as the first statewide tuition-free community college policy in the nation, was established and signed into law in June 2014 by Governor Haslam.

Identified Problem and Purpose of the Policy

Seen as a policy solution to achieve the goals laid out in the “Drive to 55” initiative, Tennessee Promise’s enacting legislation, Senate Bill 2471, identified several justifications for the necessity of such an ambitious program.  Increasing educational attainment was outlined as a major concern, since Tennessee ranks below the national average for residents with higher education degrees, “ranking forty-third in the percentage of adults with a two-year degree or higher” (Tennessee Legislature, 2014).  This ties in closely with the economic concerns Tennessee is looking to address with their statewide tuition-free community college program.  SB 2471 recognizes that the demand for skilled workers in the state currently outstrips the supply, and the knowledge and skills provided through postsecondary education have become the gateway to secured employment and the middle class (TN Legis., 2014).  Tennessee’s Masterplan for Postsecondary Education (2015-2025) also acknowledges that higher education affects not just the economy but the “quality of life for states and individual citizens in myriad ways” including increasing returns on earnings, improved health, and civic engagement such as voting and volunteering (THEC, 2015).

Affordability of higher education in Tennessee was also prioritized as a growing concern.  In 2013 to 2014, the THEC estimated that 8.9 percent of median family income was required to pay tuition and fees at Tennessee’s community colleges, compared to the national average of 6.4 percent (THEC & TSAC, n.d.).  For the 2014 to 2015 academic year, prior to the adoption of Tennessee Promise, approximately 24 percent of state grant aid was need-based, much lower than the national average of 76.2 percent.  This was due to the expansive Tennessee Education Lottery Scholarship (TELS) program, which awards state aid primarily based on merit, and includes the Tennessee HOPE Scholarship, the largest state grant available to Tennessee residents and high school graduates with at least a 3.0 GPA and an ACT score of 21 (THEC, n.d.).  Governor Haslam, in his 2014 State of the State address, declared that through the Tennessee Promise program, the state is “fighting the rising cost of higher education” and acknowledging that “for many Tennessee families, cost is the biggest hurdle to further education” (Haslam, 2014).

Key Figures and Development of Policy

As previously mentioned, the Complete College Tennessee Act of 2010, introduced by then governor Bill Bredesen, created a masterplan for higher education in Tennessee, focusing on outcomes-based funding, the Tennessee Transfer Pathway, and research enhancements for universities (Smith and Bowyer, 2016).  Building on this plan, the THEC sponsored research from several outlets including the Lumina Foundation and Complete College America that determined that to improve the state economy, Tennessee would need 55 percent of its population to have a postsecondary degree by 2025.  At its current projected rate, however, Tennessee would only reach 39 percent of adults attaining the required credentials by that time.  To achieve this goal, Tennessee Promise would become the cornerstone of these initiatives and a way to achieve these goals through policy and legislation.

In an interview with NPR, Richard Rhoda of the Tennessee Higher Education Commission discussed the development of Tennessee Promise and its main supporters. He noted that Governor Haslam took up the cause for tuition-free community college in Tennessee and that the policy “was very much a part of his agenda, which you heard from his State of the State address” (Headlee, 2014).  Continuing, he remarked that “it was clear that this is something he saw as important to the state of Tennessee and not just a higher education initiative, but one that everyone needed to embrace.”  The Tennessee Promise program received bipartisan support from the Tennessee Legislature, passing the House of Representatives with an 87-8 vote (Sisk and Smith, 2014).

Program Funding

Described as both a scholarship and mentoring program, Tennessee Promise provides students with last-dollar scholarships, meaning that the scholarship will cover the cost of tuition and mandatory fees not covered by other forms of federal and state aid like the Pell Grant, the HOPE scholarship, or the Tennessee Student Assistance Award.  Tennessee Promise was funded by transferring $312 million in reserves from the lottery-funded Hope program into a new “irrevocable trust” along with a $47 million endowment created by Tennessee’s General Assembly.  This endowment is expected to generate interest that will help fund Tennessee Promise in the coming years (Smith and Bowyer, 2016).  For the 2015 to 2016 academic year, Tennessee Promise distributed $15.2 million dollars to 16,291 recipients, averaging about $850 per student through the Tennessee Student Assistance Corporation (THEC & TSAC, 2017). The THEC estimates that the cost of the program will be $34 million annually.

Eligibility Requirements

Due to the requirements and design of the program, Tennessee Promise targets recent high school graduates seeking to enroll in college full-time.  Outline in SB 2471, the program is open to all Tennessee residents who attend and graduate from an eligible high school or complete a GED or HiSET diploma (before the age of 19).  Tennessee Promise also requires students to:

  • Complete the Free Application for Federal Student Aid (FAFSA) by February 1st of each year beginning in high school and throughout his/her postsecondary experience;
  • Apply senior year and meet established application deadlines;
  • Attend all scheduled team meetings and a mandatory college orientation;
  • Begin at an eligible postsecondary institution in the fall directly following high school graduation;
  • Remain enrolled for consecutive semesters and maintain full-time status each semester;
  • Maintain a 2.0 GPA each semester;
  • Complete at least eight hours of community service each semester.

Governor Bill Haslam’s 2015 State of the State speech emphasized the importance of the program’s mentorship component by acknowledging that while “access is important … even more important is success. Not only do we need to get those students into school, they need to finish” (Haslam, 2015).  As a result, recipients receive individual guidance from a mentor who will assist the student in navigating the college admission process and students will be required to attend mandatory meetings in order to remain eligible for the program, hopefully leading to higher completion rates among awardees.

Oregon Promise Program

Oregon’s program followed a similar trajectory to Tennessee’s.  In 2011, the Oregon Legislature adopted a policy goal known as“40:20:20,” which was developed as a roadmap to help increase educational attainment throughout the state by creating ambitious targets to measure its progress.  Like Tennessee, the goal established benchmarks that decreed by the year 2025, 40 percent of adults in the state will have completed a bachelor’s degree, 40 percent will have earned an associate’s degree, and the remaining 20 percent will have earned a high school diploma or GED (Cannon & Joyalle, 2016).  Guided by Oregon’s Higher Education Coordinating Commission (HECC) Strategic Plan for 2016 to 2020, the Oregon Promise Program (ORP) was created in 2015 as a policy response to help the state achieve the ambitious goals laid out by 40:20:20 and further the commission’s stated mission of “improving educational attainment and completion; improving Oregon’s economic competitiveness and quality of life; and ensuring resident students have affordable access to colleges and universities” (Oregon HECC, n.d.).

Identified Problem and Purpose of the Policy

In addition to advancing the state’s 40:20:20 educational goals, advocates for the ORP point to the economic concerns these policies are looking to address to explain the state’s need for a tuition-free community college program. The Oregon Education Investment Board (OEIB), in its report to the legislature in 2011, used employer-reported data to develop projections about the educational qualifications necessary for the type of jobs likely to be available in Oregon in the coming decades.  The OEIB noted that the Oregon economy is transitioning from “dwindling numbers of well-paid jobs that require only a high school diploma” to rely more heavily on “new jobs… that increasingly demand post-secondary education” (Oregon HECC, 2016). The HECC concludes that the ambitious goals laid out in 40:20:20 are justified by these economic shifts, and support their belief that significantly increasing the education levels of Oregon’s residents will help to accelerate an economic transformation for the state. Legislators also pointed to early findings from Tennessee Promise to support the need to address the affordability of postsecondary education institutions and the need to enact laws to increase access to affordable opportunities. The purpose for the Oregon Promise Program, then, is to play a major role in achieving the state’s educational attainment goals by making higher education more affordable, and therefore more accessible, to residents.

Relying heavily on findings from Tennessee, the support for the ORP also illustrates that another purpose of the program is to increase the use of federal Pell Grants among Oregon college students. Testimony given to the Oregon State Senate in support of SB81 advocates for the state to join Tennessee in taking advantage of available federal funds.  Advocates point to the sharp increase in Tennessee’s number of Free Application for Federal Student Aid (FASFA) forms as a result of students being required to apply for government funding as a stipulation of the program.  Because of this, supporters state that “hundreds of millions of federal dollars are raining down on Tennessee,” and the state can afford to make tuition-free community college a reality because “the state picks up only the gap federal funds don’t cover” (SB 81, 2015).

Key Figures and Development of Policy

Introduced as Senate Bill 81, the Oregon Promise Program was officially adopted by the Oregon Legislature in July 2015 and scheduled to be available for students beginning in fall 2016.  The proposed bill built off of the findings of a National Center for Higher Education Management Systems (NCHEMS) report commissioned by the HECC, which examined the viability of a program that would allow students to obtain a degree from one of Oregon’s seventeen community colleges tuition free. The HECC is a state agency tasked with “ensuring pathways to higher educational success for Oregonians statewide” and is composed of a 14-member volunteer commission appointed by the Oregon Governor, with nine voting members confirmed by the State Senate (Oregon HECC, n.d.-b). Presented at the request of the state’s Senate Interim Committee on Education and Workforce Development, the committee’s chair, Senator Mark Hass (D), advocated for the program to the Senate’s Ways and Means Education Sub-Committee.  His testimony relied heavily on the economic advantages of the program, noting that “without some kind of training or education after high school there is often a well-worn path to poverty” – citing Oregon’s estimated “70,000 [unemployed] young people” between the ages of 18 and 24 who cost taxpayers about “$14,000 a year in social services and direct costs to society” (SB 81, 2015).  The development and adoption of the Oregon Promise Program was realized through the concerted effort of the state’s education policy makers, spearheaded by Senator Mark Hass and including Oregon’s former Governor John Kitzhaber and its numerous state agencies.

Program Funding

Publicized as a program that provides “tuition-free” community college to recent high school graduates, ORP, like Tennessee Promise, is framed as a “last dollar” scholarship program created to supplement existing federal or state aid programs available to students.  This serves to draw more federal aid into the state by requiring students to apply and accept any grant offered to them by the federal or state government, including Pell Grants and the need-based Oregon Opportunity Grant (OOG).  For the 2016 – 2017 school year, the legislature appropriated $10 million from Oregon’s General Fund to be administered by the Office of Student Access and Completion of the HECC.  After factoring in administrative expenses, the legislature estimated approximately $9.6 million in grants would be awarded to students (OR Legis, 2015). The program was originally projected to reach between 4,000 and 6,000 students, resulting in grants of roughly $1,500 to $2,500 per recipient.  In actuality, Oregon Promise awarded an average grant of $653 and served 6,745 students (HECC, 2016).  The SB81 Budget Report and Measure Summary delivered by the Joint Committee On Ways and Means makes clear that if funding is not available to provide grants to all eligible students, the HECC is then authorized to establish the priority scale by which grants are awarded, “which may include preferences for districts and high schools that meet criteria specified by HECC” (OR Legis, 2015).

Eligibility Requirements

Because the Oregon Promise Program grant was designed to be used only towards tuition expenses, legislators intended the program’s target audience to be younger students who have recently graduated from high school, most of whom have reduced living expenses by staying home with their parents. The program is open to any graduate of a public or private Oregon high school or general education development (GED) recipient who enrolls in community college within six months of completion. (For the first year of the program the requirement was lengthened to twelve months). Outline in SB81, the program also requires:

  • a minimum 2.5 cumulative high school grade point average (GPA) or a passing GED score of 145
  • Oregon residency for at least 12 months prior to community college enrollment;
  • A complete and filed Free Application for Federal Student Aid (FAFSA);
  • Acceptance of any grant offered by the federal or state government;
  • $50 fee per term once enrolled, and
  • Students must complete at least six credits per term, and must attend at least three terms per school year.

Once all the requirements are met, students are able attend any of Oregon’s seventeen community colleges free of tuition costs for up to 90 credits, which is equivalent to two years of full-time enrollment. Legislators and the HECC make sure to note in the program’s guidelines that continued participation after the first year is dependent on state continuation of the program.

New York Excelsior Scholarship

New York’s tuition-free program has expanded the reach of Oregon’s and Tennessee’s own ambitious policies.  Unlike Tennessee and Oregon, New York has crafted a program that allows students to attend college tuition-free at all City University of New York (CUNY) and State University of New York (SUNY) two and four-year colleges in the state, a total of 45 public four-year institutions and 36 community colleges.  Advertised as the “nation’s first accessible college program,” the Excelsior Scholarship was announced by Governor Andrew Cuomo in January 2017 and was included in the state’s 2018 fiscal year budget (New York State, n.d.). The program was officially rolled out for the 2017 fall semester and will be “phased in” over three years.  It is designed to apply first to families making up to $100,000 annually for the fall of 2017, then increases to $110,000 in 2018, and finally reaches the $125,000 cap in 2019.  Under the plan, the New York legislature approximated that 80 percent, or about 940,000 New York families and individuals, would qualify to attend SUNY or CUNY tuition-free (New York State, n.d.).

Identified Problem and Purpose of the Policy

New York’s official Excelsior Scholarship website helps to identify some of the key problems New York officials and legislators are hoping to remedy through introduction of the program.  Announcing that accessing these scholarships will allow “thousands of students to realize their dream of a college education,” the website asserts that the program will help to “crush… the burden of student loans” and alleviate the financial stress associated with high debt by putting “more New Yorkers on a path to financial security” (New York State, n.d.-b). In 2016, the New York Assembly’s Standing Committee on Higher Education’s Subcommittee on Tuition Assistance Programs held a public hearing focused on the rising costs of higher education and student loan debt throughout the state. Seeking testimony on a variety of issues, including the effectiveness of proposed “free community college proposals and debt-free college proposals,” the subcommittee noted that student loan debt in New York has grown by 112% in the last decade (New York Assembly, 2016).   The committee stated that by 2015, New York residents had an average of $32,200 in student debt, which was notably higher than the national average of $29,700.  Because of this, the Assembly was investigating effective proposed measures to help reduce and relieve student loan debt in New York State (New York Assembly, 2016).

In his 2017 State of the State, Governor Andrew Cuomo said that “college completion has emerged as a significant issue” in New York, and a large number of students in college are unable to complete their degrees on time, resulting in rising costs for both students and the state (Cuomo, 2017).  This message is mirrored on the Excelsior website, where promoting on-time degree completion for students is a specified goal of the program.  The website states that by making college affordable, “the Excelsior Scholarship Program will encourage more students to graduate on time and will grow the number of graduates from our public universities” (New York State, n.d.-b).

Governor Cuomo’s administration also stresses the economic factors and considerations behind supporting such an expansive “tuition-free” program.  The State of the State address acknowledges that a college education is increasingly necessary for residents hoping to succeed in the workplace, and that the proposed scholarship program will work to “ensure all… students have access to a quality education and the skills they need to succeed in [the] global economy” (Cuomo, 2017).  The address also includes information on New York’s developing job market and the need to meet employer demand.  It cites research from the New York State Department of Labor that asserts approximately 3.5 million jobs in New York State will require an Associate’s Degree or higher by 2024 and that a person with a bachelor’s degree will earn about $1 million more over their lifetime than a person without a degree.

Key Figures and Development of Policy

The New York Excelsior Scholarship program was created as a major and important piece of Governor Cuomo’s legislative agenda.  Advertising the Excelsior program as an important tool to help strengthen New York’s middle class, it was included in Section HHH of New York’s state budget for FY 2018.  On his website, Cuomo and his administration announce that the passage of the budget was an integral step towards advancing the governor’s “Middle Class Recovery Act,” which included policy initiatives and goals including investing in jobs and infrastructure, reducing state taxes, and expanding access to education.  When it was approved by both the New York Assembly and Senate in April 2017, the $153 billion budget was billed as a way to “create a path forward and upward for New York families” and proclaimed that New York “the first-in-the-nation to provide tuition-free college at public universities” (Arinde, 2017).

Governor Cuomo embarked on the Excelsior Scholarship Campaign in early 2017 to publicize and advocate for the program before the passage of New York’s budget.  This tour was supported by other members of his administration such as Lieutenant Governor Kathy Hochul and various cabinet members, who planned to meet with students and faculty at SUNY and CUNY campuses to support the Excelsior Scholarship program and its goals of enacting free tuition for middle-class families at both two and four year institutions.  The governor also relied on support from high-profile politicians outside New York like Vermont Senator Bernie Sanders, who joined the governor in Long Island City when he announced his free tuition proposal in January of 2017.  Sanders, who campaigned for the Democratic presidential nomination before losing to Hillary Clinton, made eliminating tuition at public colleges and universities throughout the country a central part of his platform.  He also acknowledged that New York’s “revolutionary” program was the first in the United States and its passage would “reverberate not only throughout the state of New York, but throughout [the] country” (Cluckey and Skelding, 2017).

Program Funding

Like Tennessee and Oregon, the Excelsior Scholarship was also created as a “last dollar” approach, designed to supplement New York’s twenty other available aid programs administered by the state’s Higher Education Services Corporation (HESC).  The state’s FY 2018 budget included $7.5 billion in total support for higher education, with $87 million allocated for the Excelsior Scholarship (Campaign for Free College, n.d.).  Since the Excelsior Scholarship’s income eligibility threshold was raised to $110,000 for the 2018 to 2019 academic year, the state budget for FY 2019 allotted an increase to approximately $118 million to support the estimated 27,000 students in the Excelsior program (New York Higher Education Services Corporation, n.d.).

When fully implemented, the Excelsior Scholarship is expected to cost New York state approximately $163 million in its third year (Campaign for Free College Tuition, n.d.).  Through the program, students are eligible to receive up to $5,500 per year which will help allow 200,000 students to attend a SUNY or CUNY college tuition-free (NY HESC, n.d.).  These scholarships are intended to supplement, and work in combination with, the state’s other aid programs, including the Tuition Assistance Program (TAP), federal Pell Grants, and SUNY/CUNY Tuition Credit programs. TAP is New York’s largest state aid program that provides need-based tuition grants of up to $5,165 for residents who have met the eligibility requirements. For the 2015-2016 school year, TAP awarded $956 million to 289,601 New York students, with an average grant of $3,302 (NY HESC, n.d.).

Eligibility Requirements

Due to its design and the nature of its requirements, the Excelsior Scholarship is targeted towards relieving the tuition burden for “middle class” New York residents.  While there is no restriction on the length of time since an applicant has attend and graduated high school, students are required to attend their chosen institution on a full-time basis. The scholarship is open to any U.S. citizen and New York resident who has resided in the state for twelve consecutive months prior to their first term.  Outlined in Section HHH of New York’s State Budget for FY 2018, the program also requires applicants:

  • Have graduated from high school in the United States, earned their GED, or passed a federally approved “Ability to Benefit” test;
  • Have a combined federal adjusted gross income of $100,000 or less in 2017 (this amount will be raised to $125,000 by 2019);
  • Be a matriculated undergraduate student in an approved program of study at a SUNY or CUNY institution;
  • Enroll in at least 12 credits per term and complete at least 30 credits each year;
  • Be on track to graduate on time with an Associate’s Degree in two years or a Bachelor’s Degree in four years;
  • Sign a contract agreeing to reside in New York state for the length of time the award was received, and, if employed during such time, be employed in New York state

The program literature also notes that students who fail to earn 30 credits per year will become ineligible for the scholarship and students will be responsible for the tuition liability for their second term.  Additionally, if a student does decide to move out of New York after receiving their degree, their scholarship will be converted to a ten-year no-interest loan. While the post-award residency obligation can be deferred if a student continues their education outside of New York, they must return to New York within six months after finishing their advanced degree (NY HESC, n.d.-b).

Implications for New Jersey

New Jersey has good reason to be looking for ways to reduce the cost of higher education for students in the state.  According to the State Higher Education Executive Officers Association (SHEEO), the cost for attending a public four year institution in New Jersey is, on average, $13,303 a year (Rinde, 2016).  With the national average at $9,142, this makes New Jersey’s average tuition costs the fourth highest in the nation. Two year community colleges are also more expensive in the state at an average amount of $4,600 a year, compared with $3,962 nationally.  In 2016, 62 percent of students in New Jersey graduated with an average college debt of $30,536, the ninth-highest in the United States (Young, 2018).  These high costs have led many students to move out-of-state to pursue their education. The National Center for Education Statistics (NCES) shows that for the fall 2014 semester, 31,528 of New Jersey’s first time college enrollees migrated out of state (NCES, 2017).  Many often choose not to return to New Jersey after completing their postsecondary degree, choosing instead to contribute to the “economy of some other state [by] paying taxes, buying houses, and often starting families” (Rinde, 2016).  State officials and legislators have increasingly been pushing to fund programs that encourage New Jersey’s high-school graduates to stay home.  This includes proposals to increase funding to the state’s need-based aid program TAG (Tuition Aid Grants) and the expansion of the NJ Stars program.  With the election of Phil Murphy in November 2017, the governor is now looking to make tuition-free community college a reality New Jersey’s residents.

The initiatives developed and adopted by Tennessee, Oregon, and New York, while requiring more data and research to fully analyze their impacts, nevertheless offer some important insights and implications for New Jersey’s own possible tuition-free community college policy.  These cases raise compelling questions about the feasibility and reality of providing free college to students.  The most pressing question, at least in the case of New Jersey, is the sustainability of such a program.  As a potential remedy for the rising cost of higher education and the growing student debt burden, and achieving the goal of increasing access to postsecondary institutions, these programs can only provide relief if they are sustainable in the long term.  Oregon, for example, has had difficulty accurately estimating the costs of its program.  After the initial appropriation of $10 million in 2016, the Oregon legislature was required to pass Senate Bill 55 in April 2017 to provide an additional $3.6 million to fully fund all recipients through the end of the 2016-2017 academic year (OR Legis, 2017).  Because of a higher than expected participation rate, $4.4 million in grants was distributed for the fall 2016 term and Oregon needed to match the demand.  In August 2017, Oregon also announced that due to a budget shortfall the eligibility requirements for the scholarship would be changed, and the program would no longer apply to students “whose families are expected to be able to contribute $18,000 or more to pay for college… based on information submitted on the Free Application for Federal Student Aid (FAFSA)” (Lobosco, 2017).  State legislators say that the new criteria is not permanent and full eligibility may be restored in the future.  It is clear that programs like Oregon’s and New York’s, which require annual or biennial approval to receive appropriations from their state legislatures, are less secure and stable than a program like the one in Tennessee, which is funded through an endowment of lottery revenues (Perna et al, 2017).

The sustainability of these programs will also depend on a variety of factors outside of the states’ control.  The design of these lower-cost tuition-free programs means that expenses will rely on continued levels of funding of other state aid programs, federal Pell Grants, and future increases in tuition and fees set by the colleges themselves.  The last dollar approach of these polices means that an overburdened state may be responsible for absorbing future increases in tuition expenses.  For example, the rising costs of tuition over the last three decades has far exceeded the maximum total amount of Pell Grant awarded to students and has resulted in larger and larger gaps in college affordability (Cannon & Joyalle, 2016).  It is also difficult for these programs to provide guarantees that they will make up the difference and gaps in aid when the institutions themselves are the ones that have the power to set tuition rates, “including the ability to raise them to cover higher personnel costs or pay for new infrastructure” (Cannon & Joyalle, 2016).

In April 2018, Governor Phil Murphy announced his own plan for providing tuition-free community college in New Jersey.  His proposed $37.4 billion budget includes $50 million for New Jersey’s program and would provide grants for students with average household incomes below $45,000.  The program would eventually be expanded to include more students until community college is paid for by the state for all by 2021, costing the state an estimated $200 million annually (Young, 2018).  This proposal has raised concerns about fiscal sustainability in a state facing a potential budget deficit of $161 million, a severely underfunding pension program, and the second worst credit rating in the U.S. (Reitmeyer, 2018).  Though Tennessee, Oregon, and New York’s programs have all been established to supplement existing federal and state aid programs, other states have developed different policy designs.  Arkansas, which introduced its Arkansas Future Grant in March 2017, chose to eliminate the state’s Workforce Improvement Grant and the Higher Education Opportunities Grant in order to fund the estimated $8 million cost of ArFuture (Smith, 2017).  Most students who received benefits from these two grants will end up qualifying for ArFuture instead because the program is much broader, applying to any traditional or nontraditional student who enrolls in a state community college in the science, technology, engineering or math field (State of Arkansas, 2017).  This could become an option for New Jersey as well.  Creating a timeline for absorbing the state’s NJ Stars program, which provides free community college tuition to students who rank in the top 15 percent of their high school class, into Murphy’s complete state funded tuition-free plan could help increase the program’s financial viability.  Though New Jersey’s budget for FY 2017 only allocated $7 million for the NJ Stars program, legislators should begin considering various approaches to directly coordinate both federal and state higher education financing options.

One way to assure long-term fiscal sustainability of these programs is by creating policies that incorporate a federal-state partnership.  In a report written by members of Oregon’s HECC, the Education Commission of the States recommends that state and federal officials “actively explore new opportunities to establish a more formal alignment…across their respective agencies and jurisdictions” (Cannon & Joyalle, 2016).  One suggestion recommended by the commission was the establishment of a pilot tuition-free community college program that would provide direct assistance to certain colleges in exchange for a commitment by those institutions to stop charging tuition altogether. While aid would be provided for students who continued to have unmet non-tuition-based expenses, this approach would not require a separate application in order for students to be reimbursed by the state for the cost of tuition. In this approach there would be “no sticker price to consider, no financial aid gauntlet to run, no fine print” (Cannon & Joyalle, 2016).  Simplifying and streamlining the financial aid process has been proven to be the cheapest way to increase college enrollment (Dynarski and Wiederspan, 2012).  Both Tennessee and Oregon’s programs have led to increases in FAFSA filing rates throughout the state, and such a program, like many other placed-based promise programs, could potentially increase college enrollment among students who may otherwise have not enrolled due to barriers beyond just tuition expenses.

While the increases in student FASFA filing rates are encouraging, it is still too early to determine the full impact tuition-free programs will have on educational attainment levels.  According to the National Student Clearinghouse’s (NSC) 2017 annual report, which tracked the six-year outcomes for students who began their postsecondary education in fall 2011, nearly half of all community college students (47%) in the United States drop out without obtaining a degree or certificate (NSC Research Center, 2017).  In January 2018, Governor Bill Haslam addressed these concerns by proposing changes to the Tennessee Promise program that introduced credit requirements like those laid out in the New York Excelsior Scholarship.  His proposed additions would require students enrolled in Tennessee Promise to complete 30 credit per year or risk losing a portion of the scholarship.  Relying on research like that provided by the NSC, Haslam recognized that “taking the credits needed to graduate on time results in better academic performance, higher retention rates, and the increased likelihood of completion” (Dries, 2018).  These amendments, however, were rejected by Tennessee’s bipartisan legislature.  This helps to illustrate the difficulty of making changes to existing programs that require legislative approval, rather than those attached to much larger and more expansive budget bills.

Additionally, access gaps for students of color and lower socioeconomic status have increased over the last decade compared to students from middle-income families (Page & Scott-Clayton, 2016).  While the existence of college programs that eliminate tuition costs may contribute to an increase in college awareness and information on the types of aid available to these students, their ability to increase educational attainment and graduation rates may be hindered without the existence of other educational reforms.  Since these programs limit their awards to tuition and fees, they ignore the many other costs incurred by attending college including room and board, books and supplies, and transportation and childcare (Perna et al, 2017). Also, many community college students are required to take remedial courses before they can begin working towards their degree. This plays a large role in length of time a student takes to graduate and can negatively impact their ability to complete the credit requirements laid out by some programs.

Conclusion

Due to the newness of these programs, additional time and data is needed to fully understand the outcomes and consequences of tuition-free policies with different designs, requirements, and funding sources.  Whether these programs will contribute to increased levels of educational attainment, reduce the student debt burden for residents, and continue to be sustainable in the long term remains to be seen.  The specific policy design choices made by each state, combined with the level of funding made available by policymakers, will ultimately impact how successful they will be in meeting these goals. The cases of Tennessee, Oregon, and New York all illustrate some potential concerns New Jersey must answer as it begins shaping its own tuition-free policy.  The question of sustainability and how to best increase educational attainment, not just enrollment, are the two most significant factors New Jersey should build on as it begins creating a comprehensive and cohesive statewide higher education program.  As these programs continue to grow in popularity, research tracking student outcomes will be invaluable to policymakers as they begin evaluating these policies in order to move forward towards the next stage of higher education policy in the United States.

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