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Manhattan Institute

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A College Plan That Just Isn't That Smart

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A College Plan That Just Isn't That Smart

New York Daily News January 11, 2017
EducationHigher Ed

Gov Cuomo’s proposal last week to make public colleges free for students from households earning less than $125,000 a year sends almost no additional aid to poor students, while giving big breaks to families making more than twice the median household income.

And while “free tuition” makes for a good sound bite, the plan ignores college costs beyond tuition, including textbooks, rent and food — expenses that may be a big reason the lowest-income students are completing degrees at much lower rates. If Cuomo is keen on sending $163 million in subsidies to higher education, there are much better ways to spend those dollars.

The major problem with Cuomo’s plan is that the biggest benefits are delivered to some relatively wealthy New York families. The Excelsior Scholarship he proposes has a “topoff” design, which means that the funds will pick up the remaining tab for students’ tuition bills after they have already collected grants from the federal Pell program and the existing state Tuition Assistance Program.

Cuomo’s proposal isn’t shy about the fact that the plan is aimed to help middle-class families. But that goal is misguided...

Both of those programs are means-tested, meaning that poor students receive the largest awards. As a result, students from the lowest-income households are already facing free or deeply discounted tuition. It’s the most well-off families that have the largest uncovered tuition bills, which means they will be the ones to benefit most from Cuomo’s plan.

Not to mention that those who go to college will ultimately be among the most well-off, guaranteeing that additional support delivered to those who would have gone to college without it will ultimately be regressive in nature.

Cuomo’s proposal isn’t shy about the fact that the plan is aimed to help middle-class families. But that goal is misguided and perhaps built on a misunderstanding of higher education  finance. “Free tuition” is a catch phrase and concept that became popular during the 2016 election cycle — Vermont Sen. Bernie Sanders accompanied Cuomo for the plan’s announcement — but it’s not as generous as it initially seems.

Tuition is only a fraction of the cost of enrolling in college. The annual tuition at SUNY four-year schools is just $6,470 — thanks to generous taxpayer subsidies — compared with the total cost of attendance of about $25,110, which includes things like fees, textbooks, travel, food and housing.

When it comes to getting low-income students into and through college, it’s the overall cost of attending college that creates a barrier, not just the tuition bill. Low-income students enroll in college at lower rates than their well-off peers, and those who do enroll have lower rates of success at completing their degree. So while helping middle-income families afford college is a laudable goal, it’s difficult to justify it when a gap remains for the neediest students that seems to be preventing them from making needed gains in academic achievement.

To make matters worse for poor students, the governor’s proposal may actually make it more difficult for disadvantaged students to get into college. As the Excelsior Scholarship makes public colleges in New York State cheaper for state residents, more and more students will begin choosing public colleges over private alternatives. If capacity at SUNY colleges doesn’t increase to meet the new demand, colleges will get increasingly selective, which will push the lowest-achieving students, who often happen to be from poorer families, into lower-quality options.

If the state wishes to make additional investments in higher education, it should be done with a few things in mind. First, aid should be targeted to the neediest students. Second, it must understand that tuition is only a small piece of overall cost pressures. And third, it should recognize that taking on debt to finance investment in education isn’t the end of the world. Typical borrowers face affordable monthly payments, and those who struggle have access to federal safety nets to protect them from delinquency in periods of economic hardship.

The state would be better served by taking these funds and increasing the generosity of the existing, means-tested, Tuition Assistance Program grant. That wouldn’t sound as transformative for an ambitious governor to tout — but it would be far more progressive.

This piece originally appeared at the New York Daily News

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Beth Akers is a senior fellow at the Manhattan Institute and Matthew M. Chingos is a senior fellow at the Urban Institute. They are coauthors of "Game of Loans: The Rhetoric and Reality of Student Debt."

Photo by Kenneth Gabrielsen / Getty and Bryan Thomas / Stringer

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