The reconciliation bill currently under debate in Congress includes a scheme to provide two years of free community college, the centerpiece of a $111 billion boost to higher education funding. The bill’s Democratic backers say that “every American should have the opportunity to get the quality and affordable education they need to find a rewarding career.” But community college is already affordable. The problem is the quality, which is something the free-tuition plan does too little to address.
Nationwide, average community college tuition is just $3,770. Over the last decade, real tuition at these schools has risen by only $50 per year, far less than the increase at four-year colleges.
But even that overstates the cost. The $3,770 figure represents the “sticker” price of tuition at community colleges. In practice, most students get financial aid from federal and state governments, which defrays the cost of attendance. After applying financial aid, the average community college student pays no tuition at all.
Yes, you read that right: on average, community college is already free.
Of course, the price of tuition does not reflect the full cost of community college. Students sometimes need to spend time out of the labor force to earn their degrees, which means they might forgo income needed to cover the cost of living. It’s possible that these secondary costs are the real barrier, not the price of tuition.
If that were the case, we would expect community college students to make full use of the federal financial aid programs they’re eligible for. Specifically, we’d expect to see community college students borrowing federal student loans to cover the cost of living while enrolled.
But community college students who take on student debt are the exception, not the norm. Just 18% of full-time community college students borrow, compared to more than 50% at four-year colleges. Such low borrowing rates are not consistent with the narrative that community college is unaffordable for most students. Progressives often cite “debt-free” college as the goal of higher education policy—but for most community college students, debt-free college is already a reality.
Free community college also wouldn’t put much of a dent in student debt overall. Out of $90 billion in federal student loans disbursed every year, just $3.6 billion (4%) goes to students at community colleges. The main drivers of student debt are not community colleges, but expensive four-year private schools and graduate programs.
It’s true that averages can be misleading. In a few states, notably Vermont and New Hampshire, annual tuition at community colleges can exceed $7,000. But the Democrats’ free community college plan would probably fail to lower tuition in these states. Because of the program’s design, high-tuition states would have to contribute large amounts from their own budgets before they can dip into federal coffers. According to the Urban Institute’s calculations, New Hampshire must commit an additional $4,000 per student to make its community colleges free.
The Granite State and other states with high tuition are likely to find that a bad deal and opt out of the free community college scheme. New Hampshire Governor Chris Sununu has already signaled that his state will not participate in the national free-tuition program.
Advocates of free community college seem to be projecting their concerns about the cost of four-year college—which is indeed out of control—onto the community college sector. But the two groups of institutions face very different problems.
Community college is already affordable. However, the education that students purchase—and taxpayers subsidize—often fails to live up to its promises.
Just four in ten students who attend a community college receive any sort of credential within six years. Students who start at a community college with the intention of earning a bachelor’s degree at a four-year school face even worse odds: just 16% of students on this track succeed.
The few students who do borrow at community colleges fail to repay their loans at alarmingly high rates. This is a sign that community college students aren’t getting what they wanted out of their education—either because they failed to graduate, or because the credential they received had limited value in the labor market.
New research by Cody Christensen and Lesley Turner has found that the financial returns associated with community college degrees are all over the map. Programs in construction, engineering, and health care vastly increase students’ earning power, while those in education, consumer sciences, and the arts will usually leave students financially worse off. But the free community college plan in the reconciliation bill would fund all these programs equally, regardless of how well they serve students.
If the federal government must get further involved in the community college sector, funding should be contingent on better student outcomes. Community colleges should be incentivized to expand programs that are working and scale back those that are failing. One way to do this is to award community colleges a flat subsidy for every student who graduates and earns significantly more than a typical high school graduate. Such a plan would concentrate taxpayer dollars on the programs that serve students best.
Congress is poised to make community college free while leaving the sector’s quality issues largely unaddressed. The lure of free tuition could draw students away from better educational options, such as four-year schools, alternative training programs, or apprenticeships. Changing community colleges’ funding source from tuition to taxation will not solve the schools’ problems. But better incentives might.