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Biden’s American Families Plan could make free college a reality

Key Points
  • Before a joint session of Congress, President Biden will pitch his plan for free college.
  • His proposal could increase the number of students attending college and their incomes over time, the White House said.
  • Critics argue there are better ways to help the students who need it the most.
President-elect Joe Biden unveils $1.9 trillion plan to combat the virus and stimulate the economy
President-elect Joe Biden unveils $1.9 trillion plan to combat the virus and stimulate the economy

As part of a massive new spending package, President Joe Biden is calling on Congress to enact legislation to allow students to enroll in community college at no cost.

The administration's American Families Plan calls for $109 billion to make two years of community college free for all students in addition to a roughly $85 billion investment in Pell Grants to decrease the reliance on student loans.

Under Biden's plan, about 5.5 million students would pay no tuition or fees, the White House said.

Also included in the massive spending package is $62 billion for programs to increase college retention and completion rates at institutions, particularly community colleges, that serve high numbers of low-income students.

Biden is set to detail the plan Wednesday night, during an in-person address before a joint session of Congress.

In fact, 25 states, including Arkansas, Indiana, Minnesota, Montana, Oregon, Rhode Island and Tennessee, already have statewide free community-college programs and even more were expected to follow before the coronavirus pandemic put a severe strain on state and local budgets.

In the state-based programs already in place, students receive a scholarship for the amount of tuition that is not covered by existing state or federal aid.

How soon will your state's colleges be tuition-free?
Source: Campaign for Free College Tuition

Most are "last-dollar" scholarships, meaning the program pays for whatever tuition and fees are left after financial aid and other grants are applied.

Enrollment at four-year private colleges would fall by about 12%, while enrollment at four-year public universities and community colleges would rise by roughly 18%, according to a study on the economic impact of making some college tuition free by the Campaign for Free College Tuition and the student-led advocacy group Rise.

"You've got a net effect of almost 2 million more students enrolled in college," said Robert Shapiro, lead author of the study and a former economic advisor to President Bill Clinton.

Make it free and they will come.
Robert Shapiro
former economic advisor to Bill Clinton

"Make it free and they will come," he said.

Graduation rates would also rise, Shapiro found, resulting in an increase in social mobility and higher incomes overall.

"I cannot think of a single policy change that would affect the long-term prospects of as many people as this would."  

Over time, "I feel quite confident that ultimately this program will pay for itself," Shapiro said. "It will raise incomes and also raise underlying productivity which would [in turn] raise incomes and corporate profit.

"That's the closest thing to a win-win."

Not only have millions of American workers lost their jobs since the Covid outbreak and economic crisis that followed, but with rampant unemployment, many families now say they they cannot afford college.

One-quarter of last year's high-school graduates delayed their college plans, according to a survey from Junior Achievement and Citizens, largely because their parents or guardians were less able to provide financial support.

Even fewer students enrolled in community college due to the pandemic.

Community college students likely are older, lower-income and often balancing work, children and other obligations. They are also disproportionately people of color — all groups that were especially hard hit by Covid.

Pandemic hammers higher education
Pandemic hammers higher education

However, not all experts agree that free college is the best way to combat the college affordability crisis.

Critics say lower-income students, through a combination of existing grants and scholarships, already pay little in tuition to state schools, if anything at all.

Further, the money does not cover fees, books, or room and board, which are all costs that lower-income students struggle with, and diverting funds toward free tuition could come at the expense of other operations on campus, including hiring and retaining faculty and administrators.

In addition, community college is already significantly less expensive. At two-year public schools, tuition is $3,770 for the 2020-21 school year, according to the College Board. Alternatively, at four-year, in-state public schools, tuition is $10,560 and, at four-year private universities, it averages $37,650.

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