Free College Is a Good Start, But Low-Income Students Need Additional Support

Presidential candidates Elizabeth Warren and Bernie Sanders are thought to represent the left-leaning wing of the Democratic Party and even to embrace some socialist ideals.

Their ambitious proposals to eliminate undergraduate tuition and fees at public two-year and four-year colleges, as well as at Historically Black Colleges and Universities (HBCUs) and Minority Serving Institutions (MSIs), though, signal that the real constituency they are courting is the American middle class.

Critics of Warren and Sanders’ proposals have pointed out that eliminating undergraduate tuition would disproportionately benefit well-to-do families, as these families are much more likely to send their children to college.

For instance, among a nationally representative sample of ninth-graders in 2009, 56 percent from the lowest socioeconomic quintile had enrolled in college seven years later, as compared to 91 percent from the highest quintile.

Still, one could argue that a bold policy vision for the middle class is overdue. Between 1984 and 2016, median U.S. household incomes rose only 19 percent after adjusting for inflation, from about $49,500 to $60,000 in 2016 dollars, despite the Gross Domestic Product per household rising 57 percent. In other words, only about a third of the real rise in economic productivity showed up in median family incomes. During the same period, the median cost of a home rose 74 percent, greatly outpacing income growth.

Of course, as incomes inched up and housing costs climbed, postsecondary education costs skyrocketed. At public four-year colleges across the United States, inflation-adjusted annual tuition and fees leaped a staggering 227 percent from 1984 to 2016, from about $2,700 to $8,800 in 2016 dollars.

Private four-year colleges saw a spike of 134 percent from about $12,000 to $28,000. Even at public two-year colleges, which have historically served as low-cost gateways to postsecondary education, tuition and fees jumped 146 percent, from about $1,200 to $3,000 a year in 2016 dollars.

What’s more, federal financial aid failed to keep up. At $5,775, the maximum federal Pell Grant for low-income, full-time undergraduates in 2015-16 did not cover even tuition and fees (to say nothing of room and board) at the average four-year public college.

In short, the rising costs of college and housing have been slowly asphyxiating American families, even as the overall economy has expanded. The 2018 Trump tax cuts, which favored corporations and earnings from wealth while rendering moot many popular middle-class deductions, merely exacerbated the trend.

In a crowded field of Democratic hopefuls, Sanders and Warren have set themselves apart with a proposed rethinking of how Americans pay for higher education. Both of their free-tuition proposals would offer matching incentives to states, HBCUs and MSIs that agree to eliminate tuition and fees for undergraduate programs.

Warren has proposed to fund the incentives with a wealth tax on families with more than $50 million in assets; Sanders, with transaction fees on securities trades. But even in states that agree to accept the proposed federal incentives, students’ access to free tuition would still depend on whom the states deemed eligible for relief. This is where a potential tension arises between the needs of the middle and working classes.

Many existing financial-aid programs are designed to benefit traditional, full-time students. Federally subsidized student loans, for instance, are restricted to students attending college at least half time, and federal financial-aid formulas for Pell Grants, subsidized loans and work study favor students who are still financially dependent on their parents. These students are often those who attend college directly after high school, and their dependent status means they are not working full-time or raising families of their own. Similarly, California’s recent offer of two free years of community college requires that students not only enroll full-time but that they are first-time college students. This leaves out workers wishing to upgrade their skills or finish uncompleted credentials.

Such rules are surely intended to limit program expenditures and encourage full-time enrollment, which is linked to a higher probability of graduation. Still, these types of restrictions would do little to help students whose personal constraints require part-time enrollment. In 2017, 63 percent of undergraduates at two-year colleges and 25 percent of undergraduates at four-year colleges were enrolled part-time.

Though Warren’s plan would also increase federal Pell Grant funding, and Sanders’s plan would reduce student loan interest rates, these steps would be unlikely to fully offset food and housing expenses (50 percent to 70 percent of student expenses at public institutions), and neither would they obviate students’ family responsibilities. As such, part-time attendance would remain a necessity for many working-class students.

This is not a critique of the candidates’ proposals, which would presumably leave benefit eligibility up to the states. Rather, it is a reminder that tuition subsidies may be most needed by those for whom higher education is not a foregone choice but a response to shifting workforce realities.

Still, at a time when the cost of annual tuition, room and board at public institutions averages nearly a third of median household incomes, or about $19,000 in 2016, the Sanders and Warren proposals are more than symbolic. They would redirect a modicum of investor capital toward the wide expansion of human capital and a skilled workforce. They suggest a sound enough investment in America’s economic future that even savvy conservatives may wish to take a second look.

This story about free college and the U.S. economy was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our newsletter.