Free college: How do you pay for it?

Some experts believe there’s room for the federal government to play a bigger role in higher education, especially as the student debt crisis has ballooned in the past decade and resulted in $1.7 trillion in outstanding debt owed to the federal government.

by Shirin Ali & Adam Barnes | June 9, 2022 | Jun. 09, 2022

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It could cost around $680 billion annually to provide free college at public institutions in the U.S.

Many states, like California and New York, already offer free college tuition programs to eligible residents.

As tuition rises alongside housing and food costs, some experts argue the federal government has a bigger role to play in supporting higher education costs.

Advocates for free public colleges and universities face a problem: Who is going to pay for it?

The cost of providing free college at public institutions in the U.S. is estimated at around $680 billion a year, or about 1 percent of last year’s $6.82 trillion in federal spending. That’s compared to $782 billion spent on defense and $829 billion spent on Medicare. It’s a large number and one that observers say will be difficult to find political support for.

Brian Powell, a professor of sociology at Indiana University, previously told Changing America that although public opinion on loan forgiveness varies, his research shows strong support for free tuition.

“If we think about the future, if we think about providing opportunities for more Americans to go to college, one of the first steps would be, making it affordable and free tuition at the public level,” said Powell, who authored “Who Should Pay: Higher Education, Responsibility and the Public,” alongside Natasha Quadlin, an assistant professor of sociology at the University of California at Los Angeles.

A 2019 survey conducted by the authors and published in their book found that 71 percent agreed with the statement “tuition at public colleges and universities should be free for anyone who is qualified to attend.”

California, New Mexico and New York are among the states that currently offer free college tuition programs to eligible residents. These efforts, experts say, could be expanded through strategic partnerships with the federal government, potentially giving more Americans a chance at free college — at least in states that participate.

Some experts believe that by partnering with states, federal agencies could establish targeted grants that could only be used to fund tuition — eliminating the need to create entirely new mechanisms to fund free college.

Higher education funding has historically been handled by individual states who are beholden to an annual budget. An analysis by the Urban Institute found that in 2019, states collectively spent $311 billion on higher education — about 9 percent of general spending.

Typically, the federal government only offers help in paying for higher education to students directly, in the form of financial aid packages, including the Pell Grant, and student loan options.

“One of the reasons that the federal government is an important partner in these things is that the federal government can spend more than it takes in in taxes. Most states have to run a balanced budget,” said Kevin Miller, associate director for higher education at the Bipartisan Policy Center.

Miller also noted that states are more restricted with how much money they can allocate to higher education affordability before having to turn to increasing taxes.

One idea popular among experts is developing block grants, which could supplement states’ existing higher education budgets and would be tailored to address tuition fees. This could ensure states focus their education budgets on affordability.

“We think that a flexible grant program that allows states to sort of support their existing affordability programs, the scholarship programs or College Promise Programs, makes a lot of sense, in that we could support the mechanisms that are already there rather than building an entirely new mechanism,” Miller added.

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Another more immediate option — expand the Pell Grant.

The Education Department issues Pell Grants to eligible, low-income students and in most cases the funds do not need to be repaid. In the 2019-2020 academic year, about 34 percent of students received one.

President Biden did manage to increase the maximum award amount by $400 in his latest $1.5 trillion omnibus funding package.

Currently, eligible students can receive a maximum of $6,895 in Pell Grants per academic year. However, the average in-state student attending a public four-year institution spends about $25,000 per academic year on tuition, housing and other expenses, according to the Education Data Initiative.

That cost more than doubles for students attending private institutions, who pay close to $53,000 per academic year on those same expenses. These increases have occurred alongside soaring cost-of-living expenses.

“Especially for low-income students, it’s important to look at making sure their financial aid is covering all their actual costs,” Miller continued. “If you want low-income students to be able to attend college, either zero cost or debt free – or however you define that kind of expense sensibilities – you need to make sure that their financial aid is meeting all those needs.”

However, the reality of the federal government taking up free college proposals anytime soon appears bleak. First lady Jill Biden confirmed in February that the president’s proposal to make two years of community college free for eligible students did not garner enough Democratic votes to pass through the Senate.

Moving forward with a free college plan means Congress would need to make big structural changes to its existing education policy, and Iris Palmer, deputy director for community colleges with the Education Policy program at New America, told Changing America “there’s just not a political coalition that’s willing to put their money in this at the expense of some other things like climate change mitigation, early childhood education, childcare.

“We have a lot of problems in this country. And if you’re going to spend a ton of money and totally change the way we fund higher education, it needs to be behind some of these other really, really pressing priorities,” Palmer added.

Though free college is enticing to many Americans, it’s no longer a key focus of the Biden Administration. Currently, the president is zeroing in on student loan forgiveness and considering forgiving up to $10,000 per borrower.