Students should be allowed to buy cars with financial aid

As lawmakers sharpen their attention on infrastructure, much of the conversation focuses on reducing reliance on cars. But what about people with no choice? Today, 99 percent of community college students commute to campus — and a sizable number of community colleges aren’t accessible by public transportation. 

The Biden administration is calling for bold investments in community and technical colleges. Recent proposals include a $62 billion grants fund to support proven strategies for student success, $12 billion for campus improvements and $109 billion for two years of free community college tuition. Community and technical colleges educate 36 percent of college students — for the students who can get there. To be fully successful, the administration’s community college agenda must include automobile access and affordability.

The proposed Biden free community college plan covers two years of community college tuition, enabling students to use federal grant aid and federal loans to cover living expenses. When a college is not accessible by public transit — which is the status quo at 37 percent of community and technical colleges — students should be able to use federal financial aid for a car purchase. This seems intuitive, but actually it is illegal. 

Currently, students are not allowed to purchase a vehicle with federal financial aid funds. Numerous financial advice blogs warn of dire consequences to students who opt to use their financial aid to buy a car, including the revocation of student aid and possible jail time. While these ominous outcomes are unlikely in practice, federal policy is not currently designed to support students who need cars to get to campus. 

The good news is that the Biden administration can take meaningful steps toward ensuring community college students can get to campus — without congressional engagement. Currently, higher education institutions are prohibited from including the cost of purchasing a vehicle in their cost of attendance (COA). This figure is a college’s “all in” sticker price, and one of the most critical aspects of a student’s college financial aid package. The Department of Education (ED) has the authority to allow car purchase as part of students’ COA. 

Here’s how this would work: The ED can establish a “car” as an allowable COA category for students at commuter schools. Another option would be to grant schools permission to use professional judgement to adjust COA to allow a student to purchase a vehicle. For a student at any given institution, that school’s COA is a critical number, as it also represents the top limit for the grant and scholarship aid a student can accept to attend a school and the limit for how much a student can borrow from the federal government to support their education. Community college presidents often observe that their students are “one flat tire away from dropping out.” With food and housing insecurity among community college students now in the double digits, few students have cash available to deal with that flat tire. 

Traditional infrastructure expansion alone will not fix transit accessibility for community college students. Our foundation’s analysis shows that at least 18 percent of community and technical schools are too far from existing public transit systems to be practical for investment. Broadband expansion, while critical for student success, will not fully fix this gap; we’ve seen how online learning isn’t for everyone. Moreover, community and technical colleges provide hands-on training for jobs like nursing, welding or industrial repair work, teaching workforce skills that require students to be physically on-site. 

The Biden administration recently highlighted that 40 percent of Americans lack access to affordable public transit. Without question, community college students live in this inequitable reality; indeed, current federal financial aid policy exacerbates this divide. 

We cannot write off prospective college students just because they can’t afford cars. And, routing students to costly private auto loans by pretending cars aren’t a school-related expense doesn’t seem particularly prudent either. The Biden administration has an easy opportunity to ensure that all college students can get to campus. The Department of Education can act on this simple fix today.

Abigail Seldin is the CEO and co-founder of the Seldin/Haring-Smith Foundation.