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Economists find free community college can backfire

Simulations by researchers find that the most cost effective way to raise college education levels in America would be to increase taxpayer spending at public universities

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College is expensive, so what’s the best way to help more Americans afford a degree? One team of researchers has a surprising answer. The most cost-effective way to increase the number of Americans who get a four-year degree, they found, is to increase tax-payer spending at all public colleges and eliminate tuition for students from families with incomes under $60,000 a year.

Free community college, an increasingly popular idea, is much less effective, actually reducing four-year college education rates while low-income Americans reap the smallest benefits, the researchers found. General tuition cuts for all aren’t as bad, but lowering the price of college turns out to be not as effective as increasing instructional spending at colleges.

“What’s remarkable about this paper is that it relies on a vast body of empirical literature generated over the last 5-10 years,” Joshua Goodman, a Brandeis University economist who focuses on education research, wrote on Twitter.  “It’s a great synthesis of our slowly accumulated knowledge.”

The study, “Policies and Payoffs to Addressing America’s College Graduation Deficit,”  is a conference paper published by the Brookings Institution in September 2019 and conducted by four economists and quantitative researchers at Dartmouth College, Harvard University and the research division of the College Board.

The researchers married previous scholars’ research on policy proposals to make college more affordable or improve college graduation rates with actual student data on college enrollment and degree completion and simulated what would happen under different scenarios. Simulations like these can be controversial because they’re based on assumptions of how people of certain income and academic achievement levels will change their behavior when, say, tuition is eliminated at community colleges or four-year universities. The assumptions here are derived from research findings that previous scholars have calculated on smaller groups of people around the country and then applied to this larger national database of students who graduated high school in 2007. It’s possible that many people won’t enroll in college or succeed and fail in college the way these researchers expect they will. And small changes in these assumptions can sometimes generate different results.

Related: Popular “free college” programs yield mixed results

Much has been written about how state legislatures have cut funding to public colleges and universities but scholars are starting to connect these cuts to enrollment and completion rates. The logic is that spending cuts affect core instruction and academic support and that trickles down to poor graduation prospects for students at less selective, less elite public colleges. A tuition cut, by contrast, might help a student pay the bill but it doesn’t help them get access to great instructors or complete the coursework for their major.

Versions of free community college have already become policy in many states and cities, and proposals to increase free college across the nation are very popular with Democratic presidential candidates. It is alarming to learn that economists don’t think they work.

In the research simulations, many students were lured by the free tuition and decided to attend a two-year school. Roughly 15 percent are people who wouldn’t have attempted college in the past but 6 to 7 percent are students who might have otherwise gone to a four-year institution. Many of these students are predicted to fail at completing a four-year degree if they start at a two-year institution. To the extent that free tuition plans lure new students to try college and enroll, they are a good thing. But that is offset by the fact that free community college also draws students away from better resourced, higher quality four-year schools. “It increases the proportion of high school graduates who complete a post-secondary degree,” the authors wrote, “but it does so at the expense of BA degrees.”

Related: How many already attend community college for free?

Of course, there are critics who disagree with an analysis that is focused on measuring completion of four-year degrees. Sarah Goldrick-Rab, a professor of higher education policy and sociology at Temple University, argues that the authors didn’t fully factor in the psychological power of free community college to low-income Americans.  “Low-income students overwhelmingly still don’t attend college,” Goldrick-Rab wrote to me in an interview conducted by email. “Free community college is first and foremost about getting them to come to college in the first place.”

But if you do care about four-year degrees — the bachelor’s — this research argues that eliminating tuition at four-year public institutions for families below a certain threshold is the way to go. In the simulation, eliminating tuition for families that make less than $60,000 translated to a 3 percentage point increase in bachelor’s degree completions. That’s big. And it was far more effective than reducing everyone’s tuition by 10 percent.

This story about community colleges was written by Jill Barshay and produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

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Jill Barshay

Jill Barshay is a staff writer and editor who writes the weekly “Proof Points” column about education research and data. She taught algebra to ninth… See Archive

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