Free College Tuition: Overview

Introduction

The National Center for Education Statistics reported an average annual cost (including tuition and fees) for the 2021–22 academic year that varied among different types of four-year colleges and universities. Public institutions averaged $9,700, while private nonprofit institutions averaged $38,800, and private for-profit institutions averaged $17,800. While these amounts represented an increase of between 6 and 14 percent over amounts in 2010–11, the latter average—for private for-profit institutions—was actually 8 percent lower than the 2010–11 figure. The 2022 Report on the Economic Well-Being of US Households conducted by the Federal Reserve Board found that 30 percent of adults had taken out student loans to pay for their education. Loan amounts include not only interest but also fees based upon the amount of the loan, and therefore the total amount borrowed can be more than initially apparent. .

In many aspects, a four-year college degree has essentially replaced the high school diploma as the necessary preparation for a career in the modern information economy. Higher-order skills, including critical- and creative-thinking abilities, are often required to compete globally. Yet, many students in the United States cannot afford the tuition to achieve these skills. Consequently, they are unable to attend college, end up dropping out due to exorbitant costs, or rack up large amounts of student-loan debt.

Federal support for higher education comprises loans, such as the Federal Direct Loan program; grants, such as Pell Grants or Supplemental Educational Opportunity Grants; college work-study; and tax credits as outlined in the Taxpayer Relief Act of 1997. State support is usually divided between direct appropriations to institutions and student grant and loan programs. During an economic downturn or recession, educational funding is often susceptible to cuts because it is viewed as a form of discretionary (i.e., elective) spending. Support for education has proven beneficial for both society and the economy. A college degree helps raise the standard of living by preparing students for jobs that pay better salaries, which in turn provides more tax revenue and personal fulfillment. Higher education levels are also associated with better health outcomes and greater community engagement.

Understanding the Discussion

Federal Direct Loan Program: A program managed by the United States Department of Education that makes available subsidized Stafford loans to lower-income students and unsubsidized Stafford loans to all students. Additionally, low-interest PLUS loans are available for parents, and graduate or professional students. Other federal loan programs include the Federal Family Education Loan Program (FFELP) that provides Stafford and PLUS loans from qualifying private lenders and the Federal Perkins Loan Program, in which funds are awarded directly to institutions that in turn provide low-interest loans to the neediest students on their campuses.

GI Bill: Also known as the Servicemen’s Readjustment Act, this program enacted by President Franklin Delano Roosevelt in 1944 provided tuition benefits for veterans of World War II, especially those who were White. The program evolved into the Montgomery GI Bill in 1984 and was supplemented by the Post-9/11 GI Bill in 2008.

Higher Education Act: Legislation passed in 1965 that authorized federally funded student grants and loans. The act must be reauthorized by Congress every five years, yet the 2008 reauthorization to the Act was the first time the legislation had been renewed in ten years.

Information economy: Also called the knowledge-based economy; the current state of global affairs that demands higher-order thinking skills rather than the traditional physical skills needed to advance industrialization in past centuries.

Pell Grants and Supplemental Educational Opportunity Grants: Federal grants available to qualifying students based on income. Grant money does not have to be paid back.

Taxpayer Relief Act of 1997: This federal program enacted two separate tax credits: the Hope Scholarship Tax Credit, which credits up to $1,500 per year for the first two years of college, and the Lifetime Learning Credit, which credits up to 20 percent of college costs for adult learners.

History

The Boston Latin School, opened in 1635, was the first public secondary school in the United States; however, private schools that emphasized religious instruction dominated education until the nineteenth century. Most students who attended school left after fifth grade. Only wealthy individuals could continue on to college.

For many years, illiteracy among the general population worked against the economy and social well-being of the country. Thomas Jefferson believed that the country had the moral responsibility to educate all its children and that schooling should be separate from religious instruction. His endorsement for a public school system set the tone for the “common school” movement, which in the early 1840s founded dozens of public high schools under the guidance of Horace Mann. The common school movement established federal support for education.

As the country shifted from an agrarian economy to an industrialized economy, new technical and scientific skills were in great demand. In 1862, President Abraham Lincoln signed the Morrill Land-Grant College Act, providing in each state 30,000 acres of federal land for each senator and representative to support the first public universities that would focus on agricultural and technical education. These land-grant colleges included Pennsylvania State University, Ohio State University, and the California State University system, as well as the Massachusetts Institute of Technology (MIT) and Cornell University, both of which became private later on. The land-grant universities evolved into institutions that offered a wide variety of liberal arts and career-oriented programs. Lower tuition enabled students of more modest means to attend college, although a college degree still remained out of reach for many Americans.

In 1944, President Franklin Delano Roosevelt introduced the controversial Servicemens Readjustment Act (also known as the GI Bill), the first major federal student financial assistance program, which fueled the democratization of higher education. In 1947, nearly half of all admitted college students were veterans. By 1956, almost 8 million veterans had taken advantage of the GI Bill. The result was the growth of the middle class, a strong postwar economy, and increased tax revenue. However, it is important to note that despite the success of the GI Bill, Black veterans were denied many of its benefits. For example, low-cost mortgages were not available to Black veterans because banks did not offer loans to Black people. Likewise, Black veterans were unable to take advantage of the GI Bill's educational benefits.

In 1960, California adopted the Master Plan for Higher Education, which included free tuition to public and state colleges and graduate schools for all California residents. The program may have inspired other states and institutions, including the City University of New York (CUNY), which offered free tuition to New York City residents in the 1970s.

In 1965, President Lyndon Johnson signed the Higher Education Act, which included funding for the Federal Guaranteed Loan Program. The program was the first to offer college loans to low-income students.

During the 1990s, as college costs soared, states looked for creative ways to help their residents pay for college. In 1990, Indiana created the Twenty-First Century Scholars Program, which requires a commitment from students beginning in seventh grade to fulfill certain obligations, including a pledge to remain drug-free, in exchange for four years of free tuition to state colleges (or the equivalent benefit for private schools). Other states, including Georgia and Florida, use lottery proceeds to pay for higher education. New York provides free tuition to the children of New York State residents who died while serving in the military or were killed or permanently disabled in the September 2001 terrorist attacks.

In 2005, Massachusetts implemented the John and Abigail Adams Scholarship Program, which provides a tuition waiver for up to eight semesters of undergraduate education at a state college for students whose scores on the Massachusetts Comprehensive Assessment System (MCAS) standardized test qualify them for the program. Other state programs include Utah’s New Century Scholarships and Minnesota’s ACHIEVE Scholarship program. In 2014, the State of Tennessee launched its Tennessee Promise Scholarship, which offered free tuition at a state community college or technical school to Tennessee residents who had recently graduated from high school. In 2017, state lawmakers approved legislation that would expand the Tennessee Promise program to all adults who do not already hold an associate's or bachelor's degree, beginning in the 2018 fall semester.

In 2015, the City of Chicago implemented its Star Scholarship program, which offers free tuition at a state community college to all public high school students who earned a B average or higher. Within two years of the program's implementation by Chicago mayor Rahm Emanuel, approximately one thousand students each year (representing about 5 percent of each Chicago Public Schools graduating class) took advantage of the program. Most Star Scholars use the program to obtain an associate degree before transferring to a four-year college or to the workforce. In 2017, San Francisco mayor Ed Lee announced that the City College of San Francisco would be tuition-free for city residents, making it the first free community college in the United States.

Efforts have also been made to help Americans pay for college at the federal level. During the 2016 election campaign, Bernie Sanders and Hillary Clinton, both Democratic candidates for president, proposed plans to ensure college affordability for American students. Both Sanders and Clinton proposed eliminating college tuition at in-state public colleges and universities for families earning $125,000 or less each year.

Many schools have also looked for ways to ease the financial burden on incoming students, especially for students unable to borrow. Early in the twenty-first century, a number of elite public and private higher education institutions, including Stanford University, the University of Virginia, and the University of North Carolina at Chapel Hill, increased their efforts to enroll more low-income students by replacing loan aid with grant aid for these students.

Free College Tuition Today

While sIn 2022, Americans owed approximately $1.75 trillion in total outstanding student loan debt. Subsequently, during the 2020s, much of the conversation around college affordability centered on lowering interest rates for borrowers by cutting out private banks. Private loans, which students increasingly used from the 1980s to the early 2000s, often charge higher interest rates (sometimes 18 percent). In the 2022–23 academic year, interest rates on direct government loans for undergraduate education were 4.99 percent. After the outbreak of the COVID-19 pandemic in 2020, the US Department of Education implemented a temporary 0 percent interest rate on student loans as well as a payment freeze as part of its emergency relief package. In August 2022, the Biden administration announced its plan for student-loan forgiveness, which included $10,000 in forgiveness for students earning under $125,000 per year and $20,000 for Pell grant recipients.

Meanwhile, pressure continued from the American public and some political leaders for all states to implement some form of free college tuition. The official platform of the Democratic Party during the 2020 elections called for providing two years of tuition-free college for all American students and four years of tuition-free public college for families making less than $125,000 per year. While the Republican Party was more hesitant to adopt a tuition-free platform, both Democrat and Republican citizens showed support for the policy. In a 2021 survey conducted by the Pew Research Center, 63 percent of American adults supported tuition-free college for all students at public institutions in the US. This support caused the movement for free college to gain momentum. By 2022, thirty-two states offered some form of tuition-free college to its residents, with other states, such as Minnesota, continuing to propose new tuition-free legislation. In early 2023, Biden reintroduced a proposal to fund tuition-free community college at the federal level in his FY24 budget, but the proposal stalled in Congress. The following year, Biden made another push for free community college, including the proposal once again in his FY25 budget. Meanwhile, free college programs at the state level continued to expand, with thirty-five states offering such programs by 2024.

These essays and any opinions, information or representations contained therein are the creation of the particular author and do not necessarily reflect the opinion of EBSCO Information Services.

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