Kentucky legislators embraced free college in the state budget, and they await the governor’s signature for it to become law.
The budget provides $25 million for scholarships that fund up to two years of free community college for high school graduates, according to Inside Higher Ed.
The budget also included a change to performance-based funding for colleges; 5 percent of their budgets will depend on student outcomes starting with the next academic year. Funds for higher education will fall by 4.5 percent, the Louisville Courier-Journal noted.
The “Work Ready” scholarships for students is meant to function as last-dollar aid. The funds will cover tuition and fees that are not covered by other federal and state aid. Previously, advocates estimated that 18,000 students would take advantage of the offer and cost the state $20 million.
Advocates argue that the offer will keep future graduates in the state and lead to economic growth. Free community college is a way to educate and train students for their future.
The problem, however, is that tuition and fees for community colleges don’t tend to be a barrier for students. Those costs are only 21 percent of a community college student’s budget, according to The Washington Post. The extra money helps students, but housing costs, books, transportation, and other living expenses could make the program ineffective.
The program also seems misguided for two reasons. Community college graduates already receive large benefits from earning an associate degree, or moving on to a four-year university. In a study commissioned by the American Association of Community Colleges, it’s estimated that graduates receive an internal rate of return of 17.8 percent. That is, for every $1 a student pays for a community college degree, they receive $4.80 in future income. If graduates receive such a large benefit, they can pay for that benefit without government assistance.
Community college students, however, rarely take federal loans to pay for school. ”Only 21 percent of eligible community college students took out federal student loans in 2011-12,” according to a 2014 report from The Institute for College Access and Success. Students borrow less, even though they’re more likely to default on their loans than their peers at four-year colleges. A four-year degree is more economically valuable than a two-year degree, so earnings are higher, which makes debt more manageable.
The problem isn’t funding so much as completion. Community college rates are abysmal. Three-year graduation rates for students at two-year public colleges are 20 percent, according to the National Center for Education Statistics. Part of that is a result of transfers and students who pursue a certification program, but the disappointing record of America’s community colleges to graduate students should dampen the excitement about free community college. Before throwing more money to those schools, politicians and taxpayers should demand results-oriented reform.
