Report Highlights. Less than 1% of the $6.27 trillion annual federal budget could be used to make college free for all.
- A First-Dollar tuition free-program would cost $58 billion the year it is implemented.
- Over an 11-year time frame, a First-Dollar Tuition-Free program would cost a total of $800 billion.
- The cheapest free college program, the Last-Dollar Tuition-Free program would cost $28 billion the year it is implemented.
- Free college would cost on average three times what federal tax dollars pay for now.
The American Family Plan originally endorsed by the Joe Biden administration aimed for free college tuition at community colleges, historically black colleges, tribal colleges, and other minority-serving institutions. The proposed plans funds were to come from a federal, state, and Indian tribal partnership.
- The estimated total cost of the American Family program is $290 to $305 billion.
- $109 billion of the total cost would go to funding two years of free community college.
- $85 billion would go to the Pell Grant program.
- $62 billion would go to grants for programs that help low-income students complete community college.
- $39 billion would be earmarked for two years of free college for those students enrolled in a minority-serving college and whose families earn less than $125,000 a year.
The College For All Act endorsed by Senator Bernie Sanders and Representative Pramila Jayapal aims for free college tuition at all community colleges, public 4-year colleges, and tribal colleges. The purpose of the act is to eliminate tuition fees for students from families making under $125,000 and to reduce the cost of attendance by doubling the maximum Pell Grant award.
- The estimated total cost of the College For All Act is $700 billion.
- The program shares the cost of tuition between the federal government (75%) and the state/Indian governments (25%).
- Those tribal colleges with a majority population of low-income students would be responsible for just 5% of the cost of tuition.
- The federal government would provide at least $41 billion annually to the states and tribal governments to cover free tuition.
- Of the $700 billion total cost, $1.3 billion of it is earmarked for low-income students at private non-profit colleges that serve minorities.
- The proposed funding for this plan is a separate bill that taxes wall street speculation on stock trades by 0.5%.
- The tax is intended to raise $2.4 trillion for the funding of this program.
This act is endorsed by Senator Tammy Baldwin, Senator Patty Murray, Representative Andy Levin, and Representative Bobby Scott. Originally a proposal by the Barack Obama administration, it was reintroduced in Congress in 2021.
- The program shares the cost of tuition between the federal government (75%) and the state/Indian governments (25%).
- America’s College Promise Act of 2021 estimates that its own program will continue to cost $2.52 trillion annually after 2031.
- The act would also create an annual formula grant program called the Student Success Fund (SSF) – $1 billion would be apportioned to this program.
- The Student Success Fund (SSF) doles out grants to states using evidence-based strategies aimed at ensuring student success.
- Under the first 4 years of the SSF, states would receive federal grants totaling 75% of their program costs, 50% of their program costs for the 5th and 6th years, 25% for the 7th and 8th years, and no more grant aid for the 9th and 10th year.
Several different approaches to free college exist. As a result, the cost of college varies wildly based on the program. These programs include the Last-Dollar Tuition-Free program, the First-Dollar Tuition-Free program, and the Debt-free program.
- The least expensive program to the government would be the Last-Dollar Tuition-Free program.
- The most expensive program for the government would be the Debt-free program.
- Some of the previous programs endorsed by politicians have provisions that address the full cost of attendance – not just the elimination of tuition and fees.
- The College for All Act proposes to double the maximum Pell Grant to $12,990 specifically so that students can use it to pay for room and board.
- Similarly, the American Family Plan proposes to increase the maximum Pell Grant award by $1,400.
Under this program, the government pays the remaining tuition fees after grant aid has been applied. The program does not cover the cost of room and board. Last-Dollar Tuition-Free programs require more administrative effort to implement, but can closely identify a student’s exact level of financial need.
- If tuition totaled $10,000 and grant aid covered $4,000, the government would pay the remaining $6,000.
- The Tennessee Promise program is a real-life implementation of the Last-Dollar program.
- The majority of tuition-free programs being implemented across the states are Last-Dollar programs.
- The Last-Dollar Tuition-Free program would cost the federal government $27.8 billion the year it is implemented.
- After 11 years, the Last-Dollar Tuition-Free program would cost the federal government $415 billion.
Under this program, the government would pay for the full cost of tuition before grant aid is applied. Grant aid could go to a different expense instead. First-Dollar Tuition-Free programs are streamlined, quick, and require less administrative work to implement. However, the grants may not accurately reflect each student’s financial needs.
- If tuition totaled $10,000, the government would pay the full $10,000.
- The $4,000 grant aid could go to room and board expenses instead.
- Note that in this example, the government paid $4,000 more than it would in the Last-dollar Tuition-Free program.
- The Kalamazoo Promise in Michigan state was a real-life implementation of a First-dollar Tuition-Free program.
- The First-Dollar Tuition-Free program would cost the federal government $58.2 billion the year it was implemented.
- After 11 years, the First-Dollar Tuition-Free program would cost the federal government $800 billion.
Under this program, the full cost of college is covered by the government. This includes tuition, the cost of room and board, or any other expense. The Debt-Free College Act endorsed by Senator Brian Schatz and Representative Mark Pocan is a specific example of a tuition-free program that also covers the cost of attendance.
- If tuition totaled $10,000 and room and board totaled $15,000, the government would fund the whole $25,000.
- The Debt-free College Act endorsed would cost an estimated $95.4 billion.
- A Debt-free program would cost the federal government $75 billion the year it was implemented.
- The Debt-free College Act includes extra costs beyond making the cost of attendance free such as renovation and construction of new facilities.
Depending on the program implemented, free college may benefit lower-income students over wealthier students. The majority of the beneficiaries will be White, but free college is projected to have a significant impact on minority communities as well.
- 25% of the funds from a First-Dollar program would benefit students living in the bottom-income quartile.
- 13% of the funds from a Last-Dollar program would benefit students living in the bottom income quartile.
- 29% of the American Family Plan program’s funds would go to students living in the bottom income quartile.
- The graph below is a nationwide look at how free college tuition affects students in public schools.
One popular, albeit limited implementation of free college in the last 15 years has been free tuition at the community college level in certain states. These experimental programs offer data on how free college might fare on the nationwide level.
- The state of Tennessee uses a last-dollar program to cover the cost of tuition for residents pursuing their associate’s degrees.
- The Tennessee program dubbed the Tennessee Promise costs about $30 million last school year.
- The Tennessee Promise program covers the cost of college tuition for students attending Tennessee community colleges.
- The original America’s College Promise proposal was based on the Tennessee Promise program.
- The Oregon Promise program covers the cost of college tuition for students attending Oregon community colleges.
- Eligibility for The Oregon Promise program is dependent on the student’s Expected Family Contribution (EFC).
|State||First-Dollar Program (First-Year Costs)||Last-Dollar program (First Year Cost)|
|Alabama||$933 Million||$406 Million|
|Alaska||$91 Million||$45 Million|
|Arizona||$1,070 Million||$534 Million|
|Arkansas||$520 Million||$152 Million|
|California||$6,008 Million||$1,448 Million|
|Colorado||$1,049 Million||$561 Million|
|Connecticut||$599 Million||$325 Million|
|Delaware||$141 Million||$92 Million|
|District of Columbia||$14 Million||$4 Million|
|Florida||$2,217 Million||$701 Million|
|Georgia||$1,612 Million||$566 Million|
|Hawaii||$170 Million||$70 Million|
|Idaho||$221 Million||$94 Million|
|Illinois||$3,314 Million||$2,214 Million|
|Indiana||$1,293 Million||$637 Million|
|Iowa||$541 Million||$314 Million|
|Kansas||$587 Million||$328 Million|
|Kentucky||$811 Million||$289 Million|
|Louisiana||$962 Million||$301 Million|
|Maine||$169 Million||$71 Million|
|Maryland||$1,204 Million||$743 Million|
|Massachusetts||$1,207 Million||$706 Million|
|Michigan||$2,696 Million||$1,563 Million|
|Minnesota||$1,122 Million||$669 Million|
|Mississippi||$440 Million||$112 Million|
|Missouri||$875 Million||$370 Million|
|Montana||$138 Million||$92 Million|
|Nebraska||$316 Million||$117 Million|
|Nevada||$313 Million||$164 Million|
|New Hampshire||$226 Million||$153 Million|
|New Jersey||$2,361 Million||$1,517 Million|
|New Mexico||$273 Million||$65 Million|
|New York||$3,180 Million||$1,183 Million|
|North Carolina||$1,507 Million||$526 Million|
|Ohio||$2,317 Million||$1,260 Million|
|Oklahoma||$592 Million||$194 Million|
|Oregon||$689 Million||$393 Million|
|Pennsylvania||$2,984 Million||$2,077 Million|
|Rhode Island||$154 Million||$75 Million|
|South Carolina||$971 Million||$426 Million|
|South Dakota||$150 Million||$91 Million|
|Tennessee||$1,005 Million||$302 Million|
|Texas||$5,544 Million||$2,501 Million|
|Utah||$589 Million||$317 Million|
|Vermont||$115 Million||$73 Million|
|Virginia||$2,062 Million||$1,352 Million|
|Washington||$1,382 Million||$711 Million|
|West Virginia||$265 Million||$83 Million|
|Wisconsin||$1,079 Million||$703 Million|
|Wyoming||$53 Million||$13 Million|
More examples of limited implementations of free college are the schools running free tuition programs for students with low income and low expected family contributions. Several of these programs require part-time work in exchange for free tuition. Note that most of these colleges cover tuition, but not the total cost of attendance.
- Alice Lloyd College (KY) offers free tuition for students who reside in Central Appalachia.
- 30% of the free tuition program funding at Alice Lloyd College comes from gifts and bequests.
- 37% of the free tuition program funding at Alice Lloyd College comes from Financial Aid Grants for students.
- The University of New Hampshire has the Granite Guarantee financial aid program that covers tuition for all 4 years of an undergraduate degree.
- To be eligible the student must be a New Hampshire resident and an incoming freshman or a transfer student.
- 24% of first-year students at The University of New Hampshire qualified for the Granite Guarantee program
- Brown University’s free college tuition program covers the tuition of students whose families make less than $125,000 annually.
- In addition, Brown University has another program for students whose families make less than $60,000 annually – this program fully covers tuition, books, and room and board.
- Texas A&M University has the Aggie Assurance program which covers tuition for students whose families make under $60,000 annually.
- Peter G. Peterson Foundation: What Is Free College and How Much Would it Cost?
- Economics for Inclusive Prosperity: The Economics of Free College
- Campaign for Free College Tuition: The Case for Free Public Higher Education
- The Pew Charitable Trusts: ‘Free College’ Is Increasingly Popular – and Complicated for States
- Fee Stories: The High Cost of Free College
- Brookings Institute: Is free college a good idea? Increasingly, evidence says yes
- National Association of Independent Colleges and Universities: Free Public College
- Georgetown University: The Dollars and Sense of Free College
- National Association of Student Financial Aid Administrators (NASFAA): Free College Proposals Matrix May 2021
- Congress.gov: S.1396 – America’s College Promise Act of 2021
- Datalab: Federal Investment in Higher Education
- Treasury.gov: Federal Spending Overview
- Peter G. Peterson Foundation: What’s In The American Families Plan?
- The White House: The American Families Plan Fact Sheet
- The American Families Plan | The White House
- Senator Sanders: The College for All Fact Sheet
- Senator Baldwin: America’s College Promise Act
- Debt-Free College Act of 2021 | Congress.gov
- Our Tuition Guarantee | Alice Lloyd College
- Granite Guarantee | Undergraduate Admissions
- Brown to significantly expand financial aid and college access
- Aggie Assurance