How Obama’s Tuition-Free Community College Plan Would Affect One State

By Yves Salomon-Fernandez

President Obama started off the year with a proposal to make a community college education as “universal” as high school by making the associate degree or first two years of a bachelor’s degree tuition-free. The details of how this would be funded are still emerging. Should the proposal successfully move through Congress, Massachusetts, for one, stands to gain much from it. Here’s why:

  1. Community colleges prepare students for “middle-skills” jobs. New England’s available pool of middle-skills workers has been historically low and continues to decline, as documented recently by the Federal Reserve Bank of Boston. Coupled with declining high school enrollments and a projected 15% reduction in the region’s labor force by 2020 due primarily to retirements, an increase in middle-skills talent would help employers in our knowledge-driven economy fill open positions.
  1. Since the Boston Foundation report in 2011 that highlighted the low graduation rate of the state’s community colleges—a report that precipitated the community college reform passed by the Massachusetts Legislature that established performance across multiple metrics as funding criteria—there has been little evidence that outcomes of community college students have significantly increased. Nationally, the Gates Foundation, and locally the Boston Fed, have documented the barriers to completion and transfer for community college students. Not surprisingly, they are largely economic with students balancing work and family obligations.
  1. The Obama proposal would positively affect the taxpayer base in Massachusetts and elsewhere. Moving the traditional community college students into a higher income level has the potential of increasing the tax base for the state and reducing existing or potential burden on government.

For the president’s proposal to work, there will have to be some accountability and alignment of policies at both the federal and state levels. Accountability should vary by state. Massachusetts is not Tennessee, Utah, California or Florida. There are significant variations among states in how community colleges are funded, how they are structured, how well they are aligned with business and industry, and how well integrated they are within the state’s public higher education system.

For the proposal to work, necessary provisions will have to be made to current welfare policies. Current policies do not always favor students returning to school, especially single mothers. The existing research shows that in households where the mother holds a college degree, children are more likely to attend and succeed in college. A uniform proposal at the federal level that does not reduce benefits for students receiving public assistance as they increase their income because of their college attendance would also need to be in place to maximize returns on this $60 billion investment over the next decade for current taxpayers who will be footing the bill. Appropriate policies at the state and federal levels that encourage long-term economic independence and reduce the burden on government should accompany the free community college proposal. On average, the community college population represents a vulnerable segment of students. Thus, their upward movement on the socioeconomic ladder on a large scale will strengthen the country’s overall competitiveness and reduce costs for the public in the long-run. The tuition-free proposal’s success will depend on community colleges being able to improve outcomes for students—meaning completion or transfer into a bachelor’s degree program and job placement.

To maximize outcomes for regional industry under this proposal, local businesses, policymakers and colleges will need to be intentional about working together. Increases in community college graduates may not automatically translate into increases in the available talent pool for local businesses. At the end of last year, a joint study published by Accenture, Burning Glass, and Harvard University advocated taking a supply-chain approach to closing the middle-skills gap in Massachusetts. Its basic premise was that the middle-skills problem needs to be viewed from an economic competitiveness perspective. Among its recommendations was that policymakers and higher-education administrators act as facilitators for greater collaboration between businesses and community colleges. Intentional and effective public-private partnerships can maximize the returns for states should the president’s proposal move forward.

The president’s proposal is not as radical as it may appear to those outside higher education. Subsidizing higher education costs for students is rampant among private colleges and universities under the practice known as “tuition-discounting.” A 2006 study by the College Board found that private colleges and universities included in its sample discounted as much as 33% of their tuition to attract students. These took the form of need-based as well as non-need-based aid. While most tuition discounts are used as a means to provide access to students who would otherwise not be able to attend those schools, those students are not the sole recipients. Tuition discounts are also extended to students whose family incomes indicate that they can afford the full price of tuition and fees. A more recent study by the National Association of College and University Business Officers in 2013 found that 88% of freshmen received an institutional grant or discount during the 2012-13 academic year, with the average grant covering over 50% of tuition and fees. These discounts come at a financial loss to the institution.

The details of the president’s proposal have yet to emerge, but the concept itself holds much promise for the country. As many have already pointed out, it would not solve the student loan crisis, but it would significantly slow it down and reduce the magnitude of its scale for students who opt to start at a community college and major in the fields targeted by the president’s proposal, since tuition and fees at community colleges tend to be a fraction of most colleges and universities. A community college education presents value for both low-income and middle-income students and families. In Massachusetts, for example, a student who completes a bachelor’s degree through the community college to a state university or UMass pathway can complete a degree for as little as $30,000, compared with the state median of $120,000 for a bachelor’s degree. With community colleges enrolling 36% of the state’s high school graduates and nine out of 10 of those graduates remaining in the state, an investment in community college completion can ensure that local business can fill jobs that do not require an advanced degree and keep those jobs here rather than moving to other states or offshore.

Yves Salomon-Fernandez is vice president for strategic planning at MassBay Community College and campus executive officer for its Framingham location.

Related Posts:

Obama Urges Free Community College, Tripled Child Care Tax Credit, Student Digital Privacy

Reactions Swirl Ahead of SOTU Pitch for Tuition-Free Community College

View the Middle-Skills Gap Through a Competitiveness Lens

Community College Transfers Can Thrive at Best Colleges and Universities

Alignment Job: Community Colleges and Workforce Development

To Close the Skills Gap, Re-Value the Associate Degree





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