Hello and welcome back to MarketWatch’s Extra Credit column, a weekly look at the news through the lens of debt.
This week, we’re digging into free community college, a proposal aimed in part at decreasing the level of debt students take on to pursue higher education. A couple months ago, a nationwide program for providing two years of community college tuition-free seemed on the verge of becoming reality.
Congressional Democrats had offered a detailed plan for the initiative as part of their social spending package, the idea seemed to have a White House champion in First Lady and community college professor Jill Biden, and President Joe Biden had pitched free community college on the campaign trail and in his first speech to a joint session of Congress earlier this year.
But then, just as suddenly, free community college became one of the headline items to be dropped from the Democrats’ spending bill.
This week, we’ll look at the history of the free community college movement, why it was left out of the bill and where the idea goes from here.
Biden has been pitching free community college since the Obama administration
The first time free community college grabbed headlines on a national level, Biden was also in the White House, but then as vice president. “They really believe in the power of education and they really believe in creating those kinds of ladders of opportunity,” then-President Barack Obama said of the Bidens during a 2015 speech outlining his proposal for free community college. “They understand the promise of America’s community colleges.”
To announce the proposal, Obama and the Bidens appeared at Pellissippi State Community College in Knoxville, Tennessee, alongside the state’s then-Governor, Bill Haslam, a Republican who launched the Tennessee Promise in 2014, the first state-wide free community college program in the nation.
The idea of free community college and free college more broadly began to gain traction on the national level as Senator Bernie Sanders, a Vermont Independent, pushed the idea on the campaign trail as he vied to become the Democratic candidate for president. In announcing he would sit out the 2016 election, Biden said the nation needed to commit to 16 years of free education.
Though the candidates pitching free college didn’t win the presidency in 2016, states and localities across the country continued to launch programs on their own. By the time Biden was in the White House again, about 20 states had created their own programs, according to estimates from the W.E. Upjohn Institute for Employment research, and it was back on the agenda at the national level.
In September, House Democrats outlined a plan as part of a suite of proposed Build Back Better initiatives that would make two years of community college free through a federal-state partnership. States that chose to opt into the plan would agree to bring community college tuition down to zero. In exchange, the federal government would send them the equivalent of the median national community college tuition per student, a sum that would eventually slide down to 80% by the fifth year of the program.
States where community college tuition was higher than the national median would need to kick in more than their 20% share to bring costs down to $0 for students. That effectively rewarded states that had already brought tuition low for students and penalized those where it was still relatively high.
But by late October, Biden was hinting that the plan wouldn’t make it into the final reconciliation bill.
How a popular policy got cut
At its most basic level, the decision to cut free community college from the Build Back Better agenda can be chalked up to politics.The White House and other leading Democrats were looking for areas to slash the bill so it would become palatable to Senators Joe Manchin and Kyrsten Sinema, of West Virginia and Arizona, respectively, who were the major holdouts on approving the spending package..
“Mr. Manchin and one other person has indicated that they will not support free community college,” Biden told viewers during an October CNN town hall.
But there are other, more particular reasons that free community college was left vulnerable.
Though roughly 80% of voters support the idea of making two years of college tuition-free and many in Congress back it too, “it was not something that was laid out as one of the five must-have priorities of progressives and it’s not something that clearly more conservative Democrats or more moderate lawmakers were willing to go to bat for,” said Mark Huelsman, senior policy fellow at the Hope Center for Community, College and Justice.
“It got stuck in the middle,” he added, noting that it wasn’t “a line in the sand for enough lawmakers.”
Given the Bidens’ commitment to free community college over the years, advocates who have been pushing the proposal and free college more broadly said they were surprised at how quickly the White House let the initiative fall out of the bill.
“Overall I’m incredibly disappointed,” said Max Lubin, the CEO of Rise, an organization focused on college affordability and other youth and student issues. Students are currently struggling under the status quo, Lubin said.
Indeed, though community colleges are often framed as — and in reality are — students’ cheapest option for higher education, research indicates that more than 50% of community colleges are not affordable for low-income students.
Even when students are able to go to community college tuition-free thanks to state promise and other financial aid programs, they often struggle with living expenses, as well as balancing work, child care and other obligations. That dynamic led to an unprecedented decline in community college enrollment during the pandemic as students left college because they lost jobs when shops and restaurants closed, and had to watch their children who weren’t in school.
Though the national proposal wouldn’t have ameliorated all of those concerns, it might have mitigated some of them because it was what’s known as a first-dollar program. That means that through the plan, federal, state and local governments would kick in the money for tuition and students could use other financial aid resources, like Pell grants, the money the government provides to low-income students to attend college, for living expenses.
The proposal would have made a difference to students like Angela Valdellon, a first year student at Frederick Community College.
At age 19, Valdellon lives in Maryland, where her college is located. She originally planned to go to a four-year school, but her father’s job loss during the pandemic shifted her plan. Valdellon became aware of Maryland’s program that provides tuition funding to community college students from families earning $150,000 or less after the application deadline had passed. Maryland’s program is also last dollar, meaning it fills in gaps after other financial aid is applied and funding is limited — not every eligible student is guaranteed to receive the money.
Valdellon and her family hustle to afford tuition, which they pay on a monthly basis. Her dad works two jobs and a typical weekday for Valdellon starts at 4 a.m., stocking for a retailer. She gets off work at noon and then tries to focus on her classes, which are mostly online, homework, and helping her dad and sister keep the house clean and the dog fed and walked. Not having to pay tuition for school would have allowed her to step back from her 37-hour work week.
“I have the option to bring that down if I wanted to but because I need to keep up with tuition and all these bills that I have to help pay off, I honestly don’t have any choice,” she said.
Students’ stories not enough to convince lawmakers
Even after Biden indicated free community college likely wouldn’t make it into the bill, Lubin, students and activists from Rise traveled to Washington, D.C. to try to convince lawmakers to keep it in.
Pam Williams, a third-year student at Milwaukee Area Technical College, was part of the group in Washington. Williams said the experience of having the proposal left out of the bill even after they spoke with lawmakers was “really disheartening.”
“No matter what we do or how many stories we tell, they won’t feel the need to make this adjustment,” she said. “It makes us feel a little powerless.”
In addition to the general political obstacles faced by all of the elements of the Build Back Better agency, free community college met pressure from some surprising corners: Other types of colleges. The initiative reportedly didn’t have widespread backing among all sectors of higher education over some concern that making community college free would draw students and dollars away from other types of schools.
Jonathan Fansmith, assistant vice president, government relations at the American Council on Education, a higher education lobbying group which counts public and private two-year and four-year colleges as its members, said their organization heard reports “that individual institutions might speak with their members about concerns they had with free community college.”
“Any time you’re talking about billions of dollars in federal money and formulas that are used to allocate that money there are going to be winners and losers,” he said. “It’s not a shock that people in Washington will lobby in the best interests of their members and themselves.”
Fansmith, whose organization was pushing for free community college among a host of higher education-related proposals, said that it was less the case that organizations and colleges were lobbying against free community college and more that they would talk to members of congress about their priorities for the bill, which may not have included free community college.
The National Association of Independent Colleges and Universities, an advocacy group for private, nonprofit colleges, took that approach, focusing on increasing the maximum Pell grant award, according to Paul Hassen, a spokesman for the organization. “At no time did our association lobby against free community college,” Hassen wrote in an email.
The current framework for the Build Back Better bill would increase the maximum Pell grant by $550 and expand access to the grant to undocumented immigrants who were brought to the United States as children.
While Huelsman said he applauds the increased investment in Pell, even if it’s implemented, “we’re still looking at Pell grants that cover a very small percentage of a total cost of attending college, relative to when Pell grants were conceived.”
“I don’t think it has the transformative power of something like free community college,” Huelsman said of the Pell proposal, adding that it’s “doubling down on the current federal financial aid system and the way we support students today.”
Our current financial aid system requires students to apply and get accepted to college before learning how much funding they’ll get. It also asks them to repeatedly prove their financial precarity. Critics say this has all been an obstacle to students, particularly low-income students or those from families with little experience with the college process and getting through school.
“They’re inherently esoteric,” said Mike Krause, a senior advisor at Bradley Arant Boult Cummings, said of financial aid packages. Krause was the executive director of the Tennessee Higher Education Commission and the founding executive director of the Tennessee Promise program.
Often it’s a combination of already existing financial aid resources, including Pell grants, that allows students in Tennessee to attend community college for free, Krause said. But it was the label of free college that pushed students towards attending and accessing that funding.
“‘What free college got Tennessee that I thought it might have been able to do nationwide is to radically alter the messaging and to make clear to folks that college is within reach.’”
“There’s no question we entered in knowing that nothing sells like free,” he said. “What free college got Tennessee that I thought it might have been able to do nationwide is to radically alter the messaging and to make clear to folks that college is within reach.”
Businesses not at the table
Framing was important to the success of Tennessee Promise in another way too. The catalyst for the program was realizing that more residents would need training and education in order to meet Tennessee’s future workforce needs, Krause said.
“It really wasn’t about any inward facing higher education challenges although higher education is unquestionably the pathway to address economic development issues,” he said.
That conversation surrounding workforce development as well as buy-in from the business community is often present in states where free college has been successful, but it was missing from the national conversation, at least this time around, said Michelle Miller-Adams, senior researcher at the W.E. Upjohn Institute for Employment Research.
That’s despite some evidence that there’s a business case to make around free community college. A recent analysis from Georgetown University’s Center for Education and the Workforce found that if every state opted into the free community college plan proposed at the national level, it would have boosted gross domestic product by an average of $170 billion per year over the next 10 years, outweighing the roughly $109 billion cost.
“Why weren’t national business organizations at the table around this as they have been in states?” Miller-Adams asked. “I don’t know what the answer is except that what it looks like a lot of national business organizations are doing is starting their own tuition free college programs as a kind of benefit for workers. Those tend to be narrow and a little bit hard to access and you don’t have a lot of choices.”
What’s next
With free community college dead in Congressional legislation — for now — advocates are looking ahead to what’s next in the movement to create a nationwide free college program.
“This is something that has been on the moderate end of Democratic proposals for college affordability and it’s something that to some extent has been championed by even conservative governors in some states,” Huelsman said. “Nothing happened to free community college’s popularity in the course of negotiating this bill.” Instead, it was a victim of the pressure to trim the cost of the overall spending package, he said.
That popularity at the state level is part of what will likely keep the idea of free college viable. When asked what’s next for College Promise, an advocacy group pushing for free college, Martha Kanter, the organization’s CEO, said, she’ll “keep going,” building up state and local programs.
Kanter, who has been working on college affordability issues for years, including as a Department of Education official during the Obama administration, said that in the days following the announcement that free community college wouldn’t make into the Democrats’ spending package, she heard from multiple localities looking to start or advance their own college promise programs.
Still, she said an investment from the federal government could be crucial to keeping these programs sustainable, allowing them to smooth the economic cycles that spur constriction or growth.
“We just have tremendous support nationally,” Kanter said. “If it doesn’t happen in a reconciliation there should be other ways to make this happen.”
Whether the proposal will get another airing depends a lot on how the Democrats perform politically during the midterm elections, Miller-Adams said. Even if Democrats were to try again to get the measure passed while they still have an assured majority, Fansmith said “it seems unlikely,” that Manchin and Sinema will be willing to set aside concerns about the cost of the program in six or eight months.
“They may not have a better opportunity,” he said. “It’s just not clear exactly what another opportunity might be.”
Anthony Carnevale, the director of the Georgetown Center for education and the workforce, said the momentum at the state level will ultimately be enough to eventually make free community college a reality nationwide.
“If I was directly involved in this negotiation and I had to drop something, I’d think to myself we’re going to get this anyway,” he said. “It will become so common in states that federal participation will be a lot easier. We’ve got more than 20 states that are effectively making community college free and that will grow.”
'All of my accounts have her as the beneficiary, and our will lists her to get everything we own if I should die.'
Jillian Berman covers student debt and millennial finance. You can follow her on Twitter @JillianBerman.
