President Obama has proposed a plan to make community colleges tuition-free. And, as I wrote yesterday, it’s a good plan! At $60 billion for the feds over 10 years, it’s also a pretty cheap one. But this brings up a related question: What if we wanted to go whole hog and zero out tuition at all of our public colleges? How much would it cost?
It’s tough to say exactly. But for a couple years now, I’ve been making the following point: With what it spends on its various financial aid programs today, including money that goes to private and for-profit schools, the feds could cover the cost of tuition for every single public college student in the country. According to the State Higher Education Executive Officers, four-year state schools and community colleges took in $61.8 billion worth of tuition dollars, including money from federal loans and grants, in fiscal year 2013. Meanwhile, according to the New America Foundation, Washington currently dedicates $67.7 billion to grants, tax breaks, and work-study money. If you took the money out of the private sector and put back it into the public sector, it could cover all of today’s undergrads, and then some.
Or could it? In FY 2012, the Government Accountability Office released its own analysis of public college funding and revenue streams. It found that students were paying a total of $76.3 billion in tuition—more than the feds could theoretically cover with today’s aid budget. Why the difference? According to State Higher Education Executive Officers senior policy analyst Andy Carlson, it seems the $8.6 billion gap has a lot to do with how the two reports categorized money from state scholarships, such as Georgia’s HOPE program. SHEEO classifies that cash as state funding, since it’s not really coming out of a student’s pocket. The GAO calls it tuition revenue, since undergrads take the money, then pay the college. Personally, I think SHEEO’s approach makes a bit more sense, since it’s state money in the end. But the argument is basically semantic. Either way you look at it, the federal aid budget should be enough to cover whatever today’s college kids are paying out of pocket.
At the same time, that doesn’t necessarily mean Washington would be able to make college free long term without spending more. For starters, college costs rise (and rise, and rise). Meanwhile, if you really did abolish tuition at public institutions, they would almost certainly attract more students, thus putting the feds on the hook for more money. You could cap admissions at the schools that don’t already, but there’d probably be some strain on the system.
But in a sense, the exact dollar figures aren’t important here. The idea that we already spend enough on higher ed to make public colleges tuition-free, at least for today’s undergrads, is a fun policy talking point. (ThinkProgress certainly loves it.) But it’s mostly just an illustration of how wildly inefficient our current system of funding higher education already is. Even if the arithmetic changes a bit, that basic reality won’t.