Can California Pull Off Debt-Free College?

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One expert explains what kind of dent the state’s ambitious plan could make on the college affordability crisis.

By Elena Gooray

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Students walk on the University of California–Berkeley campus. (Photo: Justin Sullivan/Getty Images)

California legislators are taking on a whale: giving hundreds of thousands of students pathways to debt-free college.

Lawmakers unveiled plans on Tuesday aiming to eliminate college debt for more than 390,000 students in the University of California and California State University systems. Their plan also calls to reduce costs for the roughly 80,000 students receiving aid to attend the state’s community colleges. The plan has been reported as the most “generous” and “ambitious” from any state; perhaps it will act as a catalyst for what’s become a nationwide problem: As of 2015, seven in 10 college seniors graduating from public and non-profit colleges in the United States had student loan debt, with an average of $30,100 per borrower, according to the Institute for College Access and Success.

While many states have sought to expand tuition aid in recent years, California’s plan stands out for reaching beyond tuition and fees to cover the “true costs of college,” including expenses like housing, food, and transportation. To do this, lawmakers have estimated an optimistic price tag of $1.6 billion coming mostly from existing state funds — nearly $2 billion less than the state’s Legislative Analyst’s Office calculated as the cost of debt-free college in January. But is that estimate, and the plan’s lofty goals, feasible? Pacific Standard spoke with Darcie Harvey, senior policy analyst at the Higher Education Policy Institute, about how this approach could set a promising, though imperfect, example for other states — if it can be sustained.

What would the proposed plan change for California college students and applicants?

The program is built like a shared responsibility financial aid program. It is based on maintaining all current financial aid programs, and then having this be an extra program on the top to fill in what is needed for students to pay for college, without incurring debt. The shared responsibility model is usually built around a contribution from the federal government, like a Pell Grant; state contributions; personal contributions from [students ’ families]; a student work contribution; and then the rest of what’s left needed will be filled in by this additional program.

What are the different proposals being put on the table for community college students?

As I’m reading this [plan], they are proposing to have community college be free for full-time students for the first year, and then they’re proposing an increase in these Student Success Grants. And the Student Success Grants are the ones that help community college students pay for living expenses.

What kind of student would these changes most benefit?

It [includes] students whose families are earning under $156,000 a year. So it’s aimed at students who are not just low-income, but middle-income as well. I think what this plan is trying to do that’s different from lot of others in the past is trying to offset not just tuition costs, but also living costs. There have been a lot of reports recently that California has very high costs of living, that students are struggling with food insecurity and housing insecurity. If you go to UC–Berkeley, you don’t just have to pay for UC–Berkeley; you have to pay to live in Berkeley. And that’s expensive.

This idea of covering those extra costs to achieve “debt-free college” for the average student. Do you think that’s really feasible, or more like a buzzword?

The idea of “debt-free” is tricky because the plan here envisions that students will work 15 hours a week during the school year, and 40 hours a week through the summer. If students chose not to do that, that they would rather take out a loan instead of working so they can take more classes, have more time for studying and whatnot, then even with this “debt-free” program, student could be incurring debt. The student contribution would be fulfilled not with a work requirement but through a loan instead. It gets a little bit complicated when you want to say “debt-free.” Because there is student choice. Even if we built in a student work component, you can’t mandate that students work. They’re free to take out a loan, if they would choose to do that instead.

I think this plan is ambitious. And it has a price tag. That’s one of the components I’m not sure about — I haven’t seen that many details about how the state is planning on paying for it. I read something when the bill was released that the assembly members think they won’t have to cut any other programs, that they think revenues are going to be higher than expected than what the governor is forecasting and therefore they think they’ll just be able to pay for it out of current revenues. I don’t know about that.

I do know that there are twoother states with shared responsibility programs, and both of those programs have struggled to have the state contribution keep up with college costs. I think that that really speaks to the fact that, however well-meaning programs are, when you make a goal that we’re going to fill that gap of what is needed for students to be able to afford college, it’s not clearly defined as a dollar amount. Because if tuition goes up, if living expenses go up, that amount of money is going to change. That becomes a difficult piece for those constructing the state budget to accommodate. If prices go up, and the state revenue doesn’t keep up with that, can you keep filling in more and more money?

So not having a specific dollar amount makes it harder to project the true cost.

It really does. A similar last-dollar grant program in Oregon, they have had a lot of pressures, and the state hasn’t been able to sustain funding to fill the gaps completely. [For the 2012–13 school year], only about 20 percent of the students who were eligible got the grant, because the state had simply run out of money. And one of the things this program could do is encourage enrollment. So if all of a sudden a lot more students enroll, and there’s more participation, that would be an unknown factor that would also make it difficult to estimate the cost.

Even if the costs are realistic, which students might get left behind?

I do have significant concerns about the community college aspect of this program. There has been a lot of good work done by organizations showing that, because the University of California and California State University have institutional aid programs, which can [sometimes] be used to offset living expenses, it can be more costly to go to, say, the City College of Berkeley than it is to go to the University of California–Berkeley, because maybe the student at the community college does not have access to the same amount of aid that the University of California student has.

Also, the plan says the first year of community college will be free for full-time community college students. But, as we know, many community college students are part-time. So that’s a concern. Although it’s a great idea to encourage full-time enrollment, because we know that students who enroll full-time often have better graduation rates or a better chance of completion, it’s just not possible for some students to enroll full-time. Some of them have family commitments, and they have to work for various reasons. I would [also] want to see whether or not the UC/CSU program is being targeted to only full-time students.

Beyond this plan, are there other aid plans that should be widely considered in states — anything that’s more proven?

There’s free community college being tried in some states. There are other plans out there that aim to reduce costs by getting students to finish more quickly. A lot of students aren’t able to complete a “four-year degree” in four years. One of those plans was called 15 to Finish in Hawaii, trying to get students to take 15 units per semester instead of 12. Another included in the budget proposal for this year is a guided pathways program in community colleges, which aims to reduce students’ costs by getting them to take fewer extraneous credits.

We’re really still in the process of evaluating these to see how well they work. The free community college program in Tennessee, it’s probably too new to evaluate. It just started a few years ago. We’re still in the, “Well, did it work, I don’t know?” phase. But there has been lot of promise in that.

What [all these programs] say to me is that it is well-known that we need more people graduating with these degrees. That’s why there’s such an appetite for trying different ways to make it work better for students and families. And, ultimately, to make it work better for employers. Here in California especially, we have an economy that’s going to need people coming out with these bachelor’s degrees. Our employers want the higher education system to be producing more people with bachelor’s degrees so that they have a workforce.

This interview has been edited for length and clarity.

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