On Sunday night, New York State approved a budget that will offer free college tuition to lower- and middle-income residents. The Excelsior Scholarship Program will provide free tuition at two- and four-year colleges that are part of the state university system, which includes 64 campuses. The program is the first in the U.S. to cover four-year colleges as well as community college degrees.
Students whose families earn less than $100,000 annually will be eligible to participate in the program starting this fall. The income cap will expand to $125,000 by the third year.
“While states like California and Georgia have comprehensive grant and scholarship programs for four-year college as well, New York’s is the nation’s only truly universal program — with no requirements other than residency and income, and no caps on the amount of residents who can receive full tuition,” writes Mary Emily O’Hara at NBC News.
The program is expected to cost $163 million per year. The state government estimates that students from 940,000 families will qualify. Students who receive the scholarship will be expected to live and work in New York after graduation for the same amount of time as they received funding.
New York will become the first state in the U.S. to offer free tuition to four-year colleges.
Living Expenses and Last-Dollar Programs
The Excelsior Scholarship is what’s called a “last-dollar program,” meaning that students who receive federal grants or scholarships will be expected to use that funding first, before accessing money from this program.
“This somewhat undermines one of the big rationales behind making college tuition-free in the first place,” writes Jordan Weissmann at Slate. “A lot of progressives hope that by zeroing out tuition, low-income students would be able to use their other scholarship and grant money to cover living expenses. That might let them spend less time working, hopefully allowing them to attend class full time, which gives them a stronger chance of graduating.”
PayScale’s College ROI Report shows that household income affects earning potential after graduation. The median income after graduation for students who entered college in the bottom 25 percent of income distribution is $55,300 — over $7,000 less than students who started off their college careers as part of a middle-income family. Thirty-three percent of low-income students stay among the lowest earners after graduation, compared to 24 percent of middle-income students and 15 percent of high-income ones.
Why do lower-income students earn less after graduation? The simplest explanation is that their college experience is different from that of higher-income students. They have less time for their studies, and are often forced to take paying jobs instead of unpaid internships that could lead to better opportunities after graduation.
Help with living expenses would go a long way toward leveling the playing field for lower-income students. However, free tuition is a good start. Obviously, the less students have to borrow, the less they’ll have to pay off after graduation. Further, it will be interesting to see if New York’s program inspires more students to opt for four-year degrees who might otherwise have held off due to concerns about crippling student loan debt after graduation.
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