States expand ‘free community college’ subsidies as higher education costs rise, enrollment plummets
Thirty states currently subsidize two-year college expenses through “first-dollar” payments that pick up the whole tab or “last-dollar” programs that pay for whatever federal grants don’t cover, according to the Campaign for Free College Tuition. They include Arkansas, California, Indiana, Maryland, New York and Virginia.
“In common sense terms, we shall be, paradoxically, poorer than before this free carrot program was instituted,” Mr. Block said.— Massachusetts Gov. Maura Healey, a Democrat, included $20 million in her proposed 2024 budget to extend a “last-dollar” program to residents over 25 without a college degree. State legislative leaders have added the idea to their budget proposals, suggesting a surtax on the wealthy to fund it.
Most states pay for the programs through a “millionaire tax” on upper-class residents. Others rely on alternate funding methods — including New Mexico, which uses the state lottery to offer “first-dollar” tuition payments to students. That’s down from a 3.1 % decrease from spring 2021 to spring 2022 and a 3.5% plunge from spring 2020 — when pandemic lockdowns shuttered campuses — to spring 2021. This spring’s final tally remained 1,309,284 students short of the 18,462,601 the nonprofit clearinghouse counted in the spring 2019 semester.
“It is my hope that the trend picks up at the university level,” said Mr. Howard, who specializes in racial equity. “Given the rising costs of higher education and the growing student loan debt crisis, we need to be creative about how we can incentivize education without saddling people with crushing debt.”
The subsidies have attracted more students and calls for expansion, leaving taxpayers with a growing bill to pay at a time when inflation has eaten into their savings, said Michael Austin, a former economic adviser to two Republican governors in Kansas.
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