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Title: Who would benefit most from free college?

Citation Type: Journal Article

Publication Year: 2016

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Abstract: Free college is unlikely to see the light of day in today’s divided political environment, but is frequently in the news as a point of contention between the two leading contenders for the Democratic nomination for president. Bernie Sanders supports eliminating tuition and fees at public colleges, whereas Hillary Clinton favors increases in student aid targeted at low- and middle-income students. This report provides new evidence on which groups of students are likely to benefit the most from a policy that eliminates tuition and fees at public colleges and universities. Using nationally representative data on in-state students at public institutions, I find that students from higher income families would receive a disproportionate share of the benefits of free college, largely because they tend to attend more expensive institutions. Under the Sanders free college proposal, families from the top half of the income distribution would receive 24 percent more in dollar value from eliminating tuition than students from the lower half of the income distribution. The non-tuition costs of attending college, including living expenses, are larger than the costs of tuition and fees for most students. Free college, which does not address these expenses, leaves families from the bottom half of the income distribution with nearly $18 billion in annual out-of-pocket college costs that would not be covered by existing federal, state, and institutional grant programs. Devoting new spending to eliminating tuition for all students involves a tradeoff with investing the same funds in targeted grant aid that would cover more of the total costs of attendance for students from less well-off families. This analysis is meant as a starting point for considering the potential implications of making college free, and does not consider the likely impacts of free college on the enrollment rates of students from different income groups. It also does not consider the distributional implications of the revenue side of the free college proposals, such as Sanders’s proposed tax increase targeted at affluent families. But it highlights the need to carefully consider the tradeoffs between targeted and universal programs aimed at the goal of increasing educational attainment.

Url: https://www.brookings.edu/wp-content/uploads/2016/07/Download-the-paper-5.pdf

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Authors: Chingos, Matthew, M

Periodical (Full): Economic Studies at Brookings

Issue: 15

Volume: 1

Pages: 4

Data Collections: IPUMS USA

Topics: Housing and Segregation, Labor Force and Occupational Structure

Countries: United States