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    Tuesday, April 23, 2024

    New York's 'free college' experiment should be closely watched

    New York Gov. Andrew Cuomo, right, and Vermont Sen. Bernie Sanders appear onstage together during an event at LaGuardia Community College in New York earlier this month. Leading Democrats around the country are struggling to respond following Trump's victory in November. Cuomo has been mentioned on some lists as a possible challenger in 2020. That speculation only intensified when Cuomo asked Sanders to join him in announcing his free-tuition plan, which would cover students attending public institutions whose families make $125,000 or less. (Mary Altaffer/AP Photo)

    Last Tuesday, the Senate held a hearing for Betsy DeVos, Donald Trump's nominee for Secretary of Education. Senator Free-College (Bernie Sanders) didn't miss his chance to advance his signature cause. Surprise, surprise. But what is surprising is that national Democrats have clearly adopted the cause, as evidenced by recent proposals by both New York Gov. Andrew Cuomo and Rhode Island Gov. Gina Raimondo for tuition-free public college in their states.

    Sounds like another costly Democrat spending plan, right? Well, Cuomo seems almost an alchemist in estimating his plan's cost at only $163 million – an increase of just 1.5 percent over New York State's $10.7 billion 2017 higher education budget.  The truth is that public college in New York is already virtually tuition-free, on the strength of very low tuition charges and hefty state-funded tuition assistance, both fueled by significant increases in the higher education budget in prior years.

    While free tuition is not free college (don't forget fees and room and board), Cuomo's plan is a dangerous step in that direction, not just for already overburdened taxpayers in New York State, but for its system of private nonprofit colleges. After all, what happens to private providers when the government gives something away?

    While the governor didn't release any cost analysis, two obvious factors are behind the alchemy, by which Cuomo claims that he can make public college tuition-free for 80 percent of New York households — those with income below a lofty ceiling of $125,000.

    First, tuition at State University of New York (SUNY) and City University of New York (CUNY) is near the lowest for any state university system, an average of about $6,400 annually for four-year students and $4,575 for two-year students, according to the governor's announcement. The College Board ranks New York the 12th-lowest state in the U.S. for combined tuition and fees.

    The second factor is the generous grants that New York provides lower-income SUNY and CUNY students on top of about $1.25 billion in federal Pell Grants.

    New York State provides lower-income public and private college students roughly another $1 billion in grants under its Tuition Assistance Plan, known as TAP. And $770 million goes to about 270,000 SUNY/CUNY undergraduates (an average of $2,850 each), who constitute a majority of SUNY/CUNY full-time equivalent undergraduate enrollment.

    Cuomo's plan is actually directed at a small population of middle-class undergraduates. Giving the usually overlooked middle class, a break is quite novel and admirable.

    Eligibility requirements exclude part-time students, who represent about one-third of New York's public college enrollment. Moreover, the plan is a "last dollar" proposal, meaning that non-debt assistance from all other sources must be applied to tuition first, leaving only the remainder eligible for dollars from Cuomo's plan.

    So, the plan targets a relatively small segment of students and covers only part of already low tuition. That's how it arrives at "low cost."

    Also, "low-cost" relies upon the foundation of substantial tuition assistance built in prior years. TAP spending has increased about $140 million since Cuomo entered the governor's mansion. Even before that, TAP spending was increasing rapidly, almost doubling from about $580 million in fiscal 2000 to almost $1 billion today.

    New York spends more per public college student than any but two small states, according to the State Higher Education Executive Officers Association, which has also found that 47 of 50 states have reduced spending on public college students since the Great Recession, with New York cutting back the least – only 2.6 percent.

    In addition to the added budget pressure the free-college plan could portend, and perhaps further tax increases for already heavily taxed New Yorkers, another concern is the impact on New York's private colleges and universities. So far, they have survived and thrived in face of the existing near-free public college status quo. The Empire State has the biggest private nonprofit college sector of the 50 states, with more than 100 institutions and almost 500,000 students, including many lower-income kids who receive about $475 million in Pell Grants plus a per-recipient average of $600 in TAP awards.

    Nonetheless, to widen the public-private tuition gap further is a worrisome proposition. Nationally, private nonprofit colleges charge average net tuition and fees of about $14,000 a year, according to the College Board. This is a hefty sum compared with free tuition for all but the wealthiest 20 percent of the state's households. Some of New York's private colleges may not survive.

    Free college is an almost irresistible siren song. Thankfully, DeVos resisted Sanders' virtual demand that she endorse the idea. Other Democratic governed states, including hyper-liberal but fiscally strapped Connecticut, would be smart to wait to see the results before following the risky lead of Cuomo and Rhode Island's Raimondo. The fact remains that nothing is free. Someone always pays.

    Red Jahncke is president of Townsend Group International, a business consultancy in Connecticut, and a freelance columnist who writes on public policy issues.

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