President Obama recently announced that he will call Congress to pass a legislation to make the first two years of education in Community College free for everyone who meets some academic credentials.
Before analyzing the details of Obama’s proposal, it is important to explain what Community Colleges are. In the U.S., Community colleges are public educational institutions that provide higher education and lower-level tertiary education. After attending a Community College, some students continue studying, transferring to a four-year college or completing a bachelor degree in two or three years, some others find a job. Community Colleges in fact provide also those kind of intermediate competences highly demanded by firms, thus constituting a valuable link between the world of education and the labor market.
Obama’s proposal is simple in its structure, but implies several implications that deserve attention.The idea is to make the first two years of Community College free for everyone whose GPA is higher than or equal to 2.5.The entity of the contributions needed to cover the cost of this policy is shared in the following way: 75% of the cost will be covered by the Federal Government and the remaining 25% by the States. The website of the White House states that, if this policy were implemented by all 50 states, it could benefit 9 million students/year, allowing them to save $3,800/year. However, there are no precise indications on the actual formalities that would regulate the implementation of the policy, nor on its interaction with the Pell Grant, which is a Federal aid granted to low-income students (its coverage among Community College students is of 38%).
The lack of precise information about the implementation of the program suggests that the rationale of the proposal is mainly a political one, at this stage. Once examined by the Congress, the proposal will probably face the strong opposition of the Republican Party, which holds the majority of the seats both in the House of Representatives and in the Senate. However, the economic reasons behind the proposal deserve some reflection. The White House website claims: “[…] by 2020, an estimated 35 percent of job openings will require at least a bachelor’s degree, and 30 percent will require some college or an associate’s degree. Students should be able to get the knowledge and the skills they need without taking on decades worth of student debt”. Therefore, the proposal has a twofold economic rationale: granting easy access to intermediate competences and knowledge (which are essential to find a job) and alleviating the cost of tertiary education for students with good academic results.
The proposal seems to have some logic, but still advocates of low-income students argue that this is not the right way to solve the problem of affordability of higher education. In fact, the Pell Grant covers most of the tuition fees of low-income students and what makes Community Colleges not affordable for the poor are living expenses and foregone earnings. Examined from this perspective, the proposal made by President Obama would bring more benefits to middle-class and wealthy students, rather than to the very poor ones. But, of course, this will totally depend on the design and the implementation of the policy.
Addressing the problem of affordability is actually a major concern at the moment, since data regarding the total level of students’ debt are pretty worrying: from 2005 until now, the total students’ debt level has tripled in the U.S. (from $363 bn in 2005 to 1.2 trillion now). A careful analysis of the issue would probably need another article, but we can try to identify the major factors that contributed to generate this debt. Of course, there are more students going to college than used to, a higher proportion of them finances the studies through loans and the amount of money needed to cover tuition fees is increasing (much faster than inflation). We could list some numbers to get an idea of the phenomenon: in 2004, 23 million students were granted student loans, with an average balance of $15,651, whereas in 2013, 39 million students had students’ loans, with an average balance of $25,000.
In conclusion, we could say that this program is one of the most bold proposals to grant the affordability of tertiary education made in recent American history. It tries to effectively address the problem of a progressively increasing debt, which is a major financial concern for numerous American families. However, it could just constitute a political strategy to put the Republicans in difficulty in front of the public opinion and the design of the policy should be evaluated before judging its effectiveness. The U.S. educational system definitely needs to change and grant more equality of opportunities. This program could constitute one step forward.