Should college tuition be free in New Mexico?
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KEY SOURCES
Pew Research Center
National Institute for Education Statistics
Office of the Governor of New Mexico
Brookings Institution
U.S. Department of Education
College Board
Manhattan Institute
CATO Institute
National Education Associations
National Bureau of Education Research
Associated Press
Pell Institute
WHY THIS QUESTION MATTERS:
Student loan debt has more than doubled in the last decade, reaching amounts of $1.5 trillion as of the end of March. This increase is driven by the rising cost of tuition and high numbers of young people going to college. In the last two decades, tuition for college has increased from roughly $22,000 to $104,000 for a four year degree (in current dollars). This has led some states to pursue “free-tuition” options.
Most recently, New Mexico announced a plan to make public universities and colleges free for all state residents. While supporters say the New Mexico Opportunity Scholarship will increase access to higher education, opponents say these costly programs will do little to benefit low income students.
LET’S BREAK DOWN STUDENT DEBT BY THE NUMBERS
Students aged 18-29 account for almost 50% of the $1.5 trillion dollars of student debt. This is partially because older individuals have had time to pay off their debts, but also because younger students are far more likely to take out loans for education (18-24 year olds were twice as likely to take out loans in 2015-2016 compared to 1999-2000).
Loan amounts vary depending on degrees obtained, with a median of $25K loan for bachelor’s degree and $45K for post grads. Brookings predicts that 40% of students will default on their loans by 2023. Furthermore, students who attend a 4-year, for-profit college will default at nearly 4 times the rate of other borrowers. To top it off, federal aid and Pell grants, which are awarded to undergraduate students who display exceptional financial need, haven’t been able to keep up with rising tuition costs. The staggering trends in student debt has prompted various policy responses, including state implemented “free” tuition university systems.
“FREE” TUITION PROPOSALS: FIRST DOLLAR v. LAST DOLLAR
Currently, there are roughly 20 states that support a “free” tuition college program — each with varying degree of coverage. However, the same phrase “free-tuition” is being used to discuss many different proposals, so it isn’t always clear what “tuition-free” really means. For example, some programs cover two-year vs. four-year programs, others have family income restrictions or minimum GPA requirements, and some require a community service component. Furthermore, some proposals exclusively cover tuition while others cover other expenses associated with attending school. This difference is also addressed with terms like “first-dollar” and “last-dollar.”
First-Dollar Programs: Offer funding regardless of financial aid or other scholarship sources.
Last-Dollar Programs: Wait until financial aid and scholarship has been paid out and then cover what is left. Often the last dollar approach doesn’t account for the other costs of education (housing, living expenses, textbooks etc).
Middle-Dollar Programs: Mimics the last dollar approach but also guarantees additional funding on top of the cost of tuition to cover these added expenses of education.
The opinion section of this article specifically addresses the New Mexico Opportunity Scholarship. The New Mexico proposal is a last-dollar program. It is unique from other last dollar programs in that there are no caps to family income nor are there any requirements for minimum high school GPA or student achievement. The program is open to New Mexico residents who have earned their high school diploma, a GED, or are returning adult learners. The scholarship would apply to both two-year and four-year higher education.
What do you think?
The Common Thread
Supporters and opponents of the bill both say they want to to promote a cost-effective and fair education system.
FIND YOUR Thread
Supporters argue that free-tuition would be more fair as it would increase access to education and prevent large debt burdens for disadvantaged students. Opponents argue that free-tuition is less fair as benefits primarily go to higher income families and this option just passes the financial burden of college to the taxpayers.
Yes, New Mexico should offer free tuition
Reason 01
Free tuition increases access to education, especially for lower income families.
The price of public institutions has doubled since the 90s, making it difficult or impossible for low-income students to afford a college education without taking on significant debt. (National Center for Education Statistics)
The Federal Pell grants, which provide aide to low income students, have not kept up with the increasing costs of education. (Pell Institute)
Even after federal grants and state lottery scholarships, there is an average of 25-40% unpaid tuition gap for New Mexico students. (New Mexico Opportunity Scholarship)
Subsidizing education and eliminating tuition costs would make college more accessible for low-income families and boost college attendance. (National Bureau of Economic Research)
Reason 02
Reduce the financial burden for most vulnerable, break the poverty cycle.
By 2020, two-thirds of all jobs will require post-secondary education. Individuals who have attained a bachelor’s degree typically earn 66% more than those with a high school diploma. (Department of Education)
If lower income individuals can’t afford a college education, they will be left behind in the modern economy. (National Education Association)
Reason 03
More educated citizens = more productive and competitive economy.
Instead of leading, the US is now 10th in the world for higher education attainment. Making higher education more accessible will help the U.S. stay competitive in the global economy. (Brookings Institution)
The majority of those earning a college degree or other post-secondary credential achieve higher earnings, quality of life, civic engagement, and other positive outcomes. (Brookings Institution)
No, New Mexico should not offer free tuition
Reason 01
“Free-tuition” just passes along the increasingly high costs of college tuition onto taxpayers.
“Free” tuition really just means taxpayer funded. Opponents ask, “why should anyone get a degree to increase their lifetime earning on the backs of taxpayers?” (CATO Institute)
The New Mexico program is estimated to cost $25-$35M in annual funding — a cost that would be taken directly from the New Mexico general fund. (Associated Press)
Similar programs in Oregon and New Jersey needed to be scaled back due to budget limitations. (Pew Charitable Trusts)
Reason 02
The program may do more to benefit wealthy families than low-income families.
“Free-Tuition” is not the same as free college. In fact, when you account for books, materials, housing, etc. — the cost of tuition only represents 39% of the total costs for college attendees living on campus at a four-year institution. Meaning college may still be unattainable for low-income students despite free-tuition. (College Board)
The New Mexico tuition scholarship is “last dollar” — which means students will not receive any scholarship money until all federal and state grant aid is used. Low-income students may not receive any money from the New Mexico scholarship because expenses are already covered by other sources. (Brookings Institution)
Instead, the scholarship would primarily subsidize middle and high-income families who did not qualify for other federal and state grants. (Brookings Institution)
Reason 03
Making tuition free doesn’t address quality and price issues in post-secondary education.
Government subsidies (in the form of scholarship programs, grants, and loans) may actually be one of the root causes of skyrocketing tuition rates. Government influx of cash allows colleges to charge more. (CATO Institute)
Quality may also be an issue. Free college may encourage more individuals to attend college, but less may complete it as high school education. Within the G-7, the four countries that charge college tuition have higher education attainment rates (Japan, 59%; Canada, 58%; United Kingdom, 48%; United States, 46%) than those that don’t (France, 44%; Germany, 28%; Italy, 24%). (Manhattan Institute)
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