This year, Governor Cuomo proposed the Excelsior Scholarship — a program offering free tuition to any SUNY or CUNY school to residents of New York (or parents or guardians of dependent children) making under $125,000 a year.[2] The individual would still have to meet the admission requirements of a particular school, and it would require that the student graduate on time.

The Excelsior Scholarship is intended to help increase retention for students who are currently struggling to afford a college education and may unlock the door for others who never dreamed of attending college.

Before digging into the analysis of the governor’s Excelsior Scholarship program, I offer full disclosure that I was one of the chief architects of the program. With this particular background in mind, let me offer you some of the reasoning behind the mechanics and requirements of the program.

There has been much said about the program — some good and some bad; some analyses better than others — but the important thing is we are having a vital discussion about college access, completion, and success. Whether attending a specialized training program at a community college or enrolling in an advanced degree, stopping at a high school diploma is often not enough to give a person a chance at economic opportunity.

As part of the Rockefeller Institute of Government’s ongoing, evidence-based analysis of higher education issues, Senior Fellow Bruce Johnstone posed a series of important questions with respect to the Excelsior Program in his piece, “Tuition-Free SUNY and CUNY: Who Benefits, Who Doesn’t, and How Free Is It After All?”

Hopefully, this collective analysis can help policymakers move the process forward. Dr. Johnstone has four basic issues with the program: (1) it focuses on tuition, which he believes is not the “heart of the access or persistence issues in New York” like room and board and fees; (2) it puts low-income individuals at a greater disadvantage because of the full-time credit requirement; (3) it potentially harms New York’s private independent schools; and (4) it’s projected cost may be too low.

Let me briefly address these issues.

(1) Tuition. It is a point of pride that tuition at SUNY and CUNY were lower compared to other peer public university systems. So why cover tuition when associated fees, or other costs — such as room and board — are often greater? Because all money is green. Even eliminating tuition costs offsets a significant share of total cost. Focusing on tuition was easy for people to understand what the program was, and it gives significant financial relief to students.

As a last dollar — or what I called the last mile program — the Excelsior Scholarship fills the gaps of existing federal and state grant programs supporting the costs of attendance. Given that New York State already provides significant tuition assistance, largely through the $1 billion Tuition Assistance Program (TAP), many low-income students are already able to go to college tuition free.

Other students may need a couple of hundred dollars to close the tuition gap, but like Potsdam President Kristin Esterberg said in the New York Times, for many students, even a couple of hundred dollars “… is the difference between coming back to school in the spring or stopping out for a semester, and once they stop out the chances of them coming back are just not as good.”[3]

Then there are many students who are not eligible for any state assistance. Take, for example, a student of a family making $100,000 a year. Those families are not eligible for TAP.

On average, the total four-year direct costs of a college education — tuition, fees, and room and board — would be $82,800 at a SUNY four-year school.[4] Under Excelsior, the cost for that family making $100,000 is reduced significantly to $56,920 — $25,880 less (and consider this: the average student loan debt in New York State is about $29,000[5] ). The Excelsior Scholarship offers a meaningful savings to individuals, even though it’s limited to tuition.

 

(2) Full-time credit requirement. Like others, Dr. Johnstone has raised concerns that the full-time credit requirement and last mile or last dollar provision (where an individual would have to exhaust all other sources of financial aid first, and then the Excelsior Scholarship closes the remaining tuition gap) disadvantages low-income students. These are important issues and ones where there are legitimate points on both sides.

The full-time credit requirement was an important policy choice. Graduation rates at our public colleges have lagged, and although we made strides, we must do better (public four-year graduation rates are 39 percent and community college on-time graduation rates are 9 percent). There is a need for further analysis of the effects of policies to incentivize on-time graduation. New York State’s Tuition Assistance Program — and its 12-credit eligibility — may have actually exacerbated this problem.

When a student does not graduate on time, they take on more college costs and debt. And, at times, the difference of a couple hundred dollars is all that forces a student into fewer credit hours and increased work hours. The Excelsior Scholarship closes that gap for some.

Moreover, studies have shown that those students taking 15 credits do better than those who take 12 credits. For instance, a study by the Community College Research Center at the Teachers College at Columbia University found that students who enroll in their first college semester with 15 credits are much more likely to graduate and do better in college than those students who enroll with 12 credits.6

But, when drafting the proposal, it was not a one-size-fits-all-approach. The Excelsior Scholarship does include “stopping out” and hardship provisions allowing certain students to take fewer credit hours. But, as a result of recent policy discussions, adjustments have allowed for flexibility. Under the program, students may adjust their number of credit hours per semester under 15 credits as long as they have enough at the end to graduate on time.

Even though this is a “last dollar” program, lower-income students are already eligible for additional state and federal resources for other non-tuition costs. The best way to illustrate this is to show the profile of a lower-income student, say with a family income of $30,000. This student would qualify for TAP, federal Pell, and the SUNY TAP Gap Credit. Full awards of all these programs total more than $12,000, allowing for tuition to be covered as well as other non-tuition expenses. Many low-income students are also eligible for other state programs such as the Equal Opportunity Program, Accelerated Study in Associate Programs, and the Community Schools program, which provide even greater financial assistance.

 

 

 

Unlike many other states, New York already has a robust grant program (coupled with federal grants) to assist low-income students and families. One area where New York has not done so well is for lower-middle-class families. While some critics, like economist Beth Akers, have argued that the Excelsior Scholarship program favors the “well-off”[7] over the poor, let me put it in perspective.

Bureau of Labor Statistics data show that average salaries of many blue-collar fields, like a bus driver (average salary $51,940) or firefighter (average salary $66,390)[8] , may create combined family incomes ($118,330) just high enough to disqualify them for any financial assistance, yet these families are on the lower end of the income tax bracket scale and thus not considered well-off.[9]

(3) Private independent schools. Interestingly, of all the issues that could have been raised with the program, much of the debate has centered on the Excelsior Scholarship’s exclusion of private schools. Let us tease out some of the issues. First, according to data from the Integrated Postsecondary Education Data System (IPEDS), over the past decade enrollment in private schools have increased 16 percent in New York. Of course, some schools — specifically some small and medium-sized private schools — have struggled for a number of reasons[10] well before this program. Thus, the Excelsior Scholarship is not necessarily driving this problem, and low enrollment is not necessarily unique to private colleges — similarly situated SUNY schools have also struggled with enrollment.

 

 

Missing from this public-private debate are other threats to private institutions, like online colleges and other propriety schools, which have driven enrollment down across the nation. Figure 3 shows that there has been significant growth in private online colleges, while other private liberal arts colleges have lagged. Further study in this area could help provide a clearer picture of the problem.

In addition, unlike other states, New York already offers generous incentives to private schools, or grants to students attending private schools. Since 2011, private schools have received $2.4 billion from the state. Currently, 100,000 private school students received about $300 million in grants from the state.

Of note, some advocates from the independent colleges have argued just offering free tuition is enough to change an individual’s behavior to forgo private schools in favor of a public school. In New York, there is already a serious difference in cost between the two sectors (tuition at SUNY four year schools is $6,470 versus the $34,000 as the average private school tuition). Interestingly, after the governor announced his free-tuition program for public colleges, applications at the capital region private colleges have actually gone up.[11]

Additionally, the pool of students between public and privates are different in other respects. The governor’s Excelsior Scholarship are eligible to residents of the state. According to IPEDS data compiled by the New York State Division of Budget, approximately 92 percent of all SUNY and CUNY students come from New York, versus 58 percent for private schools. Thus, the private schools rely on nonresidents — students who would not be eligible for Excelsior anyhow — at a significantly higher rate.

(4) Cost. Finally, many have disputed the cost estimate of $163 million. The New York State Division of Budget ran various models based on experiences of other states that offer some version of free tuition, like Tennessee, and factored in our already robust TAP program.

However, like any program, that number may have to be adjusted up or down based on use. The program is not capped, so if a student is eligible he or she will receive the grant. Dr. Johnstone and others have pointed out that this number is too low by extrapolating from modeling of the Clinton/Sanders national free tuition model, but New York far outpaces virtually every other state in state grants for college now.[12]   Therefore, such extrapolation may not be warranted.

In short, the Excelsior Scholarship may help students who are struggling financially stay in school and could help unlock the door of opportunity for thousands of individuals who may not have even dreamed of attending college. Programs can always be adjusted as needed, but there is now a need, and this program will meet an important goal in a smart, commonsense way. More importantly, the proposal has focused policymakers to address college affordability and completion issues in New York. That alone has made the proposal worth it.