Obama’s Free Community College Tuition Plan: What’s It Mean and Who Would Benefit?

President Obama's Community College Proposal

President Obama made a big proposal last week: Free tuition at community colleges for every American. This universal program would help students work toward earning a two-year certification or transferring credit to a four-year bachelor’s program.

The goal of this program would be to make college “as free and universal as high school,” according to the president.

While this sounds like a great leap for college students everywhere (and especially those looking to avoid debt), is it all it’s cracked up to be?

Why This Plan?

This program aims to allow more students to obtain a degree without having to worry about debt. The president believes that Americans need more knowledge and skills to compete in the global economy.

According to his proposal, 35 percent of job openings by the year 2020 will require at least a bachelor’s degree. Another 30 percent will require at least some college or an associate degree.

How Would It Work?

While the details aren’t all laid out yet, this program would cover tuition costs for community college students who meet the requirements (more on that below). The president’s proposal reports that full-time community college students could save an average of $3,800 per year.

It’s estimated that 9 million students could benefit from this program each year. It would cost the federal government about $60 billion over 10 years. In terms of who covers the cost, the federal government would foot 75 percent of the expense. States who decide to participate in the program would cover the rest.

What Are the Requirements for Students?

This program would be universally available to community college students regardless of income or other economic measurements. To be eligible, students must:

  • Attend community college at least half time
  • Maintain a GPA of at least 2.5
  • Take courses toward completing a certificate or degree program

Students would either earn a two-year certificate or be able to transfer full credits toward a four-year bachelor’s program.

Would Attending Community College Be Completely Free?

No, this program only covers tuition. Students would still be responsible for some fees as well as other costs of attending college, like room and board.

This could lead to continued reliance on student loans to cover these other costs. However, since the cost is significantly lowered, it could decrease the student loan burden. Students could still participate in work-study and other programs to cover the additional costs.

How Would This Actually Help Students?

The more education students have, the more they may be able to earn.

The Washington Post points to a couple of studies showing that graduates can earn more with a two-year degree than just a high school education. One review found that “each additional year of school raises earnings between five percent and 10 percent per year.”

The Post also points out that the degree you choose matters, too. It might not be worth it for low-earning degrees, but for others in fields like health care, it can mean a big boost in wages.

Who Would Benefit Most?

According to some, this program might end up benefitting mid- to high-income students more than low-income students. This is because low-income students often already receive grants that cover the cost of community college.

Some students who stand to benefit from this program may already be able to afford tuition costs, and many believe it’s a good thing to increase economic diversity in community colleges.

Would It Actually Help More People Get Degrees?

That’s highly uncertain; several media outlets have already published their own criticisms or cast doubt on the plan.

The Atlantic touched on these points in their article “Where Obama’s Community-College Plan Falls Short.” They report that “just 20 percent of students who started community college in 2009 had completed their programs three years later in 2012.”

It turns out that many students don’t go on to earn bachelor’s degrees, either. One study says “only about 15 percent of all students who start at two-year public colleges earn a bachelor’s degree within six years.”

Is This Program Definitely Happening?

No. As of now, there’s no start date for this program, as Congress will need to approve funding for the program first. With Republicans now in full control of Congress, the president would need to drum up support from the opposing party.

Some Republican Congressmen did join the president for his announcement, but it’s uncertain if there’s enough widespread support to fund the program. Other attempts to pass federal student loan refinancing and other aid in Congress haven’t fared so well.

There’s also the question of what states will choose to participate. Since they’ll have to contribute about 25 percent of the program’s cost, it’s uncertain at this point if states will agree to this.

What are your thoughts on President Obama’s proposal? Let us know on Twitter @StudentLoanHero!

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Published in Financial Tips, News

  • I think it’s not such a bad idea, there are too many people with student loans and the cost of college education has gotten to some shocking levels. We have paid tuition here too, but it doesn’t cost more than 2 salaries/year (and small ones, actually).