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A new bill would provide states incentives via matching federal government grants to offer debt-free college education. If the Debt-Free College Act becomes a law, the voluntary state-federal partnership would establish dollar-for-dollar matches by the federal government to state higher education institutions at public two- and four-year public colleges. In return, state schools would commit to assisting qualified students with needs-based grants to cover costs.
The bill has been co-sponsored by 32 additional senators and representatives from different states. U.S. Senator Brian Schatz (D-Hawaii) led the initiative.
“We’re at a point now where the full cost of college is more than twice as much as tuition, which is why solutions to the student debt crisis need to focus on the full cost to students and their families,” he said via press release.
The bill addresses full college costs including books, room and board, meal plans, and other expenses. According to LendEDU, average annual tuition at public, in-state school cost approximately $11,000 for the 2017-2018 school year, up drastically since 2007 when tuition was roughly $6,500. When factoring in the overall cost of attendance in 2017-2018, the annual bill jumps to over $25,000.
“Covering tuition for everybody is not a bad idea — it’s just that tuition is only 45 percent of the cost of college,” Schatz told Vox. “And I also believe that we ought to cover the full cost of college for people who can’t afford it before we cover tuition for people who can.”
The bill’s program does come with an expensive price tag. During its first year, it would cost $80.1 billion but could rise to $95.4 billion in order to make all states’ public colleges debt-free. In addition, the bill carries minimum student eligibility requirements: a completed FAFSA, enrollment in an in-state public school, and maintenance of satisfactory academic status. States cannot establish extra requirements.
While the bill could offer a debt-free education for qualified students, some states already have similar programs up and running but they do come with some restrictions. New York State has its Excelsior Scholarship for in-state New York college students attending state universities including CUNY or SUNY. Limitations include the exclusion of resources for private schools or out-of-state students attending New York colleges.
Other states offer grant programs for subsidizing university costs including California’s Cal Grant Program. This program offers supplementary grants for qualified students but it does not guarantee free tuition for them.
Author: Mike Brown
In his role at LendEDU, Mike uses data, usually from surveys and publicly-available resources, to identify emerging personal finance trends and tell unique stories. Mike’s work, featured in major outlets like The Wall Street Journal and The Washington Post, provides consumers with a personal finance measuring stick and can help them make informed finance decisions.