One of the most hotly contested proposals put forward by President Barack Obama during his State of the Union address is the president’s free-tuition plan for students attending two-year community colleges.
Called the “America’s College Promise” proposal by the Obama administration, the plan promises to cover tuition for qualifying community college programs for students who maintain a GPA of 2.5. The White House says the plan is expected to cost $80 billion over the next 10 years.
Obama administration spokesperson Eric Schultz said although the proposal is a “significant investment… it’s one the president believes is worthwhile because we need to make sure that America’s young people are getting the skills they need to succeed in the 21st century economy.”
Pundits on both sides of the aisle have already lined up to praise the president’s plan or to denounce it as another costly government social program the nation cannot afford.
What the White House isn’t telling you and what many political talking heads fail to realize is that the free-tuition plan is really just a political ploy that does nothing to help students because existing programs, already in place, largely cover the cost of two-year community college programs at taxpayers’ expense.
According to the College Board, the same organization that runs the SAT exams, the published tuition and fee price at public two-year community colleges is $3,350. This figure is more than $2,000 less than the $5,500 nearly all students attending college can receive in guaranteed federal student loans and about $150 less than the subsidized loans most students are eligible for.
The president’s argument that a free-tuition program is necessary to help give all Americans access to quality education is simply not true; the federal government already provides access through its loan programs.
Some suggest that a free-tuition program is necessary despite the available federal loan offerings because too many students are stuck with massive tuition bills when they graduate college. While this is certainly a problem—one that has only grown since the federal government has become more involved in the student loan industry under Obama—the reality is that federal tax exemptions and existing grants already offset the entire cost of community college for many students.
The American Opportunity Tax Credit, for instance, provides a tax credit for up to $2,500 of the cost of attendance at any college for up to four years. Amazingly, up to $1,000 of the credit is refundable, which means students or their parents are eligible to receive it in most situations even if no other taxes are owed. This means that a student can loan out the cost of his or her tuition at a two-year college using federal loans subsidized by taxpayers and then receive a tax refund check of as much as $1,000, all without having to pay a single penny out of pocket.
Other federal programs also exist to help students who come from low-income households. Pell grants, perhaps the most famous of these programs, offers a maximum of $5,730 for college expenses, far more than the average cost of tuition at two-year community colleges, and the grants do not need to be repaid.
The mythology fabricated by the Obama administration surrounding access to higher education claims students are in desperate need of government assistance to stay competitive in the global marketplace, but the truth is that the government is already aiding these students much or more than Obama’s State of the Union proposal.
The president’s America’s College Promise plan is nothing more than political theater designed to win political favor with an American public still enduring a sluggish economic recovery. The only people this program will help are those who live and work at 1600 Pennsylvania Avenue.
Justin Haskins (Jhaskins@heartland.org) is an author, blogger, and the editor of The Heartland Institute, a leading free-market think tank based out of Chicago, IL. Follow him @TheNewRevere.