Parsing The 'Free' In Free Community College

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Let's say you have invites to two parties that advertise "free drinks!"

At the first party, there's simply an open bar. At the second party, though, you have to bring in your tax return, fill out a long form, and register to receive a cocktail grant in a given amount based on your annual income.

Once those funds are drained, you can then become eligible for vouchers to pay for further beverages up to a predetermined limit.

Which party sounds like more fun? Which will be better attended? And which one is likely to be more expensive for the hosts?

As this experiment illustrates, the promise of "free" can mean very different things in practice. And that has important implications for one of the biggest policy debates in education right now: how best to ease the cost of college tuition.

Sandy Baum, a longtime expert on the issue, and David Baime of the American Association of Community Colleges, have just released a report from the Urban Institute focusing on community colleges. "Community colleges differ dramatically from place to place," Baum observes. When proposing changes, "We have to take into consideration their different starting points and different purposes and values."

If you want a free lunch, someone has to pick up the check. In order to make community college free to students, someone, whether the state or the federal government, needs to cover tuition.

And to understand how big of a change that would be and how much it would cost, you have to understand how states are currently funding community colleges and how much of the cost they're currently passing along to students in the form of tuition.

Across the country, community colleges, like all public colleges, are relying more and more on tuition as a source of funds.

In 2002-2003, one of four dollars spent by these two-year schools came from tuition payments (which include federal and state grant aid). A decade later, that percentage had risen to 39 percent.

But again, there are lots of local variations. "In some states there is very little by way of state and local appropriations," Baum says.

The outlier among all of these is Vermont, the home state of Sen. Bernie Sanders, a notable advocate of free college. Vermont's community colleges have the highest tuition in the nation — $7,530. That's more than some public four-year universities. They take in four and a half times more money from students than they receive from the state.

Switching to a tuition-free model, clearly, would be a big change in Vermont.

At the other end of the spectrum, California, which educates one out of every five community college students nationwide, is predominantly state-funded. California community colleges charge the lowest tuition in the country: $1,420 for the academic year, the same at all colleges statewide.

These wide differences from state to state make it harder to put together a federal policy for lowering the tuition costs of community colleges. As illustrated in the party example, a "free community college" policy can be relatively cheap, simple or fair. But it's hard to do all three.

Baum calls the Tennessee Promise, one of the most widely known state initiatives for free community college, a "last-dollar policy." That means students who are already eligible for Pell Grants must use them to pay for school. After that money is gone, the state pledges to fill in the gap.

This method is the cheapest for the state, since most community college students have low enough earnings to be Pell-eligible, meaning they can draw on federal money first before taking state aid. And it's fairly simple for colleges as well, since they can still continue to charge tuition.

However, says Baum, "if you come from an affluent family" that isn't Pell-eligible, "the state will pay your tuition up front." And that means, "The extra money is actually going to people who need it less."

By contrast, the Obama administration's proposal for free community college, called America's College Promise, is what Baum calls a "first-dollar" plan. In this scenario, the federal government pledges to cover 75 percent of tuition and fees, with states agreeing to pick up the remainder.

According to Baum, low-income students would, under this plan, still be able to keep their Pell Grants to pay for living expenses. Depending on location, those expenses can be many times the cost of community college tuition alone.

Such a first-dollar plan is more like an open bar. Experts like Baum say this approach is simple enough to actually raise participation in community college, which is an important goal of all these policies. And it is structured in such a way that more public assistance goes to low-income students.

But the cost to taxpayers would be much higher, and such a program would also vary wildly in its impact on state budgets, depending on how and how much they currently support community colleges.

"It's easy to throw around phrases like 'free,' " says Baum. Harder to work out the fine print.