By: Matthew M. Chingos

Executive Summary

Free college is unlikely to see the light of day in today’s divided political environment, but is frequently in the news as a point of contention between the two leading contenders for the Democratic nomination for president. Bernie Sanders supports eliminating tuition and fees at public colleges, whereas Hillary Clinton favors increases in student aid targeted at low- and middle-income students.

This report provides new evidence on which groups of students are likely to benefit the most from a policy that eliminates tuition and fees at public colleges and universities. Using nationally representative data on in-state students at public institutions, I find that students from higher income families would receive a disproportionate share of the benefits of free college, largely because they tend to attend more expensive institutions.

Under the Sanders free college proposal, families from the top half of the income distribution would receive 24 percent more in dollar value from eliminating tuition than students from the lower half of the income distribution. The non-tuition costs of attending college, including living expenses, are larger than the costs of tuition and fees for most students. Free college, which does not address these expenses, leaves families from the bottom half of the income distribution with nearly $18 billion in annual out-of-pocket college costs that would not be covered by existing federal, state, and institutional grant programs. Devoting new spending to eliminating tuition for all students involves a tradeoff with investing the same funds in targeted grant aid that would cover more of the total costs of attendance for students from less well-off families.

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