REPORT: 'Free' community college would cost NYC up to $232 million per year

New York City’s nonpartisan budget agency estimates that applying President Obama’s free community college proposal to just the City Universities of New York (CUNY) system would cost between $138 million and $232 million annually.

According to The New York Daily News, Brooklyn Borough President Eric Adams was inspired to suggest the idea of eliminating all charges at New York’s seven community colleges last year after learning of Obama’s tuition-free community college plan, which has failed to gain traction in Congress but sparked a political conversation about tuition costs.

[RELATED: Obama announces plan to make community college free]

“For many students, the cost of tuition prevents them from completing an associate’s degree or substantially delays their completion,” Adams asserted in defense of the plan. “Tuition-free community college is the future for New York City.”

A report released Tuesday by the city’s Independent Budget Office, however, cautions that while the cost of the program would be significant, it remains unclear whether providing free community college to all residents would have the demonstrably positive effect on graduation rates that supporters envision.

“For the city, the benefits of eliminating tuition for community college students are dependent on how successful the program is at raising the very low current graduation rates,” IBO Director Ronnie Lowenstein remarks in a letter to Adams that prefaces the report. “However, we do not have the means to estimate the impact on graduation rates for this particular program.”

Lowenstein points out, for instance, that while surveys show that an associate’s degree can have a large impact on median income compared to a high school diploma, “the income boost varies greatly and is closely tied to the field of [study].” Similarly, he continues, smaller-scale initiatives to provide free community college have focused on specific demographic groups and cannot be generalized to the population as a whole.

The IBO report states that just 16 percent of CUNY students currently earn an associate’s degree within three years, while an abysmal four percent manage to graduate within the two years typically allotted for that course of study.

Lowenstein’s letter posits far greater certainty in the IBO’s estimates of the plan’s costs, asserting that a three-year program limited to full-time students would cost the city $138 million per year, while a permanent program that extends benefits to both full- and part-time students would require $232 million in annual funding.

“Generally, a program with a time limit greatly decreases costs compared with an open-ended program, given how slowly many community college students progress toward graduation,” Lowenstein explains.

The IBO report notes that the annual tuition rate at CUNY community colleges is $4,800, but says its estimates were weighted to reflect the fact that about 60 percent of students receive some form of state or federal assistance, amounting to $2,240 on average.

Based on that data, the report calculates that the CUNY system would stand to lose between about one-half and two-thirds of its tuition revenue, which currently stands at $351 million and constitutes 36 percent of the overall budget.

Those estimates are likely somewhat conservative, though, because the IBO had no way of predicting the impact the program might have on either the number of students choosing to attend community college or the number that would maintain their enrollment rather than dropping out, and was therefore compelled to assume that it would have no impact on either measure.

“In reality,” the IBO says, “reducing the cost should have some impact on those figures, in ways that would likely increase the cost of the program.”

A separate report, released last week by the American Action Forum, estimates the costs of free community college on a national scale, and finds that only $32 billion of the program’s $80 billion cost would actually result in a student earning a degree, while the remaining $48 billion would simply be a loss.

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