Oregon's Budget Woes Highlight the Challenges of Free College

For the past few months, graduating Oregon seniors looking for information on the state’s nascent free college program were greeted with a peculiar message: any grant aid awarded under the promise program would be subject to legislative approval, meaning it may or may not actually be available come September. The reason for this caveat stems from Oregon’s decision to fund free community college through the whims of the annual state appropriations process. This gives Oregon high schoolers reason to question what exactly it is that they’ve been “promised.”

This week, Oregon’s legislators announced they were budgeting $8 million less than what’s needed to fully fund the program, forcing state higher education officials to scale back eligibility for the program and undercutting their message of free college. State officials have indicated that they’ll address the funding gap by creating an income threshold for eligibility, kicking off a process requiring them to review each applicant's materials and notify students who are no longer eligible. All just months before school is set to start.

These last minute changes send a strong signal to current and future students that the program is unsustainable, and that relying on this funding a risky choice. While the same could be said of many more traditional state scholarship programs, this is particularly troubling in a “free college” plan, because the explicit goal is to change the way students view their own college prospects. Meaningfully changing the idea that college is out of reach for financial reasons requires making a credible and sustainable commitment to all students, and changing the rules this late in the game significantly undermines that promise.

In response to funding cuts, Oregon has made the right decision in where to cut the program. They’re taking away funding from wealthier students who are the most likely have other options lined up. In its original form, the program included no income limits. This meant any graduating Oregon seniors who attended an eligible community college and met GPA requirements could benefit from the grants. As as result, an interim report indicated that students in the top quintile of expected family contribution* received nearly a third of the dollars from the promise program.

That said, cutting funding this late in the application cycle could cause problems for students regardless of their family income - “decision day” at most four-year schools is May 1, so for students who were planning to attend community college in lieu of a four-year school may have already declined enrollment at those institutions. What’s more, these last minute eligibility changes send the message to students across Oregon that the program is just another scholarship, which may or may not be available when they actually need it.

This year over year funding structure could explain why the Oregon program has failed to take off in the way that the Tennessee Promise has. Because Tennessee set up an irrevocable endowment, the funding for Promise scholarships is designed to be available consistently for future generations. This has implications for Tennessee students and their families who will now be able to plan for a college education very early regardless of their income.

But these differences are not merely conceptual: during their first year, Oregon’s saw a 2.2 percent increase in enrollment at community colleges and a 0.4 percent drop in enrollment at four-year institutions. This small bump in college enrollment is certainly notable but pales in comparison with the 10.1 percent overall increase in college enrollment in Tennessee’s first year (including a 24.7 percent increase in community college enrollment, and 20 percent increase in enrollment at technical colleges in the state).  There are many other differences between Oregon and Tennessee’s free college models, but it is clear that program design matters when labeling something “free.”

The political momentum behind free college programs makes it an appealing project for states to take on. You can see this in its current popularity among state legislatures. But it as Oregon illustrates, paying for these programs is the hardest part. At the same time, spending millions of state dollars to implement unsustainable and poorly thought out versions of free college is not just unfair to students who’ve attempting to make their college plans, but also wastes state dollars by funding scholarships that fail to meaningfully change the culture of postsecondary education.

*A family's Expected Family Contribution (EFC) measures a family's ability to pay for college, based on a federal formula. Earned income, other assets, and family size  are all considered in the formula, but in general, a higher EFC is correlated with a higher family income.