Source: Forbes

Free college proposals are stalled out at the federal level, with it seeming increasingly unlikely that a federal free college program will get passed before the midterms. The states are still working to introduce new promise programs to support students. With students and families struggling with the high price of college, finding ways to make college more affordable is essential for students and families around the country.

State-level promise programs are one way to reduce the price of college for students. Promise programs are one name for free college. The programs come in various forms. But at their core, they promise students that their tuition and fees will be covered by grant money. There are significant differences in how such programs can be designed, with the most important distinction being whether they are set up to be a first dollar or last dollar program.

First dollar versus last dollar free college programs

First dollar programs cover tuition and fees upfront, allowing students to use the federal Pell Grant and any state grants they receive to pay for books, housing, transportation, and other expenses. Last dollar programs promise to top up students’ financial aid if federal and state grants do not cover all their tuition and fees. Last dollar programs are less expensive and thus more common.

First dollar programs provide more support to students from low-income households. Students with the lowest personal and family incomes are the most likely to receive already federal and state grants that would cover tuition and fees, leaving no room for a last-dollar promise program to add to their financial aid.

More states are introducing free college programs

New Mexico is the latest state to introduce a free college plan and has taken the brave step of making it a first-dollar program – meaning students can stack federal and state grants on top of free tuition and fees to help cover their basic needs. The Governor’s office estimates that the plan will support more than half of the undergraduate students in New Mexico.

With over twenty states now providing some form of promise program and more actively considering starting them, other states will be looking to see how successful – and expensive – New Mexico’s program turns out to be.

Will New Mexico’s free college program provide an example for other first-dollar programs?

New Mexico’s Opportunity Scholarship is one of the most generous and wide-reaching promise programs in the country so far. The scholarship is open to graduating high school students and older students entering higher education later in life. Additionally, the scholarship is available to part-time students as well as full-time and can be used for career training certificates, as well as for associate and bachelor’s degree programs. Many free college programs limit eligibility to recent high school graduates and full-time students.

Dr. Michelle Miller-Adams, an expert on free college programs, responding to questions via direct message, said that it was good to see the first-dollar program as a model for other states, but that she was less sure it would encourage other states to adopt similar approaches, noting that “New Mexico is unique in that its student population is small and there are already substantial resources committed to scholarships, so the lift was not as heavy is it would be elsewhere.”

With college enrollment still in decline, free college programs are one way to communicate to students, especially students who might not think they can afford college, that it is financially possible to attend college. Recent research from the National Center for Education Statistics shows that when students believe they and their families can afford to pay for college, they are more likely to enroll.

Federal state partnerships would create stronger, longer-lasting free college programs

State-led innovation in promise programs is an excellent first step in making college more affordable for students. Combining these first steps with a federal program would be much more powerful. States tend to cut higher education spending when revenues decline, making promise programs vulnerable to changes in state finances. Federal funds do not decline during lean years in the same and can help smooth over the economic rough patches for the states. Combined state and federal programs are likely to be more resilient and longer-lasting.