When President Barack Obama first proposed his plan for two years of free community college for qualifying students, wiser Americans waited to pass judgment until the next part of the plan was announced.
Why? Because they know nothing is really free.
And so it is with the $60 billion community college plan. The White House has released an overview of how they would pay for the plan. The answer: it’s going to come from the richest Americans and from large banks. That is, of course, if it can get past the Republican-controlled Congress.
Tennessee Leads the Way
Obama’s national proposal mirrors “Tennessee Promise,” a plan that also helps pay for high school students to attend community college. The plan is wildly popular in Tennessee – about 90% of the 2015 senior class in Tennessee (58,000 students) have applied to the program, according to The Tennessean.
Enacted last year under Gov. Bill Haslam, a Republican, the “Tennessee Promise” offers high school graduates in the Volunteer State money to help pay for community college. The “last dollar” program gives money to students after they have exhausted all other avenues, including Pell Grants. The “Tennessee Promise” money covers whatever costs are not covered by other means.
The Tennessee program is available to all students, regardless of academic merit or economic need. It is funded by interest earned in the state lottery reserve. The program is part of the state’s “Drive to 55” program, where the state wants 55% of its population to earn college degrees. That number hovers now at about 32%, ranked 43rd out of the 50 states.
The president’s plan has its roots in the same concerns Haslam has in Tennessee – there are an increasing number of jobs that require a college education, and that trend is going to continue in the coming years.
His plan would allow states to cover the costs for qualifying community college students. The federal government would pay two-thirds of the program, the states the other third. Obama proposes paying for the plan through two main avenues. The first is raising taxes on capital gains, a move the White House says will affect only the top 1 percent of taxpayers. The second is raising the fees on institutions that borrow large amounts of money.
The proposal also calls for expanding tax credits to part-time students and also exempt Pell Grants from taxation (currently only money used to pay education expenses is exempt). The proposal also would call for not calculating Pell Grants in applications for the free community college, meaning students could take advantage of both programs (as they do in Tennessee).
Passing the plan as is could prove difficult. Critics argue it would be more effective to simply expand Pell Grants or increase the amount a student can receive. Republicans in Congress have already said they oppose new taxes.
And Ben Nelson of the Minerva School, which works with high tech companies to design a curriculum for information technology that meets the needs of business, said expanding online classes with targeted educational programs would be a better solution. Community colleges, Nelson told Yahoo! Finance, are now more like remedial schools teaching students the basics because high schools are, in his opinion, no longer doing the job.