Free Tuition Won’t Solve California’s Student Debt Problem
A new report released last month provides some staggering figures on an incredibly important topic – state disinvestment from higher education in California – and rightly makes the case that shortchanging public colleges shortchanges our future. Unfortunately, the report makes the erroneous claim that eliminating tuition at public colleges will eliminate student debt for the students who attend them. This is simply not the case. In California, state and institutional financial aid programs are among the most generous in the nation in helping students pay for tuition charges at all three public systems. In fact, most Californians who leave public colleges with debt already attended college tuition-free. The real affordability challenges for California’s public college students are paying for non-tuition college costs including room and board, books and supplies, and transportation.
Consider the University of California (UC), where tuition charges are highest among the state’s public institutions: UC’s Blue and Gold plan promises that no student with family income under $80,000 will need to pay tuition, and in fact UC also gives aid to many students above that threshold to at least partially cover tuition. If tuition charges equated to student debt, then only students with family incomes above $80,000 would leave school with debt. Yet data from UC show that is not the case: we estimate that half of the UC graduates who leave school with debt have family incomes under $54,000 – students whose tuition UC guarantees it will cover. Graduates’ likelihood of leaving school with debt decreases with income – students from the lowest income bracket are three times as likely as students from the highest income bracket to graduate with debt – because higher income students are more likely to be able to afford what they are asked to pay. Available data on debt loads by income for other public college graduates, in both California and across the nation, show this same trend.
In fact, the majority of students’ costs for attending public colleges and universities are not tuition charges, but rather the living expenses students incur to buy their books, get to campus, and stay housed and fed. Yet, while tuition-focused aid programs in California have kept up with increases in tuition, the same cannot be said about the primary state grant that helps students with non-tuition college costs. If it had kept pace with costs, the Cal Grant B access award, $900 in 1969-70, would be more than $6,300 today. Instead, it is just $1,670.
State disinvestment from public higher education is a significant problem, and one that demands both federal and state policymakers’ attention. But eliminating students’ need to borrow requires more than just free tuition, because most Californians who leave school with debt already had free tuition. Policymakers interested in improving college affordability and reducing student debt should start by looking at who has debt and why, and increase grant aid for students struggling to pay for non-tuition college costs.
 Includes dependent students only as UC does not release information on independent student debt loads. Ninety-three percent of UC undergraduates are dependent.