The Free Tuition Trap: Cuomo’s Scholarship Plan Is Full of Risky Loopholes

Governor Andrew Cuomo’s plan to waive tuition fees for lower- and middle-income New Yorkers at any two- or four-year public college in the state, touted as the first of its kind in a nation drowning in student debt, has emerged from the state budget brawl and is set to go into effect beginning this fall. “Today, my friends, college is what high school was seventy years ago — it is not a luxury, it is a necessity,” the governor said last week at a signing ceremony at LaGuardia Community College. But the final version of the Excelsior Scholarship program, which will cost the state $163 million a year once it’s fully phased in by 2019, comes with some unexpected and alarming caveats.

For starters, it now includes a requirement that students live and work full-time in New York State for as many years after graduation as they received aid; otherwise, the New York State Higher Education Services Corporation will convert the scholarship money into a no-interest loan that students will have to repay. The state senate and private-college officials across the state also pushed for and received a provision for private-college students to receive up to $3,000 per year in Tuition Assistance Program grants — which must also be repaid if they don’t live and work in the state after graduation.

That’s a mistake, says Sara Goldrick-Rab, a professor of higher education policy at Temple University who has advocated for free-college initiatives. The requirement could leave Excelsior recipients unable to pursue job opportunities elsewhere, forcing them to remain in New York to avoid debt even if it means unemployment.

The allure of a free education, Goldrick-Rab warns, could ultimately spell disaster two or four years down the road. “People will believe that they’ll be able to fulfill the terms,” she says. “It will only be after graduation [when] something happens — it might be the best job offer is out of state, or that they can’t find one in the state and have to look somewhere else, or their grandmother gets sick — at the last moment they’re going to find out that New York expects to be paid back.”

Another provision demands that students maintain the minimum GPA required by their schools to remain in good academic standing, and that they graduate on time. Asked whether students will be responsible for repaying tuition from prior years if their GPA drops below the minimum, the governor’s office said it would be handled on a case-by-case basis.

The graduation requirement alone would make most students ineligible for Excelsior scholarships. On-time graduation rates at CUNY community colleges have remained consistently below 10 percent since at least 2005. The four-year graduation rate at SUNY schools is 48.9 percent according to the most recent data available, higher than the national average. The governor’s office says the requirement is intended to incentivize on-time graduation: If finishing your degree on time means free college, the thinking goes, those rates will improve.

Excelsior recipients will also be required to earn thirty credits per year, meaning part-time students — a group that includes those who work full-time, have children, care for elderly family members, or are not recent high school graduates — are excluded entirely. Undocumented students are also ineligible for the scholarship, despite early attempts by Governor Cuomo to have them included.

While the governor has touted Excelsior as the first state program to fully subsidize tuition at four-year colleges, other states’ and cities’ free tuition programs at two-year community or technical colleges come with no income restriction, no requirement to stay in the state post-graduation, and in some cases considerable academic support that begins at the high school level and continues through college graduation. In Tennessee, for example, community college is free for any high school graduate in the state regardless of income, provided they remain a full-time student. Oregon and the city of San Francisco have similar programs, and Senator Bernie Sanders recently introduced a federal bill that would make tuition at public four-year universities free for families making up to $125,000, establish free tuition for all at community colleges, cut student loan interest rates in half, and triple the federal work-study program budget.

Cuomo has insisted that the residency requirement is justified. “Why should New Yorkers pay for your college education and then you pick up and move to California?” he said on a call with editorial writers from around the state last week, as reported in the New York Post. A spokeswoman from the governor’s office notes that several other financial aid programs in the state have similar residency requirements, including a master’s in education teaching scholarship and a STEM scholarship for high school graduates in the top 10 percent of their class, each of which requires graduates to remain in the state for five years at the risk of loan conversion. She says there are plans to prevent loan conversion for students who pursue advanced degrees out of state, provided they return to New York afterward, and for students who join the military, as well as hardship deferments on a case-by-case basis.

Still, the rule will mean some students will have to turn down job opportunities — the very thing a college education is supposed to give them — to avoid student debt, the burden the program is meant to alleviate in the first place. 

The residency clause pushes the initiative “in the wrong direction,” says Cody Hounanian, digital director at Student Debt Crisis, which represents graduates with student debt burdens across the country. He rejected the notion that a potential loss of talent was reason enough for New York to threaten students with incurring debt: “Education is a public good. Educating people is reward enough.”

According to SUNY, about 73 percent of graduates are still employed in New York State four years after graduation. But many people work in New York state but live on the other side of bridges and tunnels, sometimes in search of more affordable housing — something Excelsior graduates would be prevented from doing.

Though marketed as free college, the program is more accurately described as a “last dollar” plan, meaning it will award eligible students (by 2019, any student from a family that earns up to $125,000 in adjusted gross income) a scholarship to fill in gaps left over after they receive state and federal financial aid, including via the state Tuition Assistance Program and federal Pell Grants. While this would be a huge savings for students from middle-income families who are ineligible for TAP and Pell Grants, it won’t help with room and board, food, transportation, textbooks, personal expenses, or student fees — costs that can add up to as much as $18,210 a year at four-year colleges and $14,810 at two-year schools by SUNY’s own estimates, dramatically eclipsing tuition at the schools, which is among the cheapest in the nation. (The new state budget does include $8 million for CUNY and SUNY to spend on electronic and open-resource textbooks to help offset costs.)

Many CUNY students, in fact, already have their tuition covered by financial aid, and so will see no benefit from the plan, says John Aderounmu, a junior at Hunter College and member of the Campaign to Make CUNY Free Again. Because those students are often forced to take jobs while in school to pay for rent, food, and books, he says, many end up pursuing fewer than the required thirty credits per year, which would leave them ineligible for Excelsior. And all this does nothing for the thousands of people across the state who have already graduated and are saddled with exorbitant student debt burdens.

The Campaign to Make CUNY Free Again, a coalition of CUNY students and faculty, slammed Cuomo’s program as one that “aids middle-income students while turning poor and working-class students into a profit center, continuing the forty-year trend of reducing access for the poor to public higher education and shifting the funding burden to students” — especially coming in tandem with a planned tuition hike for CUNY schools over the next five years. For students unable to meet the terms of the Excelsior Scholarship, or ineligible for it, college only promises to get less affordable.