Home Cost of a Degree New York’s Tuition-Free College Scholarship Program: Too Good to Be True?
New York’s Tuition-Free College Scholarship Program: Too Good to Be True?

New York’s Tuition-Free College Scholarship Program: Too Good to Be True?

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Wally BostonNew York isn’t the first state to offer tuition-free college, but it is the first to offer free tuition for a four-year degree. The Excelsior Scholarship program was proposed by Governor Cuomo in January and approved by the legislature last week. The published details are as follows:

  • Eligibility – Students must be New York citizens, permanent residents or refugees enrolled full-time (30 annual semester hours, excluding students with disabilities) as undergraduates at a SUNY or CUNY school. There is no age limit, but you cannot be in default on a federal or state student loan. You must also maintain the school’s minimum GPA to stay enrolled and must graduate on time.
  • Income Restrictions – Families with adjusted gross income not exceeding $100,000 annually are eligible initially. This threshold increases to $110,000 in 2018 and to $125,000 in 2019. There are no adjustments for those with higher incomes. You are ineligible if your family’s AGI exceeds these limits. However, there is no limit on the number of children in a family who may utilize the program.
  • Obligations post-graduation – For each year a student receives free tuition, he/she must live and work in New York. If they leave before the period is up, they must reimburse their award. Exceptions include military service post-graduation and students who attend graduate school out of state but then return to New York. Some have criticized this feature of the program, but I believe the legislature was correct to avoid subsidizing other states’ future residents.
  • What doesn’t the scholarship cover? – Fees (which can average $1,500+ annually), books ($1,000+ annually), and room and board (could average $12,500 to $15,000 annually). Students who receive Pell Grants or New York Tuition Assistance Grants must apply those grants to tuition first before the new program will cover the remainder.
  • How much will the program cost New York? The Governor’s office has estimated that the first year of the program will cost $163 million. SUNY and CUNY are protected from having to absorb any costs for the first four years. Neither have estimated how much their costs may increase if enrollments increase as a result.

What are my concerns about the program?

First, with an average annual tuition cost of $4,350 at CUNY, students receiving full Pell Grants will not receive much of a scholarship because of the program offsets. Pell recipients need funding for expenses beyond tuition and the Excelsior Scholarship only covers tuition. If approximately $1,000 of a full Pell Grant remains after applying the first dollars toward CUNY tuition, the remainder may cover books, but not fees or other costs. I don’t see huge enrollment gains based on this program with Pell-eligible students. The most likely beneficiaries are middle-class students ineligible for Pell but who may have had to borrow to cover in-state tuition at SUNY or CUNY.

Second, while there are no age restrictions, eligibility requires all students to complete 30 annual semester hours. That is not easy for working adults who may also have a family. There may be a few adult students who initially enroll, but I suspect that most of them will be unable to meet the annual credit requirements for more than the first year. I see no reason why the same program couldn’t be created for students who accumulate 15 annual semester hours and graduate in eight years instead of four. Theoretically, it shouldn’t cost the state any more unless their clever budget analysts already know that older students will be unable to meet the requirements.

Third, the program cost could exceed the desired state budget contribution and the state cancels it. We won’t know if this is the case for a while.

Finally, the program fails to increase the overall college enrollment of New York residents. Assuming the goal is to increase the number of state residents with at least an associates degree, I wonder if the Pell and State grant offsets will result in providing a middle-class scholarship program for students who would have attended SUNY and CUNY anyway.

Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In September 2019, Dr. Boston retired as CEO of APEI and retired as APUS President in August 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. For four years from 2009 through 2012, APEI was ranked in Forbes' Top 10 list of America's Best Small Public Companies. During his tenure as president, APUS grew to over 85,000 students, 200 degree and certificate programs, and approximately 100,000 alumni. While serving as APEI CEO and APUS President, Dr. Boston was a board member of APEI, APUS, Hondros College of Nursing, and Fidelis, Inc. Dr. Boston continues to serve as a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA) and as a member and chair of the board of New Horizons Worldwide. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. In August 2020, the Board of Trustees of APUS appointed him Trustee Emeritus. In November 2020, the Board of Trustees announced that the APUS School of Business would be renamed the Dr. Wallace E Boston School of Business in recognition of Dr. Boston's service to the university. Dr. Boston lives with his family in Austin, Texas.

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