Sunday, May 12, 2019

Arkansas Steps Up

College affordability comes in different flavors.  An alert reader just sent me a new one from Arkansas, and I have to tip my cap.

The red state/blue state divide can obscure as much as it explains.  For example, Tennessee has the gold standard “free community college” program, doing a much better job of it than such blue strongholds as New Jersey and Massachusetts.  Now, Arkansas is stepping up with a remarkably simple vertical transfer program that recalls the best of what California was able to do back in the days of its Master Plan.

The Arkansas Transfer Achievement Scholarship allows any in-state community college graduates to transfer to the University of Arkansas, at the same tuition rate that they paid at the community college.

This is so simple, straightforward, and retrospectively obvious that it might actually work.

It’s a pretty powerful incentive for prospective students to start at community college: not only are the first two years cheaper, but the last two are as well.  And it requires graduation prior to transfer, thereby encouraging the behavior we’d like to see.

I’m a fan of the “earned benefit” model, because it strikes me as more consistent with our political culture than anything that smacks of “handout.”  To get the discount for years three and four, you have to complete years one and two successfully; that’s no small achievement. We’ve long considered a decent jump shot to be a form of achievement worthy of reward.  Why not look at academic achievement as worthy, too?

Part of the elegance of the plan is its simplicity.  By changing the list price, the starting point from which financial aid is subtracted moves downward.  Moving below the Pell maximum means that some Pell money can be directed towards living expenses. For higher-income families, the lower list price means that even folks who aren’t eligible for financial aid will see a benefit.  That can go a long way towards political sustainability.

Anyone who has experienced the joy of FAFSA lately knows about that yawning chasm into which most of the country falls: too “rich” for much help, but too broke to cover the costs without much help. The folks who fall into that valley get mad about it, with good reason.  Yes, in theory, a high tuition/high aid model could work. But in practice, tuition goes up a lot faster than aid does, and has for decades. That’s why student loan balances have exploded. Applying an across-the-board discount to the “top” line benefits everybody, but particularly that large majority in the uncanny valley.  Politically, that makes a difference.

I don’t know how the program is being funded, which may be a concern.  If it’s funded out of general appropriations on a year-to-year basis, then it will probably be underfunded when the next recession hits.  The double whammy of decreased tax revenues and increased demand (driven by the reduced opportunity cost of education when nobody’s hiring) could lead to people being stranded, thereby reducing political support.  If the state is basing its cost estimates on current enrollment and funding levels, it may be in for a rude surprise when the next recession hits. Tennessee set aside a separate, dedicated funding stream. I hope Arkansas either did or will, too.

Yes, it could cover more.  But it’s a hell of a good start, and it might actually last.  Well done, Arkansas!