Lessons from a ‘first dollar’ approach to student aid

A successful ‘first dollar’ community college student aid programme in the United States offers an alternative funding model for four-year colleges and universities where students run up tens of thousands of dollars of debt because existing financial aid options fail to cover both tuition and living expenses.

The figures for the students in the Rediscover Laramie County Community College (R-LCCC) programme are striking. For the year ending in spring 2021, the percentage of RLCCC students who remained enrolled at the junior college in Laramie, Wyoming, was 17 percentage points higher than the rest of their cohort: 77.36% to 60.76%. The difference was even greater from fall 2020 to fall 2021: 74.42% to 42.33%.

In “Understanding institutionally supported free college programs”, published in New Directions for Community Colleges (Wiley, October 2023), Assistant Professor of Higher Education Administration at the University of Wyoming Jonathan W Carrier and his three co-authors attribute R-LCCC’s success largely to the fact it is a ‘first dollar’ tuition and fee grant programme that increased students’ income enough so they could pay other expenses without taking part-time jobs, allowing them to devote more time to their course work.

‘Last dollar’ options can miss the mark

Most of the more than 300 free college programmes in the United States are ‘last dollar’ programmes rather than ‘first dollar’ programmes.

“With last dollar programmes, the student gets tuition and fee funding only after they have already exhausted all other non-loan funding sources,” Carrier explains. “In America, we have the Pell Grant that is meant to support the lowest income students entering college. There are also [merit] scholarships that the student might get based on their grade point average (GPA) or because of membership in various groups.”

These programmes have shown some success. The Oregon Promise programme, for instance, produced a 5% increase in community college enrolment. A similar programme in Tennessee registered a 40% increase in community college enrolment, though with the unintended consequence of cannibalising enrolment in the state’s public universities.

However, last dollar programmes can end up missing the mark. Oregon’s Promise programme, for example, saw two-thirds of its funding flow “to the top 40% of the most affluent students”, says Carrier. Oregon has recognised this inequity and instituted a US$1,000 grant to all Pell eligible students.

Further, Carrier says, “last dollar programmes are of dubious value to lower income students because they are already getting tuition and fees paid for in many cases by Pell Grants and-or scholarships”. Accordingly, these students are left without funds to pay for housing, food, childcare, health care, transportation and other necessities. To pay for these, students are forced to take one, two, sometimes three part-time jobs to earn money to cover the necessities of life.

“There’s no point in giving them free tuition,” says Carrier, “if they still have to work three jobs. They’re not going to be successful.”

Further, as at many junior colleges across America, the students at LCCC are disproportionately the first in their families to go into postsecondary education. In America’s major cities, this population is overwhelmingly Black or Latinx, while in Wyoming, where 92% of the population is White, the vast majority of the first-generation lower income students are White.

“If you’re the first generation anything, blazing that trail for your family is exceptionally difficult,” because of the “absence of cultural capital”, says Carrier. 56% of the students in the first three cohorts of the R-LCCC were first generation college students and 70% were women.

“When you come to higher education and you come from a working-class background, you have no family history or family language or family culture to tell you about college. So things like FAFSA (Free Application for Federal Student Aid), things like drop [and] add dates [course changes], things like GPA … these things may be foreign to you. It’s very challenging for you to navigate all that and it makes it very difficult if you add work on to that,” Carrier says.

The results can be seen in the completion statistics. At public university, Carrier explains, you expect a 60% to 70% graduation rate within five or six years. “Community colleges would be excited if they were to get a 35% graduation rate within four years,” he says, before adding, “remember, these are two-year programmes … The difference between 35% and 60% tells you how challenging it is for community college students because of all the things they have to traverse to be successful.”

‘First dollar’ programmes

Even though first dollar programmes pay for tuition and fees, they do not prevent low income students from applying for Pell Grants and other scholarships; indeed, the R-LCCC programme required applicants to complete the FAFSA form so they could receive Pell Grants and other grants they were eligible for on the basis of their socio-economic status and any applicable merit scholarships.

“First dollar programmes like the R-LCCC programme awarded the money for tuition and fees first. And then the students, who are primarily low income, could still get Pell Grants and scholarships which could be used to pay for rent, childcare, food, medical expenses, etc. theoretically making them more successful because they’re not having to work two or three jobs,” Carrier says.

Students in the R-LCCC programme received 16% more money overall than did other students in the spring 2020 cohort: US$3,115 vs US$2,659. The R-LCCC student also borrowed less money: US$874 vs US$1,020. This last figure is especially important given the student loan debt crisis in the United States; the average community college graduate owes US$19,270 upon graduation.

Carrier is equally enthused about how first dollar programmes can help university students who, on average, owe more than US$33,000 upon graduation. Black graduates owe, on average, US$20,000 more.

Referring to students pursuing BAs, Carrier told University World News: “Taken together, tuition, books, learning technology, housing, food, transportation, childcare, and healthcare can make the attainment of a college or university degree all but impossible for many without working multiple jobs or taking on crippling student loan debt.”

A path to employment

The R-LCCC programme, which is funded by the Laramie, Wyoming-based John P Ellbogen Foundation, was a ‘proof of concept’ project that enrolled 201 students in its first three cohorts. Enrolment was restricted to students 25 and over who were Wyoming residents and had already attended LCCC but had not completed an associate degree.

Like most American junior colleges, LCCC has two streams. One prepares students for university; since community college tuition and fees are lower than at four-year BA-granting institutions, students who study at community colleges pay significantly less for their BA.

Articulation agreements allow universities to accept credits in, for example, psychology 101 and other introductory courses earned in community colleges. Between 2017 and 2022, the average number of LCCC students transferring into the University of Wyoming was 201.

Over that same period, the numbers of students from Wyoming’s seven community colleges transferring into the state university varied between 703 (during COVID) and 883. The R-LCCC programme did not include students in this stream.

Rather, the R-LCCC students had to enrol in two-year associate bachelor degrees leading to immediate employment. These programmes were in business (for example, accounting, management, entrepreneurship and supply chain), information technology (for example, computer science and cybersecurity), education, healthcare (for example, speech pathology, nursing and surgical technology) and legal studies.

Additionally, students could enrol in diesel technology, heating ventilation and air-conditioning, wind energy and several other trades, and graduate with work-ready credentials.

“These people are coming out with little to no debt, walking into high paying jobs – a welder makes more money than an assistant professor – and they are immediately paying into the tax base of society,” says Carrier.