What You Need to Know About New York State’s Free College Tuition

The Excelsior Scholarship Program was signed into law in 2017 with the passage of New York’s Fiscal Year 2018 State Budget. The program’s website proudly presents a photo of a smiling Governor Andrew Cuomo with the headline, “We’ve made college tuition-free for middle class New Yorkers.” Existing aid programs had already made tuition essentially free for low-income families, so the new Excelsior Scholarship Program is aimed at helping reduce the cost and debt burden confronting families who don’t qualify for the New York State Tuition Assistance Program (TAP) and/or federal Pell Grants, but still don’t have the resources to send students to college without significant financial hardship.

What Does the Excelsior Scholarship Program Provide Students?

Full-time students who are New York State residents with a family income of  $100,000 or less in the fall of 2017 will receive free tuition at public two- and four-year colleges and universities. This includes the SUNY and CUNY systems. In 2018, the income limit will rise to $110,000, and in 2019 it will be $125,000.

Students who wish to attend a private university in New York State can receive up to $3,000 from the state for four years as an Enhanced Tuition Award as long as the college or university matches the award and doesn’t raise tuition during the duration of the award.

What Does the Excelsior Scholarship Program NOT Cover?

• The program does not cover room and board for residential students. These costs are often quite a bit more than actual tuition. For example, at SUNY Binghamton, room and board was $13,590 in 2016-17.
• Books are not covered. These often cost $1,000 a year.
• Miscellaneous fees are not covered, and these are often in the $3,000 range at residential SUNY colleges and universities.
• Families earning over $100,000 receive nothing from the program in 2017-18
• Low income families are likely to receive nothing because tuition costs are already covered by Pell Grants and TAP Grants. The Excelsior scholarship kicks in only after all other forms of grant and scholarship money (including merit grants) have been accounted for.

The Restrictions and Limitations of the Excelsior Program

“Free tuition” is a lovely concept, and any effort to increase college access and affordability is a something we should all applaud. Recipients of New York State’s free tuition, however, need to be aware of some of the fine print:

• The program supports full-time students for two years for associate degree programs, and four years for bachelor degree programs. Fewer than half of students in the SUNY system are full-time, and at many campuses, the four-year graduation rate is around 50% or lower. A fifth and sixth year of college will not be covered by Excelsior, and with the enrollment burden the Excelsior Program is likely to put on the state system, we are likely to see four-year graduation rates decline. Moreover, the firm four-year limit of the scholarship can make it difficult for students to change majors, complete a co-op experience, transfer to a different school, study abroad, or complete student teaching. These activities often extend the time to graduation.
• Students who receive an Excelsior scholarship are required to stay in New York State after graduation for the number of years that they received the scholarship. So if you got free tuition for four years of your undergraduate career, you need to stay in New York State for four years after graduation or else you will need to repay the money you received from the state. This restriction has received a lot of criticism across the political spectrum. The idea behind the restriction is clear: since New York is paying your tuition, you should give back to the state by contributing to its economy after graduation. The burden on the student, however, could be huge. Want a job in Silicon Valley? Too bad. Want to work for NASA in Houston? Nope. Is there an amazing teaching opportunity in Michigan? You’ll need to either take on a significant debt or postpone for four years. Finding a job as a 21-year-old is challenging enough, but to limit that job search to a single state could be remarkably limiting and frustrating.
• The cost of the Excelsior free tuition plan was estimated to be a mere $163 million. With tuition currently at $6,470, that $163 million covers full tuition for just over 25,000 students. The SUNY network in 2016 had an undergraduate enrollment in four-year programs of over 400,000 students, and a community college enrollment of roughly 223,000 (see the 2016 SUNY Fast Facts). The numbers make it pretty clear that Excelsior doesn’t represent a very meaningful investment in higher education in New York State. The SUNY website notes that "940,000 families with college-aged children across New York would qualify for tuition-free college" under the Excelsior Scholarship Program, but the reality is that the budget can fund only a tiny fraction of those families.

A Cost Comparison of Excelsior vs. Private Colleges and Universities

"Free college tuition" makes for a great headline, and Governor Cuomo has created a lot of excitement with the Excelsior College Scholarship initiative. But if we look beyond the sensational headline and consider the actual cost of college, we may find that excitement misplaced. Here's the rub: if you are planning on being a residential college student, you may save no money. The program could be fabulous if you are in the qualifying income range and plan to live at home, but the numbers for residential college students paint a different picture. Consider the side-by-side numbers for three colleges: a SUNY university, a mid-priced private university, and a highly selective private college:

*Other Costs includes books, supplies, fees, transportation, and personal expenses

The table above is sticker price—this is what the school costs with no grant aid (including the Excelsior College Scholarship or Excelsior Enhanced Tuition Award). However, you should never shop for a college based on sticker price unless you are from a high income family with no prospects for merit aid.

Let's take a look at what these colleges actually cost for students in the typical Excelsior College Scholarship income range of $50,000 to $100,000. This is an income range for which students are likely to get good grant aid from private colleges and universities. Elite schools like Vassar with its nearly billion dollar endowment have a lot of financial aid dollars at their disposal, and private institutions such as Alfred tend to offer a significant discount rate across all income brackets.

Here’s the most recent data available from the Department of Education's National Center for Educational Statistics on the net price paid by full-time students. This dollar amount represents the total cost of attendance minus all federal, state, local, and institutional grants and scholarships:

The data here is illuminating. The current cost of SUNY Binghamton with free tuition is $19,517. Those numbers above for Binghamton are not likely to change much even with Excelsior's free tuition scholarship because the cost of tuition was already discounted for most students who would qualify for the scholarship. The reality here is that if your family is in the $48,000 to $75,000 income range, the private institutions with a much higher sticker price might very well be the less expensive schools. And even with a higher family income, the difference in price isn't much.

So What Does This All Mean?

If you’re a New York State resident looking to attend a residential college and your family is in the income range to qualify for Excelsior, there isn’t much point in limiting your college search to SUNY and CUNY schools in an effort to save money. The actual cost of a private institution may actually be less than a state institution. And if the private institution has better graduation rates, a lower student / faculty ratio, and stronger career prospects than the SUNY/CUNY school, any value connected to Excelsior immediately evaporates.

If you plan to live at home, the benefits of Excelsior could be significant if you qualify. Also, if your family is in a high income bracket that doesn’t qualify for Excelsior and you aren't likely to receive a merit scholarship, SUNY or CUNY will clearly be less expensive than most private institutions.

The reality is that Excelsior shouldn’t change how you approach your college search. Look at the schools that are the best match for your career goals, interests, and personality. If those schools are in the SUNY or CUNY networks, great. If not, don’t be fooled by sticker price or promises of "free tuition"—they often have little to do with the actual cost of college, and a private four-year institution is sometimes a better value than a public college or university.