In April, New York Governor Andrew Cuomo signed a bill enacting the Excelsior Scholarship program, an initiative that allows New York residents from families earning up to $125,000 per year to attend all CUNY and SUNY colleges tuition free. With over 940,000 families potentially eligible, the program will undoubtedly reshape the competitive landscape for New York’s small, private institutions, which are already facing challenges related to cost/affordability and demographic trends that have led to a declining statewide population.

Since the Excelsior Scholarship is the only program of its kind in the nation, it’s important to look past the hype and frame the program’s details in the context of relevant regional data. Here are a few important points we think are worth exploring.

The graduation rate at public institutions

The Excelsior Scholarship carries many stipulations, one of which requires recipients to graduate within four years. But according to the data, the four-year graduation rate among students enrolled in New York’s public universities was 54.8 percent in 2015. The remainder of students either took longer to graduate or never completed a degree at all. To help make the new program successful, Governor Cuomo and his team will need to focus on ways to dramatically improve retention and graduation rates.

Beyond tuition: room and board increases

Though tuition costs have leveled off at New York public colleges and universities, the price of room and board continues to climb (there was a 13 percent increase in the 2012–2013 school year alone). The increase is relevant because Excelsior Scholarship funds only cover tuition, not room and board. To be a true game-changer for low- and middle-income families, either the Excelsior Scholarship should begin applying funds to the other (sometimes quite significant) costs of attendance, or public institutions should more equitably distribute cost increases between tuition and room and board.

The cost-of-attendance gap

Data from 2014–2015 shows a widening gap in the net cost of attendance between public and private institutions in New York. To illustrate, a student from a family with an annual income of $75,000–$110,000 can expect to pay $6,371 more each year to attend a private college versus a public one. These findings seem to confirm the widely held belief that private schools are simply more expensive than their public counterparts—even after scholarships and financial aid are factored in.

A disparity between Pell Grant recipients

Not surprisingly, students attending public schools in New York are more likely to have a greater financial need than those attending private institutions. Forty-two percent of students attending a public college or university are Pell Grant recipients, compared with only 28 percent of private school students. Perhaps justifying the need for the Excelsior Scholarship, this data indicates that private institutions are less effective in serving the interests of low-income students.

A greater need for online-learning options

Another important facet of the Excelsior Scholarship is the requirement that recipients complete a minimum of 30 credit hours per year. For many students, this may be an unreasonable expectation due to work and family commitments, course availability at various institutions, and cost concerns.

These constraints may demand that students seek out viable online alternatives to fill Excelsior’s credit-hour requirement. However, according to 2015 data, the vast majority (88.6 percent) of students attending a public institution in New York did not enroll in online courses at all—a statistic that suggests online-learning options are either low in quantity or quality. To help students supplement their regular course schedules and meet the 30-credit-hour requirement, public institutions in New York will need to increase online course offerings and fortify their online-learning infrastructure.

New York students in neighboring states

The Excelsior Scholarship program impacts not only New York institutions but also private schools in surrounding states such as Connecticut, Vermont, and Massachusetts. Since some colleges and universities in these neighboring states draw as much as 40 percent of their students from New York, Excelsior is likely to have a broad ripple effect. It will be interesting to see how adjoining states adapt the programs that out-of-state schools enact to solidify their positions in the marketplace, and the choices students make as a result.

The long-term effects of Excelsior are difficult to accurately predict. As with all new programs, the real test will be a human one—how students respond to it and how it contributes to the educational and economic success of graduates. As New York’s great experiment unfolds, we’ll monitor how the market reacts, share our thoughts, and contribute relevant data to the conversation.

 

New legislation for free tuition at SUNY and CUNY institutions in New York has become a controversial issue. Listen to Dr. Charles Flynn, President of the College of Mount Saint Vincent in New York City, deliver compelling commentary on this matter. Watch the video.

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