There have been campaign promises. There have been protests and lawsuits. There has been article after article and news segment after news segment. College affordability and student loan debt have been hot topics over the past couple of years and free tuition has been the two most used words. If you want to get people’s attention say free tuition. Well, New York has the entire country’s attention now because it announced that it is giving free tuition to all of it’s residents that live in a household making $100,000 or less. To my surprise there has been much more negative reaction than positive reaction. Positive reaction from future students and parents, but negative reaction from those who are NOT future college students and parents! Negative reactions from people with one, two, and three college degrees.

If you have not heard about the New York Free Tuition initiative here is a quick overview. It is called the Excelsior Scholarship and it was passed in the FY 2018 state budget. Households making less than $100,000 will be eligible for free tuition starting Fall 2017, then it goes up to $110,000 in Fall 2018, and $125,000 in 2019. There are numbers floating around that the amount of students that could be eligible this year is 22,000 and by 2019 940,000! That is a lot of households. So what negative reaction could come from the announcement of this scholarship?

Obviously many negative reactions could come from this announcement and you can see them here, here, and here. I am only going to cover a few of them that I think were the most common.

It will only benefit rich kids

The Excelsior Scholarship is a last dollar scholarship for tuition which means that if tuition is $6,672 and a student has $5,672 paid for then Excelsior will pick up the last $1000. Those who are saying that this NY initiative is only going to help rich kids are pointing out that low income students get pell grant money that covers tuition and what they need is money to cover the other costs of college. For the “rich” kids the opponents of this scholarship say that they will be the ones who benefit the most because they will have the least covered tuition and that is because they don’t receive pell grant money.

I will acknowledge that yes those with higher incomes will receive a higher benefit out of the scholarship because they don’t qualify for pell grant, but I will also like everyone with this negative opinion to acknowledge that $100,000 is not a lot of money in New York. $100K is a massive amount of money in North Carolina, South Carolina, and Indiana, but in NY, Los Angeles, and Chicago it does not go as far. Especially if you go eighteen years with a child who needs child care, a safe place to live and just ordinary costs that comes with raising a child. Because they live in New York is the reason that they may not have the discretionary income to save fully for college.

Now let’s talk about low income students because those are the ones that opponents point out. Pell grant is available to these students, but it does not cover the entire tuition at New York Public Universities. Also pell grants have not been keeping up with the rising price of college including tuition so as the initiative continues low income students will see a larger benefit as they will require more of the Excelsior Scholarship to cover tuition. People can’t make the argument that other college costs rise, but tuition is slow to rise. As I type this universities like University of Oregon are feeling the pressure of state budgets and internal expenses. That pressure just caused University of Oregon to raise its’ tuition by 10.6% for IN STATE students. Pell grants doesn't cover Oregon’s tuition currently so it definitely won’t cover it when the tuition increases in the Fall.

I understand the argument about “rich kids” getting the most benefit out of this initiative, but all the low income and middle income students will be covered as well. They will also be protected against future hikes in tuition prices. The income requirement should be looked at in a positive light because other last dollar scholarship at first did not have an income requirement, but had to implement one after an abundance of students received the scholarship and drained the fund.

It does nothing for everything else

Another argument against the scholarship is that it only covers tuition and does nothing to help with room and board or other expenses like books. Once again this argument is aimed at showing the disadvantage to lower income students. Majority of low income students live in areas of NY like Harlem, Brooklyn, and Queens where room and board may not even be a factor. Why? Transportation options are plenty in NY and if the students are native New Yorkers they know the transportation system like the back of their hands.

Why can’t students in New York stay and eat at home while going to college? They definitely can stay at home and save those expenses. What about books? The money saved from ditching room and board can be used for purchasing books. Students can also make extra money by selling items on Ebay or other strategies that I share in my book “Debt Sucks! A College Student’s Guide To Winning With Money So They Can Live Their Dreams!” Students in NY have an advantage over other students in states with “last dollar tuition scholarships and that advantage is a diversified transportation system!

So many restrictions

The last negative that I want speak on is that opponents think there are to many restrictions on the scholarship. Students have to take thirty credits per year and maintain only a 2.0 to keep the scholarship. The point of this is to make sure students graduate in four years, not five or six which have become the norm. Graduates that use this scholarship must stay and work in New York for four years after they graduate. If a student does not meet these requirements they must pay the scholarship portion back.

Taking thirty credit hours is very doable and for the ones saying that this requirement will hurt first generation students I would like to say as a first generation graduate we are tougher than you think. First gen students are some of the most determined students you will ever meet. I took thirty hours, had a high GPA, did an eight month internship and finished in 3.5 years. When did it become normal to get out in six years? If you are not an engineering major or some other complicated major getting out in four years should be your goal. As a marketing major I don’t think anyone in a business school needs more than four years!

As far as having to live in New York for four years after. SO WHAT! New York is not some backwoods place. It is full of life and has people running to it and not away from it. I have family members who live there and you could not bribe them to move. If people love their home so much why would they care about having to stay there for four more years? They wouldn't care. I know people from large cities who have taught at schools in rural areas so that they could get a portion or all of their student loan debt forgiven. Worked at companies they hate to get $5-10K knocked off their student loan debt. All New York is asking is that you live there for four years!

Potential future issues

If you want to look at the potential issues that could arise from this initiative, there are a couple. Funding is the first and has been shown to put a “ last dollar scholarship” initiative in jeopardy. Funding programs in the past that have not put an income limit in place has seen money fly out the door because more students are taking money out of the fund faster than people are donating in. It is great that NY has the $125,000 ultimate limit because that means only a certain amount of students can apply each year and it may be able to gauge the amount of students who will apply.

State legislatures are more tricky and can be seen from what is going on and has been going on in IL, Louisiana, Texas, Missouri, and other states. These state legislatures and their actions have put a financial strain on public universities in these states. Budget shortfalls and showdowns have almost closed higher ed institutions. Bills such as the one that almost passed in NC could have shut five NC colleges down and I explain it all here. This volatility is why I think the NY legislature could be a potential issue. What if the tables turn in the future and people are elected that don’t see the value in the Excelsior Scholarship and want to defund it or cancel it altogether?

That will leave current college students on the scholarship scrambling to figure out how they will pay the rest of their tuition dollars going forward. It will force higher ed institutions to cover the lost funding for those students or ask the students for the money which could risk students dropping out. Many higher ed institutions could not cover that money because their funds are not deep enough.

Another potential issue that this NY initiative faces is that the higher ed institutions in NY will not have the programs in place to support students from the time that they step on campus until the time they graduate. All the critics of this scholarship repeated over and over again “low income” and “first generation” students and how this would not help them. What about the institutions that they will be attending? I think the focus should be now that we (NY state) have taken tuition costs out of the equation for these students what are you (NY colleges) going to do to make sure that these students have the best chance to graduate? What student support programs are in place to help first generation and low income students? (Especially since the federal government is talking about decreasing federal funding for such programs that help these students: TRiO, etc). What financial literacy initiatives do you have in place to make sure these scholarship students don't fall into the usual financial traps? If the programs are not in place on these campuses this initiative may be in jeopardy.


There are a few solutions that can ensure this initiative is successful. Although it is a requirement for scholarship recipients to fill out the FAFSA colleges should still reach out to local high schools and make sure potential applicants to the college are doing that. If opponents are worried about low income students not benefitting a lot from this scholarship they should know according to this research the lower the income of a student the less likely they are to fill out a FAFSA which means they basically leave money on the table. If you are really about helping low income students go to college with less debt put forward the initiatives that get them to fill the FAFSA out!

The colleges and NY state also can do community outreach at local high schools to make sure that parents and their children truly understand what this scholarship is and what the requirements are. So many parents and students get confused by “last dollar tuition” scholarships because people promote it as free college and it is not! They must help those interested understand that they need to find the money for everything else and everything else is what usually costs the most! A local initiative “Say YES” ran into this problem and I am 100% sure all of these initiatives run into the same problem where people get angry at them because they don’t understand that it is not free college. It is paid tuition after all other dollars have been applied.

There must be real real financial literacy on campus. Students can’t just hear from the financial aid office as freshmen and then think that they are going to make the right financial decisions going forward. Or listen to some industry “professional” talking about investing or mortgages when these students are worrying about paying off future student loans. They are not worried about stocks or buying a house! There has to be consistent programs and initiatives that ENGAGE students and actually cause them to take ACTION with their finances. This should be of interest to the state of New York as well since they are the ones providing all of this money. They should want to make sure the students have the best possible chance of making it to the graduation stage.

Tennessee has a successful program in TN Promise, but New York could be the first one to cover all public institutions. Many states will be looking at New York to see how all of this turns out. The “free college” conversation is not going away and it has stretched further than the colleges and government. It is the most talked about topic in most circles. Whether you like the Excelsior Scholarship or not everyone has a choice. If a student and their parents don’t like the terms they don't have to apply for it and instead find the tuition money along with everything else!

Watch video below where I share my thoughts on the Excelsior Scholarship

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