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President Joe Biden campaigned on free college, larger Pell Grants and expanded aid for schools that serve Black and other minority students — and now, he’s acting to turn those promises into reality.
Biden formally announced his American Families Plan on April 28. While the plan includes several policies intended to aid those in the workplace, including paid family leave and universal preschool, it also includes provisions that could reshape the American higher education system.
Here are the highlights:
- Free community college: Community college tuition and fees would be covered for all Americans, including DACA, or Deferred Action for Childhood Arrivals, program recipients. You could use the benefit over three years and up to four years, if circumstances warrant.
- Larger Pell Grants: The maximum Pell Grant award would rise by $1,400, to $7,895. The plan also would make DACA recipients eligible for Pell Grants.
- Aid for HBCUs, TCUs, MSIs and their students: The plan would subsidize two years of tuition at historically Black colleges and universities, tribal colleges and universities, and other minority-serving institutions for students from families earning less than $125,000 a year. It also would provide $5 billion to strengthen programs in high-demand fields at these schools.
The expected impact
Biden’s college plan could decrease the amount of debt and the number of students who have to take out student loans to complete college. Thomas Hudson, president of Jackson State University in Mississippi, says decreasing college costs and the burden of student debt would change the landscape for HBCUs.
“One of the factors in lower retention rates is finances — students just not being able to afford college year to year,” Hudson says. “What it does is it traps students in a pretty tough cycle of debt where they are paying more for their education, and it puts them in a state where they have to go further into debt or they have to take (semesters off).”
About 45% of high school graduates enrolling in a four-year college in 2021 are expected to take on student loans. Those who get a bachelor’s degree from a four-year public college could graduate with an average of $38,147 in student loan debt, according to an upcoming NerdWallet study. That ever-growing debt burden leaves some student advocates to say the American Families Plan doesn’t go far enough.
Jessica Thompson, associate vice president for The Institute for College Access and Success, said in a written statement, “While these investments are historic, we encourage policymakers to go even further by including all public four-year colleges and doubling the maximum Pell Grant, which together would allow all students to access affordable, high-quality education without relying on overly burdensome student debt.”
Also see: How would ‘free college’ actually work? What experts say could be in the cards
The American Families Plan is still a long way from becoming law. If you’re planning to go to college before it does, consider existing options for getting the most aid and a degree or credential without racking up large student debt. The big picture: First take aid that doesn’t have to be repaid, use federal student loans carefully and resort to private student loans only to fill a gap.
Other aid options
State-based free college
If you live in one of 17 states — Arkansas, California, Delaware, Hawaii, Indiana, Kentucky, Maryland, Missouri, Montana, Nevada, New York, Oklahoma, Oregon, Rhode Island, Tennessee, Washington or West Virginia — you may already qualify for free college. In most states, the programs cover community college, but some are four-year programs.
These states provide free college to residents based on a number of qualifying factors. For example, New York covers tuition for students from families making up to $125,000 who will attend a school in the State University of New York system or the City University of New York system.
South Dakota even offers free college to nonresidents who attend one of four qualifying institutions and commit to live in South Dakota after graduation.
College-based free aid
Many colleges also offer need- and merit-based aid for students. When applying to college, consider the aid packages available there. Compare aid offers after you’re accepted to see which has the best deal before you make a decision.
“If you (apply) early, you can compare offers,” says Jack Murphy, a financial aid counselor at the University of Northern Iowa. “Choose three (schools) that you really like and send your FAFSA to all three to see what they can do for you.”
Depending on the aid package and considering any changes in your financial situation, you can request additional aid from a school. If you’re an existing student, your school may also be able to provide emergency grant money if you’re experiencing a hardship.
Free federal aid for college
All students who plan to attend college should complete the FAFSA, or Free Application for Federal Student Aid.
Completing the FAFSA makes you eligible for federal aid, such as the Pell Grant and work study. It’s also required for many state-based free college programs. For example, Indiana’s 21st Century Scholars Program and the College Bound Scholarship for Washington require the FAFSA.
Many college-based aid programs are also contingent on a completed FAFSA. Texas State’s Bobcat Promise program and all four of the University of Northern Iowa’s institutional grants require the FAFSA.
More: Here’s what’s in Biden’s $1.8 trillion ‘American Families Plan’
Even if you don’t think you’ll need help paying for school, filling out the FAFSA gives you a cushion in case your finances change.
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Cecilia Clark writes for NerdWallet. Email: cclark@nerdwallet.com.
