Policies and Payoffs to Addressing America's College Graduation Deficit

We consider four distinct policy levers available to states for raising bachelor's degree completion rates in the United States through their public colleges and universities. We simulate these policies using elasticities from the existing literature and a matched College Board/National Student Clearinghouse data set on enrollment and degree completion. Increasing spending at public colleges and targeted elimination of tuition and fees at four-year public colleges with an income cutoff are projected to be the most effective of these policies in terms of cost per additional bachelor's degree. Reducing tuition and fees at public colleges and a distinct policy of moving students to the best available in-state public college (BISPO) are next best on a cost-benefit basis. Free community college policies are significantly less cost-effective at raising bachelor's degree completion, though such policies do improve other outcomes. Reducing community college tuition and fees to zero does lead to more associate degrees, though students are drawn away from the four-year sector in the process. Low-income students see the smallest gains from free community college policies since these students already face very low net prices of attendance.