The movement to make college tuition-free is gaining speed. 

Since the Tennessee Promise launched in 2014, 21 states have introduced “Promise” programs, most of which create a tuition-free pathway to an associate degree or short-term credential. This is a bipartisan project: Promise programs covering community college costs have been created in places as diverse as Oregon (2015), Arkansas (2016), Indiana (2017), Maryland (2018), and Kansas (2021).

States invest in tuition-free college in part to boost their economies. College degrees increase residents’ lifetime earnings and state revenues from taxes on those higher earnings. Less obviously, when a larger proportion of a state’s population has a post-secondary degree, some benefits accrue to those without such credentials. Having more educated workers strengthens communities, making it easier to attract new businesses and enabling existing employers to improve productivity and expand. These developments lead to higher earnings, not just for those residents who earn degrees but for many other state residents.

Recent data from Michigan’s Futures for Frontliners (F4F) can help us understand why tuition-free college is likely a good economic bet. F4F, introduced in September 2020, granted essential pandemic workers a tuition-free path to a community college degree. The state followed up in 2021 with Michigan Reconnect for adults without degrees and in 2024 with the Community College Guarantee, further broadening access to tuition-free college to recent high-school graduates.

As Bridge reported in December, 27,000 residents enrolled in college under F4F, and about a quarter of those had earned a degree or credential by 2023-24, roughly in line with community college completion rates more generally. The article’s negative conclusion, however — which emphasized that the program was expensive, “few students chose to attend,” and completion rates were poor — does not adequately reflect the potentially huge benefits of F4F.  

F4F cost the state $49 million. Counting only the 5,868 associate degrees awarded (so far) that were supported by the program, that amounts to $8,350 in state funds per degree. What are the potential returns on this investment? (The calculations behind the following numbers can be explored here.)   

• A Michigan resident with an associate degree has lifetime earnings about $219,000 higher, on average, than a Michigan resident with either a high school diploma or some college but no degree.
• We estimate that each associate degree holder who remains in Michigan also produces spillover benefits, such as higher wages for other Michiganders, totaling about $174,000 over their lifetime.
• Combining the lifetime earnings boost for the degree holder and the spillover benefits leads to an extra $38,000 in state and local taxes collected in Michigan.

You read that right: on average each person obtaining an associate degree yields almost $400,000 in career earnings for Michigan residents, of which almost $40,000 would be paid in extra taxes to Michigan state and local governments. If these gains can be realized for less than $10,000 in state costs per extra associate degree, the benefit-cost ratio for Michigan residents and governments would be over 40 to 1, and the program in the long-run would be self-financing. This is unusual: a recent review of 133 benefit-cost analyses of government programs found that only 1 in 4 programs had benefit-cost ratios exceeding 3 to 1, and only 1 in 8 programs generated tax revenues exceeding program costs. 

This analysis is admittedly imperfect. Ideally, we want to know what share of program-supported associate degrees were earned because of F4F — and would not have been earned otherwise — but this would require a more sophisticated research study. However, even if three-quarters of the F4F associate degree recipients would have obtained a degree without the program, the cost per extra associate degree that can be attributed to the F4F program would quadruple to $33,400. In this case, the increase in career earnings still exceeds state costs by a factor of more than 10 to 1, and the program would still pay for itself in future state and local tax revenue.

Policymakers and the public should examine the returns to any significant state investment, but F4F likely has a high rate of return. Because the benefits of higher educational attainment are large, any program that can significantly improve it warrants a sizable investment.