Association for Public Policy Analysis & Management

Given the current policy interest in expanding community college access, as well as the growing concerns about quality disparities between different types of two-year colleges (e.g. community colleges vs. for-profit colleges), it is of critical importance to understand how tuition rates and policies at the community college level affect students’ postsecondary enrollment decisions and outcomes. In this paper, I exploit an institutional feature of Michigan’s community college system to estimate the effects of community college tuition on students’ college enrollment decisions. Like several states, Michigan’s community colleges offer students varying tuition rates based on their place of residence relative to geographic boundaries. Students who reside within a given “community college district” face tuition rates that are, on average, 40% lower than their peers who reside outside of the district. However, in Michigan, up to 25% of students do not reside in any community college district and, as such, do not have access to any low-cost community college option. I use this tuition variation and student-level administrative to determine whether facing a reduced tuition rate at the local community college causally affects students’ college enrollment decisions. To control for selection into community college districts, I use a boundary discontinuity design that compares students who reside in census tracts on either side of a community college district boundary and include a rich set of covariates to account for differences in individual and school-level characteristics.

My preliminary results indicate that reducing the tuition rate at a student’s local community college by $1,000 increases the probability of community college enrollment by 3.5 percentage points. Approximately 30% of this increase may be attributed to students who would not have initially enrolled in any postsecondary option in the absence of the tuition reduction. An additional 52% of the increase is due to students shifting enrollment within the two-year college sector, including a reduction in enrollment in private vocational colleges. This substitution effect may have implications for the quality of education students receive, as I find that students exposed to the reduced tuition rate choose to attend two-year colleges with higher levels of instructional and academic support spending. These findings suggest that the subsidization of community colleges can be a powerful tool to boost community college enrollment, but that it may also cause ripple effects across several sectors of the higher education market by changing the type and quality of institutions students choose to attend.