Late last week, Congress agreed to spend an additional $4 billion over the next two years on programs to improve college completion rates. "How should these resources be used?" asks THP author David Deming in this blog post on higher education, featuring research from his recent Hamilton Project policy proposal.
The federal government largely invests in higher education through aid to students that aims to lower the effective price of college. However, Deming finds that increases in institutional spending per-pupil are particularly important for increasing degree completion. Based on this work, Deming proposes a federal matching grant for spending by public institutions in states that implement free college proposals. The proposal would give states an incentive to rein in college costs while maintaining or increasing spending levels in the core spending categories of instruction and academic support.