American philanthropy is often an innovator in social policy, but the recent announcement that Santa Fe Community College will be participating in a guaranteed-income project for 100 low-income students, using a $500,000 grant from Twitter CEO Jack Dorsey, raises many questions. Certainly, poor students warrant attention with respect to their low graduation rate: Nationally, of students from the top quartile of family income, 60 percent will graduate from college, but only 12 percent of those from the bottom quartile will receive a diploma. New Mexico college students, including those at Santa Fe Community College, struggle with low and erratic income, deal with expense shocks and have family obligations, which can impede degree completion. So, what’s wrong with providing a monthly bonus of up to $500 for a low-income student?
First, college President Becky Rowley suggests that 10 percent of students would be eligible to apply for a grant. Assuming SFCC’s enrollment of 3,841 in fall 2020 bounces back to a post-pandemic 4,000, about 400 students could apply, but only one-fourth of eligible students would receive a grant, leaving three-fourths finding their prospects shortchanged by a lottery.
Second, the guaranteed-income project adds another silo program to the already complicated social welfare and tax refund maze that low-income college students have to navigate to obtain benefits for which they are already eligible. Single Stop, a pioneer in directing low-income students to social welfare benefits, reports increased income averaging $3,200 per student. Adding tax refunds would increase income for all low-income students. This project not only fails to address the array of existing welfare benefits and tax refunds, but also adds another hurdle for low-income students.
Third, the guaranteed-income project would run for a year, although community college students typically require longer to graduate: Nationally, only 13 percent graduate within two years, 22 percent in three and 28 percent in four. While an income boost logically would increase graduation rates for 100 SFCC students for one year, the vast majority would still require much longer to complete their studies.
Any policy analyst would appreciate the value of a pilot program to ascertain program efficacy, especially regarding efficiency and effectiveness, but improving the graduation rate of low-income college students in New Mexico, including those at SFCC, would be advanced by a program optimizing income for all of them. In addition to Pell Grants, many students are eligible for Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI) and Medicaid, as well as the Earned Income Tax Credit, the Child Tax Credit and the American Opportunity Tax Credit.
Up$tart calculates each low-income student leaves, on average, $5,000 per year on the table due to uncoordinated applications for these benefits. Just as TurboTax and TaxSlayer have decoded the tax code for low-income households, there is good reason to do so with regard to college students, and not just for one year but into the future.
The leadership of SFCC and the city should be congratulated for addressing the economic needs of low-income students, but they should also consider better alternatives.