New York touted its free college tuition program as a first-of-its-kind plan that would eliminate the burden of student loans. But the zero-dollar price tag came at a cost: It tore a hole in the finances of Clarkson University, an upstate private college of more than 4,300 students.

In 2017, right as high-school seniors were preparing to declare where they’d enroll in the fall, New York officials said they would eliminate tuition for thousands of students at the state’s public universities. More than 100 prospective students changed their minds to instead enroll in public schools, according to Clarkson estimates.

“The timing was really tough,” said Anthony Collins, president of the university, which is located near the Canadian border. The shift deprived the college of $47,950 in tuition and fees those students each would have paid in the 2017-18 school year. “For four years, it creates a financial strain.”

Collins isn’t alone in his concern as the rising cost of college becomes a 2020 campaign issue. U.S. Senators Bernie Sanders and Elizabeth Warren, two leading Democratic presidential candidates, have said they want to make public college free -- a major threat to the survival of some of the country’s 1,700 private, nonprofit institutions if $0-public tuition becomes the national solution to the $1.6 trillion student-debt crisis.

Competing With Free
In New York, private college administrators warned that the Excelsior Scholarship could put them at a competitive disadvantage in an already-tough environment. In the Northeast, the number of high-school graduates is projected to drop by 72,000 students between 2013 and 2030, according to a report by the Western Interstate Commission for Higher Education. There’s also a large number of private institutions -- more than 100 -- competing with each other for students, according to figures from a state lobbying group for them.

The Excelsior program allowed residents making as much as $125,000 per year to attend City University of New York and the State University of New York system schools for free. The state estimated there were about 940,000 families with college-aged children that met the income requirements, according to the New York State Higher Education Services Corporation.

When it launched in 2017, private colleges that primarily serve students living in New York saw an estimated 5% drop in enrollment, an “unusually sharp decline,” said Mary Beth Labate, president of the Commission on Independent Colleges and Universities in Albany.

“When you put that in terms of the impact on a college’s bottom line, that’s probably $120 million over four years,” Labate said. “It’s a difficult thing for colleges to accommodate.”

The impact of the New York program has since been muted, with enrollments recovering the following year, she said. College administrators say the restrictions to the program, such as the requirement to work in the state after graduation, has minimized the number of students they’ve lost. Clarkson has since met its enrollment targets, according to Collins.

But some administrators see concerning parallels with New York’s program and those proposed by Democratic presidential candidates.

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