Impact of Free Community College: Evidence From Chicago

As college costs rise, free community college has become a key policy to improve access to higher education and reduce student loan burdens. This study examines the Star Scholarship in Chicago, which offers free community college tuition to high school graduates with at least a 3.0 GPA. Using a regression discontinuity design, we find that while the scholarship does not increase overall college enrollment, it initially shifts students from 4-year universities to community colleges. However, longer-run results show no negative impact on 4-year degree completion and an increase in the likelihood of earning a 2-year degree. These findings suggest that free community college increases overall degree attainment without causing students to substitute 4-year degrees for 2-year degrees. Students like to be from immigrant families are twice as likely to take up the scholarship, highlighting an important potential gap in financial support for these students