Consequences of Community College Tuition Reductions. Policy Brief

This paper explores the effects of community college tuition reductions on student enrollment decisions and graduation probabilities. The study leverages changes in community college taxing districts in Texas. The paper examines five community colleges who annexed municipalities into their taxing districts from 1994 to 2012. The study uses a differences-indifferences framework to compare enrollment rates of recent high school graduates before and after the annexation relative to students already included in the taxing district. This framework isolates the effect of annexation and the resulting reduced community college tuition. This research asks, "What happens when community college tuition is lowered?" Specifically, how does reduced community college tuition affect enrollment patterns and the educational attainment of students? While this report does not offer specific policy recommendations, it does provide a picture of what policymakers might expect if tuition is reduced. Namely, reducing community college tuition would increase the number of students at community colleges with much smaller (and possibly no) impacts on four-year enrollment.