Testimony of E.J. McMahon
Research Director, Empire Center for Public Policy
Submitted to the Joint Legislative Fiscal Committees
Feb. 4, 2020
In April 2017, the Legislature approved Governor Cuomo’s proposal to establish the
Excelsior Scholarship program, which promised to eliminate SUNY and CUNY tuition
for undergraduates from state resident households with gross annual incomes up to
$125,000. In legislation submitted with the FY 2021 Executive Budget, Governor Cuomo
proposes raising that gross annual income threshold to $135,000 in 2020-21, and to
$150,000 in 2021-22, at a total additional cost of $35 million.
The proposed increase in the Excelsior Scholarship income cap would build on a
program that was fundamentally flawed, wasteful and unfair to begin with.
The Legislature should reject this proposal, and instead begin phasing out the Excelsior
Scholarship program, accepting no new applicants after this year. The entire proposed
$146 million budget allocation for Excelsior ultimately should be redirected to fund
expansion of the means-tested Tuition Assistance Program (TAP).
As of 2019-20, Excelsior Scholarships have been awarded to 30,000 students, or less than
5 percent of total SUNY and CUNY undergraduate enrollment. But the principal fault
of the Excelsior Scholarships program is not its failure to deliver on a promise of “free”
college. Even if the state could afford the multi-billion dollar cost of such an
entitlement, the elimination of public college tuition would be a highly debatable policy
priority on grounds of equity and efficiency.
Exaggerated promises and flawed premises aside, the Excelsior Scholarship program is
objectionable on three grounds.
1. It is regressive.
Excelsior is a “last-dollar” addition to other state-funded and institutional aid
programs, which already eliminate or significantly reduce tuition for hundreds of
thousands of lower-income students in New York. But in contrast to those programs,
the net value of the Excelsior Scholarship increases with the gross income of the
recipient’s tax-filing household—regardless of family size, living expenses, or marital
status—before abruptly dropping to zero once income tops $125,000.
Many students currently qualifying for the maximum Excelsior award of $6,470 could
no doubt afford to pay New York’s relatively low public college tuition rates without
any added subsidy. Raising the income cap to $150,000—into the top income quintile of
New York households—would simply offer a generous tuition break to even more
students who clearly don’t need the help.
2. It is cumbersome to administer.
Eligibility for Excelsior requires a minimum of 12 credits per semester and a full course
load of 30 credits a year, which cannot be fully confirmed by campus financial aid
offices until the year has ended. Excelsior winners also are required to sign a contract
stipulating that, after graduation, they will live and work in New York State for as
many years as they received the scholarship. Those who fail to meet the residency and
workplace requirement will have their grants converted into interest-free 10-year
loans—a claw-back provision that will be difficult to enforce.
3. It shuts out the private sector.
New York is home to the nation’s largest combination of public and private colleges.
Among New York residents aiming for four-year degrees, more than 40 percent initially
enroll in private institutions located in the state, which award more baccalaureate
degrees than SUNY and CUNY combined. But in a striking departure from Albany’s
longtime bipartisan commitment to promoting diverse educational options, the
Excelsior program excludes students at private colleges. In its place, the state offers
students at private colleges a more limited “Enhanced Tuition” program with so many
strings attached that few colleges are choosing to offer it.
Excelsior was promoted as the solution to what the governor portrayed as a college
affordability crisis, including the frequently cited $30,000 average debt levels. In reality,
even before Excelsior, barely half of all SUNY undergrads—and barely one out of every
four CUNY students—graduated with any college loans outstanding.
To reduce the cost of college attendance for New Yorkers who can least afford it, the
money budgeted for Excelsior could be more effectively spent on expanding the state’s
existing TAP scholarships. With more than 300,000 recipients and a budget approaching
$900 million, TAP is the most extensive means-tested scholarship program funded by
any state—a college affordability boost truly worth boasting about.
Unlike Excelsior, TAP is based on demonstrated financial need, reserving its largest
benefits to students from lower-income households. It annually subsidizes a fully
tuition-free SUNY and CUNY education for many more students than now receive
Excelsior scholarships.
Combined with federal Pell grants and institutional aid, TAP also significantly reduces
tuition costs for low-income students attending private colleges in the state. It thus
helps New York students afford the college that best suits their academic interests and
career goals.
A more detailed analysis and critique of the Excelsior Scholarship program can be found in the
attached Empire Center research paper.
Attachment
Published by the Empire Center for Public Policy, Inc.
Issue Brief
Excelsior
Illusion
Getting Real About
‘Free’ College in NY
by E.J. McMahon
I
n April 2017, the New York State Legislature approved
Governor Andrew Cuomo’s proposal to establish the
Excelsior Scholarship program, which the governor de-
Excelsior Scholarships promised to eliminate tuition
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Issue Brief
October 2019
promises, the Excelsior Scholarship program is
1. It is regressive.
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contrast to those programs, the net value
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2. It is cumbersome to administer.
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also are required to sign a contract stipulat-
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ment will have their grants converted into
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3. It shuts out the private sector.
New York is home to the nation’s largest
enroll in private institutions located in the
state, which award more baccalaureate de-
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time bipartisan commitment to promoting di-
verse educational options, the Excelsior pro-
Excelsior was promoted as the solution to what
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is the most extensive means-tested scholarship
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Excelsior Illusion
BACKGROUND
With over one million undergraduates attend-
ing 301 degree-granting institutions, New York
has the nation’s third largest higher education
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New York has more private schools and col-
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In-
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the state, compared to 47 percent attending the
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schools, with just over one-quarter in private
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ates; among the three most populous states, the
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October 2019
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dergraduate degrees in New York, the ninth
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nors and state lawmakers in both parties had,
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vored aid policies designed to give evenhand-
ed treatment to students in both public and pri-
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leges based on degrees awarded—although, at
to 24 are enrolled in degree-granting colleges
among states, compared to a national average
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In economic
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vate sector institutions to attract tuition dollars
A group of graduates at a recent commencement ceremony at St, John’s University in Queens—part of the largest concentration of
private colleges in any state, whose students are shut out of the Excelsior Scholarship program. (Photo courtesy of QNS)
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Excelsior Illusion
LOW TUITION, HIGH AID
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Empire State’s public colleges and universities
$8,700 per student, which is 11 percent above
the national average and the 11th highest
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York’s neighboring states all charged their resi-
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doesn’t end with low tuition—or with pub-
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based college student aid entitlement program
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Issue Brief
October 2019
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New York’s public universities cite a growing
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no added merit requirement such as a min-
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tution in New York State, public or private
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or more credits applicable toward the de-
gree program, per semester;
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award; and, last but not least,
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investment income—subtracting deductions
and personal exemptions allowed on the state
resident personal income tax, and adding back
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Excelsior Illusion
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single independent undergraduate, the AGI
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went to students at private colleges; the public
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THE EXCELSIOR PROMISE
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mo mounted a stage at LaGuardia Communi-
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college, and take at least 12 credits a semester
while completing at least 30 credits in an aca-
In line with the governor’s original propos-
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culated to close the gap between the maximum
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Invited to join Cuomo at the Excelsior unveiling
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The small print
apparent, the Excelsior proposal came with
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Excelsior Illusion
Governor Cuomo and Sen. Bernie Sanders of Vermont shared a stage for the January 2017 rollout of Excelsior Scholarships at
Laguardia Community College in Queens, introduced by CUNY Chair William C. Thompson, Jr. (Photo from governor’s website)
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a contract with the [Higher Education Services
student loan according to a schedule to be deter-
a student who needs more time to complete
undergraduate studies or to attend graduate
levels, course credit and post-graduate residen-
However, the Enhanced Award is limited to a
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must agree to match a recipient’s Enhanced
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had risen to 24,000, and the
total cost was estimated at
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20, with the income cap
set at its maximum level
expected to award 30,000
Excelsior Scholarships at a
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—
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cal 2020 will come to $100 million—or at least
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ticipation is projected to rise to 5,350 students,
Reverse means-testing
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limit applies to the combined gross incomes
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Assuming identical AGIs
high-cost downstate sub-
urb would get the same
in low-cost Central New
with gross incomes close to the $125,000 limit,
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a summer job—unless the job paid much more
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‘Anchor’ aweigh
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and the debt is so high it’s like starting a race with
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Net of any grant from TAP,
which targets its largest
awards to students with the
lowest incomes, an individual
Excelsior Scholarship rises with
household income—a sort of
reverse means-testing.
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Excelsior Illusion
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high college-going rate, and even with recent
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nancial aid to low-income
College Grant program, which in 2017 awarded
like most programs in other states—but unlike
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less dependent
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thew Chingos have summed up the situation
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ment and have higher de-
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million checking accounts
in multiple states, research-
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COST AND CONSEQUENCES
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More than half of recent SUNY
graduates—and 79 percent of
CUNY graduates—have had no
overhanging college debt.
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see the sticker price, even though this is much
higher than what most students will end up
including income and assets, to their college
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private colleges, such as Hamilton College and
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that low- and middle-income students can use
grant is means-tested, so a student with low-
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a progressive pricing structure, eliminating tu-
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The Academic Podium at the the University at Albany, one of SUNY’s three largest campuses. (Photo from albany.edu)
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Excelsior Illusion
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which does not address these expenses, leaves
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pricing structure at New York’s public colleges
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though the Excelsior Scholarship has an income
In addition, to the extent that Excelsior attracts
who might otherwise have enrolled in private
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CONCLUSION
Governor Cuomo’s Excelsior Scholarship pro-
gram was custom-tailored to back up a political
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net value to students with higher incomes; it is
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uates who choose colleges in the state’s excep-
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tion aid program that is better designed to pro-
expects to spend on Excelsior and Enhanced
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Issue Brief
October 2019
new recruiting and retention tool for New York public
colleges during a period of increased competition for a
shrinking cohort of high school graduates in the state.
In the wake of Excelsior’s heavily promoted 2017 debut,
student undergraduate headcounts increased for two
years in a row at four-year SUNY and CUNY colleges.
During the same period, there was a more accelerated
decline in the total undergradiuate enrollment of New
York’s four-year private colleges.
As shown in Figure 5 (below), total SUNY enrollment
peaked in 2010, at an all-time record of 429,020
students—then dropped almost 9 percent in the
next seven years. The continuing decline in SUNY’s
undergraduate enrollment between 2017 and 2018—to
382,488 students, its lowest level since 2006—has been
concentrated at the community college level.
CUNY enrollment, shown in Figure 6, has been
stronger. Between 2000 and 2010, the number of CUNY
undergrads increased from 167,969 to an all-time high
of 245,646 in 2014. It has decreased slightly since then,
but CUNY’s recent enrollment decline (like SUNY’s) has
been concentrated in the system’s community colleges.
college headcounts peaked in 2012 at 352,011, but by
2018 had fallen to 336,827, the lowest level in 10 years,
including a decline of more than 13,000 in the two years
following the introduction of Excelsior Scholarships.
a
Enrollment in New York’s preK-12 public schools—the
primary source of future students for SUNY and CUNY,
in particular— has been declining since 2000. The most
recent national projections indicate New York State’s
cohort of new high school graduates will roughly hold
steady through the early 2020s, rise again in 2023 and
2024, then resume declining into the 2030s.
b
The same source projects a faster decline in the college-
going cohort for the rest of the Northeast. That’s a
looming concern for New York’s mid-sized regional
private colleges, which (unlike SUNY and CUNY) recruit
neighboring states.
a
of the College of New Rochelle in Westchester County.
b
Knocking at the College Door, “Projections of High School Graduates Through
2032, Western Interstate Commission for Higher Education (WICHE). https://
knocking.wiche.edu
Excelsior and Enrollment Trends by Sector
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ENDNOTES
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