Raising College Access and Completion : How Much Can Free College Help ?

Free college proposals have become increasingly popular in many countries, yet cross-countryevidence indicates that higher college subsidies raise enrollment but not graduation rates. To capture the evidenceand evaluate proposals, this paper develops and estimates a dynamic model of college enrollment, performance, andgraduation. A central piece of the model, student effort, has a direct effect on class completion and an indirecteffect mitigating the risk of performing poorly or dropping out. The model is estimated using rich student-level datafrom Colombia, and multiple free college programs are simulated. Among them, universal free college expandsenrollment the most but does not affect graduation rates, thereby helping explain the evidence. Performance-based freecollege, in contrast, raises graduation rates yet has a smaller enrollment impact.