The debate over whether undocumented students should be granted in-state tuition rates at state colleges has been a particularly sensitive topic for the Jewish community. As the book of Exodus teaches, “You shall not wrong a stranger or oppress him, for you were strangers in the land of Egypt.” This lesson is pertinent to this particular facet of the immigration reform debate for two reasons: First, as a society, we should not wrong individuals who entered the United States for reasons beyond their control; and second, undocumented students are children who grew up feeling as though they were Americans. They are part of the American family.
The public debate concerning undocumented students has many subissues, one of them being the use of tax dollars to subsidize in-state tuition rates. Today, approximately twelve states make in-state tuition rates available to undocumented students, provided that specific criteria are met.1 Detractors of these state policies claim, in part, that the policies burden citizens with higher taxes and do not result in any economic benefit for the state. How solid is this claim? What are the facts?
Since the earliest of these state policies was passed in 2001, there is limited data to determine the validity of this criticism. Indeed, any data produced is an estimate, given that it is impossible to determine the exact size of the undocumented population. That said, the economic argument in favor of in-state tuition policies rests on the sound economic concept that college graduates have higher productivity, and thus, contribute greater tax revenue to state and federal budgets. Accordingly, tax dollars allocated in support of these policies are likely well spent.
College is Cost-Prohibitive
Officials who support in-state tuition policies argue that the difference between in-state and out-of-state tuition is a prohibitive barrier. Currently, in-state students at the best American public colleges pay, on average, $13,000 less than those from out of state.
Multiple analyses suggest that the introduction of in-state tuition benefits positively affects college attendance rates, and that colleges incur little or no added cost by enrolling qualified undocumented students. For example, a study published in 2008 estimates that as many as 31 percent more undocumented students would attend college if in-state tuition were offered. The potential exists, therefore, that public universities will take in more tuition revenue if an in-state tuition policy is instituted. This is a win-win situation for schools and their students.
College Graduates Pay More in Taxes
A college degree is a key to economic and social advancement in this country, and becoming a taxpayer is a sign of such financial success. Research indicates that average earnings increase measurably with higher education. A study published in 2010 concluded that an individual who only completes high school will contribute roughly half as much in incomes taxes as someone with a college degree.
Accordingly, if more undocumented students are able to obtain a higher education, then there will be a larger population of people from which to grow the tax base. A recent study by the Maryland Institute for Policy Analysis and Research Institute in Baltimore estimates that Maryland, which recently passed legislation granting in-state tuition to undocumented students, will ultimately earn $24.6 million in savings and tax benefits. The study also found that private businesses will ultimately earn $42 million in yearly benefits as a result of the policy. If this analysis is accurate, then it reflects positively on Maryland’s tax-and-spend priorities.
Americans should appreciate that undocumented individuals already contribute to federal and state tax revenue. A review of analyses performed by the Congressional Budget Office and Social Security Administration suggests that between 50 percent and 75 percent of undocumented immigrants pay at least a portion of their required federal, state, and local taxes. Furthermore, a study conducted by the Institute for Taxation and Economic Policy estimates that households headed by undocumented immigrants paid $11.2 billion in state and local taxes in 2010. Many undocumented immigrants choose to pay their taxes utilizing Individual Taxpayer Identification Numbers (ITINs).2
With the recent passage of the Obama administration’s program known as “Deferred Action” — which allows qualifying young, undocumented immigrants to remain in the country and apply for work permits — more young people stand a chance at becoming significant taxpayers in the future. Thus, allowing undocumented students to pay in-state tuition rates may lead to increased tax revenue and greater economic growth.
Support for these in-state tuition policies is in step with American and Jewish values regarding advancement through education. Ultimately, however, the larger immigration dilemma facing these undocumented students can only be solved through comprehensive immigration reform.
1 Texas, New Mexico, California, Utah, Washington, Nebraska, Kansas, Oklahoma, Illinois, Connecticut, New York, and Maryland allow undocumented students to pay in-state tuition.
2 The IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have one, and are not eligible to obtain a Social Security Number.