How are private colleges supposed to compete when state schools are free?

The New York Times reports:

Private Colleges Suggest New York’s Free Tuition Plan Limits Choices

When Gov. Andrew M. Cuomo unveiled plans this month to make state colleges free for middle- and low-income New Yorkers, he seemed to find a path to instant popularity. There was approval from both the left (Senator Bernie Sanders of Vermont) and the right (Republicans in the State Senate).

But as legislators and education advocates parsed the governor’s budget in a hearing on Tuesday, elements of the tuition proposal came under greater scrutiny, with the governor’s office moving to counter concerns about the program’s cost, scope and impact on private colleges.

A legislative analysis suggested that as few as 32,000 students could benefit from the state scholarship, a fraction of the hundreds of thousands that the governor’s office initially said it could impact.

And for some of the nearly 150 nonprofit private colleges in the state, the governor’s plan has raised questions about their survival.

The budget proposal threatens to strip state funding from private institutions that fail to keep their yearly tuition increases under $500 or the higher education rate of inflation, whichever is greater. (That rate is about 2.3 percent.) Starting in 2018, New Yorkers who choose to attend private colleges that do not comply with the cap would not receive tuition grants from the state’s tuition assistance program, known as TAP, which covers students with incomes up to $80,000 a year.