When I went to College in New York City the City University was a "Free" college. It started as the Free Academy and turned into the City College which was the first college in the City University. City College was called the Harvard on the Hudson and basically founded on the idea that there was a tremendous potential in the poor of NYC that could be developed to the benefit of society. It was free but you needed to qualify to get in and that was not easy. Many of the students from City college went on to obtain PhD's in Ivy Leagues and other top level colleges. Many other became leaders in industry and other fields. Yes the City subsidized it but again it was thought to be a long term benefit to the city and society as a whole.