Tennessee’s Promise is None at All

Last Dollar Scholarships Provide the Least Aid to Students with the Most Need

Passage of the Tennessee Promise program this spring garnered a great deal of media attention on community colleges, the Tennessee legislature, and Governor Bill Haslam. This new effort to increase degree production through two, tuition-free years of community college also reignited longstanding debates over the proper focus of college access, workforce development, and the level of funding provided to public colleges and universities. But the program also posed a frequent paradox for advocates of state support for higher education: is there a time when additional funding for community colleges might not be a good thing?

New programs touting “free” community college, including Tennessee Promise as well as those proposed in Oregon, Mississippi, and Chicago, have been offered as “last-dollar” scholarships — covering only tuition and fees that are not covered by all other existing grant aid, such as the federal Pell Grant. Last-dollar programs do not cover other necessities like room, board, books, supplies, and transportation that most students need in order to attend school and to survive.

The practical effect of these last-dollar programs is also to spend the most state money on students who need the least aid. Higher education policy wonks sometimes call these “high expected family contribution (EFC)” students, or those who are generally ineligible for federal grant support because their income, or their family’s income, is too high to qualify. Setting aside the issues with the calculation of EFC, the metric can be a useful tool to help ration limited federal aid dollars. High EFC students may not be wealthy, but they’re almost certainly not the poorest students enrolled in higher education in the United States.

The targeting of aid in last-dollar programs is specifically designed to keep state expenditures at a minimum. Tennessee currently spends more than $825 million per year for the operating budgets of all institutions of higher education in the state. Tennessee Promise will cost just over $34 million per year, funded entirely from an endowment of the state lottery. But is this an equitable policy choice, even if it’s “new” funding?

Recent analysis conducted by the Tennessee Higher Education Commission, in a paper published by the Lumina Foundation, indicated that 48 percent of all community college students in Tennessee attend full time, slightly higher than the national average. Of these full-time students, 35 percent have an Expected Family Contribution of $0. In other words, over one-third of full-time Tennessee community college students are deemed by the federal government to be unable to afford anything out-of-pocket for the cost of higher education. These students have serious financial need. Many come from families making less than just $24,000 per year, only slightly above the federal poverty line.

These low-income students also receive a federal Pell Grant to help pay for college. The maximum federal Pell Grant is more than average tuition and fees at a Tennessee community college — currently clocking in at $3,800 per year. As a result, students who receive a maximum Pell Grant get a small refund to help afford their other necessary costs of attendance, such as room, board, books, and supplies. But sadly, they’re also at a disadvantage under last-dollar programs.

Students receiving the maximum Pell Grant are not eligible for any funds under the Tennessee Promise program because their costs are deemed by the state to be “covered.”
The problem is: they’re not.
THEC Analysis shows that students with EFC of $2,100 or less receive at least some financial aid refund. They will get no Tennessee Promise.

For those lowest-income community college student who receive the maximum Pell Grant — students whom Tennessee Promise leaves without additional state financial support — the “net price” of college after their federal aid is applied would still be more than $10,000 per year.

“Max Pell” students would still have to cover out-of-pocket cost with loans and part-time work in order to afford college. All while students with a expected family contribution of $5,000 or more— and proportionally less financial need — get all of the Tennessee Promise program’s funding. Part-time students who may be working to support themselves or their families while attending school, and who make up 52 percent all community college students enrolled in Tennessee, also receive no Promise funds. That’s because part-time students are statutorily ineligible for Promise. Neither are returning adults. In fact, the program does nothing for the poorest and most at-risk students at community colleges whatsoever.

To get a clear picture of just how restrictive the Tennessee program is, it is best to read straight from the program documents. (Note: these have since been curiously removed from the program website).

Students must apply senior year, meet all established deadlines, begin at the post-secondary institution in the fall or summer directly following high-school, maintain at least 12 credit hours each semester, maintain consecutive enrollment for 4 or 5 semesters, perform community service, and meet satisfactory academic progress — generally a 2.0 GPA — each semester.

Research has firmly established that these “traditional” students represent a very small portion of overall community college enrollments. They are also generally students who have the most resources and academic preparation before starting college, and are the most likely to attend a post-secondary program regardless of the aid offered to them. Gone are the days when most college students have enrolled straight out of high school and attend full time without any breaks. You might think that the Tennessee Promise program could encourage more students to attend full time, but there’s a problem with that, too.

The Promise program documents explicitly state a desire to limit additional state expenditures if demand creeps up, by imposing income-level requirements, additional GPA thresholds, or a first-come, first-serve policy. That’s straight from their website.

Tennessee Promise projects to serve an initial cohort of roughly 12,000 enrolled students. However, meeting that projection is likely to be difficult. The state reports that 17,246 students were first-time community college freshman in fall of 2012, approximately half of whom were full-time. That’s about 8,600 first-time, full-time students in the pipeline. Of those, the number who could meet all the Promise eligibility requirements, such as consecutive enrollment, is undoubtedly much smaller.

How the state could serve about 50 percent more full-time students than exist today, and especially with such strict program eligibility, is beyond the scope of this analysis. But there is reason to suspect that the Promise program will serve far fewer students, and certainly far fewer students in need, than it was originally conceived to serve. Alternatively, many may enroll in the program, find they can’t meet all of the student eligibility requirements, and subsequently drop out. They will never be able to receive a Promise scholarship again.

There’s another damaging possibility, too.

When policymakers think community colleges are “free,” they sometimes fail to support other vital financial aid programs and equity is ultimately diminished. The intention of the Promise program to direct additional funding toward low-income students and increase degree completion is well intentioned. But unfortunately it fails to reach the students who need the most help.

Governor Haslam celebrating the Tennessee Promise program in a bill signing, May 2014.