Friday, February 21, 2014

TN Promise: looks like a good higher ed policy proposal

From TN Edu-Independent Posted: 21 Feb 2014:
Recently, Gov. Haslam proposed TN Promise, which offers free tuition to community colleges and the state's tech centers. Lottery reserve dollars will be used to create an endowment to pay future ongoing expenses.  There was some criticism in that to pay for the program, the policy proposes to lessen the support for 4 year colleges from $4,000 per year to $3,000 for freshman and sophomores but increases the amount for juniors and seniors from $4,000 to $5,000 per year.

I think it's a good policy for reasons I explain below.

1. TN is still in a bad place when it comes to postsecondary completions.  Compared to other states, we still have comparatively low outcomes, for comparatively much higher costs. When we think of the Return on Investment implications in spending state money for higher ed (subsidy support for higher ed institutions, HOPE scholarships), it's not good.

This data comes from the Chronicle of Higher ed College Completion data project.

For TN public 4 years, only 45.5% graduate in 6 years (less than half) and only 19.7% graduate in 4 years. The chart below that shows that TN is much higher in educational spending per completion than many other states:
For TN public 2 years, it's much worse. Only 11.3% graduate in 3 years, and only 8.0% graduate in 2 years. The chart again shows that TN is much higher in educational spending per completion for 2 years than many other states:

By providing tuition support, the TN Promise Initiative will help move the needle on the really subpar 2 year college graduation rates, and will likely improve the Return on Investment of state dollars being spent on 2 year public colleges.

For 4 years as well, shifting greater support to junior and senior years incents more completion at the 4 year level. Ultimately, this will help improve the 4 year grad rates, which also need significant improvement.

Providing marginally less support in the freshman and sophomore years - $1000 each year, doesn't seem like it would be the make or break reason students leave during these years.  Financial pressures are present every year for a student at a 4 year program, but I think it makes a lot of sense to put greater incentives in later years - years 3 and 4 (the scholarship amount increase) - than the beginning years when students may drop out for primarily non-financial reasons. 

2.  The policy proposal that will bring more equity to how TN Lottery Dollars are allocated.  As I've previously pointed out in this post, TN Lottery dollars derive the majority of their revenues from poor Tennesseans (who are more likely to play the lottery), but then the majority of dollars are allocated to families that already have the means (via HOPE scholarships), or close to the means to cover public higher education tuition. 

By providing greater support for 2 year students out of reserve lottery funds (which tend to be lower-income), this seems more equitable for how HOPE scholarship dollars are put to use.  I actually think there is some strong underlying morality in this policy proposal, something that we don't see every day from public officials.

3.  Tuition out of pocket costs for students may slow.
This was one of the Governor's talking points, and seems realistic.  A number of students can complete 2 year associate's degrees, and then transfer to a TBR or UT System 4 year school to complete a 4 year degree.

Getting the first two years paid for can be a big financial help to students, dramatically cutting the total cost of a postsecondary degree.  It's a page out of the Zach Bissonette playbook.

One potential side effect this policy proposal is that if demand for the 4 year colleges declines, enrolling less students each year because students are going to 2 years, 4 year universities may feel inclined to raise tuition prices at an even further rate than they would otherwise. Yet, I don't think this is too concerning, because there is already lots of consternation out there with student loan debt and tuition hikes - there's a limit to what people are willing to pay, and subsequently, what universities can charge.

4. Lottery dollars just sitting in a reserve account aren't helping students. This was state Senator Jim Kyle's main point and he's right.  Put the money to use for Tennessee students.

The TN Promise proposal looks like a good higher ed policy proposal on a number of fronts, putting money to use instead of just sitting around.  Tennessee has a long way to go for improving 2 year and 4 year higher ed graduation rates, and it looks like this is a good policy to help with that.

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