UT Haslam Faculty Finds Tennessee’s Free Community College Expands Opportunity without Breaking Budgets

When then-Governor Bill Haslam signed the Tennessee Promise Act into law in 2014, it was a bold commitment, as the first-of-its-kind initiative would extend tuition-free community college to all in-state residents. At the time, the former governor touted the bill as a way to materially improve the lives of Tennesseans, all without incurring major costs to the state.

Over a decade later, new research suggests that commitment is delivering on its promise. A working paper co-authored by Celeste Carruthers, the William F. Fox Distinguished Professor of Labor Economics and associate director of the Boyd Center for Business and Economic Research at the University of Tennessee, Knoxville, Haslam College of Business, finds the program increased college enrollment, degree completion and transfers. It also finds no evidence that the program reduced four-year degree attainment.

“It’s consistently been a low-cost program,” notes Carruthers.

The paper, which is undergoing peer review, has drawn attention for its evidence on a program that helped establish a national model for tuition-free college. Tennessee Promise was the first statewide program of its kind, and similar promise programs now operate across the country.

Low Cost, More Degrees

Tennessee Promise is a last-dollar program, meaning it covers the balance for a two-year degree after all relevant grants, scholarships and aid opportunities are applied. The last-dollar structure keeps program costs low, as the study finds the average participant receives less than $1,000 through Tennessee Promise, a strong indicator of how effective college grants and scholarships have become.

Carruthers and coauthors also found the program has led to meaningful gains across many key metrics, including college enrollment numbers, two-year degrees earned and transfers from two-year to four-year programs. The gains in college enrollment were especially meaningful among nonwhite students and students from rural areas.

While Tennessee Promise has led to more students seeking and completing two-year degrees, it has not led to a decline in four-year degree rates. Promise-eligible students are 2.7 percent more likely to hold a four-year degree by the age of 24; among women, the rate rises to 4.1 percent.

Offsetting Costs

Carruthers’ work with Tennessee Promise initially began with a Gates Foundation Grant to the Tennessee Higher Education Commission. The commission subsequently awarded Carruthers and the Boyd Center funding to use state program data to provide descriptive characterizations of the typical Tennessee Promise participant.

Research results quickly revealed the program’s success, prompting further review of census and survey data to more accurately account for Tennessee Promise’s impact and reach. Carruthers teamed up with Jonathon Attridge, chief evaluation officer in the Tennessee Office of Evidence and Impact, Jilleah Welch, lecturer and senior research associate at UT’s Howard H. Baker Jr. School of Public Policy and Public Affairs, and Paige Schoonover (UT, ’18), assistant professor of economics at the School of Economics and Business Administration with Saint Mary’s College of California.

Among other discoveries, the research team found that Tennessee Promise increased salary ranges for its enrollees, resulting in more taxable income for the state.

The paper weighs these higher tax revenues against additional public spending, including community college appropriations, arriving at the conclusion that Tennessee Promise offsets its own costs.

Tennessee Model, National Reach

Tennessee Promise was initially a pilot program for Knox County before eligibility was broadened statewide, making the Volunteer State the first in the nation to offer tuition-free community college. Now, such programs are more common, with 200 promise programs across the country, some sponsored by state governments and others by private institutions.

“Tennessee Promise gave us one of the first opportunities to study what happens when a free community college program goes from serving a single county to an entire state,” notes Schoonover.

While the Tennessee Promise model has been widely imitated, it remains distinctive in many ways — primarily in its simplicity.

According to Carruthers, many similar programs impose strict eligibility requirements, such as income limits or minimum in-state residency periods, which Tennessee Promise avoids. Comparable programs also provide scholarships that convert into loans if students move out of state after college.

“The pieces of Tennessee Promise have been replicated widely in terms of funding structure or focus on two-year degrees, yet it remains fairly unique,” she says. “There are only three or four states that don’t impose all these other criteria for students to meet.”

In other words, Tennessee Promise is standard setting, and as this research makes clear, it continues to be impactful for the Volunteer State and beyond.

Contact

Josh Hurst

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Haslam College of Business - UT Haslam Faculty Finds Tennessee’s Free Community College Expands Opportunity without Breaking Budgets