Tennessee Promise Program Pays for Itself, Study Finds

Tennessee's pioneering free community college program pays for itself through the higher earnings of its graduates, according to a recent economic working paper. The study, published in May by the National Bureau of Economic Research, analyzed the Tennessee Promise, a last-dollar scholarship program launched statewide in 2015.

Program Boosts Enrollment and Degrees

The research found the program increased college enrollment by 5.4 percentage points among 19-year-olds when comparing periods before 2009 and after 2015. Associate degree attainment grew by 2.9 percentage points among 21-year-olds over the same timeframe.

Celeste Carruthers, a labor economist at the University of Tennessee, Knoxville and co-author of the study, said the program pays for itself when factoring in the higher salaries that degree holders earn. The analysis showed participants in their early 20s had incomes that were 6% to 8% higher than their peers. The program also led to 8% to 9% more transfers from two-year to four-year colleges and a slight increase in bachelor's degree completion.

No Diversion from Four-Year Degrees

A significant finding was that the free community college offer did not steer students away from pursuing bachelor's degrees. Paige Schoonover, an economics professor at Saint Mary's College of California and study co-author, said this was a major takeaway.

Laura Perna, a professor of education at the University of Pennsylvania, noted a common concern with such programs is that they might encourage students who would have completed a four-year degree to instead attend a community college, where transfer rates are typically lower. The Tennessee Promise data did not show this effect.

Instead, Schoonover said the program appears to have changed the pathway for how some students earned a four-year degree. Along with increases in associate degree attainment, the study saw a small increase in bachelor's degrees as well. Perna added she would like further research into what other factors in Tennessee might be helping Promise students successfully transfer.

Structure and Low Cost

The Tennessee Promise began as a pilot in Knox County in 2009 before launching statewide for the high school graduating class of 2015. It was part of then-Governor Bill Haslam's "Drive to 55" campaign to raise the percentage of Tennesseans with a postsecondary credential to 55%.

The program covers any remaining tuition and fees for full-time students after other financial aid is applied. Since most students qualify for Pell Grants, state merit aid, or both, the study reports the additional cost per participating student is less than $1,000 per year.

The authors highlighted the program's simplicity. To qualify, Tennessee high school students must submit a short application in the fall of their senior year, complete the FAFSA, and enroll in college immediately after graduation. They must also maintain at least a 2.0 GPA and meet mentoring and community service requirements.

A Model Among Many Promise Programs

The Tennessee Promise is one of more than 200 college promise programs in the United States, according to a database from the W.E. Upjohn Institute for Employment Research. These programs vary widely in scope, design, eligibility, and effects.

The report concludes that understanding how specific design features shape outcomes remains a critical question as free college proposals continue to evolve nationwide.