Haslam Plan For Community College Prompts Questions

A plan by Gov. Bill Haslam to pay for two years of community college for Tennessee students has been met with questions over its potential costs and criticism that it erodes a successful scholarship program.

Haslam proposes to pay for the program, called Tennessee Promise, by setting up a $300 million endowment with lottery funds and reducing the amount freshmen and sophomores receive from the HOPE scholarship, from $4,000, to $3,000, while increasing the amount to $5,000 in the final two years of college.

In unveiling the program during his State of the State address, Haslam described it as “a bold promise” and said it would be the only such state program in the country.

“We are committed to making a clear statement to families that education beyond high school is a priority in the state of Tennessee,” Haslam said.

This year, in-state tuition and fees at UT Knoxville total $11,200 per year, not including housing. That’s about a fifth of the median family income in Tennessee, $54,700.

Under Haslam’s proposal, a student could enroll for two years at a community college courtesy of state taxpayers, then transfer and finish up a bachelor’s degree at a four-year school. The idea would be to make a four-year education less costly while giving students the same piece of paper from the same school.

The bill, filed last week, calls for proceeds above $10 million in the lottery fund to be transferred to a new endowment, with the earnings used to pay for the program. Presumably, the endowment could not be raided to pay for other lawmaker wish lists, but the Legislature would do well to make sure the purpose of any new fund is locked down tight.

A lawmaker who helped craft the state’s lottery scholarships has come out against the plan. Congressman Steve Cohen told the Tennessean that “high-achieving students beginning four-year degree programs” will end up with less money.

Questions remain, though. A recent WPLN story explored whether the funding mechanism is sound. Budget crunchers will have to predict the future costs of the program, the potential demand by parents and students, as well as the estimated savings from restructuring the lottery scholarship.

It’s also not known what effect a new incentive to head to community college would have on the costs at four-year schools in the state. With fewer freshmen and sophomores in lecture halls, would schools respond by trying to raise their fees faster than they would have otherwise?

The Chattanooga Times Free Press pointed out out that the lottery program itself ended up paying for less of the total cost of attending school over time:

At its peak, the maximum HOPE award covered about three-quarters of the average price of tuition and fees at public universities and community colleges in 2006-07. In 2012-13, the maximum HOPE award barely covered half of the average cost, according to a 2013 Tennessee Higher Education Commission report.

Haslam’s bill would incentivize scholarship students at the state’s four-year schools to finish on time.

Current law allows students to receive a HOPE scholarship until earning a bachelor’s degree or earning the number of semester hours for the degree — with funding also cut off five years after enrollment. The Haslam bill would cut off lottery scholarship funds at either 120 semester hours (15 hours per semester for four years) or completion of eight full-time semesters, whichever comes later. The bill would keep in place the five-year cutoff.

The Promise program follows other efforts by the Haslam administration to expand access to higher education, including a nonprofit, online college aimed at working adults and priced at $2,890 per full-time, six-month term.