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Education Featured NewsTracker

Governor Selling Free College to High School Seniors

With summer winding down and school kicking off, Gov. Bill Haslam is on a statewide tour promoting the benefits of higher education to seniors who’ll graduate high school this year.

This week Haslam is traveling the Volunteer State  pitching his “Tennessee Promise,” a new program offering two years of community college or technical school free to any student interested. The governor says the initiative, which the state Legislature overwhelmingly OK’d last spring, is unique to Tennessee.

“Every Tennessean, if you graduate from high school, we will ensure that you can go to community college for two years — or to technology school — absolutely free of tuition and fees,” Haslam told a gymnasium packed with students at Red Bank High School near Chattanooga Tuesday.

This year’s deadline for sign-up is Nov. 1, Haslam said. The governor told reporters after the event that he’s still running into high school seniors who’re unaware the program exists, which is one of the reasons he’s out talking it up.

The Tennessee Promise is part of Haslam’s “Drive t0 55” initiative, which aims to increase the number of high school grads in the state with some form of higher education certificate to 55 percent — the percentage of jobs in the state that will require some sort of degree in about 10 years. Currently the number of degree-holding Tennesseans is at 32 percent, Haslam said.

“We’re trying to increase the whole spectrum of qualified candidates in the workforce in Tennessee,” he said.

The governor said big companies like Volkswagen and mom-and-pop shops alike have shared similar concerns with him about Tennessee — namely, that the Volunteer State needs to do a better job prepping skilled laborers for the job market.

Haslam noted to the students, though, that even though the two years of school they’re being offered is “free” to them financially, they’re going to be expected to produce results.

“Your obligation is to complete high school, fill out the financial aid forms, work with a mentor — which we will provide you, who will help you with all of that — and then perform eight hours of community service,” Haslam said.

According to the program’s website, Tennessee Promise is a “last-dollar scholarship, meaning it will cover college costs not met from Pell, HOPE, or TSAA.”

The money to fund the “last-dollar” program came from reserve funds from the Tennessee Lottery, initially created for the HOPE Scholarship, which was aimed at high-achieving students.

“It was helping some students, but not enough to where we could get to a larger percentage of Tennesseans having a degree,” Haslam said after the event. “So, we took some reserve money that had built up in the lottery fund, and used that to form an endowment. So, this is a promise, the money’s not going to go away, we’re only spending the interest off of that endowment.”

When the free tuition plan was announced earlier this year, there were some concerns that it could hurt four-year higher education institutions. However, Haslam said he’s confident the program will “increasing the size of the funnel opening” for kids to go to school.

More young adults headed to post-secondary institutes means more graduates, which translates to a better-skilled and better-educated workforce that’ll be more attractive to companies thinking about moving here, he said.

Haslam added that the trend he expected to see is students going to a community college for two years, and then continuing on to a four-year school.

Tennessee House Majority Leader Gerald McCormick, a Chattanooga Republican and the sponsor of the legislation in the General Assembly’s lower chamber, told reporters after the event that the Tennessee Promise “is going to be the highlight of the governor’s first term,” and that he hopes to see it built-on over the next four years.

“It was the most important bill I believe I’ve ever moved,” McCormick said.

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Education NewsTracker

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.

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Press Releases

March a Month of Records for TN Lottery

Press release from the Tennessee Education Lottery Corporation; April 16, 2012:

NASHVILLE – Boosted by sales from a world-record jackpot and increasingly popular instant games, the Tennessee Education Lottery Corporation today announced record-setting totals for the Third Quarter of Fiscal Year 2012, including a whopping $89.96 million raised for state education programs, a 17 percent increase over the same quarter last fiscal year, and well above the previous record of $79.6 million set in the Third Quarter of Fiscal Year 2006.

Year-to-date, Lottery proceeds for education—the funds used for scholarships, grants and related programs—have now reached $234 million, up $22.44 million, or 10.6 percent, over this time last year.

When combined with Lottery funding for after-school programs— $87.1 million to date— the total Lottery funding for education-related programs now exceeds $2.3 billion since the Lottery’s inception in 2004.

Benefitting from the historic Mega Millions jackpot drawing, March figures were especially impressive, with total sales of nearly $142 million, the highest of any month since inception and surpassing the previous monthly sales record set in February by over $11 million, or 9 percent. The February totals, a record up to that point, were aided by sales from the successful introduction of the new Powerball game, which features bigger jackpots and better odds, among other changes.

The Mega Millions game, which culminated with the world’s all-time biggest jackpot of $656 million, also contributed to the best week and the best day in Tennessee Lottery history. The week ending March 31, 2012 produced total sales of $41 million, surpassing the previous record of $37. 4 million set in the week of February 11, 2012. And Friday March 30, 2012, the day of the winning Mega Millions drawing, showed total sales of $14.3 million, smashing the previous single day record of $10.8 million set on the Lottery’s first day of operations on January 20, 2004.

Through the end of the quarter, the three-month period ending March 31, 2012, drawing-style games such as Powerball, Mega Millions and Tennessee Cash are up 10.6 percent, producing $19,411,000 in additional sales. The strength of the Tennessee Lottery, however, continues to be the growing popularity of instant games (“scratch off”), which have grown by 10.4 percent, producing an additional $73,680,000 in sales over this point last year.

“We’re gratified that our approach to maximizing proceeds for the education programs is meeting with such success,” said Rebecca Hargrove, President and CEO of the Tennessee Education Lottery Corporation. “We’ve worked to bring an array of fun and entertaining games to our lottery players, expand the retailer base, and prudently manage our overall operations.

Thankfully, it’s a strategy that makes for a great Lottery and continues to provide funding for thousands of students and their families all across the state.”

Last year the Lottery announced an all-time high transfer of $293.5 million to education programs in the state, an increase of $4.6 million over the previous record set the year before. The Lottery also reported a record-breaking $1.19 billion in total sales, which was a 4.2 percent increase over the previous record also set a year earlier.

“I couldn’t be more pleased with the strength of this quarterly report and the overall direction of the Tennessee Lottery,” said Keith Simmons, Chairman of the Board of Directors for the Tennessee Education Lottery Corporation. “The innovative and business-like approach to the Lottery’s mission has put us on track for another record year, and I congratulate the team for their hard work and continued success.”

About the Tennessee Education Lottery

The Tennessee Education Lottery Corporation operates entirely from the revenue it generates through the sale of its products. Net proceeds from sales of Lottery tickets, currently averaging over $5.3 million per week, fund specific education programs, including college scholarships and after-school programs.

Since the Lottery began selling tickets on January 20, 2004, it has raised more than $2.3 billion for these programs. In addition to the educational beneficiaries, players have won over $5.2 billion in prizes and Lottery retailer partners have earned over $573 million in retailer commissions.

For more information, please visit www.tnlottery.com. For information about Lottery-funded scholarships, visit www.collegepaystn.com. To see a county-by-county breakdown of the number of students who benefit, visit www.seehowitaddsup.com.