So, yesterday I talked about a big increase in access in the UK, which seems to have little to do with tuition fees. Today, let’s talk about a developing story in the United States, where a lowering of net prices seems to have had a big impact on access.
You may recall that in the US over the last couple of years, there has been a growing movement for free community college, something that President Obama picked up on earlier this year. But before Obama picked up this baton, free community college had already been introduced in Republican Tennessee, where governor Bill Haslam had turned something called “the Tennessee Promise” into law in 2014.
Technically, the Tennessee Promise is not “free tuition”. It’s only available to students entering straight from high school (which is a bit weird in terms of design, but whatever). Students have to be full-time, maintain a 2.0 average, meet regularly with a mentor, and perform eight hours of community service per term. And technically, what it does is reduce your tuition to zero after all other forms of aid and scholarship are taken care of (this is what is known in the business as a “last dollar” scholarship). If you apply for the award and meet the terms, government will cover your tuition to the point where your net price is zero. For a good number of people, this means free tuition with minimal strings attached, so let’s just call it free tuition.
Now, you might expect that with this kind of incentive, enrolment might rise a bit. And you’d be right. According to very early results, the number of freshmen is up 29.6% over last year. Obviously this is a pretty impressive result, but before we get too excited, we should probably find out a little more about where these new students are coming from. Are they “new” students, or are they mostly students who would have gone to a 4-year college, but have chosen 2-year instead? And what about students’ financial background? If you’re poor enough to be anywhere near maximum Pell grant ($5,775), the Tennessee Promise provides no additional aid, because tuition at Tennessee Community Colleges is about $4,000. So it may well be that what the Tennessee Promise is doing is providing aid to people higher up the income ladder. This is a little inefficient, but since (as I noted back here) community college students tend to come from poorer backgrounds anyway, this is not as regressive as it would be if it were implemented at 4-year colleges.
We should be able to answer these questions in a few weeks (yes, Canadians, in some places data is available in weeks, rather than years). Even though Tennessee does not track applicants by income the way the UK does, the state’s excellent annual Higher Education Fact Book does contain two pieces of data that will help us track this. The first is college-going rates by county, which will help us understand whether the jump in participation is concentrated in higher- or lower-income counties, and the second is the percentage of students who are Pell-eligible. I’ll keep you up-to-date on this when the data is out.
The most intriguing possibility here is that rates of attendance for Pell-eligible students might be rising, even though the Tennessee Promise provides no actual added benefit for many of them. It may well be that simply re-packing the way we frame higher education costs (“it’s free!”) matters more than the way we actually fund it (“your tuition is $4,000, and you also have a grant for $4,500”).
This would have significant policy ramifications for us in Canada. As we noted last year in our publication, The Many Prices of Knowledge, many students at Canadian community colleges face an all-inclusive net price that is negative, or very close to it. Similarly, poor first-year university students in both Ontario and Quebec have negative net prices. No one knows it, because we package aid in such a ludicrously opaque fashion, but it’s true. And if the Tennessee data provides evidence that the packaging of aid matters as much as the content, then it will be time for Canadian governments to re-evaluate that packaging, tout de suite.