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Journal of Student Financial Aid

Journal of Student Financial Aid

Short Title

The Spillover Effects of the Tennessee Promise

Abstract

Tuition-free college policies have gained momentum since the implementation of the Tennessee Promise, which provides financial aid to students pursuing two-year post-secondary degrees in Tennessee. While previous research has addressed the effects of similar programs on student outcomes, scholars have yet to thoroughly investigate potential spillover effects of Promise policies on colleges that are ineligible for Promise funds. In this paper, I leverage a difference-in-differences design to explore changes in enrollment and tuition and fees at institutions eligible and ineligible for Tennessee Promise funds. First, I find that in-state enrollment increased significantly at public Promise eligible institutions (mainly public two-year and technical colleges) and in-state enrollment decreased at public four-year colleges that are ineligible to receive Promise funds. Moreover, out-of-state enrollment increased at Promise ineligible public four-year colleges after the Promise was implemented. Second, I find that Black student enrollment declined by 1-2 percentage points at private colleges ineligible for Promise funds. Finally, public colleges eligible for Promise funds raised tuition after the Tennessee Promise was implemented. Together, these findings indicate that in the aftermath of the Tennessee Promise, there were significant changes in enrollment and tuition levels across institutions eligible and ineligible for Promise funds.

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