Boost for Community Colleges Means 1-Year Bust for Universities

New analysis of Oregon Promise tuition-free scholarship program found that it increased community college enrollment but decreased enrollment at four-year institutions in the first year, and that fewer first-generation and low-income students benefited financially than expected.

May 21, 2019
 

A recent analysis of Oregon’s tuition-free community college scholarship found that the program helped increase enrollment at the state’s two-year colleges but shifted students away from public four-year institutions in the first year of its existence.

The analysis by Oded Gurantz, an assistant professor of education policy at the University of Missouri, also found that low-income students in Oregon didn’t receive much financial aid from the Oregon Promise program because it is a last-dollar scholarship, meaning it covers tuition and fees only after students have used all federal and state financial aid for which they are eligible.

Oregon Promise was started in 2016 and became the country’s second statewide tuition-free program. In the first year, 6,971 students received the scholarship. More than 5,600 students and 5,900 students participated in the program in 2017 and 2018, respectively.

Gurantz examined the graduation and college enrollment records of high school students in the state who took the Preliminary SAT, which measures college readiness, in 10th grade. He found a 4.2 percentage point increase in community college enrollment in the first year of the Promise program. Most of that increase was the result of a corresponding 2.9-percentage-point enrollment decline at the state’s four-year colleges, he said. Gurantz used PSAT data because the exam is subsidized by the state and students are more likely to take it. The PSAT and SAT student data are also linked to National Student Clearinghouse data on postsecondary enrollment.

“In that first group of eligible students for the Oregon Promise, the enrollment shifts away from four-year colleges,” Gurantz said. But that effect didn’t appear in the second year of the program, even as the community colleges continued to see enrollment gains, he said.

Gurantz said the shift of students choosing not to attend four-year colleges and instead using the Promise scholarship to attend community colleges could have occurred because it took longer for information and marketing about the program to reach students from families with no college experience, or those who hadn’t considered college as an option.

“The spread of information is quickest to the highest-income families and slowest to families less likely to go to college,” he said.

Oregon universities have been opposed to the Promise program since it began and have argued that the state should instead fund the need-based Opportunity Grant program that directly helps low-income and underrepresented students regardless of whether they attend two- or four-year colleges. The grant program provides up to $2,700 to eligible students attending community colleges and $3,300 to students attending public or private four-year institutions in the state. The program has a maximum $3,500 expected family contribution cap.

“Oregon State from the beginning has advocated funds for students with financial need should go toward improving the Oregon Opportunity Grant, which targets low-income students,” said Steve Clark, vice president of university relations for Oregon State University.

Clark said that the university doesn’t have the data to show a direct correlation between enrollment rates at community colleges in 2016 and 2017 by Oregon Promise students and enrollment rates at the university. Oregon State’s overall enrollment in 2016 increased 2.6 percent, to about 30,354 students, and in 2017 increased by 1.8 percent to nearly 30,900 students.

However, Clark noted, the university had been enrolling fewer Oregon high school graduates before the Oregon Promise started. Enrollment by graduates of the state’s high schools decreased by 0.6 percent in 2016 and by 4.1 percent in 2017.

A report from the Oregon Higher Education Coordinating Commission found similar effects in the first year of the Promise program between four- and two-year institutional enrollments, said Ben Cannon, executive director of the HECC.

The rate of students with state and federal grants increased by 3.6 percentage points, to 29.3 percent, in 2016 among the community colleges, while the rate of students receiving grant aid at public universities in the state decreased 4.2 percentage points, to 37.2 percent, according to HECC data.

Gurantz’s analysis also shows that because of the last-dollar component of the program, fewer low-income students received actual scholarship dollars. Oregon does provide a separate $1,000 stipend to full-time Promise students if they are entirely covered by Pell Grants -- or $500 if they attend part-time -- to help offset additional costs such as textbooks, transportation or living expenses.

The first year of the Promise program did not include a limit on the maximum expected family contribution, or EFC, allowed for eligibility, which means middle- and higher-income families were able to receive the scholarship dollars. As a result, about one-fifth of Promise scholarship dollars went to students from families with an EFC of more than $20,000, according to Gurantz's analysis.

Oregon's community colleges on average cost about $5,000 a year in tuition and fees, according to the state. Gurantz's analysis found the average Promise scholarship award was $653.

“A lot of the money goes to middle- and high-income families,” he said.

Oregon placed a $20,000 EFC cap on the program in 2017 to prevent Promise dollars from going to high-income families. But that cap was removed last year, Cannon said.

The Legislature is considering imposing another EFC cap, but in the interim, the state is encouraging students of all income levels to apply for the program, he said.

“I am concerned that first-generation or low-income or other underrepresented students will be inadvertently affected by the mixed messaging that we have given over the years,” Cannon said. “When we are forced to impose EFC restrictions, or otherwise have to adjust eligibility, it confuses the message that I think we’re trying to drive around this program, which is tuition will not be a barrier for any Oregon student who wants to go to community college.”

Compared to all community college students, Oregon Promise students are less likely to be first generation. Only 31 percent of Oregon Promise students in 2016 were first generation, according to HECC data.

“We know signaling of college being free is an important and powerful magnet for students,” Gurantz said. “Even if more money is going to middle-income families, some money is still going to low-income families.”

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