New state scholarship programs proposed in Indiana and Wisconsin would offer funds to students attending in-state institutions, with strings attached -- or, as the man behind the Wisconsin proposal puts it, “tethers.”
“If we can’t lure them here, let’s tether them here,” said Mark O’Connell, executive director of the Wisconsin Counties Association, a lobbying organization, and a member of the Commission on Enhancing the Mission of the Wisconsin Colleges, a group created to advise the network of 13 two-year colleges in the state. The commission, appointed by the chancellor of the University of Wisconsin Colleges in August, submitted a report  late last month calling for an investment in new scholarships pegged to residency requirements post-graduation. “If we can’t lure people to our state, smart, young people, let’s give them education and then require them to stay here a certain number of years," O'Connell said.
For all of the talk of pushing students into the wider world to ensure they’re prepared for today’s international marketplace, a parallel challenge for state and local policymakers is to ultimately keep those same students close to home – to stem the brain drain to the country’s urban centers, mostly in the East and West, as the manufacturing jobs once supporting the heartland continue to bleed abroad. A new, purely merit-based proposal  from the Republican governor of Indiana, Mitch Daniels, would provide up to $20,000 for residents who pursue a four-year degree at private or public institutions in-state, and $5,000 for those obtaining two-year degrees, in the form of forgivable loans that would not have to be repaid if a student stays in Indiana to work for three years after graduating. The “Hoosier Hope Scholarships” would be funded by franchising the Hoosier Lottery to a private contractor. Under current estimates of upfront proceeds from the contract, about 1,700 scholarships, including several hundred designated for students seeking two-year degrees, would be awarded per year, said Jane Jankowski, spokeswoman for Governor Daniels. The proposal is expected to be debated by the Indiana General Assembly this spring.
In Wisconsin, the proposal is far less defined. Details haven’t been hammered out and the chancellor of the state’s two-year colleges, who received the report just before Christmas, has not yet had the opportunity to review the recommendations with the president of the UW System or the regents, a spokeswoman said. But O’Connell, whose committee recommended another task force be appointed to study the purposely vague “Wisconsin Accord” further, envisions a set of need-based scholarships with post-graduation residency and work requirements that would ultimately be self-funding through increased tax revenue.
Typically, scholarships tied to residency requirements are focused on specific professional areas where states face shortages, so government ends up paying for nursing or medical degrees for those who agree to work in remote areas, for example. More broad-based programs like those being proposed in the Midwest are uncommon, but not unheard of (Maryland in fact is phasing out a similar program this year due to a gubernatorial push to shift the focus to need-based aid, and in North Dakota, where a state legislator proposed providing free tuition  for students who stay in-state in December, a loan forgiveness program posed to voters in a 2002 ballot measure was soundly defeated).Yet, given the growing outcry about the increasing shift toward merit versus need-based aid, Indiana’s proposal at least may prove controversial. But, more to the point, some experts say, these sorts of strategies are unproven – and unlikely to work.
“I don’t think there’s any evidence to suggest that these policies have been effective,” said Bruce Vandal, director of the Postsecondary Education and Workforce Development Institute for the Education Commission of the States . The idea behind them, Vandal added -- that providing scholarships to keep students in-state will necessarily attract new businesses -- is unsound. A more promising strategy would be for states to match educational opportunities with workforce needs in more targeted areas, rather than address just one end of the pipeline, he said. “If there are no jobs for people to stay there, why would you want to require people to stay there? The idea, 'We’ve financially tied these people to the state, so you can come here and provide jobs for them. . .’ That really doesn’t stand the test of logic, in my opinion.”
“The best and the brightest in Indiana and Wisconsin -- the market for them is the world.”
But the presidents from all seven public colleges and universities in Indiana have signed on to Governor Daniels’ proposal, writing in a collective letter  to The Indianapolis Star that the plan will give “Indiana a leg up in the ‘Brain Game’ – that is, the international competition to attract the best minds and the best jobs to create a diverse and robust economy.” The initiative, they wrote, will increase the percentage of college-educated residents and, in turn, provide an incentive for businesses to locate there.
“We believe that the Hoosier Hope Scholarship will enable us to attract some of the finest, some of the brightest students in Indiana, and give them a chance to engage in projects that will stretch their creativity, help them become more entrepreneurial and, in the end, help grow our economy,” said Jo Ann Gora, president of Ball State University, where 88 percent of students are from Indiana and about 75 percent choose to stay in-state after graduating. Statewide, 55 percent of all college graduates stay in Indiana.
“The problem I have with this is that it’s going to affect the students who are likely to go to college anyway,” said Donald Heller, an associate professor and senior research associate for the Center for the Study of Higher Education  at Pennsylvania State University. “If they’re going to be giving this money to the top 1,700 students in the state, the money’s going to go disproportionately to upper-class students.”
“From a public policy, equity point of view, it would be hard to imagine a worse match,” added Don Hossler, a professor of educational leadership and policy studies at Indiana University Bloomington. “Plenty of research shows that low and moderate-income people are more likely to gamble, so you’ve got low and moderate-income people funding a program for higher-income and affluent students.”
“It’s funded by the people who are least likely to ever be able to take advantage of the program.”
Gora from Ball State pointed out that nothing would inhibit the Hoosier Hope scholarships from going to students with high need, and pointed to Indiana’s 21st Century Scholars Program , viewed as a national model for need-based aid, as one of the venues through which low-income in-state students can receive scholarships. “I understand the need to provide need-based scholarships, but there are many programs to do that,” Gora said. “I think it is students who have excelled in high school who have the potential to excel in college. I think recognizing that excellence is important.”
Plus, Gerald Lamkin, president of Ivy Tech Community College of Indiana, said the scholarships will not only help keep students who attend the four-year institutions in-state, but also provide an incentive and relief for two-year students, who are much more inclined to stay in-state to begin with.
“Many of my students are the heads of their households. The idea that they could get their loans forgiven if they stay in Indiana, which they will – this could be a real attractive thing to get more Hoosiers involved,” Lamkin said.
In Wisconsin, where the proposal is very much in the preliminary stages, O’Connell said he hopes any movement forward will not only keep students in-state who would complete their degrees anyway, but also provide the means to students who otherwise couldn’t. “Some of the criticism has been, here in our state we only lose 20 to 25 percent of our graduates, so it’s really not worth it. I think we’re overlooking significant numbers,” O’Connell said, pointing out that 25 percent of people who begin college in Wisconsin don’t complete it, often for financial reasons. “There’s going to be a good number of people who are going to say, ‘I really don’t care if it’s free or not, I’m going to pay for my education because I don’t want an obligation to live in Wisconsin.' But for people who can’t afford an education, I want us to provide this opportunity.”
O’Connell has suggested borrowing money to finance the early years of the proposed scholarship, with the idea being that eventually increased tax revenue from a more highly educated and paid workforce will fund the program – and perhaps even result in surpluses that can be invested to increase the attractiveness of communities and lure young professionals to stay in-state even without a tether.
But the fundamental question of desirable jobs – or lack thereof – will be the sticking point for many students, said Tim Vlietstra, legislative affairs chair for the Associated Students of Madison, the student government organization at UW Madison. “I just don’t really see the jobs in Wisconsin,” said Vlietstra, a sophomore information systems major. “And I love Wisconsin, my family’s from Wisconsin.”
He added: “The people I know that pay the most taxes think that this is completely insane. They feel that the people who are the best and the brightest are going to move anyway." However, Vlietstra said, many liberal arts students seem more favorable about the proposal than his peers in the sciences and engineering.
But John Torinus Jr., chair of the commission on Wisconsin colleges and chief executive officer of Serigraph, Inc., a manufacturing company, said the response from students and teachers at “listening sessions” held throughout the state has been largely positive. “This is only a broad concept at this time,” he said. “But I hope it gets legs, I hope it gets traction and we go forward with this.”