Higher education experts and states around the nation will have their eyes on Tennessee as the Volunteer State embarks on an ambitious plan to provide free community college to all high school graduates.
Tennessee lawmakers gave final approval late Tuesday to one of Republican Gov. Bill Haslam's most high-profile initiatives.
"Governors across the country will be watching to see how the Tennessee plan plays out as they all try to figure out how to best tap into the talents of an increasingly diverse student population," said Richard Kahlenberg, a senior fellow at The Century Foundation, a nonpartisan think tank.
Haslam is expected to sign the measure into law. When he does, the state will use proceeds from its lottery to fund a $300 million endowment to help pay for the program, which would begin in the fall of 2015.
The aim is to boost college graduation rates and build a more educated and skilled workforce. It's an issue facing states from coast to coast.
Haslam is championing a "Drive to 55" initiative aimed at increasing the number of college graduates in the state from 32 percent to 55 percent by 2025. Nationally, 41 percent of adults 25 and older have an associate's degree or higher.
"This makes a clear statement to Tennessee families that education beyond high school is a priority in our state," said Haslam spokeswoman Alexia Poe. "It is a bold promise that will make college a reality for more high school graduates."
But the plan is not without its critics. Tennessee uses lottery proceeds to fund a Hope Scholarship, and the governor's plan calls for reducing the amount provided to freshmen and sophomores at state universities to $3,500, a $500 cut. The plan also shifts money from the lottery's reserves to the new endowment.
U.S. Rep. Steve Cohen, D-Tenn., who helped create the lottery when he was a state lawmaker, has been one of the plan's biggest critics. Cohen has said the plan spreads resources too thin and creates a program with no achievement incentive or standards.
Some four-year institutions worry the plan will make it more difficult for them to maintain socioeconomic diversity in their student body.
Thomas Bailey, director and founder of the Community College Research Center at Teachers College, Columbia University in New York, said other states will be watching Tennessee. The state is making a big political statement that two-year college is free, he said.
Generally, research has found that a $1,000 reduction in tuition increases enrollment between 2 percent and 3 percent, he said.
But the practical effects of the plan remain to be seen. For one, community college already is relatively cheap and for some students it is free when federal aid is taken into account, Bailey said.
What will be important for Tennessee is the follow-through, he said. The state must put just as much emphasis on the services – counseling and help transferring to a four-year school – for students once they are enrolled, Bailey said.
Kahlenberg, an expert on inequality in higher education, said Tennessee's plan makes sense.
"In today's economy, we need a more highly educated workforce, and 'free' is something people understand," he said. "It's important to provide a welcome mat for students of all economic backgrounds."
Kahlenberg said some object that the plan subsidizes upper-middle-class students, but attracting them to community colleges could strengthen those two-year institutions.
"Higher education is seeing increasing segregation by race and class – with low-income and working-class and minority students attending community colleges and better-off and white students attending four-year institutions," he said.
"That rising economic and racial segregation reduces the political capital of community colleges, which are increasingly underfunded. Helping integrate two-year institutions will help all students attending."