– May 18, 2017
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New York recently announced the Excelsior Scholarship, a program that will make tuition to New York public colleges free for New York residents. We have many reasons to doubt the efficiency of this plan, as argued for example by David Brooks in the New York Times, but regardless of its efficiency, it calls to mind a landmark private initiative to send students to college: the Kalamazoo Promise.

The Kalamazoo Promise is a program, funded by anonymous donors, to pay in-state tuition to any Michigan state colleges or universities for Kalamazoo Public Schools graduates. The program pays anywhere from 65 percent of tuition for students that attended four years of high school in Kalamazoo to 100 percent for those who continuously attended Kalamazoo public schools from kindergarten.

Educational outcomes since the program’s unveiling in 2005 have shown both the benefits and limitations of providing free tuition. Kalamazoo residents of all racial groups and incomes are more likely to enroll in four-year or two-year colleges than their statewide counterparts. For example, disadvantaged Kalamazoo students are 10 percentage points more likely to enroll in a four-year college and 13 percentage points more likely to enroll in community college than disadvantaged students in Michigan as a whole. However, graduation gains are smaller.

The Upjohn Institute has found the program passes a cost-benefit test. It estimates an internal rate of return of 11 percent, setting future income gains from educational attainment against scholarship costs. When breaking results down by subgroup, the institute finds especially large effects for non-white and female students.

This leads to one of two major caveats in applying lessons from the Kalamazoo Promise to much-larger programs such as the Excelsior Scholarship. Returns differ for different subgroups, and it matters whom the program affects most. If the New York State program systematically favors white students and crowds out poorer minority students, as Brooks suggests it could, the return may be lower from a broad perspective. The other caveat is that the Kalamazoo Promise, targeted locally, can affect the culture of the area more than a statewide government program. The program reversed a decline in Kalamazoo public school enrollment, and other college-prep programs have grown up in the wake of the Promise. One economist who has studied the program noted real estate signs in the Kalamazoo area advertise “Promise-Eligible Houses,” meaning that children of families who move there will one day be eligible for the scholarship. It will be difficult or impossible to replicate this atmosphere of college prep across an entire state. Regardless, in implementing the New York plan, it would be wise for government officials to take note of how private programs like the Kalamazoo Promise have and have not succeeded in improving the lives of high school students.

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Patrick Coate, PhD

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