Promise Programs and the Allocation of Institutional Expenditures at Community Colleges

Objective/Research Question: Many localities have implemented promise programs, which cover tuition for students to attend college based on residency criteria. These "free college" programs have been shown to increase student enrollment, creating the need for additional institutional resources to support student graduation. We analyzed the impact of 30 promise programs, each targeting a single community college, on institutional expenditures. Methods: Using data from 2001 to 2002 to 2015 to 2016, we incorporated generalized difference-in-differences estimation strategies and panel event-studies. Results: We find that the full sample of community colleges did not change their total spending per student nor their spending in the categories of instruction, student services, academic support, or institutional support. For privately funded programs, which receive revenues from donors, businesses, and philanthropic foundations, the affected colleges increased their institutional support per student. In contrast, publicly funded programs, which receive revenues from the college itself, the college foundation, or repurposed local appropriations, experienced increases in student services. Colleges with a combination of funding sources (mixed) observed no changes to spending in any category. Conclusions/Contributions: This study generates knowledge about expenditures within colleges, starting the conversation about adequacy of financial support, and investigates a first-level effect of programs on institutional expenditures to uncover the missing link between promise programs and enrollment outcomes.