Kalamazoo Promise scholarship program ‘significantly’ increases college grad rates, study finds

KALAMAZOO, MI — The Kalamazoo Promise free college scholarship program "significantly" increases college graduation rates and offers a substantial return on the dollars spent, according to the first major study of what happens to “Promise” students after high school.

The biggest finding: Promise-eligible students are a third more likely to graduate college within six years of finishing high school compared with their pre-Promise peers.

The researchers also estimate The Promise yields an estimated $4.60 in benefits for every $1 invested. That means the $66 million spent so far on the program is worth more than $300 million, based on the projected increase in wages over 30 years for students who wouldn't have graduated college otherwise.

The paper, "Effects of the Kalamazoo Promise Scholarship on College Enrollment, Persistence and Completion," was released today by the W.E. Upjohn Institute for Employment Research. It was co-authored by Tim Bartik, Brad Hershbein and Marta Lachowska.

"The question with The Promise has always been: Does it have a large effect? The answer is yes," Bartik said. "I was actually surprised to see how big of an effect it had, and that it was so clear-cut.

"A lot of times you get data that's muddy," he said. "This was pretty clean."

The Promise is a universal college scholarship program for graduates of Kalamazoo Public Schools. The program is funded by anonymous donors and is marking its 10th anniversary this year.

In analyzing the outcomes to data, Hershbein said he was most surprised to see the improvement in college completion rates were just as strong for low-income and minority students as for white and middle-income students.

"Going into the project, I thought there was a distinct possibility the effects would be concentrated among relatively well-to-do students who would attend better colleges and/or accumulate less debt (which we can't measure), with a perhaps modest boost to their completion rates," Hershbein said in an email. "I did not necessarily expect that completion effects would be at least as strong among poorer students or ethnic minorities."

The findings are "incredible," said Janice Brown, the former Kalamazoo Public Schools superintendent who worked with the donors to create The Promise a decade ago.

"This is the first study that has true meaning for the community, that is answering many of the questions that people have been asking," she said. "The results are pretty powerful. It shows The Promise pays off more than any capital improvement project."

The study was funded by the Upjohn Institute with support from the William T. Grant and Lumina foundations.

The findings

Unveiled in November 2005 when Brown was superintendent and Bartik was KPS board president, The Promise started with the Class of 2006 and pays the college tuition of any Kalamazoo Public Schools graduate who lives in the district and started in the district by ninth grade.

It covers all Michigan public colleges, and was just expanded to include 15 private colleges in Michigan. Students have up to 10 years after they graduate high school to use the scholarship.

So far, the program has paid $66 million in college costs for about 3,800 students.

To measure the impact of The Promise, researchers analyzed the changes over time in college enrollment, number of credits taken and post-secondary program completed for both students who qualified for The Promise and those who did not.

They found The Promise had an impact on all three areas. Compared to similar students before the Promise was created, the Promise-eligible students were:

  • 14 percent more likely to start college the fall after high school graduation and a third more likely to enroll at a four-year university.
  • 40 percent more likely to attend a Michigan public university or college versus an out-of-state school or private college in Michigan.
  • Taking more college classes. By the fourth year after high school graduation, the average Promise-eligible student had enrolled in the equivalent of two or three more classes compared with what would be expected by looking at similar students before the Promise was created, and compared to their non-eligible peers.
  • A third more likely to earn any post-secondary credential. Before The Promise, about 36 percent of comparable KPS graduates earned a college degree or other postsecondary credential within six years of graduating high school. Among Promise-eligible students, that increased to 48 percent, boosting the number of postsecondary graduates by a third.
  • A third more likely to earn a bachelor's degree. Before The Promise, 30 percent of comparable Kalamazoo graduates earned a bachelor's degree within six years of their high school graduation. That increased to 40 percent of Promise-eligible students.

The study also found the impact of The Promise seemed greater for women and minorities, although many of the differences among sub-groups were not statistically significant due to smaller sample sizes.

About 62 percent of KPS students are non-white and about 70 percent qualify for the subsidized lunch program because of family income.

Conducting the study

This study is the first analysis to compare college graduation rates for KPS students before and after The Promise, said Robert Jorth, executive director of The Promise.

"We didn't know for sure what was going on before The Promise," Jorth said. "We thought things were improving, but we didn't have any idea in terms of the scale.

"To hear the numbers, it's staggering ‒ in a good way."

To create the comparison, Bartik said researchers first had to wait for enough Promise-eligible students to get through the six-year window after high school graduation to collect their college graduation rates.

The researchers also had to create a database of pre-Promise students, no easy task since college graduation rates by high school are not readily available. Upjohn researchers did it by obtaining KPS graduation lists and running the names through the National Student Clearinghouse, which matches student identifiers against college records from around the country.

The study's Promise graduation rates are based on the Classes of 2006, 2007 and 2008. Based on those findings, Bartik and Hershbein say they can make some projections about the 4,400 Promise-eligible students who graduated from KPS between 2006 and 2014.

It is reasonable to assume that about 1,308 would have obtained bachelor's degrees within six years of high school graduation and another 268 would have earned an associate's degree or other post-secondary certification regardless of whether The Promise existed, Bartik and Hershbein say.
As a result of The Promise, they estimate an additional 427 students will get a bachelor's degree and another 114 students will get an associate's or other post-secondary certificate.

That's an additional 541 people now likely to earn significantly higher wages than they would have with only a high school diploma.

There are also societal benefits, Bartik said. College graduates generally pay more taxes, have high employment rates, are less likely to use social service programs, more likely to marry and less likely to divorce, more likely to volunteer and be engaged in civic activities.

The children of college graduates also benefit. Parents of college graduates do better in school and are more likely to grow up in a stable home, which means less stress and fewer behavior issues.

In addition, greater skills help make a local economy more attractive for business investment and job creation, according to the researchers.

Just looking at the projected increase in lifetime earnings for Promise-eligible students makes The Promise a profitable investment, the researchers say.

"If you were an investor in The Promise and you could somehow collect the extra earnings generated by KPS graduates as a result of the fact more students graduated college," that return is estimated at 11.3 percent a year, compounded annually, Bartik said.

"That's huge. Better than the stock market," he said.

"That's not even counting a lot of the benefits of The Promise," such as the $66 million in tuition costs saved by KPS parents and students, Bartik said.

Bartik and his co-authors also stress they feel their numbers are conservative. It is likely, for instance, that post-secondary success rates also have improved for KPS students who don't qualify for The Promise.

"When all your peers are going to college, that has to have an effect," Jorth said.

Bartik and Jorth also say it is likely college graduation rates for Promise students will continue to improve as KPS better prepares students for college-level work.

In fact, Jorth said the grade-point average for Promise students at Kalamazoo Valley Community College has trended up in recent years, a heartening sign.

Why aren't the numbers higher?

While Bartik said The Promise has had "very, very large effects," he acknowledged some may be surprised the impact isn't bigger.

But he said the numbers compare very favorably to other efforts to improve academic outcomes.
"When you're trying to change behavior, it's very hard," Bartik said. "A lot of things don't work."

Some may also question the expenditure of $66 million on tuition when researchers acknowledge that a third of Promise-eligible students would have completed a post-secondary program regardless and another 52 percent of students fail to earn a degree or certificate.

Why not concentrate resources on the 12 percent who directly benefit?

"I doubt whether it would be possible to easily predict whose behavior will and won't be affected by The Promise," Bartik said. "There would be lots of errors of misclassifying people."

The Promise's success appears linked to the fact it is simple, generous and universal, Bartik said.

"In order to change people's behavior, you have to make an offer they understand," Bartik said. "The Promise has a very simple message: Your college is paid for, and it's up to you to decide whether to take advantage of it."

A more targeted program, Bartik said, would be "at the very least, a totally different program, and probably a less effective program."

"A simple message of 'you all can go to college' becomes a message 'we think a few of you need an extra financial boost to go to college, and we are going to have you jump through multiple hoops to see who needs that boost,'" he added.

From a larger public policy standpoint, Hershbein said the study is noteworthy because previous research on college scholarship programs "overwhelmingly suggest that more money gets more people to attend college, but there's far less certainty when it comes to actually finishing."

"Things would seem to be even less certain for universal scholarships, where there's no merit requirement," he said. "There's very little, if any, prior research in the past few decades on the effects of scholarship money to all students, not just those above some academic threshold."
The Upjohn study shows a universal program can indeed increase graduation rates.

No question, some KPS students would have graduated college regardless, although The Promise may impact their choice of school, he said.

"But a good chunk of students upgrade" from community college to four-year schools, "and that may be enough for them to finish their degree," Hershbein said. "Even those who don't finish may benefit" from taking some college classes and boosting their skills.

Bartik said the study counters the argument posed by those who say that student ability and motivation, not money, is the real barrier to boosting college graduation rates.

The Promise numbers show "money alone makes a big difference," he said.

"Has every kid who is eligible (for The Promise) succeeded? No," Bartik said. "It doesn't solve all our problems. ... But for some kids, it's made their future a whole lot brighter."

Julie Mack is a reporter for MLive.com. Email her at jmack1@mlive.com, call her at 269-350-0277 or follow her on Twitter @kzjuliemack.

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Thu, 06/25/2015 - 9:42am
Real compelling evidence that the Promise-type programs can move the needle on all important outcome for Michigan, increasing postsecondary attainment rates. Congrats to Janice and all who built this-- now we need to do more of the same for more Michiganders.
John S Porter
Thu, 06/25/2015 - 9:56am
This is a very good program and the study seems to have credibility. This kind of program could have good economic impact on the whole state, if it were adopted Statewide. Even a small scholarship would influence people to stay in the State to go to college. If you go to college in the state, you might stay here for your career. If you are eligible to get some cash from the state, you might go to college just to get some of your money back :) Now that the auto industry has receded in significance, education is one of our most successful industries. Since the state funds the colleges, money given to students by the state will simply be paid back to the colleges. That money won't be "lost".
John Chamberlin
Thu, 06/25/2015 - 9:59am
The Brookings Brief today has a different, and less optimistic, take on the Kalamazoo Promise. Written by Timothy Ready Director of the Walker Institute for the Study of Race and Ethnic Relations, Western Michigan University. You can find it at:http://www.brookings.edu/blogs/social-mobility-memos/posts/2015/06/24-ka.... The tagline on the conclusion: "Free college: Necessary but not sufficient for opportunity." I haven't read the fine print in either study yet, but it's interesting that two studies originating in Kalamazoo seem to have divergent bottom lines.
Richard Scott
Thu, 06/25/2015 - 10:34am
thebrookings is a good read, Itried to share on Facebookbut could not this morning. For success with post high school education more work in earlyyears is essential. Ironically the American Enterprise Institute, once a bastion of conservatism, posted a long paper on the need for all candidates to discuss what is important for the country in education. Seems pre school and first three years are essential for long term learning.
John Wierenga
Thu, 06/25/2015 - 12:57pm
Thanks to John Chamberlin for referencing the WMU study by Timothy Ready. However i hope those without the time to read thru all this info are not confused by the comment that Upjohn and WMU have come to "divergent bottom lines". The article by Timothy Ready could also be captioned "Free College Tuition Unable to Eliminate Poverty in Kalamazoo in Less Than 10 years". Did anyone think it would?
Thu, 06/25/2015 - 1:03pm
It should be pointed out that the Bartik/Hershbein/Lackowska study, & the Tim Ready study, are quite different in methodology and purposes. The study summarized in this article by Julie Mack, the BHL study, is an attempt to estimate the "true causal effects" of the Promise program on students, by comparing changes over time in outcomes for eligible versus ineligible students, before and after the Promise, using individual student data on outcomes. The Tim Ready study simply describes some aggregate data on current problems in Kalamazoo and KPS that indicate that there is poverty in Kalamazoo, and that not all graduates of KPS do well, and that there are disparities by race and income. If the point is that the Kalamazoo Promise does not solve all problems, who would deny that proposition? There is rarely any program that solves all problems. All that we find, based on our estimates, is that the Kalamazoo Promise has large effects on student success in the post-secondary world, compared to its costs. It has a high bang for the buck. For example, the one-third boost on college completion that is estimated implies that if we compare the expected future earnings increases, compared to the costs of the scholarships, we get over an 11% annual rate of return to the dollars invested in the Promise. Or to put it another way, the ratio of the increased present value of earnings to the Promise's costs is over 4 to 1. But does the Promise solve all problems for Promise eligible students? By no means. We estimate that the Promise increases the percentage of KPS graduates who receive some post-secondary credential from 36% for the comparable group before the Promise, to 48% for the eligible group after the Promise. But what about the other 52%? Some of them could have benefitted from more college attendance. Maybe they will in the future, but they haven't yet. The last 2 paragraphs of our paper summarizes our perspective: " Nonetheless, and despite these limitations, the Promise effects are large, and they speak to the potential of place-based scholarship programs to be a cost-effective way of increasing earnings. A back-of-the-envelope calculation drawing on our degree completion estimates (detailed in Appendix B) shows that the present value of increased career earnings exceeds the costs of Promise tuition subsidies at all real discount rates of up to 11.3 percent. At a real discount rate of 3 percent (5 percent), the implied Promise earnings effects have a present value that is 4.7 (3.0) times the present value of Promise subsidy costs. Since we believe the external validity of our results to be high, this conclusion could likely apply to other urban school districts considering setting up their own Promise-like scholarships—at least to the extent that they closely follow the Kalamazoo model in terms of universality and generosity. On the other hand, the Promise effects have the potential for solving only a portion of America’s skills challenge. The Promise increases postsecondary credential attainment at six years after high school graduation from 36 percent to 48 percent. Presumably some of the remaining 52 percent might benefit from receipt of a postsecondary educational credential. As one might expect, “free” college is insufficient by itself to ensure higher skill levels through postsecondary education. Other policies prior to age 18 are likely needed to improve outcomes for more students. However, simple and generous scholarship programs have the potential of being a cost-effective component of the policy toolbox to increase the educational attainment of American students. "
Fri, 06/26/2015 - 10:57am
Seems that much of your conclusion is based on a decades long study showing higher income for college graduates than non. While the study definitely showed this to be the case for that period of time, making this projection forward is questionable logic. For one thing bachelor's degrees have become much more common over this period to the point of being ubiquitous not to mention the preponderance of junk majors and degrees . In our business hiring decisions college degrees rarely even merit discussion as they rarely have much correlation with employee performance. The other troubling fact to the future value of a college degree is the fact that 40% - 50% are in occupations that don't require them. Projecting present values and discount rates based as you have - 11.3%, is extremely sketchy and similar to betting the farm on home prices based on a 30 year record.
Sun, 06/28/2015 - 2:16pm
Empirically, the most recent data suggests that the rate of return to college is staying the same or slightly increasing over time. Of course, this might change in the future, but there is no sign of this in the most recent data. It may be true that college graduates face challenges in the labor market, but those with only a high school degree face a labor market in which they can obtain very few high-wage opportunities. So the differential does not seem to be narrowing. And it that differential that is relevant to whether or not college has a payoff, not the absolute status of college graduates. See Pew Charitable Trusts for some recent evidence on this issue: http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-t...
Sun, 06/28/2015 - 2:18pm
Furthermore, even if the return to college is cut in half from current levels, the rate of return to the Kalamazoo Promise would still be high. If the differential is half of its current levels, each $ put into the Kalamazoo Promise would increase future earnings by $2.30, rather than the $4.60 we estimate.
John Nash
Thu, 06/25/2015 - 11:26am
Thanks for printing this very positive and encouraging report. Choices need to be made based on factual studies not just opinions. The Promise was a very brave and innovative step by Kalamazoo - we should cheer for them and encourage other areas to replicate their approach. Great use of local donated dollars by people who have sound future vision.
Thu, 06/25/2015 - 12:58pm
Is it really to anyone's surprise that colleges and U's will structure themselves to take advantage of any given pot of money like "The Promise"? U's have long been inventing new "majors" and dumbing down curriculum to capture student's dollars no matter how misdirected the student or bleak the job prospects from them may be. At this point of the game the evidence or verdict on the "Promise" is very premature unless your objective is to spend money and generate credentials.
Thu, 06/25/2015 - 2:32pm
For my class it was the Korean war and the GI that created the path that from grade school to graduation college was out of the question ,,,,,,,,,,,, as another blogger on a similar site commented ................ What this shows is that the motivation comes from the family structure and the home. It starts many years prior to worrying about college. I always knew I was going to get a degree some day. If you intrinsically know this at a very young age then you will. The desire to have it and advance must be there prior to the commitment. Obviously a lot of social factors play a part.
Thu, 06/25/2015 - 3:02pm
"The Promise numbers show “money alone makes a big difference,” Do we have enough information to be so sure that it is simply the money? Could there other things being influenced by the program and its high visibility? I haven't heard anything about the social influences on the student since the program was announced? Could there be a Hawthorne Effect? Could the students feel more important because the public emphasis on their education causing the students to put more effort into academics? Could people in the community be more directly supportive of the students because of the pride in the heightened Kalamazoo academic visibility? Could parents be more supportive because there is more visibility on the academic success of their children? Could there be more effort in academic success because of increased personal support? Could the attention have significant impact on the results? Before we fall into the politician’s 'trap' of claiming victory before anything is proven, we might want to have the sustainability of the results verified, that the post school impact is identified. Before we are forced into the government spending 'trap', spending started never ends regardless of results, it maybe important to have an indepth invesitagion of why and how it can be sustained. I am skeptic,e we have been hearing for generations that all it takes to make social change is money, other people's money, but I have yet to see any of the social problems solved with all that money [trillions].