Co-Principal Investigators: DesJardins, Stephen; Klafehn, Amanda

Partner Institutions: Tennessee Higher Education Commission (THEC), Tennessee Student Assistance Commission (TSAC), Tennessee Board of Regents (TBR)

Purpose: This project will assess the effectiveness of the Tennessee HOPE Scholarship in promoting Tennessee students' access to and progression through college, their completion of postsecondary degrees, and their subsequent employment outcomes. The HOPE Scholarship is a merit-based financial aid program administered by the Tennessee Student Assistance Corporation (TSAC) and assessed by the Tennessee Higher Education Commission (THEC). The project will explore how the HOPE program affects students' postsecondary outcomes and how those effects might differ across students by race/ethnicity, income status, geography, and age. Tennessee recognizes the importance of a postsecondary credential to meet the state's economic needs, and this project will aid in addressing gaps in access, completion, and labor market outcomes, thereby supporting state postsecondary education policy objectives.

The project will address these main research questions:

• Do the characteristics of students who are eligible for, take up, or lose HOPE scholarships differ from their peers who are ineligible for, do not take up, or do not lose the scholarships?
• Are there differences in postsecondary outcomes associated with the HOPE scholarships by race/ethnicity, income status, geography, or age (focal populations)?
• How does the loss of HOPE aid affect students' enrollment and subsequent postsecondary and employment outcomes? Do any observed effects differ among the focal populations?
• How do students experience the initial receipt of a HOPE scholarship and (for some students) the loss of the HOPE scholarship? How satisfied are students with the HOPE program? Do these experiences differ among the focal populations?
• To what extent do the proximal effects of the HOPE scholarship such as college choice and completion mediate the distal effects on earnings and employment status? Does any such mediation differ among the focal populations?
• Compared to their peers, do HOPE scholarship recipients and those who lose the scholarship differ in their postsecondary outcomes before and after the pandemic? If so, do pandemic effects vary for the state's focal populations?

Project Activities: The research team will address the above research questions using data collected about students that graduated from a Tennessee high school in years 2011 through 2022. The researchers will descriptively map the merit aid process from initial eligibility upon high school graduation through labor market participation while paying close attention to the focal populations. Next, they will employ quasi-experimental techniques to address the exploratory research questions and understand the longitudinal consequences of HOPE receipt and retention. Throughout the project, the entire project team (researchers and THEC staff) will consult and share findings with THEC and TSAC, the Tennessee Board of Regents (TBR), the Tennessee Department of Labor and Workforce Development (TDLWD), and other project partners.

Products: The project team will regularly update key THEC and TSAC personnel and policymakers through meetings, memos, briefs, and presentations. Upon completion of the research, the team will present a formal written policy report to THEC and TSAC that will be hosted on its website and provide resources and tools to THEC and TSAC staff members to better support students receiving financial aid. The project team will communicate its findings broadly by circulating briefs and reports to journalists and popular media outlets, presenting findings at academic and policy conferences, and submitting articles to peer-reviewed publications.

Structured Abstract

Setting: This project includes students in high schools and colleges across the state of Tennessee.

Sample: The project will use data from the Tennessee state longitudinal data system (SLDS) that links student unit record data from the Tennessee Department of Education with data from THEC, the Tennessee Department of Labor and Workforce Development, and the National Student Clearinghouse. The full sample will include records for all students who graduated from a public high school in Tennessee in 2011 through 2022 and will be used to explore the effects of HOPE receipt on enrollment, attainment, and labor market outcomes. When studying HOPE-eligibility loss, the sample will include all students who received the HOPE scholarship and enrolled at an eligible postsecondary institution. The qualitative arm of the project will include a small sample of students enrolled at the time the interviews are conducted (academic year 2024–2025).

Key Issue, Program, or Policy: To improve educational opportunity and economic outcomes for all Tennesseans, policymakers developed the Drive to 55 Initiative, whereby 55 percent of state residents will possess a postsecondary credential by 2025. To accomplish this goal, Tennessee has emphasized a robust student financial aid portfolio and currently awards the sixth largest amount of grant aid per student in the country, offering financial support based on both financial need and academic merit. Since 2019, the state has spent an average of $289 million yearly on its merit-based aid program (HOPE) to support nearly 75,000 students. Launched in 2004, HOPE awards financial aid to graduates of Tennessee high schools who enroll in a 2- or 4-year public or private postsecondary institution within 16 months of high school graduation. Tennessee's policy agenda is motivated by a connection between postsecondary education and labor market outcomes, as recent evidence indicates positive returns for college attendance as well as completion. While the Drive to 55 initiative is focused on improving educational opportunity and economic outcomes for all Tennesseans, four focal populations of students are at the center of the state's initiative: adult learners, low-income students, academically underprepared students, and African-American and Latino students. This project addresses gaps in knowledge regarding the effects of programs like the HOPE scholarship on the focal populations as well as all students.

Research Design and Methods: This is a mixed methods study, employing both quantitative and qualitative methods. The main quantitative approach used to address the research questions is grounded in the counterfactual framework and operationalized using a regression discontinuity design (RDD) to identify the effects of the program on students' college and labor-market outcomes. The RDD method will allow the researchers to make strong claims about the effects of the HOPE program on education outcomes such as persistence, credit accumulation, and completion, and labor market outcomes such as earnings and employment. To complement the quantitative analysis, the researchers will conduct interviews with HOPE-eligible students to gauge their experiences in navigating the scholarship process and whether and how the scholarship experience influences their postsecondary decisions and future career plans. The qualitative part of the project presupposes that state financial aid policies represent a complex policy environment, particularly for students from underserved backgrounds, and that this complexity will likely yield differential experiences with the program across student populations. Thus, the sampling strategy and interview protocol will be designed to ensure that the focal populations are sufficiently represented.

Control Condition: For the analysis used to assess the effects of receiving the HOPE scholarship, students below the ACT score threshold for receiving the scholarship will serve as the control group. To analyze the effects of losing the HOPE scholarship, students below the GPA threshold for maintaining aid eligibility will be the control group. The treatment and control groups are formed by policy design, exploiting a threshold or cutoff on an assignment variable. Specifically, for the margin of initial HOPE receipt, researchers will exploit the ACT threshold used to determine aid receipt, where students above the threshold receive aid while those below the threshold do not. For the margin of HOPE-eligibility loss, the researchers will again use an RD design based on measurement of GPA at credit accumulation milestones prespecified by policy, where students at or above the GPA threshold continue to receive aid whereas those below the threshold no longer receive aid.

Key Measures: For college access, the outcome measures will be indicator variables of whether an individual first attends an in-state 4-year university, out-of-state 4-year university, in-state 2-year university, or out-of-state 2-year university. For persistence, the outcomes examined will be credits completed, indicator variables of whether individuals complete at least a specific number of credits or are continuously enrolled for a certain number of semesters after starting postsecondary education. For degree completion, researchers will analyze both associate and bachelor's degree completion. Finally, the team will analyze the effect of HOPE eligibility on employment status and quarterly earnings for different lengths of time after high school graduation.

Data Analytic Strategy: To implement the RDD analysis, the team will exploit variation in HOPE eligibility and retention based on the administrative criteria used to award the scholarship (ACT score and postsecondary GPA, respectively). The researchers will employ regression models with interaction terms to determine if HOPE receipt and retention differentially affect the focal populations. They will also sub-divide the sample of HOPE recipients by type of postsecondary institution first attended (2-year and 4-year) to investigate the effects of eligibility loss on student persistence and completion. To analyze the qualitative data, researchers will apply a thematic analysis approach to the interview transcripts collected from conversations with students. The interview protocol will be grounded in existing literature on how financial aid can affect students, how state-based financial aid represents a complex policy environment, and how that complexity affects students. After conducting the interviews, the team will use multiple reviewers to analyze the interview transcripts to look for themes that align with or differ from current mechanisms highlighted in existing literature about students' experiences with financial aid.

State Decision Making: Working collaboratively with members of THEC and TSAC, the project team will develop a set of recommendations, tools, and policy suggestions to improve the implementation and design of the HOPE program. These recommendations will inform implementation of the current policy through communication with THEC and TSAC's statewide outreach team that works with high school counselors and college advisors to promote college enrollment and connect students to the state's financial aid programs. The recommendations will also inform policy development at the state level through THEC/TSAC's relationships with state postsecondary administrators and legislators.

Related IES Projects: SLDS Grants to Tennessee, Tennessee Department of Education Longitudinal Data System(R372A06127), Tennessee Department of Education: Setting Students Up for Success (R372A150015), Modernizing Data Systems from Early Childhood to Career in Tennessee (R372A200037)