Removing Barriers to Higher Education: The Economic Benefit of Tuition Opportunity in Tennessee

In 2014, Tennessee Governor Bill Haslam launched the “Drive to 55,” an ambitious initiative designed to promote economic development and reduce unemployment by equipping fifty-five percent of state residents with a college degree or certificate by 2025. Tennessee stands to benefit from adding thousands of potential college graduates to this equation—specifically, undocumented students who have grown up in Tennessee and graduated from the state’s high schools. These students are ineligible to pay the in-state tuition rate at Tennessee’s public college and universities, putting the cost of completing higher education out of reach for many of them.

Recognizing the financial barrier out-of-state tuition imposes on undocumented students, more than 20 other states – including Kentucky, Virginia, Florida, Oklahoma, Kansas and Nebraska – allow these individuals to pay in-state tuition.

This report uses data from the American Community Survey and The Chronicle of Higher Education to examine the positive impact of Tennessee passing Tuition Opportunity legislation.

Removing Barriers to Higher Education: The Economic Benefit of Tuition Opportunity in Tennessee finds:

Nearly 3,000 additional Tennessee students could enroll in college under an in-state tuition policy.

  • Based on the college enrollment rates of students from similar demographic and socioeconomic backgrounds, an estimated additional 2,844 undocumented youth in the state would be able to enroll in college under a policy allowing undocumented students to pay in-state tuition rates.

Obtaining a college degree by paying in-state tuition would boost the earnings of Tennessee’s undocumented students by nearly $14 million annually.

  • If an in-state tuition policy covering undocumented students became law in Tennessee, at least 1,362 of the new students who enroll would go on to graduate school within six years. Collectively, that group would earn $13.78 million in additional income annually following graduation.

Additional wages earned by undocumented students who graduate college would elevate their spending power by more than $10 million annually.

  • After graduation, these students would hold a collective spending power of $10.57 million that could be put back into the state and local economy through consumer spending.

An in-state tuition policy could increase state and federal tax revenues by $3.2 million each year.

  • Although Tennessee does not have an income tax, the higher wages of new graduates would allow them to spend more as consumers, benefitting the state through sales and property tax revenues. Within six years of graduating, the 1,362 students who could benefit from the policy would be paying as much as $3.2 million in additional annual federal and state taxes.

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