large_ok-loft-hero-bg.jpg

medium_ok-loft-hero-bg.jpg

small_ok-loft-hero-bg.jpg

thumbnail_ok-loft-hero-bg.jpg

ok-loft-hero-bg.jpg

category-articles.jpeg

Press Releases

Priority Project

2020-2021

### Executive Summary

_The return on investment for funding Oklahoma’s Promise scholarships is 9 years post- graduation._

Nearly 20 years ago, Oklahoma created a scholarship program with the goal of making college education accessible to more families. The construct was simple: students could sign up for the program as early as the eighth grade, and as long as they maintained acceptable grades and good behavior, the state would fulfill its promise of funding tuition at Oklahoma institutions of higher education.

Through this evaluation, the Legislative Office of Fiscal Transparency (LOFT) sought to determine the outcomes and cost benefit of Oklahoma’s Promise. LOFT examined how the tuition incentive contributes to the State’s workforce demands and economic output. LOFT also projected the future costs of funding Oklahoma’s Promise through FY30. This report is organized around five key findings:

#### Finding 1: Oklahoma’s Promise Recipients are Earning Critical Workforce Degrees and Remaining in Oklahoma.

Between 2011-20, Oklahoma’s Promise assisted Oklahoma students in earning over 39,000 post-secondary credentials; the majority (76%) aligned with the State’s critical workforce demands. Oklahoma’s Promise is supporting over 4,000 graduates per year with the vast majority (85%) employed in-state after graduation. The return on investment for funding the scholarships is 9 years after graduation.

![credentials.png](https://dy8iim215g2zo.cloudfront.net/credentials_e5fc1ae6f7.png)

#### Finding 2: Oklahoma’s Promise Exceeds the Legislative Intent to Provide Post-Secondary Opportunities for Oklahoma Students.

LOFT’s analysis confirms the primary recipients of Oklahoma’s Promise scholarships are students from race and ethnic minority populations, and students from rural communities. Female recipients have accounted for 65% percent of all post-secondary credentials awarded to scholarship recipients between 2011-2020 and rural students account for over 50% of scholarship recipients.

#### Finding 3: Trust Fund Reliance Allows Additional Savings and Appropriation Flexibility for the State Budget.

Oklahoma’s Promise has an established trust fund dedicated to the program. LOFT’s analysis found by limiting the Trust Fund balance to no more than ten percent of the last completed fiscal year’s allocation, it would reduce reliance on General Revenue. A ten percent reserve balance would provide the State Regents financial security and offer policymakers more flexibility in the state budgeting process.

#### Finding 4: Tuition and Fees and Income Inflation Is Driving Up Program Costs.

The average cost of tuition and fees has outpaced Oklahoma’s Promise scholarships, creating an affordability gap for Oklahoma’s Promise recipients. In 2020, the difference between the average Oklahoma’s Promise scholarship and average cost of tuition and fees was $2,524.

Income growth and inflation have impacted the eligible number of Oklahoma students able to meet the financial qualifications for Oklahoma’s Promise. The percentage of Oklahoma families with incomes under $50,000 has declined from 48 percent in 2010 to 36 percent in 2019. The median family income in Oklahoma has risen from $51,958 in 2010 to $68,358 in 2019, an increase of $16,400 or thirty-two percent. During the same period, the qualifying family income limit for Oklahoma’s Promise increased from $50,000 to $55,000 (10% increase).

#### Finding 5: Accessibility to Further Data Would Drive Better Evidence-Based Policy Decisions.

LOFT found that the State Regents collect a greater level of detail and data regarding Oklahoma’s Promise than peer state programs. However, opportunities exist to gather further data to formulate evidence-based policy decisions on the future of Oklahoma’s Promise. Since the program’s inception in 1996, more than $63.8 million in scholarships have been awarded through private institutions without any data reporting requirements for academic outcomes. Oklahoma also lacks information about Oklahoma’s Promise graduates who leave the state and recipients who withdraw from the program.

_LOFT estimates that Oklahoma’s Promise recipients will pay, on average, over $3,500 in general fees per year in FY2030 as opposed to $2,200 in general fees in FY2022. As fees are not covered under Oklahoma’s Promise, the increase will further create an affordability gap for recipients._

Executive Summary

Oklahoma's Promise Report

Report

Report & Resources

### Summary of Policy Considerations and Agency Recommendations

The Oklahoma State Legislature and State Regents may consider the following:

#### Policy Considerations:

- Establish a residency requirement for Oklahoma’s Promise graduates.
- Reduce reliance on General Revenue by limiting the Trust Fund balance to no more than 10 percent of the last completed fiscal year’s allocation. If the fund were to exceed the ten percent limit, the excess funds would be rolled back into the General Revenue Fund (GRF).
- Revaluate legislative peer benchmarks against which Oklahoma tuition is compared.
- Require regular review of the scholarship’s income limit and formula, with a focus on adjusting for inflation.
- Modify the qualifying income eligibility for recipients to include family size.
- Require the collection and sharing of data from private institutions participating in Oklahoma’s Promise, including student performance metrics and student enrollment data.

#### Agency Recommendations:

- The State Regents should collaborate with Oklahoma’s higher education institutions to determine the primary factors contributing to low graduation rates among Oklahoma’s Promise recipients.
- The State Regents should seek to develop cooperative agreements with the Oklahoma Employment Security Commission (OESC) and surrounding state workforce agencies to track Oklahoma’s Promise recipients in the workforce outside of Oklahoma.
- The State Regents should work to conduct research into both the retention and graduation barriers of Oklahoma’s Promise recipients to identify challenges that prohibit recipients from earning post-secondary credentials.

Recommendations

February 2021

Oklahoma's Promise Program

Evaluations In Progress

2022-2023

Report: #23-000-02
Identify and forecast critical jobs as well as related qualifications, assess gaps in preparedness, and identify strategies to improve career readiness.	

Workforce Readiness

Report: #23-090-02
Examine the historical budget of the agency for the past five years and present the percentage of operational funding sources, to include: revenue billed to State agencies for services, State appropriations, and one-time funds, such as federal relief funds.

OMES Budget Review

Rapid Response

Report: 23-922-01
Examine the operational framework for the Oklahoma Housing Finance Agency, including its governance and accountability, total programs administered by the agency, sources of revenue, and expenditure areas.

Oklahoma Housing Finance Agency

ok-loft-seal.png

Oklahoma's Promise Program

More Reports & Evaluations

Workforce Readiness

OMES Budget Review

Oklahoma Housing Finance Agency