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.
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.