Spending More or Spending Less? Institutional Expenditures and Staffing in the Free-College Era

Abstract

While research has documented outcomes for students served by promise programs, few studies have considered the behavior of institutions themselves in the promise era. A new source of revenue combined with larger and more diverse cohorts is likely to motivate changes in spending and staffing—decisions instrumental to student access and success. We employ complementary difference-in-differences and synthetic control strategies to estimate impacts of the first statewide promise program on these two outcomes. Findings suggest institutions diverted expenditures away from instruction, academic support, and institutional support toward greater institutional grant awards. We find no meaningful impact on staffing levels. While some institutional actions may further support the access and success goals of promise programs, the diversity of programs across the nation suggests not all may follow suit. This study should inform policy makers considering the full extent of outcomes of free-college programs and invigorate further research on institutional responses.