Why ‘free college’ programs don’t always deliver on promise

Pete Kadens, who made the bulk of his fortune as CEO of a billion-dollar cannabis operation, may be chasing a pipe dream

Millionaire philanthropist Pete Kadens is trying to do what President Biden hasn’t been able to get done.

Kadens has created two college-scholarship programs — Hope Toledo, in his Ohio hometown, and Hope Chicago, which he co-founded with investment-management executive Ted Koenig and launched in September in the city where he ran several businesses. The goal: provide debt-free college to public-school graduates. If that weren’t ambitious enough, he also wants to pay tuition for any parent or guardian of a scholarship student who also decides to pursue higher education.

Kadens, who retired in 2018 at age 40 to focus on philanthropy, passionately believes education can help lift entire communities out of poverty. He choked up when announcing scholarships last month in Chicago.

“No one walks out of this room the same today,” he said at Benito Juarez Community Academy. “We will walk out of here with a changed perspective on generosity, on humanity, on equality, and the fact that if we all put our minds together as a city and as a community, that we can and will do better.”

Kadens, who made the bulk of his fortune as CEO of a billion-dollar cannabis operation, may be chasing a pipe dream. He needs to secure $1 billion in Chicago alone for 10 years of scholarships. Fundraising has been robust, he says, but he’s also netted responses from those who politely hint that he’s perhaps smoking too much of his old company’s product.

Such is the conundrum facing college-promise programs popping up nationwide. Theirs is an appealingly simple idea: If you knock down financial barriers to college, more students will go — a goal made more urgent as the pandemic has depressed college-going rates. Biden and progressives like Bernie Sanders packaged the same idea in the president’s now-shelved Build Back Better plan.

Many philanthropists and promise backers dream of more than just sending kids to college. To them, such college aid can be an elixir for economic and workforce development, poverty, and a community’s well-being. The track record of promise scholarships, however, suggests that it takes sizable sums to deliver such benefits. And local philanthropy often can’t, or won’t, put up the dollars.

“Even on our best day, we are a very large Band-Aid,” says Saleem Ghubril, executive director of the Pittsburgh Promise. “We are not a solution.”

In the past five years, the number of promise programs has grown from 50 to nearly 350, according to College Promise, an advocacy group. Local donors — families, companies, universities and community colleges, and others — often drive and fund programs. “You’d be hard-pressed to find a promise program that is not based in or connected in some way to an area’s philanthropic sector,” says Michelle Miller-Adams, a Grand Valley State University scholar.

Promise programs come with great expectations, thanks to the success of the Kalamazoo Promise in Michigan. In 2005, anonymous donors pledged to pay up to 100% of tuition and fees at Michigan state colleges and universities for graduates of the city’s public schools. Unlike traditional scholarships, theirs were based on geography, not on merit or need: It is a promise for essentially any Kalamazoo graduate.

The school district since has reversed a decades-long enrollment slump, and test scores and college-going rates have jumped. Businesses and residents point to the promise as an incentive for their move to the city.

Kalamazoo imitations sprang up quickly — in Denver; El Dorado, Arkansas; and Pittsburgh, among other places. But recent promise efforts look quite different. Rather than offer aid to a range of two- and four-year institutions, they provide scholarships to local community colleges — or sometimes just one. The strategy, they believe, will help provide workers to labor-starved area businesses.

City leaders of Columbus, Ohio, fast-tracked a program in discussion for two years when the pandemic both deepened labor shortages and hurt college-going rates. “Talent development is the new economic development,” says John Tannous, the effort’s project manager.

The Harvest Foundation in Martinsville, Virginia, announced the creation of a $10.3 million fund this fall that will pay tuition and costs at the local community college for high-school graduates in Martinsville and surrounding Henry County for the next 13 years.

Demand for workers is growing in the rural region, which is attracting new businesses after years of hard economic times. That demand, the foundation hopes, can be answered in part by increased numbers of students heading to college.

Some new promise efforts focus on adult learners in addition to high-schoolers. Hope Chicago and Hope Toledo pledge college aid to high-school seniors and one of their parents or guardians. “Poverty is a multigenerational issue,” Kadens says.

None of the new programs — and very few old ones — are as robust as Kalamazoo’s. “Cost constraints are a big issue,” says Miller-Adams of Grand Valley. “All of these are running on a shoestring.”

With limited dollars, programs cut corners from their ideal and wrestle with questions like: Should we make small scholarships available to all students or award bigger grants to a smaller number based on need or merit? Four-year scholarships are expensive — do we instead offer funding for two years? One year? Can we afford to pay for support services in college?

“Kalamazoo casts a large shadow,” says the Kresge Foundation’s Edward Smith. “Many city and program leaders would say, ‘We’d do that if we had those resources. But we’re not bankrolled by a few families with millions to give’” like the Kalamazoo Promise.

Kalamazoo’s donors promised to fund the program in perpetuity. Other organizations haven’t found it easy to raise money for the long run. “It’s often the case that programs at the city level start with seed funding from philanthropy, then fade out or foreclose” or change eligibility criteria as funding tightens, Smith says.

Pittsburgh offers perhaps the best example of how the vicissitudes of philanthropy’s backing can influence impact. Launched with the high-school class of 2008, the city’s promise program has provided scholarships to more than 10,000 students, along with wraparound services. The appeal of that aid has contributed to growth in the city’s population after decades of decline, says Max King, a former foundation chief who helped start the Pittsburgh Promise.

“It’s been wonderfully successful,” he says of the program.

Still, fundraising hasn’t been easy. The program has the money to run through 2028, but beyond that is uncertain. “We’ve heard loudly and clearly from funders that it’s time to wrap things up,” executive director Ghubril says.

That’s perhaps to be expected. Philanthropy is known for its short attention span. “Some bright, shiny object comes along and everybody says, ‘Oh, let’s go after that,’” King says.

Pittsburgh also hasn’t recorded Kalamazoo-like eye-popping numbers that would wow donors. The city’s college-going rate has climbed four percentage points, to 54% — a notable improvement when such numbers have slumped nationally, but not a stunning change. Enrollment in the city’s public schools, meanwhile, has dropped by roughly a quarter, to about 20,000 students.

Were the millions put toward scholarships worth it? King says early discussion of the Pittsburgh Promise considered a host of possible benefits for the city. “And I remember saying, ‘Even if we don’t achieve all that, we still will have sent thousands of capable young people to college.’”

Ultimately, if states or the federal government decide to fund tuition-free college programs, King says, “the promise concept will have played a brilliant bridging role to a new future.”

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This article was provided to The Associated Press by the Chronicle of Philanthropy. Drew Lindsay is a senior writer at the Chronicle. Email: drew.lindsay@philanthropy.com. The AP and the Chronicle receive support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP and the Chronicle are solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.