Last-dollar funding: When it comes to a free college education for America’s students, having a guaranteed stream of revenue is as important for the funding of such programs as it is for the students who benefit from them.

“The message to community college presidents is last-dollar funding,” says Mike Krause, executive director of Tennessee Promise, the statewide program offering scholarships to cover tuition costs not covered by other grants or financial aid. “Trying to do any other financial aid right now gets into sustainability questions.”

For Krause, sustaining the Tennessee Promise program will be key to the larger goal of bringing the proportion of Tennesseans with higher-education degrees to 55 percent and closing the skills gap. Long-term funding is often a problem for colleges, and leaders spend much of their time building relationships with donors and legislators to ensure that funding continues.

But unlike many state community college funding programs, Tennessee Promise comes with a guaranteed revenue stream. That’s because Tennessee Promise is funded through the state’s lottery system, which mandates that earnings can only go to education programs. After existing programs’ needs are met, Tennessee Promise scholarships will be paid out of the fund’s $360 million reserve. With the state spending about $1,156 per student, that means Tennessee Promise could afford to cover the tuition costs of more than 300,000 Tennesseans next year alone — and that doesn’t include the number of tuitions that could be covered by interest on the $360 million reserve.

Right now, 300,000 students are not vying for Tennessee Promise funding this year. So far, 58,000 students have applied to the program, and 43,000 of those have completed Free Application for Federal Student Aid (FAFSA) forms, a key step in the process. That’s an 18 percent increase over the previous year, says Krause, who expects about 16,000 of the students who have started the Tennessee Promise process to begin community college in the fall.

The state with the next-highest rate of increase in FAFSA form completion is Delaware, another state that has offered a similar scholarship program at Delaware Technical Community College.

In Tennessee, the money comes from an irrevocable trust. “That means we’re able to focus on students, because we’re not constantly focused on fundraising,” Krause says.

According to Krause, it also means a culture change, both inside and outside of academia. First, it tells students that they shouldn’t let funding get in the way of their dreams. The funding allows the program to talk not just to 12th graders but also to fourth graders.

“What I think this funding has really done, more than anything, is open up a conversation,” he says. “Without this direct message, you can’t get the conversation started.”

Within colleges, it sends the message to faculty and staff that “our governor has got your back,” Krause says. “You can’t continue to ask them to bring in new students without some kind of funding. [Gov. Bill Haslam] is now offering the ultimate incentive.”

A model for free community college funding

So how do college leaders in states without the benefit of an irrevocable trust convince legislators to fund what could be a costly program?

Start small, says Krause. Tennessee Promise began in one city — Knoxville.

“Start with one high school,” he says. “Guarantee that every senior in that high school can go to the local community college. It depends on the size of the high school, of course, but I bet you the cost would be under $50,000. Then, let the results speak for themselves.”

But $50,000 is still a chunk of change in a cost-limited environment. That’s where those community relationships come in.

“If I were a college president and didn’t have this kind of program, I wouldn’t blink,” he says. “I’d go to community groups like chambers of commerce and say, ‘You guys beat me up on a regular basis about workforce readiness. Well, here’s your chance to invest and provide a last-dollar scholarship to students in this county.’ It’s very doable, and last-dollar scholarships are more affordable than people think.”