Tennessee: Improving transfer pathways to increase degree completion

Success Factors

Tennessee has 6 out of 6.


There must be a vision for what a state wants to achieve, from governors or other key policy makers.


Leadership vision must be backed by a clear policy agenda, based on evidence, that is adopted and implemented.


As policy is being implemented, aligned supports – including funding – are provided to increase the chances for success.

Strategic Alignment

Intentional coordination is made across policy and funding to better connect work in Early childhood, K-12, Postsecondary, and Workforce.

Stakeholder Engagement

Efforts to improve student success are backed by stakeholders with a vested interest in improved outcomes (parents, students, the business community, advocates, philanthropies).

Sustained Commitment

Improving access to opportunity for all young people requires efforts to be sustained, often over many years and across political administrations.

Key takeaway

Tennessee can improve baccalaureate completion gaps by strengthening its postsecondary transfer pathways. The fall 2014 cohort of the Tennessee Board of Regents (TBR) community colleges had nearly 14,000 first-time, full-time students. Only about 4,900 of those students completed an associate or bachelor’s degree within six years. That means that about 9,100 members of that cohort, or 65%, did not graduate. Strengthening transfer pathways in Tennessee can help thousands of students complete their degrees.


Former Governor Haslam set a goal for 55% of working age adults to have a two or four year degree by 2025.  But postsecondary enrollment rates in Tennessee have been decreasing, exacerbated by the COVID-19 pandemic.  Fewer enrollees mean fewer graduates.

The state’s Ready Graduate initiative, which seeks to boost enrollment in higher education by setting milestones beyond a diploma for high school seniors, has created important momentum in Tennessee around increasing college and career readiness, as well as higher momentum by creating an incentive for four-year institutions to increase transfer student success. The state’s outcome-based funding (OBF) Formula allows for this kind of incentive.

Data Highlights

The George W. Bush Institute’s State Education and Workforce Pipeline Tool and other data point to strengths and opportunities in Tennessee:

  • Tennessee has a 91% high school graduation rate, compared with a national rate of 86%.
  • Educational attainment among 18- to 24-year-olds with a high school degree or higher is above the national average at 89%. However, total postsecondary headcount in the state dropped 9.7% in 2020 from 2010, according to the Tennessee Higher Education Commission.
  • 55.3% of enrolled community college students in Tennessee are Pell eligible, according to the commission.
  • Tennessee has a 36% postsecondary enrollment rate, compared with the national enrollment rate of 42%.
  • Tennessee has a 39% degree attainment rate, compared with the national average of 44%.

How it can happen

The most critical factor to changing the OBF Formula will be for Tennessee leadership to ensure that there is statewide buy-in on the change. This policy update must be approved by the legislature, and funding supports will likely need to be reallocated. For the new Formula to be effective in improving transfer outcomes for postsecondary students, a sustained commitment to funding will be critical. Improving the transfer pipeline in the state will require strategic alignment of all programmatic and policy efforts already underway in this area, including aligning the work to the best practices developed by Tennessee Promise. Stakeholder engagement will also be a critical component to successfully implement policy to increase baccalaureate degree completion.


The Tennessee Higher Education Commission (THEC) oversees the OBF Formula, including convening the Formula Review Committee, which serves as an annual status check on the strengths and weaknesses in the current Formula.  THEC also administers the funds to two-year and four-year institutions. Importantly, THEC also creates recommendations for structural changes to the Formula, which are reviewed and approved by the Committee every five years. The next opportunity to recommend changes is 2025.

Given its scope, the Commission plays an integral role in creating incentives in the OBF Formula for four-year institutions to increase transfer student success. Leaders of two- and four-year institutions need to understand and support proposed changes, as well as relevant elected officials and advocates.  The proposed changes must be shared before the education and finance committees in both the state House of Representatives and the state Senate for approval.


Tennessee should seek to strengthen the current OBF Formula through the committee process run by the THEC and its subsequent recommendations to the legislature.

The community college funding model already includes a metric for students that transfer out with 12 or more credit hours and enroll in a four-year institution. The current OBF provides an indirect incentive for four-year institutions to support transfer students.

Adding a specific metric in the OBF Formula for four-year institutions to enroll transfer students with 12 or more credits (via an additional weight that gives the institution more credit for the success of these students) would provide clear, direct, and transparent incentives for four-year institutions to support transfer students into seamless program pathways. This would also increase alignment and foster collaboration between the two-year and four-year sectors around transfer pathways as well.


Additional resources would be required to fully fund an updated formula, particularly as more institutions might embrace this opportunity. The state could also allocate more financial aid dollars specifically to transfer students – similar to Maryland’s 2+2 Transfer Scholarship, which provides funds “designed to assist and encourage transfer students from Maryland community colleges to attend a four-year institution within the state.”

Sustained Commitment

A one-time advocacy effort to change the OBF Formula won’t be sufficient to ensure the success of improving transfer pathways for students in Tennessee. A long-term commitment must be made by leaders, policymakers, and advocates from across the state to ensure that the Formula is adequately funded year after year and that data are collected and frequently analyzed to assess the performance of this new incentive.

Strategic Alignment

Tennessee has strong transfer and articulation policies – and the robust OBF Formula provides a strong foundation for this policy. The Drive to 55 Alliance outlines programs already in place and highlights key policy levers such as articulation and transfer provisions, finance policy alignment, constructing a culture of access and success, P-16 initiatives, and adult-learner initiatives. Recent activities, such as the Ready Graduate measure and studies on four-year university students taking summer classes at community colleges, seek to understand and improve student outcomes and retention, using policy or programmatic solutions to effect change.

Stakeholder Engagement

Stakeholders should begin backing changes to the OBF Formula. A coordinated advocacy strategy will be necessary to engage the many stakeholders. Model recommendations could be advanced by building consensus among THEC staff and institutions leaders, as well as the Formula Review Committee, which meets annually. Changes to the OBF Formula are recommended every five years, with the next opportunity for change in 2025. Consensus needs to be reached ahead of the committee’s official vote for the proposed changes in 2025 if it’s to pass successfully.

Why it matters

Given the recent momentum and appetite in Tennessee for policies and programming around improving student access and success in higher education, there is now a political window to take broader action to improve the transfer pipeline. This policy action would also help drive progress towards Tennessee’s statewide attainment goal at a time when students and families are most in need of acceleration. By targeting policies and financial aid dollars specifically to improve the transfer pipeline from 2-year to 4-year institutions, the state can be better positioned to increase degree attainment and to strengthen the workforce. 

Many states have opted to adjust their postsecondary formula funding models to be more responsive to the changing needs and demographics of their students in the hope of increasing attainment rates. Tennessee has long been a champion of student success formula funding models and is well positioned for success by incentivizing institutions to focus on transfer students.