Texas $1.8 million

Montana $1.77 million

Arizona $1.5 million

Tennessee $1.2 million

Maryland $1 million

Ohio $950,000

Indiana $830,948

Source: Lumina Foundation

Tennessee has been named one of seven states to win grant money from the Lumina Foundation to be used toward improving poor college graduation rates.

State higher education officials said the $1.2 million grant specifically will go to creating programs to re-enroll and graduate adult students who left college without degrees but with a sizable number of credits.

The funds also will be used to revise the state's funding model for higher education, officials said.

"Increasing the number of students that complete their degrees is a primary focus in Tennessee, and being selected to participate in this effort is a significant milestone toward that goal," said Gov. Phil Bredesen.

"Tennessee's long-term economic viability relies on increasing our rate of degree completion," he said. "The multiyear funding associated with this project will help our state become more efficient in that process, which is especially important as we seek innovative ways to fund higher education."

The Lumina Foundation funding will be doled out over a four-year period. Tennessee was selected to receive a grant because state officials showed they were working to tie public funding to increasing the overall number of college graduates, identify cost savings and educate students in innovative and affordable ways, the report shows.

The grants are intended to increase the country's overall college degree completion rate to 60 percent by 2025.

Twenty-eight other states were in the running for the Making Opportunity Affordable grants, which will total more than $9 million, according to the Lumina Foundation for Education, which announced the grants Monday.

In addition to Tennessee, Arizona, Indiana, Maryland, Montana, Ohio and Texas will receive Lumina Foundation funds, officials said.

The grants are intended to encourage states to implement new policies that embrace low-cost instruction and alter public funding to reward increases in the numbers of college graduates, according to the Lumina Foundation report.

"These awards build on progress the states have made over the last year: Evaluation of policies and institutional performance in Tennessee, accompanied by two state-wide listening tours," the report read.

David Wright, associate executive director of policy, planning and research at the Tennessee Higher Education Commission, said officials already are working on a funding formula for higher education that would reward schools for the number of students they graduate.

The current model ties funding more closely to enrollment, Mr. Wright said. Those plans for increased degree production will be featured prominently in THEC's new master plan to be released in January, he said.

"In one sense we have passed the test by receiving some grant funds, but the real test will be if we can begin producing more graduates annually to move Tennessee up in the national rankings in education attainment," said Mr. Wright. "Productivity is the new public agenda for higher education in Tennessee."