From the issue dated May 23, 2003
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States Once Again Look to Lotteries for Scholarship DollarsBy MICHAEL ARNONEHoping to copy the success of Georgia's merit-based HOPE Scholarship, which is
In the late 1990s, more than a dozen states followed Georgia in establishing broad-based merit scholarships, with many paying for the programs with general state revenues. Once the economy slowed down, though, efforts in some states to start scholarship programs stalled as coffers ran low. Interest in the programs is starting to pick up again, but the states involved are now either hoping to rely on or already using lottery proceeds to cover those expenses. Last November, Tennessee voters approved amending the state Constitution to overturn a ban on a state lottery. The state Senate has already approved legislation to create a lottery and a college-scholarship program based on the game's revenues; the state House is currently working on its own version. A final agreement is expected to be hammered out by June. If successful, the first tickets would go on sale in January and the first scholarships would be awarded in the fall of 2004. The debate among lawmakers in Tennessee and elsewhere has focused on avoiding some of the problems and criticisms that have plagued the Georgia program. The state's HOPE Scholarship pays all tuition and fees at state colleges for any high-school graduate with at least a B average, and partial tuition at a private institution. Some college officials have criticized the HOPE Scholarship and many other merit programs because they do not take a family's income into account. One concern is that merit programs, which are extremely popular among middle-class voters, shift aid away from needy students. For instance, Georgia gives out the most financial aid of any state, some $44 per capita, when merit aid is considered. But when only need-based aid is included, Georgia gives out only 19 cents per capita. South Carolina Friction In South Carolina, arguments over who pays for and who benefits from its lottery scholarships have been common in the General Assembly since voters approved the scholarship, also known as HOPE, in November 2001, says Charles D. FitzSimons, interim director of finance at the South Carolina Commission on Higher Education. That is because, he says, lawmakers did not decide on how to spend the money before they started the lottery. The friction drove State Sen. John Matthews to argue last month for repealing the lottery because it does not serve the low-income people who pay the most into it. A committee in the South Carolina House initially considered cutting the state's HOPE Scholarship entirely, but eventually chose to give it even more money, some $6.3-million, up from $5-million. Every high-school graduate in the state with a 3.0 GPA or higher who does not qualify for the state's more-selective scholarship programs is eligible for the HOPE Scholarship, which is worth up to $2,500, plus $150 for books. The scholarship is good only for the first year of college, but students who maintain a 3.0 GPA or better and meet other criteria can be eligible for the state's LIFE Scholarship. That program is renewable and provides up to $4,700 toward tuition and a $300 book allowance. The committee also initially debated cutting out the South Carolina Education Lottery Tuition Assistance Program, which received $34-million in 2002-3, Mr. FitzSimons says. The program provides money for students attending two-year private and public institutions. The committee ultimately recommended reducing the program's budget to $27.8-million for 2003-4. In the Senate, lawmakers want to cut less from the program, giving it $33-million for 2003-4. The South Carolina House budget eliminated $2-million in lottery money for grants to elementary- and secondary-school teachers to take college courses, Mr. FitzSimons says, but the state Senate's Finance Committee included the grants. In Tennessee, "we're trying to tweak Georgia to make something better," says State Sen. Steve Cohen, the major backer of the lottery bill in the Senate in Nashville. The Senate's plan would award applicants who have at least a 3.0 GPA in high school and score 19 or more out of a possible 36 on the ACT with a $4,000 scholarship to a four-year institution or $2,000 to a two-year institution. Recipients could let their GPA slip to 2.75 their freshman year and still keep the award, but would have to bring it back up to 3.0 or higher in their sophomore year. The Senate removed a $100,000 income cap on the award, but decided that students from families with annual incomes of $36,000 or less would get an additional $1,000. The plan in the Tennessee House is identical to the one in the Senate, except that it would provide a smaller scholarship of $3,000 to students who attend a four-year institution or $1,500 to those who go to a two-year institution. Like the House version, the Senate plan would give additional money to needy students, and the plan also includes a $1,000 bonus for students who earn at least a 3.75 GPA and score 29 or higher on the ACT. The House also is considering a grant for needy students who do not qualify for the merit scholarship. The grant would go to students from families with annual incomes of $36,000 or less who earn at least a 2.75 GPA and score 18 or better on the ACT. Those students would earn half of the scholarship and half of the need-based bonus for their freshman year. If they earn a 2.75 GPA or higher in their freshman year, the students would then qualify for the merit scholarship for their sophomore year. Lottery Vote in Oklahoma In Oklahoma, voters will decide in November 2004 on whether they want to start a lottery and use part of the proceeds for education. The state already has a merit-scholarship program that the lawmakers have indicated could use lottery money, says Bryce L. Fair, associate vice chancellor for scholarships and grants at the Oklahoma State Regents for Higher Education. The grants now use money from the state's general fund. The program requires students to sign up in 8th, 9th, or 10th grade and maintain at least a 2.5 GPA in 17 core courses. Qualifying students get full tuition at a state institution for up to five years. The program is limited to students from families who make $50,000 a year or less, which covers 61 percent of Oklahoma residents. Before the cap was increased from $24,000, Mr. Fair says the award carried a "stigma" among students who felt it labeled them as needy. Since the cap was raised, participation in the program has also increased. BETTING ON SCHOLARSHIPS Since 1993, when Georgia started a lottery to pay for its merit-based HOPE scholarship, several other states have diverted all or part of their lottery proceeds, or created lotteries for college scholarships. Today, 39 states, the District of Columbia, and Puerto Rico have lotteries, and six of them use the profits for HOPE-like programs. In Tennessee, lawmakers are debating how to set up a lottery for scholarships, which the state's voters have already approved. Oklahoma voters will decide in November 2004 whether to start a lottery for a program similar to Georgia's.  SOURCE: Chronicle reporting
http://chronicle.com Section: Government & Politics Volume 49, Issue 37, Page A22
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Copyright © 2003 by The Chronicle of Higher Education