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Published Thursday, January 26, 2012 in Local

Legislators fish for solutions to HOPE Scholarship shortage

By Larry Peterson

Morris News Service

ATLANTA – Students least able to afford college face an increasing squeeze as the lottery-funded Georgia's HOPE scholarship drifts toward more financial woes, Democratic legislators said on Wednesday.

The lawmakers spoke out at a joint hearing of the Senate and House higher education committees that raised anew the issue of whether the scholarships should be based mostly on merit or on need.

"Obviously, it is somewhat very alarming," said Sen. Buddy Carter, R-Pooler, who ran the meeting. "Certainly we need to look at what the future holds. We're not ignoring it."

Concerns surfaced following a presentation on financial trends by Tim Connell, president of the Georgia Student Finance Commission, which divvies up funds the lottery raises for scholarships.

As he did recently before legislative panels, Connell reviewed dozens of graphs showing that, even with the changes the General Assembly made last year, the program is still going broke.

By the fiscal year that begins in mid 2015, it will need $163 million a year more just to maintain existing benefit levels.

Those were cut last year to equal 90 percent of 2010 tuition level for all but the best students, known as Zell Miller Scholars. Zell Miller was governor when the program began in the 1990s.

That amount that covered the bulk of tuition in 2010 becomes a smaller share of the total cost as tuition continues to rise. At current rates, by 2016, the current scholarship level would only cover half the tuition at the state's research universities, according to Connell's projections.

Sen. Nan Orrock, D-Atlanta, noted that the mission of the commission is to expand access to higher education.

"I would like to know how you square that mission with what we did to the HOPE scholarships last year," she said.

Connell said the changes reflected policy decisions made by the legislature to deal with reduced lottery revenue, higher tuition and other costs and increased numbers of students.

Sen. Lester Jackson, D-Savannah, and others asked Connell for data on the race, income and communities of HOPE and Zell Miller Scholars.

He said the commission has breakdowns on hometowns and schools but not income and race.

But Orrock and Reps. Calvin Smyre, D-Columbus, and Kathy Ashe, D-Atlanta, speculated that most of the Zell Miller Scholars are from upper-income families because they typically get better grades in high school.

Connell acknowledged one other potentially ominous trend.

The way the program is now structured, he said, the percentage of the total scholarship fund that goes to Zell Miller Scholars likely will increase.

That will make it more difficult for other students to win HOPE scholarships, Smyre said.

Under questioning from Orrock, Connell said the changes made last year reduced costs by nearly $300 million.

That money "came out of the hides" of students, she said.

Some legislators at least implied that the state should consider basing scholarships on need, which was done during the first two years of the program.

But Carter said he was opposed.

"Remember what the purpose of the HOPE Scholarship was," he said. "It was to keep the best and brightest in our state."

Connell cited anecdotal evidence that Georgia may have had some success.

He said about 70 percent of the high school valedictorians that attended a luncheon to honor them indicated that they intended to attend college in Georgia.

He wasn't asked if there is any data for the period before the scholarships, but Carter and others cited concerns that Georgia suffered from a "brain drain" that drew away its best students.

Smyre said he doesn't necessarily favor means testing for scholarships, but won't rule that out.

Last year's changes shored up the system "for a little while" but the state "needs to do something more to correct the problems that are still there," he added.

Rep. Ron Stephens, R-Savannah, wants to make up the revenue shortfall by expanding the lottery to include games played on video terminals. That idea wasn't discussed at the hearing.

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