Nevada Scholarship Program in Trouble, Treasurer Warns
Nevada's Millennium Scholarship program is becoming a victim of its own success.
State Treasurer Brian K. Krolicki says surging demand for the college scholarships is combining with a drop in revenue from cigarette sales to place the tuition aid in jeopardy.
Mr. Krolicki discussed his concerns with the state board of regents recently. He also suggested reducing the amount of the scholarships and committing $100 million in future unclaimed-property revenues, such as forgotten bank accounts, to pay for the program.
The Millennium Scholarship program receives 40 percent of Nevada's $1.2 billon in payments over 25 years from the 1999 settlement of a multistate lawsuit against tobacco companies. But as more students seek the scholarships, a dip in tobacco sales is in turn reducing the amount of payments from the settlement.
To qualify, a student must graduate from a Nevada high school with at least a 3.1 grade point average.
When the program was conceived in 1999, the state treasury department estimated that 50 percent of Nevada's graduating high school seniors would use the program, and that the state would pay out $43 million for the scholarships through 2004.
Treasury officials say that nearly 74 percent of students from the class of 2004 have begun receiving the aid, and that the amount allocated has reached $67 million. If the trend continues, officials estimate, the program will see a critical funding shortage by the fall of 2005.
Kathy Besser, the chief of staff for the office of the state treasurer noted that 23,000 students have received Millennium Scholarships since the program's inception. She estimates that nearly 8,000 students a year currently qualify.
If something isn't done soon to supplement lost tobacco revenues, the fund won't last, warned Mr. Krolicki, a Republican who has been trying to persuade the legislature to commit new sources of funding.
Despite being given the legislative cold shoulder in the past, the treasurer's office has drafted a bill that proposes changes to the program. The bill will be presented during the legislative session that begins in January.
Currently, eligible Nevada residents who attend a college or university in the state can receive up to $10,000 in total tuition assistance under the program if they maintain at least a 2.5 grade point average in college. Students who drop below that mark can reclaim their scholarships if they raise their grades.
The program does not limit the number of college credits financed per semester. The treasurer's office proposes a cap of 12 credits per semester and would bar students who lose their scholarships from regaining them. If legislators don't pass the changes, Mr. Krolicki said in an interview, the state will have to appropriate between $35 million and $45 million next year to keep the program alive.
"This is, perhaps, one of the greatest programs in Nevada. It's critical for Nevada's economic future," Mr. Krolicki said.
Vol. 24, Issue 02, Page 30Published in Print: September 8, 2004, as Nevada Scholarship Program in Trouble, Treasurer Warns