Georgia’s popular HOPE Scholarship program could buckle under the weight of its own success.
The program, which gives full-tuition college scholarships to students who finish high school with at least B averages, is credited with stemming the flow of top students out of the Peach State. It has been copied in 11 other states.
But with so many students using the scholarships, Georgia leaders fear the state soon will lack the money to pay for them.
A special committee is looking for ways to cut the lottery-financed program’s costs without excluding too many students. A number of ideas are already getting attention—some of which are very controversial.
The HOPE Scholarship Joint Study Commission, which has been meeting since July, is considering the option of eliminating coverage for textbooks and student fees, and of bringing back the income cap originally tied to the program.
But the most disputed idea, and one that has outraged some African-American legislators in the state as well as observers outside Georgia, is Gov. Sonny Perdue’s suggestion that eligibility for the scholarship be linked to a cutoff score on the SAT.
“If Georgia adopts this, they will do so knowing that it will have a profound negative effect on African-Americans, on Hispanics, and maybe even girls,” said Robert Schaeffer, the public education director for the National Center for Fair and Open Testing, or FairTest, a watchdog organization based in Cambridge, Mass.
“If you’re going to have merit-based programs,” he continued, “merit should be based on four years of cumulative classwork instead of filling in bubbles on one Saturday morning.”
Basing scholarship eligibility on an SAT score could prompt a court battle, he added.
Mr. Perdue, a Republican, has dismissed the criticisms. He says he’s determined to lift Georgia out of 50th place in state rankings on the SAT, and believes that linking the HOPE grants to the college-entrance exam would help.
The state would not be “out on a limb” if it added a minimum SAT score to eligibility criteria, said Donald E. Heller, an associate professor of education at Pennsylvania State University in University Park who has studied merit-based scholarships. Besides, other states already do it, he added.
But data presented to the study commission last month by the Georgia board of regents shows that if the SAT cutoff score were set at 1000 out of a possible 1600, 67.4 percent of the African-American students who received HOPE scholarships in 2000 would not have been eligible, compared with 32.4 percent of the white students.
A National Model
Created in 1993 under Democratic Gov. Zell Miller, now a U.S. senator, the HOPE program—which stands for Helping Outstanding Pupils Educationally—is paid for by a statewide lottery. A full-tuition grant is awarded to any Georgia student who graduates from high school with a B average or better and maintains the average in college.
Since the program began, almost $2 billion in lottery revenues has been spent to send roughly 700,000 students to college. Depending on tuition, the grants can be worth up to $4,000 a year and can be used at public as well as private institutions.
“HOPE has clearly communicated to all families that their children can go to college if they prepare themselves well,” said Kristin Conklin, a senior policy analyst at the Washington-based National Governors Association.
But now, demand for the program appears as if it will exceed lottery revenues in a few years. According to state budget officials, the program could be $221 million in the red by 2007. If that happens, Georgia would be forced to tap into reserve funds to cover all eligible students.
Because of those forecasts, legislators were required by law to form the commission, which is studying ways to improve and preserve the HOPE Scholarships and the state’s popular prekindergarten program, which is also underwritten by the lottery. (“Georgia’s Pre-K Program Feels Fiscal Strains,” Sept. 24, 2003.)
The 20-member group is expected to make its recommendations before the end of the year.
Concerns over how to pay for merit-based state scholarships are not unique to Georgia. Because of fiscal hard times in recent years, other states, including Florida, Louisiana, and New Mexico, have considered revising the eligibility rules for their scholarship programs.
“It’s clearly an issue that other states are going to have to deal with, and I think they are watching Georgia closely,” Mr. Heller said. “I’m sure they are going to look at what the political fallout is going to be.”
But while Georgians favor the HOPE program, they have some reservations.
A poll conducted in August by the Carl Vinson Institute of Government at the University of Georgia, in Athens, showed that 80 percent of the 804 people surveyed felt somewhat or extremely positive about the program. But 64 percent said that they would oppose a tax increase to pay for the program as it exists now, and 54 percent said they would oppose cuts in other state programs to keep the scholarships at their current level.
The respondents were evenly split on whether the scholarships should be given on the basis of financial need, but most favored the idea of limiting the aid to four years. The telephone poll has a margin of error of 3.5 percentage points.
Closing Loopholes
In the short run, the legislature might eliminate the allowances students get for books and mandatory fees, said Shelley C. Nickel, the executive director of the Georgia Student Finance Commission, the agency that administers the scholarship program.
The finance commission has also asked lawmakers to consider a standard for determining a B average. While high schools report who is eligible for the grants, not all schools arrive at the B average the same way. Some use a grade point average. Others use a 100-point grading scale. That means that almost a third of students who receive the scholarships actually have a 2.5 grade point average and not a 3.0, Ms. Nickel said.
That fact could explain why roughly the same percentage of students lose their scholarships after freshman year or the first 30 credit hours, she said.
Standardizing residency rules could also save money. Currently, three different higher education agencies set residency requirements. And as a result, Ms. Nickel said, some students receive HOPE Scholarships who never attended a Georgia high school. “We’re trying to raise the bar in our Georgia high schools, not in Pennsylvania high schools,” she said.
A fourth issue being discussed is limiting the scholarship to four years or to one degree. “You could go free forever,” Ms. Nickel said. “The state doesn’t necessarily need to be paying for that.”
Finally, the possibility has been floated of reinstating a $66,000 or $100,000 family-income cap that existed in the early years of the program, but Ms. Nickel said she doesn’t expect that option to get serious attention.
Resistance to an income cap draws criticism that HOPE covers tuition for middle-class students whose parents could afford it.
“It’s pretty obvious that the state wasn’t concerned about issues of equity as long as there was plenty of money,” Mr. Heller of Penn State said. “They’ve had their heads in the sand.”
But the debate over the HOPE Scholarships can also be seen as part of a larger question over how to contain the rising cost of college tuition, Ms. Conklin said, adding that higher education governing boards should be talking about what they can do to hold down their prices.
“Then all families would benefit,” she said.
