The first signs that HOPE scholarship changes made last year are hurting some Georgia students and colleges are starting to crop up just as Tennessee considers imposing even tougher academic requirements of its own.
Georgia Northwestern Technical College's enrollment is down about 10 percent -- from 6,407 to 5,777 -- and school officials said the lottery-funded program is largely to blame.
"Students are more leery of taking that first step of going into postsecondary education, whether to seek retraining or an associate's degree, because they know the extra expense is there," said Steve Bradshaw, associate vice president of student affairs.
In the winter quarter of 2011, 95 percent of Georgia Northwestern students received HOPE funding. That number fell to 81 percent for the current spring semester.
Statewide figures are still being analyzed.
As of Jan. 28, 187,466 students statewide had received $345.5 million, Georgia Student Finance Commission figures show. Tracy Ireland, spokesman for the commission, said it was too early to tell how it differed from last year.
In Tennessee the situation is not as dire, but the root of the problem is the same: Lottery revenues are not keeping up with the demand for HOPE and rising tuition.
From 2008-09 to 2010-11, the number of students receiving one of the main HOPE programs -- HOPE and General Assembly Merit scholarships and ASPIRE, a merit-based award with a need-based component -- increased from 61,198 to 67,693. The amount awarded rose from $236 million to $265 million.
Georgia's program started in 1993-94 with 42,796 students receiving $21.4 million. By 2010-11, the program was handing out $748.1 million to 256,477 students.
But while Georgia leaders were saying the program would go broke by 2013, Tennessee is talking about a $20 million shortfall in 10 years if nothing is done.
"Looks like both states are realizing they won't be able to sustain the program in its current form," said Crystal Collins, analyst for the Southern Regional Education Board.
Tennessee has been proactive in adjusting the program, she said, while Georgia may have waited too long.
But Georgia officials believe they've made changes that will help to sustain HOPE for the long haul.
"The new law changed the programs so that award amounts are based on the amount of revenue the Georgia Lottery for Education is expected to generate," Ireland said. "As such, a budget shortfall situation is not likely for a long time to come."
Pending in Georgia's legislative session are bills that would introduce an income cap and another one that would reverse the GPA requirement for HOPE grant recipients.
University of Georgia
• 2010-2011: 256,477 students received $748.1 million
• 2011-2012: 187,466 students received $345.5 million (as of Jan. 28)
Dalton State College
• Fall 2010: 1,852 students received $2 million
• Fall 2011: 1,672 students received $1.3 million
Georgia Northwestern Technical College
• Winter quarter 2011: 6,092 students received $3.6 million
• Spring semester 2012: 4,684 students received $2.3 million
Georgia HOPE Changes: HB 326 (applied to students enrolling fall of 2011)
• Limited time eligibility for the scholarship and for regaining HOPE once lost;
• No payments for books or fees for all students or remedial college coursework for scholarship students;
• Established GPA requirement for the HOPE Grant;
• Established a new Zell Miller Scholarship for high-achieving high school graduates;
• Uncoupled the HOPE benefit from tuition rates;
• Awards will be adjusted annually based on lottery revenue and approved the General Assembly.
Source: Georgia Student Finance Commission
What's affecting technical college students most is a new requirement to have a 3.0 grade point average at certain checkpoints, which Bradshaw said makes the grant achievement-based.
"The original intent of the grant was to provide all Georgians access to postsecondary training regardless of high school graduation date and achievement level," he said. "Not to be an achievement-based award."
About 3,100 students in the 100,000-student Technical College System of Georgia lost HOPE in the fall semester as a result of last year's 3.0 GPA requirement, spokesman Mike Light said.
Systemwide, it was a 12 percent decrease in enrollment, but Light said that's not all due to HOPE.
"What we have to realize is that these are new realities with limited amounts of HOPE funds available for every student in the state," he said. "We are learning and teaching and helping folks today under a new reality."
The new law also uncoupled the amount of the HOPE award from tuition cost, covering less than 90 percent of 2009-10 tuition levels. As tuition rises, the HOPE scholarship is expected to cover between 80 and 90 percent.
This academic year is the first in two decades that HOPE didn't cover 100 percent of tuition.
At Dalton State College, 180 fewer students received HOPE from fall 2010 and 2011.
Enrollment decreased by about 8 percent, from 5,988 to 5,506, but school officials say tougher admissions standards also are to blame.
But the biggest impact has been that now HOPE no longer covers a book allowance or school fees, said Holly Woods, assistant director of student financial aid.
Dalton State students pay about $400 in fees. A student taking 14 credit hours has about $800 not covered by HOPE, compared to less than $200 before the changes.
For Lorena Quintero, 19, who is studying biology, one book can cost $200.
She's a work-study student and receives other financial aid, such as Pell grants, but she said paying for college is still tough.
She wants to transfer to the University of Georgia, which is costlier than Dalton State, and said she might need to take out a loan.
All the HOPE changes are stressful, she said.
"It makes students not be as motivated or enthusiastic of coming to school when you have other things to worry about. ... I have friends who lost HOPE, and they can't come to school right now," she said.
But Sen. Charlie Bethel, R-Dalton, said Gov. Nathan Deal's leadership got the state out of emergency mode.
"We would love to be a able to fully fund the scholarship and grant," he said.
He said there are ongoing discussions about the impact of the HOPE changes.
Janice Barrocas, with HOPE for Georgia, a statewide campaign to bring student voices into the HOPE debate, said students were not considered.
"No one is talking directly to them, and these decision are life-altering," she said.
The organization is conducting an online survey to determine the full impact of the changes, but so far she's heard of many more students taking out loans, she said.
Last year, Tennessee formed the Senate Lottery Stabilization Task Force and Sen. Bo Watson, R-Hixson, was a member.
One of its suggestions was to require students to have a 21 ACT score and a 3.0 GPA in order to receive a HOPE scholarship. Right now it's one or the other.
If students don't meet both requirements, only half of the $4,000 is awarded. The change wouldn't affect community college students.
The Tennessee Higher Education Commission estimated that in 2010 about 22 percent, or 5,257 students, wouldn't have been eligible for the four-year HOPE scholarship if the changes had applied.
"Being successful in college can often be tied to those two performance measures," said Watson.
If implemented, the change will have a positive effect, he said.
"Students who might not be quite ready for a traditional four-year university are directed toward a community college where they can get proper remediation, then transfer over to a four-year institution," he said.
Pending bills include one requiring students to have a 3.25 GPA to receive a scholarship, and another that would impose a four- or five-year limit on student eligibility.
Watson said the goal is to stabilize the program financially and help students be successful.
The lottery reserve fund was about $360 million at the end of fiscal year 2010-11. Current projections show an annual deficit of about $18 million to $20 million.
"We don't want to get to a crisis point," Watson said.
But Sen. Andy Berke, D-Chattanooga, said HOPE is a solid program with a large reserve.
"We have to monitor the situation, but I wouldn't make drastic changes until we are sure they are necessary," he said.