Georgia's HOPE scholarship funds spread thin

Georgia's HOPE scholarship funds spread thin

January 22nd, 2012 by By Kristina Torres and Laura Diamond/The Atlanta Journal-Constitution in News

Georgia Gov. Nathan Deal

Georgia Gov. Nathan Deal

POLL: Have you lost faith in the Hope scholarship?

Georgia's new Zell Miller Scholarship, launched last year by Gov. Nathan Deal to provide full tuition to the state's highest-achieving students, is likely to be an even bigger drain on an already strained HOPE as more scholars than expected qualify.

As a result, HOPE scholars will see their financial awards shrink even further than predicted over the next several years, forcing students and their parents into higher out-of-pocket expenses for college.

While Deal has promised students will not see their HOPE scholarships diminish next year, his budget plan fails to fully reflect just how much money will be needed going forward because it merges the Zell Miller Scholarship into HOPE-related budget lines. Previously they were budgeted separately.

The Georgia Student Finance Commission, which oversees both scholarships, already has seen thousands more students qualify this year for the Zell Miller Scholarship than they had anticipated.

Commission President Tim Connell said the agency may have to borrow against future revenue from the Georgia Lottery to cover the cost. That, in turn, will only further exacerbate HOPE's financial woes.

Additionally, despite conservative cost estimates from commission officials, Deal has asked lawmakers to allot millions of dollars less than what will likely be needed.

Deal's request came as uncertainty lingers about how many students would be eligible for the money, and how much they would receive. It has some lawmakers questioning whether either program can survive without drastic changes and college freshmen wondering if the scholarships they receive will still exist by senior year.

All are trying to understand the ramifications of last year's reforms, when a reduced HOPE scholarship was put into place to prevent the program from going broke. At the same time, Deal unveiled the Zell Miller Scholarship.

The new program promised full tuition to the state's most accomplished students. In contrast, HOPE students receive about $500 less each semester than Zell Miller scholars.

The gap between the payouts to students will widen in the next few years, because of other reforms lawmakers also passed last year. Among them, the HOPE program starting in two years will no longer be able to dip into reserves to supplement Georgia Lottery revenue, which pays for both scholarships as well as pre-kindergarten programs statewide.

"HOPE is going to get worse before it gets any better," said Sen. Buddy Carter, R-Pooler, chairman of the state Senate's higher education committee.

According to current estimates, the HOPE scholarship amount will drop starting in mid-2013 while the Zell Miller Scholarship will increase because it promises to cover all tuition costs.

At the same time, UGA tuition -- currently $3,641 a semester -- is projected to increase. Since the Zell Miller Scholarship covers full tuition, a student receiving money through the program will see increased payments.

"HOPE vanishes under this program," said Sen. Jason Carter, D-Decatur.

Carter added that last year's reforms failed to force the program to live within its means. "It continues to get worse and the current Zell Miller program exacerbates the problem," he said. "You can't even call it HOPE anymore when you're talking about paying for less than half of college."

The finance commission requested $602.6 million for fiscal year 2013 to cover the HOPE scholarships and grants as well as the Zell Miller program. Deal's budget plan provided $575.3 million for them.

Deal spokesman Brian Robinson said the change reflects up-to-date enrollment data, most notably a decline in the state's technical colleges. The number of students attending Georgia's technical colleges dropped by more than 12,000 this fall and school leaders said a reduced HOPE payout is partly to blame. About 75 percent of the system's students receive some type of HOPE award.

"The governor fully supports the Zell Miller Scholarship," Robinson said, adding that the transfer of the Miller program into HOPE was "purely administrative."

Finance commission officials said any projections are purely tentative and it will be months before they have a full year's worth of data to calculate true costs. They expect to present revised figures to lawmakers next year as part of the amended budget process.

Miller created HOPE in 1993 to keep Georgia's best and brightest high school graduates from leaving the state. It has since become one of the nation's most generous, state-directed academic scholarships and a model for other states. The concept was simple: Students had to graduate high school with a 3.0 GPA and maintain that mark in college, receiving in return a full tuition scholarship.

Miller and lawmakers launched the state lottery to pay for HOPE, among other education programs. But while the lottery is one of the most successful in the nation, it cannot keep up with the demand.

UGA freshman Jackson Garner is among the first group of students wondering how they will pay for four years of college with the new HOPE rules. His strong high school grades qualified him for the Zell Miller Scholarship but he's worried that because of declining revenues the state will decrease the amount of money he gets.

Even with a full-tuition scholarship, Garner took out a $5,000 loan to pay for fees, books and basic living expenses. He's already visited the college financial aid office to learn about what other options he may have. And he is applying for jobs to help make ends meet.

"I want to know I can count on Zell Miller, but I don't know for sure that this money will be around," Garner said. "I'm going to have to take out more loans but some people won't be able to do that. People are talking about dropping out and going to community college."

Georgia already has 5,000 more students than expected qualifying for the Zell Miller Scholarship this year, launched to counter concerns a diminished HOPE would drive students out-of-state. So far, 11,600 Zell Miller scholars receive payments through the program, about 13 percent of the HOPE scholarship recipients. That number will rise, however, as the commission continues to review student information.

Zell Miller scholars must graduate high school as the valedictorian or salutatorian, or with at least a 3.7 GPA and a 1200 score on the SAT's math and reading sections. While in college they must maintain a 3.3. Other HOPE scholars must maintain a 3.0.

Adding to concerns, about 70 percent of the inaugural Zell Miller scholar class attends just two schools: UGA and Georgia Tech. Lawmakers said last week they thought the program was intended to benefit campuses throughout the state.

Senate Democrats plan Monday to announce legislation meant to overhaul HOPE and fix what they said was inequity within the program. Similar bills were introduced last year, but failed to win bipartisan support; Republicans lead both legislative chambers.

Their proposals, shared exclusively with The Atlanta Journal-Constitution, would:

• Eliminate the SAT requirement of the Zell Miller program. Instead, graduating seniors in the top 3 percent of every high school in Georgia would automatically qualify. Democrats said the change would more evenly distribute the number of scholars throughout state, including at smaller, less expensive colleges.

• Change how technical college students receive grant money through the HOPE program. The technical grants are different from the scholarship, and tend to benefit students who are older and likely supporting families of their own. Last year, changes meant technical students must for the first time maintain a 3.0 GPA. As a result, 4,200 technical college students lost HOPE.

• Reinstate a cap on family income for students to be eligible for HOPE. Such a cap existed when the program began, but was quickly lifted after the lottery proved financially successful.

• Add a student representative on the state Board of Regents, which oversees the University System of Georgia and sets tuition. Regents are appointed by the governor.

• Create legislative oversight of a new, $20 million student loan program. The program was started last year when lawmakers changed HOPE. The start-up money was paid for with lottery revenue.

"As you go forward, there will be fewer and fewer people able to afford college," Carter said. "You've got swaths of Georgia for whom HOPE vanishes and [the Zell Miller Scholarship] won't help under the current system. That is a failure and an abandonment of the original principles that were sold to the state in order to tolerate the lottery."