States seek ways to trim scholarships

States seek ways to trim scholarships

May 1st, 2012 by Perla Trevizo in News


Number of students served and total lottery scholarship program cost in 2010-11:

Florida: 179,076; $423 million

Georgia: 123,471; $540 million

Tennessee: 101,569; $297 million

Kentucky: 67,930; $93 million

South Carolina: 43;159; $164 million

Arkansas: 22,251; $88 million

New Mexico: 19,696; $47 million

West Virginia: 9,809; $45 million

Source: Tennessee Higher Education Commission

NASHVILLE - The majority of states that followed Georgia's lead in creating lottery-funded state scholarships now are coming up with policies to deal with increasing demand and declining revenues.

"The South has experienced huge growth over the last two decades. When states run with a surplus in lottery revenues, the tendency is to increase the amount of the award or the number of scholarships," said Thomas Sanford, director of research for the Tennessee Higher Education Commission.

The downside, he said during the commission's spring meeting last week, is that sometimes revenues don't hold up.

Sanford discussed the findings of a commission report comparing Tennessee's lottery scholarship program with those of the seven other states that have started similar programs since Georgia created the first one in 1993.

Tennessee ranks third among those states in the number of students it serves and the amount of money it spends, with 101,569 students and $297 million spent in 2010-11, according to the report.

Over the last several years, all the states have implemented some limit on years or credit hours to address the revenue-versus-demand problem.

Georgia changed its program in 2011 to cover up to 90 percent of tuition and fees for most students but eliminated a book allowance. Now the amount of the scholarships is tied to revenues so the state doesn't have to worry about running a deficit, Sanford said.

Florida added a five-year cap for the scholarship; New Mexico is considering raising eligibility requirements; and Arkansas, which just started its program in 2010, already lowered the award amount.

Tennessee added a 120-credit-hour cap but also allowed students to use scholarship money to attend summer school. Commission officials forecast a deficit of $40 million this year in part because of the new summer school option, but Sanford said the summer school option eventually should pay for itself because of the cap on credit hours.

Tennessee has raised the amount of the award several times since 2004, from about $3,000 to $6,000 -- summer school session included, Sanford said. But scholarships only cover between 57 percent and 60 percent of tuition and fees at public institutions, down from about 78 percent six years ago, he said.

Joe DiPietro, president of the University of Tennessee system, said he believes in being fiscally responsible and being able to lay out a plan for the scholarships.

"But that doesn't mean you can't recalibrate or re-evaluate your plan," he said. "Going to a university is important for a person's life from the standpoint of earning a good living and being able to raise a family."