Lawmakers to discuss HOPE's future

The merit-based award, which is used by more than 200,000 Georgians a year, is struggling to keep up with demand as more students enroll in college and tuition costs rise.

"Action needs to be taken sooner rather than later," said Tim Connell, president of Georgia Student Finance Commission, which oversees HOPE. "We need real structural changes. We need to get into the substance of the program."

Revenue from the Georgia Lottery, which is one of the most successful in the country, didn't generate enough money for HOPE during 2010 fiscal year, which ended June 30.

As a result, state officials for the first time in nearly a decade tapped into a $1 billion reserve fund. Those reserves are projected to drop to about $373 million by the end of fiscal 2012, according to the commission.

"We need to chart the course that shows us how we can meet and keep HOPE," said  Sen. Seth Harp (R-Midland), chairman of the Senate higher education committee. "We have crossed the line with HOPE and maybe we need to scale it back a bit."

Harp said one possibility is re-instating a parent income cap. When the program began, only students whose families earned less than $66,000 a year were eligible. The cap was later lifted to $100,000 and then eliminated.

Another suggestion would set a standard amount students receive annually for tuition regardless of how much it might increase. It could be the same for all colleges or vary for different types of institutions. Other possibilities would eliminate the book and fee allowances.

HOPE provides full tuition and some book and fee money to college students who maintain at least a 3.0 grade-point average. The scholarship and the state's free prekindergarten classes are funded through lottery proceeds.

Lawmakers addressed HOPE's finances in 2004 when they tightened eligibility requirements and instituted triggers that would reduce benefits if reserves got too low.

The first reduction, cutting book awards from $300 to $150, would take place during the 2011-12 academic year, Connell said. The book subsidy would be eliminated altogether the following year. After that,  students would no longer get money for mandatory fees.