Major cuts to the HOPE scholarship and the state's pre-kindergarten program will be introduced next week as Gov. Nathan Deal and top lawmakers release their plan for shoring up the popular lottery-funded programs.
HOPE scholarships will cover only about 90 percent of tuition instead of the full amount and will not escalate with rising cost, according to the plan, which has not been made public. The governor also is expected to recommend shortening the pre-k day by two-and-a-half hours, while increasing the number of available slots.
While Deal won’t present his proposals until Tuesday, officials at the Capitol who are privy to the plan provided details to The Atlanta Journal-Constitution.
Senate President Pro Tem Tommie Williams, R-Lyons, confirmed that HOPE grants will be reduced, but would not say by how much. Williams also said reductions will be made to pre-k. House Speaker David Ralston, R-Blue Ridge, would not provide specifics of the plan, but said, "I do think people are going to look at it and say it's realistic and fair."
But other Gold Dome insiders told the AJC the changes are likely to include:
- "Decoupling" the HOPE scholarship from tuition, meaning the amount of the grant no longer will equal the actual cost of tuition. If the legislation passes, the scholarships are expected to be worth about 90 percent of their current value, but will not go up if tuition increases as expected at many of the state's colleges and universities. HOPE also no longer will cover books and fees. The 90 percent cap also applies to students at private colleges, who are eligible now for $4,000 grants. That would drop to $3,600 under the proposal.
- No change to HOPE eligibility requirements. This was a major concern to many lawmakers, especially Democrats, who feared plans to increase the required grade point average from 3.0 to 3.2 or 3.5 or the addition of a minimum SAT score.
- Remedial college courses no longer would be covered at University System of Georgia institutions, but could still be available at technical colleges.
- The pre-k program would be reduced from six and a half hours per day to four, although lawmakers hope to increase the number of lottery-funded slots available.
The proposal also is expected to reduce or eliminate bonuses the lottery pays to its employees. The Georgia Lottery gave bonuses of more than $330,000 to its five highest paid employees in 2010 and typically awards more than $2 million a year in bonuses overall. In addition, Deal is considering reducing the amount of money that is paid to retailers who sell lottery tickets, lawmakers said.
Legislators and others provided details of the proposed changes to the AJC on the condition that they not be named, as the plans still could be modified before Tuesday. Deal met privately with Republican House members on Wednesday to brief them on his proposal.
Support for the entire plan is not universal, however. Lt. Gov. Casey Cagle, according to sources, wants to see a greater emphasis on protecting HOPE for students at public colleges, who also now will have to pay for books and fees. Cagle has advocated deeper cuts to private school grants.
HOPE and pre-k, which serve about 200,000 college students and about 82,000 preschoolers, are funded by the Georgia Lottery. While successful, the lottery has been unable to keep up with escalating costs and demand and tuition increases.
Williams said changes are unavoidable.
"Everybody is going to take a hit," he said. "The colleges that receive HOPE payments are going to take a hit, the families are going to take a hit, the lottery corporation is going to take a hit, the people who sell lottery tickets are going to take a hit."
Williams praised Deal for his work on the issue and said the process has been very collaborative.
Lottery revenue has been fairly flat over the past three to four years. In the 2010 fiscal year that ended June 30 the state spent nearly $150 million of its more than $1 billion reserves to cover costs, said Tim Connell, president of the Georgia Student Finance Commission, which oversees HOPE.
For this fiscal year and the next, the commission will need to use more than $500 million from reserves, Connell told the Board of Regents last week.
Deposits are also down for the first two quarters of this fiscal year when compared with last year.
Lottery CEO Margaret DeFrancisco said they’ve been “hurt horribly” by the recession as people cut back on spending.
“The [January] snow storm destroyed us,” she said last week, “and I don’t know how we’ll ever make that up because the drawings are gone.”
The law creating the lottery states that, as nearly as practical, at least 45 percent of the money from lottery sales should go to prizes and at least 35 percent of the profits should go to education.
During fiscal 2010, prize payouts accounted for 62.9 percent of lottery tickets sales while profits transferred to the state treasury accounted for 26.1 percent, according to a financial overview prepared by state auditors. DeFrancisco said other lotteries that have been forced to lower their prize payouts are not as successful.
College students weren’t surprised to learn they stand to get less money, but said they’re disappointed nonetheless.
“If you think about it, it’s half-baked,” said Hira Mahmood, a member of the activist group Georgia Students for Public Higher Education.
“They're cutting down on our HOPE but that’s not all they’re doing,” said Mahmood, who will graduate from Georgia State University in December. “They’re cutting funding to the college, which will lead to an increase in our tuition so we’re going to have a lot more we have to pay ourselves.”
Chancellor Erroll Davis told a House budget committee Thursday he "would not be surprised" if tuition went up but would not predict by how much. Tuition increased by as much as 16 percent this academic year at some campuses.
Kaitlin Miller, a member of the Student Government Association at the University of Georgia, said there will be tougher competition for scholarships. She expected some students will choose to attend cheaper public colleges.
Parent Stephanie Kratofil said she will do what she has to do to make sure her children go to college, but she didn’t know how much more the family could handle.
Her eldest is a sophomore at Georgia Southern University and her youngest is a high school sophomore. The college sophomore receives HOPE, the federal Pell Grant and relies on loans.
"We knew this was coming but, God, I don’t know what we’re going to do, we’re barely managing now," Kratofil said. "I’m not shocked but I’m horrified. We have to rethink our entire game plan."
Much of the burden likely will fall on students and their families, UGA President Michael Adams said Thursday during a media briefing.
“While it’s going to probably cost students and their parents more, at the end of the day we’re still one of the very best educational bargains in the world,” Adams said. “I regret this is going to create some greater difficulty for some students and their parents.”
Pre-k advocates likewise were dismayed.
Pat Willis, executive director of Voices for Georgia’s Children in Atlanta, said, “pre-k is not a luxury. In the continuum of learning, it is fundamental.”
She said a recent poll conducted by her group showed that 92 percent of Georgians rank kindergarten as extremely or very important and 84 percent have the same feeling about pre-k.
“That demonstrated for us that people understand learning is continuous, that it starts early and that we can’t afford not to support it,” Willis said.
Staff writer April Hunt contributed to this article.
HOW WE GOT THIS STORY
Shortly after he was sworn in on Jan. 10, Gov. Nathan Deal began warning Georgians that HOPE and pre-k were on an unsustainable path. Since then, AJC reporters have been monitoring the situation and over the past few days interviewed more than a dozen lawmakers, lobbyists, aides, students and other officials to determine how the governor and legislative leaders plan to address the situation.
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