Students depending on the HOPE scholarship to pay for college should set aside more money as new projections show award amounts would drop starting with the fall semester in 2014.
To prevent that from happening, the state would need an additional $107 million for the 2014 fiscal year, said Tim Connell, president of the Georgia Student Finance Commission, which administers HOPE.
The gap is expected to increase to $163 million by 2016, Connell told a joint economic development committee of the Legislature on Monday.
Lottery revenue is projected to remain flat, and more students are expected to be entering colleges and be eligible for awards through HOPE.
Gov. Nathan Deal and lawmakers overhauled the popular scholarship last year, reducing payouts to prevent the program from running out of money.
While Connell said those changes helped, the new rules include a provision over the use of reserves that would lead to a drop in the scholarship amount. The new rules require reserves to remain at a certain level, but the commission uses this money to supplement the funding provided by the Georgia Lottery.
Reserves are large enough now that the commission can tap into that money to keep scholarship payments at the same level for the 2013 fiscal year. But starting in 2014, HOPE will have to rely just on lottery revenue, Connell said.
A drop in award payouts combined with expected increases in tuition and fees will result in students having a larger out-of-pocket expense for college.
The report stunned some lawmakers, with a few describing the projections as "eye-opening" and "enlightening and disturbing."
While Georgia's lottery is considered one of the most successful in the nation, it can't keep up with soaring enrollment and tuition. More than 256,000 students received HOPE last year, while fewer than 200,000 received it a decade ago.
"I'm not sure we can ever meet the demand doing what we're doing currently," said Margaret DeFrancisco, CEO of the Georgia Lottery.
Earlier in the meeting, two Delaware officials touted the use of gaming machines and how they provided significant additional money for the state. While Georgia lawmakers in the meeting were receptive to the idea, Deal and others oppose it.
HOPE used to pay all public college tuition and provide some money for books and fees for students who maintained a 3.0 GPA. Now only the state's most accomplished students, about 10 percent of recipients, get full tuition awards.
For the rest, the scholarship amount depends on lottery revenue. Lawmakers will set the scholarship amount annually. No one gets money for books and fees.
A HOPE recipient at the University of Georgia currently receives $3,181.50 per semester. Tuition there is $3,641 per semester, and mandatory fees total $1,095 per semester.
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