Lottery funds can’t keep up with HOPE

The amount spent on public scholarship awards is projected to increase by 19 percent this fiscal year, according to the Georgia Student Finance Commission, which oversees HOPE. The cost of grant awards, which mainly go to students at technical colleges, is projected to jump by 26 percent. But during the past year, the amount of lottery money going to education programs grew by less than 1 percent.

“Growth is far outstripping new money coming in from the lottery, and it is very unlikely they will be able to meet our needs,” said David Lee, vice president of strategic research and analysis for the commission.

If lottery reserves get too low, it will trigger the three program cuts, which were outlined in a bill passed this year. With each cut, students would still receive tuition money. HOPE covers tuition, books and fees for more than 200,000 students.

Parent Stephanie Kratofil said she wouldn’t be able to send her daughter to Georgia Southern University if HOPE was cut.

The college’s mandatory fees for this fall are $622 a semester, according to the University System of Georgia. HOPE pays $350 of the fees, under a 2004 state law that capped the payout at the 2003-04 rates used by each institution. The scholarship money allows the family to afford room, board and other expenses.

“This would be catastrophic for a lot of people,” Kratofil said. “I’m glad more people can go to college and more people can qualify for the program, but cutting back on this money would kill us.”

House Appropriations Chairman Ben Harbin (R-Evans) sponsored this year’s HOPE bill, which amended a law established in 2004.

“We will have to adjust HOPE again in the next few years,” Harbin said. “The main thing is this is not a time to panic. We knew this would happen at some point and the ultimate goal of the Legislature is to protect HOPE.”

Lawmakers will begin discussing changes over the next six to 12 months, he said, with the goal of having a plan to restructure the program by 2011 or 2012. Harbin said it’s too soon to say what the plan would entail or if it would include a cap on the amount paid for tuition.

The Georgia Lottery sold its first ticket in 1993 and was created to support voluntary pre-kindergarten and HOPE. Georgia students are eligible for the scholarship if they attend college in-state and maintain a solid academic record.

State legislators approved changes to HOPE in 2004, including requiring students to maintain a 3.0 grade-point-average. The reform was prompted by fears that the program’s reserve accounts would be drained by 2007. The changes didn’t impact funds set aside for the pre-kindergarten program.

Lee, of the state student finance commission, said the cuts helped, but the financial footing didn’t last. Once again the number of students getting the scholarship and the program’s costs are rising faster than the growth in lottery sales, he said.

The number of public scholarship awards is projected to increase by about 3.4 percent this fiscal year, according to the student finance commission. The number of grant awards is projected to jump by about 11.7 percent.

HOPE grants have grown as out-of-work adults switch careers and students look for training at technical colleges.

Technical college enrollment is expected to stabilize as the economy improves, but two-year and four-year colleges will continue to grow. Officials with the University System of Georgia expect about 290,000 students this fall and predict about 400,000 students by 2020.

That enrollment surge reflects natural growth, a population boom in college-age students and work by high schools to encourage more graduates to get a postsecondary education. At the same time, colleges have increased tuition to meet the needs of additional students and to recoup money lost from state budget cuts.

Jovaughn Recasner, 32, is finishing up the marketing management program at Atlanta Technical College and hopes to enroll in a four-year college to earn a bachelor’s degree. He was laid off last July and has received the HOPE scholarship and grant.

“HOPE allowed me the opportunity to get a fresh start with my life,” Recasner said. “It would be tragic if this wasn’t around for everyone. They have to keep it going the way it is.”

The Georgia Lottery declined to answer specific questions about whether it can keep up with demand or what it will do to boost revenue. Spokeswoman Tandi Reddick said: “Our mission is to maximize revenues for the educational programs we fund and we remain focused on our mission.”

In February, Georgia Lottery CEO Margaret DeFrancisco told legislators that the lottery is at the “apex.” She said demand for HOPE and pre-kindergarten will likely surpass lottery revenues in coming years.

Harbin said lawmakers will look at what other states, including Florida, did with their lottery-funded scholarship programs. Florida, this year, implemented a cap on how much will be paid for tuition. The program used to pay up to 100 percent of a student’s tuition, but now students at four-year colleges will see the amount capped at $126 per credit hour.

Should HOPE be cut or eliminated, families will have to rely more on loans and grants, said Kratofil, the parent of both college and high school freshmen.

“I guess we’ve been spoiled by HOPE,” she said. “Maybe we depend too much on it. I guess this shows you can’t count on anything to last forever.”