The HOPE Scholarship Program: A Plan for the Future

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The HOPE Scholarship Program A Plan for the
Future
Andrew Broy Jill Joplin Welch Suggs Shannon Wilder
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HOPE Program Features

• Created by Governor Zell Miller in 1993
• Eligibility earn a B average in high school and
  maintain that average in college
• Covers tuition at public institutions, fees,
  300 a year for books or 3,500 annual
  scholarship at private schools
• Enormously popular 80 of Georgians support the
  HOPE program

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Fundamental Tension

• Purpose and Intent of HOPE?
• Keep Georgias best students in state?
• Make college more attainable for students of
  limited means?
• Both, but the policy remedies go in different
  directions.

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HOPE Program Expansion
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HOPE Sept. 1, 1993 May 9, 2009
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HOPE Program Expansion

• Lottery revenues have dramatically outpaced
  original projections
• HOPE is the only lottery in the United States
  that increased revenue in each of its first seven
  years
• Georgia citizens have the second highest per
  capita lottery sales among the states projections
• Revenues have allowed expansion
• 2008 was the lotterys best year with 3.5
  billion in sales

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HOPE Program Expansion

• Lottery revenues have dramatically outpaced
  original projections
• HOPE is the only lottery in the United States
  that increased revenue in each of its first seven
  years
• Georgia citizens have the second highest per
  capita lottery sales among the states projections
• Revenues have allowed expansion
• 2008 was the lotterys best year with 3.5
  billion in sales

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HOPE Program Expansion

• Program add-ons
• Assistance to children of Georgia law enforcement
  officers
• Scholarship for students who attend Georgia
  Military College
• Qualified students may now stack the HOPE
  Scholarship with a Pell grant and
• Promise Teacher Scholarship, Accel Program, and
  the GED Scholarship.

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Distribution of HOPE Benefits

• Increase in college attendance from middle class
  families (Dynarski, 2000)
• Higher-income, more educated households that are
  less likely to be racial minorities benefit most
  from HOPE Scholarship (Rubenstein Scafidi,
  2002)
• Highest income counties receive 70 more aid from
  HOPE than poorer counties
• Regressive impact Blacks, people with lower
  income, and lower education levels are more
  likely to play lottery

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Distribution of HOPE Revenues

• African Americans more likely to purchase lottery
  tickets and less likely to benefit
• The county with the smallest percentage of
  African Americans spent 160 per person on
  lottery tickets the county with the highest
  percentage of African Americans spent 402 per
  person.
• Same pattern holds when examined by income.
• But, picture is complicated by other programs

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Distribution of Lottery Funds
Disproportionately benefits African Americans and
others who play the lottery (McCrary Pavlak,
2002)
HOPE Scholarship benefits non-blacks and those
with more education. HOPE Grant for technical
colleges split proportionally between blacks and
whites and those with lower income (McCrary et
al., 2001)
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Distribution of HOPE Revenues

• HOPE competing purposes
• Keep Georgias best students in state?
• Make college more attainable for students of
  limited means?
• Eligibility originally limited
• Students with a household income of less than
  66,000 initially eligible
• Cap raised to 100,000 in 1994 and abolished
  entirely thereafter because of revenue numbers

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Unintended consequences?

• Grade Inflation
• Between 1993 and 1999, the percentage of high
  school graduates meeting HOPE requirements
  increased from 48 to 65, suggesting a
  substantial shift in grade distribution.
• College Tuition rates
• In 2009, University System announced end of
  fixed-for-four tuition guarantee program and
  begin permitting yearly tuition increases.

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HOPE Recommendations

• Three Options
• Redefine eligibility criteria so that fewer
  students receive HOPE awards (e.g., means test
  SAT score)
• Reduce amount so eligible students receive a
  smaller award or
• Elements of both features.

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HOPE Recommendations

• Two-tiered approach, based on extent of shortfall
• Eliminate add on programs added since HOPE
  inception (book allowance, fees, add on
  scholarships)
• Implement a graduated means test linking income
  to a grade scale
• Grade scale inclusion will allow higher
  achieving, high income students to maintain a
  portion of the benefit.

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HOPE Recommendations
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HOPE Recommendations

• Benefits
• Targets funding to students with demonstrated
  financial need
• Reduces regressivity
• Preserves university system interest in keeping
  best students in state
• More palatable to lawmakers than a strict means
  test

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HOPE Recommendations

• Challenges
• Lawmakers will be criticized from more affluent
  parents
• Broad based support might be undermined, which
  could lead to additional legislative changes
• Cf social security on national level

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What to expect for HOPE

• Increasing costs
• Moderating revenue
• Continued legislative focus, with competing
  proposals
• 2010 Governors race
• Expansion of Pre-K an additional draw on revenue?