This week we pick up looking at the Georgia Lottery and the programs it sustains. The largest of the Lottery funded programs are the HOPE Scholarship and Grant programs, which account for 66.5 percent of Lottery for Education expenditures. The other recipient of Lottery proceeds, the Pre-K program will be reviewed next week.
History of the lottery
The state lottery was passed into law by constitutional amendment in November 1992. It is interesting to note that this currently popular program was passed by a margin of less than 100,000 votes (1,146,340 to 1,050,674). This slim margin led to doubts that the state would embrace the lottery and cast a shadow on revenue projections. Initially HOPE scholarship eligibility was limited to those who graduated in the class of 1993 and later and whose family income did not exceed $66,000. The full scholarship covered two years of public college. Students choosing to attend a private college in Georgia received a $500 grant for full time study.
In FY1994, the Georgia Student Finance Commission (GSFC) records that HOPE expenditures cost $21.4 million and had 43,274 recipients.
Despite the slim margin of victory for the lottery amendment, FY94 lottery sales brought in $1.1 billion, of which $362 million was allocated for the Lottery for Education account.
GSFC notes that since Sept. 1, 1993, 1,560,174 students have benefited from HOPE at a cost of $5.35 billion. Eligibility standards for the program have changed over the years however.
In the FY11 budget the General Assembly appropriated the following amounts for HOPE programs:
HOPE Administration: $6,985,800 (0.6 percent of total lottery proceeds)
HOPE GED: $2,573,864 (0.2 percent) for further education
HOPE Grant Scholarships: $206,318,361 (18.3 percent) (technical colleges)
HOPE Scholarships-Private Colleges: $59,332,133 (5.3 percent)
HOPE Scholarships-Public Colleges: $474,575,353 (42.1 percent)
HOPE Scholarships for Public Schools is the largest of the programs with 42.1 percent, or $474 million, budgeted. The HOPE Scholarship covers full tuition and a portion of mandatory student fees at public colleges and universities for B students. The amount that the scholarship pays for fees varies by school, but the amounts were capped at 2004 levels.
HOPE Scholarships for Private schools consumes 5.3 percent of lottery expenditures, or $59 million. This program provides a $4,000 scholarship for B average students attending private schools within Georgia. Because a B average is required, these are “merit based” scholarships.
The HOPE Grant is a program that covers tuition and fees for students attending Technical Colleges. Unlike the two HOPE scholarships, this grant has no academic requirements beyond satisfactory participation. It is the fastest growing of these programs from 2000 to 2010, growing around 300 percent. This grant program accounts for 18.3 percent of lottery expenditures, or $206 million.
Since no grade requirement exists and family income is not considered, this is referred to as the “HOPE Grant” and it is neither merit-based nor means-tested.
The two biggest drivers of growth in the HOPE programs are the number of awards granted and increases in tuition. The number of all HOPE awards has increased from 302,858 in 2000 to 549,137 in 2010, an increase of 81 percent in 10 years. Over the same time period tuition has increased as well, nearly 200 percent at some institutions.
A handful of small, non-HOPE scholarships and grants account for $23 million in lottery spending, or around 2 percent of the total. These include: Accel-$5.7 million, Georgia Military College Scholarship-$12 million, Public Memorial Safety Grant-$306,761, Engineer Scholarship-$550,000 and the new College Opportunity Grant-$15 million, Georgia’s first need-based aid program.
The takeaway from this data is that while most discussion for changes center on just the HOPE Scholarship, this approach only considers half of the expenditures of lottery programs. The merit-based HOPE Scholarship, public and private, accounts for only 47 percent of lottery funds expended, leaving, of course, 53 percent in other expenditures in technical schools and pre-k programs.
I may be reached at
234 State Capitol, Atlanta, GA 30334
(404) 656-5038 (phone)
(404) 657-7094 (fax)
E-mail at Jack.Hill@senate.ga.gov
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