It made so much sense at the time. As state lotteries emerged, particularly in the South, lawmakers tied educational incentives to the proceeds in an effort to change persistently low numbers of post-secondary degree attainment — and with it, the fortunes of the state’s economy.
And for quite a while, it worked. More and more students performed better, thus increasing in-state enrollment. In Georgia, where Gov. Zell Miller’s HOPE Scholarship helped voters pass the state lottery into law in 1992, the percentage of college-degree holders jumped from 19 percent to 28 percent in 20 years.
But more students — and the limitless cost increases of a college education — taxed a system that once seemed to be an endless cash cow, leaving some states — notably Florida, Georgia and South Carolina — in a Promise pinch. A new set of lawmakers are now faced with a tough choice. Do they slash the per-student payout or tighten qualifying standards that would disproportionally affect low-income students who need the most aid?
On Friday it was reported in The State, the premier news outlet in the state of South Carolina, that taxpayers would be paying more than one-third — $59.7 million in all — of the bill for the state’s LIFE Scholarship program, which had established in 1998 as a completely lottery-funded initiative to support students who had met a set of requirements involving high school grade-point average, standardized test scores and class rank.
Neither solution — slash or tighten — would be well received by those counting on the promise of a college education. State Senator Wes Hayes, who chairs the education budget panel, told The State, “We can’t continue just to fund everything.”
When the program began 16 years ago, that wasn’t seen as a problem. “Everybody was for greater investment in higher education, but nobody wanted to pay more taxes,” said then-Governor Jim Hodges. “I saw the lottery as a voluntary tax.” To avoid the slash/tighten dilemma, the final option would be more revenue — or voluntary taxation — from the state lottery.
The Georgia HOPE Scholarship turned 20 years old recently and Atlanta Magazine took inventory of the initiative earlier this year. When the program began, the state was so flush with cash, it added coverage for books and fees. “But,” wrote Rebecca Burns and Betsy Riley, “By 2004, the joyride was over. Faced with skyrocketing costs, lawmakers started making cutbacks. They tweaked the formula for calculating high school GPAs, quit covering fees, and made it tougher for college students to keep HOPE. In 2011 there were even more radical changes.”
Those changes followed a warning by the Georgia Student Finance Commission that HOPE — which has paid out more than $6 billion in its lifespan — would be broke by 2013. Lawmakers ruled that the award amounts would be subject to annual legislation and academic requirements would be tightened. Wrote Riley, “The reduced funding and unpredictable award amounts… quickly nicknamed HOPE Lite — obviously hit low-income students the hardest.”
In short, those now benefitting from HOPE and the new Zell Miller Scholarship (which provides full tuition to the most accomplished students) are those most able to pay for college.
The Florida Bright Futures Scholarship has experienced contraction as well. Initially the program, founded in 1997 after the success of neighboring Georgia, covered tuition, fees and books. But the number of qualifying students this year has dropped to 130,000, a 10-year low, and the payout has dipped to an average award of $2,500, despite record gross sales of lottery tickets.
Early this year the Miami Herald reported that the U.S. Department of Education’s Office for Civil Rights had “quietly revived an investigation of Florida’s Bright Futures scholarships, a move that could reignite long-simmering complaints about the fairness of the popular program.”
“Since the program’s inception,” wrote David Smiley, Michael Vasquez and Kathleen McGrory, “An outsized share of more than $4 billion in scholarships has gone to white or affluent families, at least some of whom were wealthy enough to afford college without any help.”
In Louisiana last week, Governor Bobby Jindal announced he was reallocating $5 million from the Taylor Opportunity Program For Students to help close a state budget gap. While his administration was quick to point out that TOPS had excess money that was not needed this year, the New Orleans Times Picayune reported that “some legislators wonder if money collected for certain purposes — like TOPS — should be raided and used to pay for other services.”
In Arkansas — where the lottery launched just five years ago — the public is already distrustful and consultants are suggesting both “a new business strategy and an image reboot,” according to the Arkansas News. As a result, the amounts of lottery-funded Academic Challenge Scholarships have twice been reduced to keep the program alive.
Despite troubling trends in nearby states, Tennessee and its Governor, Bill Haslam, opted to swim upstream in 2014 to create the The Tennessee Promise, a “last-dollar-in” scholarship and mentoring program. As with the lottery programs before it, the launch was met with statewide enthusiasm. As the application deadline approached this fall, the scene of one long line prompted Promise executive director Mike Krause to claim “it looked like kids waiting to get into a Justin Beiber concert.”
In all, nine states — Kentucky, New Mexico and West Virginia along with Arkansas, Florida, Georgia, South Carolina, Louisiana and Tennessee — are now using lottery proceeds to fund broad scholarship initiatives. New Mexico — the only state outside the South with such a program — is also the only state relying exclusively on college performance to determine who receives its Legislative Lottery Scholarship Program.
Other states may need to consider following that lead as the promise of lottery proceeds funding post-secondary education becomes as unreliable as the lottery itself.
Patricia Melton is the Executive Director of New Haven Promise