Finally fulfilling the promise made 17 years ago to voters who approved a state lottery, all of the Kentucky Lottery's revenue will go directly to education beginning today — specifically to fund college scholarships.
That means students who meet financial criteria will get larger awards, and more students will receive both need-based and merit-based scholarships.
A projected $167 million in lottery proceeds over the next 12 months will fund the scholarships — an increase from $134 million last year, when 90 percent of lottery revenue went to the awards.
Officials say the scholarships help keep the best students in Kentucky and ensure that lower-income students can afford to go to college at a time when federal student aid isn't keeping up with need.
Nathan Parthasarathy, 19, who will be a sophomore at the University of Louisville this fall, said the approximately $2,000 he gets each year from a merit-based scholarship funded by the lottery enticed him to stay in the city for college rather than go to Duke University or another school.
"The amount of money I got was definitely a factor because I wasn't getting enough money at a lot of the other colleges," he said.
Since 1999, the program has handed out 475,000 awards; it helped 89,388 students last year.
At a news conference yesterday, Sen. Tim Shaughnessy, D-Louisville, who proposed the scholarship program in 1998, said Kentuckians didn't have a lot of confidence that the lottery money was going to education because it first went into the state's general fund.
Politicians, including the lottery's chief backer, the late Gov. Wallace Wilkinson, said the money would help pay for education and other programs.
Wilkinson often linked the lottery with educational reforms he proposed, and at one time he supported putting some of the funds toward helping senior citizens and toward a one-time bonus for military veterans.
Mixing lottery money in with the state's budget represented "a breach of trust" to those who voted for the lottery thinking the proceeds would go to education, said Arch Gleason, Kentucky Lottery president.
"Probably one of the most frequently asked questions we get, and members of the General Assembly would get over the first decade of our existence is, 'Where does that money from the lottery go?' " Gleason said.
Now the answer is simple.
The awards have contributed to college enrollment rising 20 percent in the past five years and to the "slowly decreasing" number of Kentuckians leaving the state for college, said Joe McCormick, director of the Kentucky Higher Education Assistance Authority, which doles out the scholarships.
Students can use the money at any college in Kentucky or can take the scholarship to schools outside the state if no college in Kentucky offers their course of study, McCormick said.
The program is helping "stem the tide of the best and brightest leaving Kentucky," he said.
Maggie Lorenz, 19, of Dry Ridge, who will be a junior at U of L in the fall, said she gets $2,400 a year from the merit-based fund.
"It definitely made me want to stay in Kentucky," she said. Another scholarship from the school persuaded her to attend U of L, she said.
This year, 55 percent of the money will go to need-based scholarships and the rest to merit awards. It was split evenly last year.
Under the program, merit scholarships are awarded on a sliding scale based on grades and ACT scores; they can be as much as $2,500 per year, said lottery spokesman Chip Polston. Those awards aren't expected to increase.
Linda Renschler, director of student administrative services for the assistance authority, said the additional money will let the agency increase need-based scholarships.
College Access Program scholarships would go from $1,400 to $1,700 each year and Kentucky Tuition Grants would go from $2,600 to $2,800, Renschler said.
U of L President Jim Ramsey said the $34 million awarded to students at the school over the past five years has been especially helpful as federal student aid has "been pinched" by pressure on the national budget.
"It's been tough for us to continue to move forward on our campus with the financial aid programs that we need for our students, but the commonwealth of Kentucky has been there with this program," said Ramsey, who was joined at a news conference by about 20 students who receive lottery scholarships.
University of Kentucky students have received the most money under the program, about $50 million.
Western Kentucky University students have received $37 million, and Eastern Kentucky students have received $34.5 million.