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Falling lottery sales pinch college scholarships

Insider BuzzInsider Buzz: Falling lottery sales pinch college scholarships
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ALBUQUERQUE, N.M. — The ticket-buying frenzy that erupted over January's $1.6 billion Powerball jackpot wasn't enough to reverse a long-running trend: Proceeds from lottery games aren't keeping pace with the higher education costs they were supposed to pay.

Now lawmakers in at least eight states have made or are considering making dramatic cuts to scholarship programs funded by lotteries. The programs, aimed at opening access to college by providing nearly free tuition, include one at the University of New Mexico that helps nearly half of all first-time full-time students.

College administrators and students alike are bracing for a blow if more money isn't found.

"This would force students to pay about $1,700 more out of their pockets annually, and most likely it would mean borrowing more in student loans," said Terry Babbitt, an associate vice president at the university.

New Mexico has one of the nation's most generous programs, paying more than 90 percent of tuition for eligible students. Without any new money, the benefit will have to be reduced to about 60 percent, according to the state Department of Higher Education.

The problem begins with declining ticket sales. When a state establishes a lottery, excitement typically builds and consumers rush to buy tickets. As the games mature, sales level off. After 20 years, New Mexico's lottery sales have plateaued, as have sales for multi-state games like Powerball.

Changing spending habits play a role too. Millennial consumers, according to some experts, are moving away from lotteries. And many Americans never go inside a convenience store to buy gas anymore, choosing instead to swipe a credit card at the pump. That means fewer opportunities to sell lotto tickets.

The rising cost of tuition and tight state budgets add to the strain.

Affected states have been forced to make painful changes in recent years, tightening eligibility requirements or reducing the amount of aid a student receives.

In New Mexico, lawmakers introduced dozens of measures over the last decade to shore up their program, including making one-time appropriations to prop up the scholarships and shifting $19 million in liquor excise tax revenue.

During the legislative session that ended last month, Senate majority leader Michael Sanchez, a Democrat, pushed through a bill allowing for unclaimed prize money to be transferred to the lottery tuition fund. Experts said that's a step in the right direction but not enough to close the growing gap.

Other ideas include raising the bar for eligibility. To qualify, New Mexico students must maintain a 2.5 grade-point average and complete at least 15 credit hours a semester at a four-year school.

Students are frustrated at the prospect of cuts.

"The reason we were pushing so hard for solvency this year was because we don't want to reach the point where we're looking at a cliff, where we either have to make a decision or students are looking at a 30 percent decrease in funding," said Jenna Hagengruber, a college senior and president of Associated Students of the University of New Mexico. "That's an incredibly large drop."

The scholarships were created two decades ago, shortly after Georgia established a lottery scholarship that became a model for similar programs throughout the South. Georgia was forced to make changes in 2011 that resulted in a nearly 25 percent cut in the number of students who qualified.

Tennessee has tried to buffer its program from the volatility of lottery sales by establishing an endowment that can fund scholarships through interest and earnings. The move could provide a cushion over the short term.

New Mexico already leads the nation with the highest student loan default rate, federal data show. And even if new funding could be tapped, the problem is expected to linger.

Annual revenue from lottery ticket sales has plateaued at about $40 million. Tuition costs for eligible students are expected to top $65 million a year.

Legislators have floated some three dozen ideas in recent years.

One Republican lawmaker said New Mexico's four-year research colleges regarded the lottery scholarship "as a blank check from Santa Fe" and rapidly raised tuition over the last 15 years.

State Representative Jason Harper, who has been working on the issue since his election in 2013, suggests that the scholarships serve as a bridge for students after all other financial aid is exhausted.

Boston Globe

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18 comments. Last comment 11 months ago by OneTrickpony.
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dallascowboyfan's avatar - tiana the-princess-and-the-frog.jpg
Oklahoma
United States
Member #82391
November 12, 2009
6305 Posts
Offline
Posted: March 3, 2016, 12:40 pm - IP Logged

I'm with Rep. Jason Harper "the scholarships serve as a bridge for students after all other financial aid is exhausted." I Agree!

I Love Pink & Green 1908

    bigdaddy's avatar - aviator2 1.jpg
    BETWEEN OAKRIDGE AND WRIGHT-PATTERSON AFB
    United States
    Member #1647
    June 10, 2003
    2762 Posts
    Offline
    Posted: March 3, 2016, 1:51 pm - IP Logged

    audit the books!!!

    Relax,Bigdaddy has your number!!!!!

    Pi is the way...

    turning $30 or less into thousands everyday!!

    here we go steelers ..here we go---------stairway to seven 

    TIME FOR THE LOMBARDI TROPHY TO  COME  HOME..

      spartan1707's avatar - Lottery-050.jpg
      Tucson
      United States
      Member #119762
      December 2, 2011
      84 Posts
      Offline
      Posted: March 3, 2016, 2:59 pm - IP Logged

      Lol this is hilarious they aka the schools already receive tax dollars plus lottery money. It's called greed period.

        Groppo's avatar - cat anm.gif

        United States
        Member #162631
        January 7, 2015
        540 Posts
        Offline
        Posted: March 3, 2016, 3:15 pm - IP Logged

        Lol this is hilarious they aka the schools already receive tax dollars plus lottery money. It's called greed period.

        It's a doggone shame, ain't it?

        I wish things were more like the old days.

        But, even back then, people would still be wanting older and older days.

        Next thing you know, the headlines would read:  "Titanic sunk, Great loss of life. .. . . . ", etc.  : (

        • Don't chase the numbers you play.
        • Play only numbers you've already played, plus however many random picks.
        • But, ALWAYS the regular numbers you play.  This will make you a winner, not a chaser.
                  (so far, though, I've yet to win any significant lotto prize)
          HoLeeKau's avatar - YheaShea
          Idaho
          United States
          Member #94283
          July 17, 2010
          2284 Posts
          Offline
          Posted: March 3, 2016, 3:20 pm - IP Logged

          Well, now I guess we know why so many New Mexico student loans are in default.  They learned how to budget from UNM.

            Avatar
            Kentucky
            United States
            Member #32652
            February 14, 2006
            7344 Posts
            Offline
            Posted: March 3, 2016, 4:45 pm - IP Logged

            The ticket-buying frenzy that erupted over January's $1.6 billion Powerball jackpot wasn't enough to reverse a long-running trend: Proceeds from lottery games aren't keeping pace with the higher education costs they were supposed to pay.

            Now lawmakers in at least eight states have made or are considering making dramatic cuts to scholarship programs funded by lotteries. The programs, aimed at opening access to college by providing nearly free tuition, include one at the University of New Mexico that helps nearly half of all first-time full-time students.

            College administrators and students alike are bracing for a blow if more money isn't found.

            "This would force students to pay about $1,700 more out of their pockets annually, and most likely it would mean borrowing more in student loans," said Terry Babbitt, an associate vice president at the university.

            New Mexico has one of the nation's most generous programs, paying more than 90 percent of tuition for eligible students. Without any new money, the benefit will have to be reduced to about 60 percent, according to the state Department of Higher Education.

            The problem begins with declining ticket sales. When a state establishes a lottery, excitement typically builds and consumers rush to buy tickets. As the games mature, sales level off. After 20 years, New Mexico's lottery sales have plateaued, as have sales for multi-state games like Powerball.

            Changing spending habits play a role too. Millennial consumers, according to some experts, are moving away from lotteries. And many Americans never go inside a convenience store to buy gas anymore, choosing instead to swipe a credit card at the pump. That means fewer opportunities to sell lotto tickets.

            The rising cost of tuition and tight state budgets add to the strain.

            Affected states have been forced to make painful changes in recent years, tightening eligibility requirements or reducing the amount of aid a student receives.

            In New Mexico, lawmakers introduced dozens of measures over the last decade to shore up their program, including making one-time appropriations to prop up the scholarships and shifting $19 million in liquor excise tax revenue.

            During the legislative session that ended last month, Senate majority leader Michael Sanchez, a Democrat, pushed through a bill allowing for unclaimed prize money to be transferred to the lottery tuition fund. Experts said that's a step in the right direction but not enough to close the growing gap.

            Other ideas include raising the bar for eligibility. To qualify, New Mexico students must maintain a 2.5 grade-point average and complete at least 15 credit hours a semester at a four-year school.

            Students are frustrated at the prospect of cuts.

            "The reason we were pushing so hard for solvency this year was because we don't want to reach the point where we're looking at a cliff, where we either have to make a decision or students are looking at a 30 percent decrease in funding," said Jenna Hagengruber, a college senior and president of Associated Students of the University of New Mexico. "That's an incredibly large drop."

            The scholarships were created two decades ago, shortly after Georgia established a lottery scholarship that became a model for similar programs throughout the South. Georgia was forced to make changes in 2011 that resulted in a nearly 25 percent cut in the number of students who qualified.

            Tennessee has tried to buffer its program from the volatility of lottery sales by establishing an endowment that can fund scholarships through interest and earnings. The move could provide a cushion over the short term.

            New Mexico already leads the nation with the highest student loan default rate, federal data show. And even if new funding could be tapped, the problem is expected to linger.

            Annual revenue from lottery ticket sales has plateaued at about $40 million. Tuition costs for eligible students are expected to top $65 million a year.

            Legislators have floated some three dozen ideas in recent years.

            One Republican lawmaker said New Mexico's four-year research colleges regarded the lottery scholarship "as a blank check from Santa Fe" and rapidly raised tuition over the last 15 years.

            State Representative Jason Harper, who has been working on the issue since his election in 2013, suggests that the scholarships serve as a bridge for students after all other financial aid is exhausted.

            "Now lawmakers in at least eight states have made or are considering making dramatic cuts to scholarship programs funded by lotteries."

            It looks like the legislators are blaming lottery players because they can't keep their promises. It's always the same, legislators spend money before they know how much money they have to spend.

              maximumfun's avatar - Lottery-030.jpg
              Lavender Rocket

              United States
              Member #124616
              March 16, 2012
              2642 Posts
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              Posted: March 3, 2016, 5:20 pm - IP Logged

              I'm with Rep. Jason Harper "the scholarships serve as a bridge for students after all other financial aid is exhausted." I Agree!

              I also agree with that.  "Free money" is a scary concept for the legislature to have in their minds whilst they are determining budgets.

                Avatar
                On The Edge of Infinity
                United States
                Member #160681
                November 4, 2014
                76 Posts
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                Posted: March 3, 2016, 6:02 pm - IP Logged

                audit the books!!!

                I agree.  Lets see the bonuses those lottery executives give themselves.  I bet some of them are five figures. 

                In lotto breaking even is winning- Gail Howard

                  Bondi Junction
                  Australia
                  Member #57242
                  December 24, 2007
                  1102 Posts
                  Offline
                  Posted: March 3, 2016, 10:23 pm - IP Logged

                  The ticket-buying frenzy that erupted over January's $1.6 billion Powerball jackpot wasn't enough to reverse a long-running trend: Proceeds from lottery games aren't keeping pace with the higher education costs they were supposed to pay.

                  Now lawmakers in at least eight states have made or are considering making dramatic cuts to scholarship programs funded by lotteries. The programs, aimed at opening access to college by providing nearly free tuition, include one at the University of New Mexico that helps nearly half of all first-time full-time students.

                  College administrators and students alike are bracing for a blow if more money isn't found.

                  "This would force students to pay about $1,700 more out of their pockets annually, and most likely it would mean borrowing more in student loans," said Terry Babbitt, an associate vice president at the university.

                  New Mexico has one of the nation's most generous programs, paying more than 90 percent of tuition for eligible students. Without any new money, the benefit will have to be reduced to about 60 percent, according to the state Department of Higher Education.

                  The problem begins with declining ticket sales. When a state establishes a lottery, excitement typically builds and consumers rush to buy tickets. As the games mature, sales level off. After 20 years, New Mexico's lottery sales have plateaued, as have sales for multi-state games like Powerball.

                  Changing spending habits play a role too. Millennial consumers, according to some experts, are moving away from lotteries. And many Americans never go inside a convenience store to buy gas anymore, choosing instead to swipe a credit card at the pump. That means fewer opportunities to sell lotto tickets.

                  The rising cost of tuition and tight state budgets add to the strain.

                  Affected states have been forced to make painful changes in recent years, tightening eligibility requirements or reducing the amount of aid a student receives.

                  In New Mexico, lawmakers introduced dozens of measures over the last decade to shore up their program, including making one-time appropriations to prop up the scholarships and shifting $19 million in liquor excise tax revenue.

                  During the legislative session that ended last month, Senate majority leader Michael Sanchez, a Democrat, pushed through a bill allowing for unclaimed prize money to be transferred to the lottery tuition fund. Experts said that's a step in the right direction but not enough to close the growing gap.

                  Other ideas include raising the bar for eligibility. To qualify, New Mexico students must maintain a 2.5 grade-point average and complete at least 15 credit hours a semester at a four-year school.

                  Students are frustrated at the prospect of cuts.

                  "The reason we were pushing so hard for solvency this year was because we don't want to reach the point where we're looking at a cliff, where we either have to make a decision or students are looking at a 30 percent decrease in funding," said Jenna Hagengruber, a college senior and president of Associated Students of the University of New Mexico. "That's an incredibly large drop."

                  The scholarships were created two decades ago, shortly after Georgia established a lottery scholarship that became a model for similar programs throughout the South. Georgia was forced to make changes in 2011 that resulted in a nearly 25 percent cut in the number of students who qualified.

                  Tennessee has tried to buffer its program from the volatility of lottery sales by establishing an endowment that can fund scholarships through interest and earnings. The move could provide a cushion over the short term.

                  New Mexico already leads the nation with the highest student loan default rate, federal data show. And even if new funding could be tapped, the problem is expected to linger.

                  Annual revenue from lottery ticket sales has plateaued at about $40 million. Tuition costs for eligible students are expected to top $65 million a year.

                  Legislators have floated some three dozen ideas in recent years.

                  One Republican lawmaker said New Mexico's four-year research colleges regarded the lottery scholarship "as a blank check from Santa Fe" and rapidly raised tuition over the last 15 years.

                  State Representative Jason Harper, who has been working on the issue since his election in 2013, suggests that the scholarships serve as a bridge for students after all other financial aid is exhausted.

                  State lotteries can increase revenue by offering subscription services, New York and Massachusetts offer subscription services. In New York you have to have a New York state address, in Massachusetts you can play from anywhere in the US.

                  We all get a lot out of lotteries!

                    R151413's avatar - Lottery-015.jpg
                    Fort Smith AR
                    United States
                    Member #169664
                    October 27, 2015
                    58 Posts
                    Offline
                    Posted: March 4, 2016, 2:28 am - IP Logged

                    audit the books!!!

                    Are the lottery officials paid from lottery revenue? If so, that would be an area to consider budget cuts.

                    ®

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                      norman
                      United States
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                      March 4, 2015
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                      Posted: March 4, 2016, 4:17 am - IP Logged

                      JesterBlue AngelJesterBed

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                        Beckley
                        United States
                        Member #173476
                        March 4, 2016
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                        Posted: March 4, 2016, 9:18 am - IP Logged

                        For safety reasons, the name should not be made known.

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                          Zeta Reticuli Star System
                          United States
                          Member #30470
                          January 17, 2006
                          10392 Posts
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                          Posted: March 4, 2016, 11:07 am - IP Logged

                          Interesting that this news article also mentions some of the promises that the pro-lottery politicians in Alabama are promoting. If a lottery fulfills those promises that's one thing, but if the government people are all for it only seeing it as a means to stuff their own pockets that's quite another.

                          Bang Head

                          Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                          Lep

                          There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

                            Goteki54's avatar - Lottery-007.jpg
                            Baltimore, MD
                            United States
                            Member #143332
                            May 30, 2013
                            401 Posts
                            Offline
                            Posted: March 6, 2016, 7:30 am - IP Logged

                            Schlorships are merely masking or trying to mask the 800 pound gorilla in the room. Fallig lottery revenue isn't th problem.The run away cost of college tution is the real problem. Why does college tution come with suh  an astronomical cost when it never use to be this way? Why does college tution contiues to rise? etc There has been many stories on how college education has become a big scam. As wages continue to fall and the cost of tution continues to rise, that is not good at all.

                            Following the trends and patterns means following the money!Banana