The nation's most sweeping lottery-funded scholarship program was reined in Wednesday by Georgia lawmakers, who trimmed the popular HOPE scholarships out of fear they will soon cost more than lottery revenues can provide.
The scholarships which cover books, fees and tuition for B students at state schools will get new qualification rules in response to warnings the program is growing out of control.
The scholarships cost $21 million in 1993, the first year. This school year, the state expects to spend $440 million on about 300,000 students, with a projected tab of $502 million for next school year. Economists warned the fund would be bankrupt by the end of the decade if changes weren't made.
The exploding costs came mostly because lawmakers passed generous add-ons in HOPE's early years, when the lottery was literally making more money than lawmakers knew what to do with. The public fell in love with HOPE, other states copied the program and even former President Bill Clinton oversaw creation of a federal college savings tax credit called HOPE in 1997.
"This is landmark," said Rep. DuBose Porter of Dublin, the House's second-ranking Democrat. "This is a very, very big deal, and we've got to be very careful when we talk about changing it."
Lawmakers spent nearly a year squabbling over what to do to trim costs. On Wednesday, the last day of the legislative session, lawmakers finally struck a deal they hope will keep the HOPE fund solvent but not hurt students who have come to depend on free tuition.
Among other things, lawmakers tentatively planned on a new rule to decide whether high school seniors qualify. Currently students need an 80 numeric average, but in many school systems here an 80 mark is a C, not a B. That means some C students receive HOPE because they had an overall average above 80.
Lawmakers planned to start requiring a 3.0 grade point average instead by 2007. That would save money because up to a third of HOPE recipients are thought to have grades that fall below that mark.
The agreement also sets up a slow peeling back of the books and fees currently paid for by the scholarship.
If the year-end balance of the state scholarship fund drops, students could get less all or part of their book awards. If the fund continues to lose money after several years, HOPE would also stop covering mandatory fees, which can top $1,000 a year per student.
Both parties ceded important points they argued during the long debate over the future of HOPE. Republicans wanted to require a minimum SAT score to get HOPE, which they believed would encourage students to take the test more seriously and raise Georgia's abysmal average scores.
Democrats suggested a return of an income cap. In its first years, HOPE went only to students whose parents made under $100,000 a year. Lawmakers removed that limit in 1995.
Lawmakers ultimately decided not to tie HOPE to a test score and also backed off an income requirement, both of which went over poorly with the public. The compromise must still be approved by the full Legislature, but because the leaders of both parties support the compromise, so it was thought unlikely to fail.
"They have taken huge strides in preserving the HOPE scholarship for future generations," said Derrick Dickey, a spokesman for Republican Gov. Sonny Perdue.