Projection: Low lottery funds shrinking HOPE payouts

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ATLANTA -- Rising tuition and stagnant lottery sales mean the HOPE Scholarship will be paying less than half the tuition of its recipients by 2016, according to official projections given to lawmakers Monday.

A reform of the HOPE Scholarship enacted by the General Assembly last year reduced the scholarship payout to 90 percent of the tuition at the time and ended the practice of raising the payout to meet rising tuition. Officials with the Georgia Student Finance Commission estimated continued growth in tuition over the coming years as well as modest income rises from the Georgia Lottery to reveal a spreading payout gap.
The commission is already relying on its reserves to cover part of the payout, but it with have drawn down those reserves to the legal minimum by 2014. As tuition continues to climb at the current rate, the result is that the lottery will only produce enough funds to cover less than half the tuition of all the students expected to qualify for it, said Tim Connell, the commission's president.
That funding shortage could result in many of the state's brightest students leaving college, he warned.
"The cost of attending college is the biggest reason now why people drop out," he said.
At the same meeting, Margaret DeFrancisco, president of the Georgia Lottery Corporation, told the legislators that sales growth has been hurt by the recent recession but also that the Lottery is running out of ways to boost them.
Rep. Ron Stephens, R-Savannah, asked about tapping into the state's tourist and convention market as a new revenue source by installing instant-win video terminals in private hospitality developments. The Lottery already has legal authority to use such terminals without legislation, a referendum or changing the constitution, but the commission has declined to do it, she said.
"When you walk in, it looks like a casino," she said. "For that reason, that is a public-policy decision. We would not step out on our own on that. We really need a public discussion about that."
Stephens organized Monday's meeting as a way to convince his colleagues to support a resolution urging the Lottery to start using the terminals. He said a resolution could pass quickly in order to begin the three years needed to develop the casinos.
"It's almost a no-brainer for me," he said.
Conventioneers and tourists aren't likely to buy lottery tickets in gas stations and convenience stores but they would see the electronic, instant games as entertainment in a casino-type setting, he said.
He quoted a study done for the Lottery last fall that concluded that the state could support three such casinos, and that one in Savannah alone would produce sufficient revenue to restore the HOPE Scholarship.

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my.voice 01/10/12 - 08:46 am
"It's almost a no-brainer for

"It's almost a no-brainer for me,"

Imagine a politician saying that. No Brainer........

The Lotto is a tax on the stupid. What I would like to see exposed is who is making money on the Lotto? Can the AC consider a story of unwinding the entire Lotto structure top to bottom? It seems rather than shortchange the INTENDED recipients, that those at the top should be giving up THEIR CUTS.

just sayin

augusta citizen
augusta citizen 01/10/12 - 09:30 am
No surprise here. The HOPE

No surprise here. The HOPE was not sustainable as it was being run. The recession would certainly mean less people buying lottery tickets, but why would it have been paying 100% of tuition anyway? That encourages people to go to college whether they are serious about it or not, something that's free is never appreciated by the recipient. College tuition has been one of the most inflationary costs over the last couple of decades, (400% is what I've read). Ending the practice of raising the payout to keep up with tuition increases was necessary. Why has tuition soared when the quality of the education has dropped? Because the government in one form or another has tried to make a college education a right. I didn't say a college degree as many who go never graduate since they weren't college material to begin with, but hey if it's free, why not? It's only been over the last few decades that everyone HAD to go to college, that's baloney too, many of these students leave with such high student loans, they start out their adult life deep in debt and still get the same low paying jobs as if they had not even gone. It's been a goldmine for the colleges, the opinion that you must go to college to succeed in life, coupled with the rampant student loans and lottery funded scholarships, etc. they can just raise that tuition like crazy, people are still lining up to enroll. When the money stops rolling, colleges are going to be scrambling to keep their doors open when enrollment hits the basement. Guess they'll be asking taxpayers to foot the mother of all bailouts then.

Chillen 01/10/12 - 10:19 am
Simple Solutions. 1. Tie the

Simple Solutions.

1. Tie the Hope Scholarship to SAT's and give it to only the REAL deserving students - not those "given" an A or B by their teacher so they can go to college for a year for free.

2. Get rid of the Pre-K 4 Babysitting program. Let parents pay for their own children to be educated before Kindergarten.

3. Stop giving Freshman the Hope Scholarship for a full year. If they don't earn the grades their first semester, drop them out of the program until they earn their way back in. 60-70% of them make very poor grades Semester 1 and STILL get the Hope Scholarship their second semester. That is ridiculous.

4. Force spending reform in the Public Universities. Stop the spending madness, the tenure, the lifetime pensions and all the perks for individuals who mostly work part time. This is what you get when you have liberals running the show like they do in higher education.

Save the program for those who deserve it and have earned it. And that is not a 4 year old, not a student with poor grades and not a student who was propped up by their teachers.

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