NASHVILLE ? State policymakers examined a plan today that would cut in half the $4,000 per year Hope Scholarship at four-year colleges and universities for students who achieve only one of the two eligibility criteria ? either a 21 on the ACT college entrance exam or a 3.0 high school grade-point average ? but not both.
The proposal was presented to the state Senate Lottery Stabilization Task Force today as another option for closing an $18 million-a-year deficit in what the scholarship program now costs and what the Tennessee Lottery generates for the program. But the task force won?t make its recommendation until next month, and nothing will be final until the state legislature approves the changes during its 2012 session.
Currently in Tennessee, high school graduates who make either 21 on the ACT or have a 3.0 high school GPA qualify for the base $4,000 per year Hope Scholarship at four-year institutions in Tennessee and $2,000 at two-year schools. The policy option presented to the task force this afternoon would require students to achieve both standards to qualify for the full base $4,000 scholarship at four-year schools.
Students who achieve only one of the two standards would receive only $2,000 per year at either four- or two-year schools, but they could start earning the $4,000 grant starting with their third year of college provided they have met the current retention standards for the program during their first two years of college.
That change, officials said, would ?incentivize? students who don?t achieve both standards to attend their first two years at a community college where data indicates they will have a better chance of academic success ? and then transfer to a four-year school to pursue baccalaureate degrees. When fully implemented, it would save the lottery program about $17 million a year.
But the sentiment was not unanimous. David Gregory, an administrator with the Tennessee Board of Regents, said data indicates the change would ?disproportionately affect African-American? students and low-income students.
Statistics presented with the policy option indicated that 23 percent of the students who would receive a reduced award would be black, 65 percent would be white and the remaining 12 percent would be students of other races, and 44 percent of students who would receive a reduced award would be from households with adjusted gross incomes of under $60,000.
If lawmakers ultimately adopt the plan, they would also have to decide when it would go into affect. As presented today, it would go into effect for students entering college either in the fall of 2013 or 2014 ? or students who are currently 10th or 11th graders. If that is approved, it would depart from the legislature?s previous discussions that focused on delaying any tightening of the scholarship program for all current high school students, who are already building academic credentials based on the current requirements.
The proposal, drafted by the Tennessee Higher Education Commission staff at the request of the Senate task force, appeared to gain support among members of the task force, which will meet again in November for further discussions and to decide on its recommendations to the full legislature.
?I think it gained some traction but there are still some question to be answered,? said Sen. Dolores Gresham, R-Somerville, the chairman of the task force and of the Senate Education Committee.
At its initial meeting in late August, the task force reviewed a number of other options for changes, including imposing income ceilings on eligibility. But the panel appears to be narrowing its focus to the option discussed today and with looking at ways to increase lottery revenue, including allowing lottery purchases with debit cards, as 34 of the 44 states with lotteries allow. Tennessee requires all lottery tickets to be purchased with cash only.
Despite the annual deficits, the scholarship program has enough money in reserves built up in the early years of the lottery to keep the program solvent until at least 2024, the task force was told at its first meeting.
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