Change in Lottery Scholarships

State Capitol Week in Review

From Senator Sue Madison

September 21, 2012

LITTLE ROCK  –  Legislators heard details of a plan that would change how lottery scholarships are distributed, creating a “tiered” system.  Its supporters say it would preserve the long term financial stability of the program.

Currently,  students at a four-year university who are eligible for lottery scholarships get $4,500 a year.  Students at two-year colleges get $2,225 a year.  Legislators agreed that even if a change in lottery scholarships is enacted in the 2013 regular session, students now getting scholarships would continue to receive the same amounts.

The plan would eliminate the difference in scholarship amounts between two-year college students and those in a four-year institution.  Eligible freshmen would get $2,000.  Each year they remain in college they would get an additional $1,000.  Sophomores would get $3,000, juniors would get $4,000 and seniors would get $5,000.

The sponsor of the plan said that the current lottery scholarship program is unsustainable, and if the legislature does nothing now scholarship amounts will have to be reduced in the future.  He acknowledged that there is strong opposition to tighter eligibility requirements, such as raising the minimum grade point averages and standardized test scores required to get a scholarship.  With that opposition in mind, tiered scholarships make sense, he said.

However, the proposal quickly drew opposition from backers of the current system, who said that the legislature should be careful not to make wholesale changes that would deviate radically from the constitutional amendment creating the lottery.  Amendment 87, which set up the Arkansas lottery, was approved in 2008 by a vote of 648,000 to 383,000.

According to legislative researchers, the lottery scholarship program will bring in an estimated $118 million next year.  Under current rules, students will be eligible for almost $140 million worth of scholarships.  But under the tiered plan discussed last week, the program would be under budget next year.  Scholarships valued at $115 million would be awarded, less than the $188 million the program is projected to bring in.

This school year 34,126 scholarships will be awarded, according to the director of the state Higher Education Department.

One criticism of the proposed changes is that by lowering scholarship amounts for freshmen, fewer students would be encouraged to attend college.  On the other hand, supporters of the new plan say that by gradually increasing scholarship amounts each year, college students would be encouraged to stay in school and get a degree.

A goal of Arkansas policy makers is to graduate students with degrees, because traditionally the state has a low college retention rate – 20 percent for students at two-year colleges and 38 percent for those at four-year universities.

The governor said he would keep an open mind about the proposal to create tiered scholarships because something has to be done to keep the lottery scholarship program under budget.  The governor echoed the comments of legislative leaders who are pushing the tiered scholarship plan when they said that the lottery program must keep faith with college students.  When students earn a scholarship of a certain amount, they must be assured of receiving that amount throughout their college career without fear the amount will be reduced.

The tiered scholarship plan was proposed at a meeting of the Lottery Commission Legislative Oversight Committee by its Senate chairman.

If you have any questions or comments about legislative issues, please call me at 479-442-2997.

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One Response to Change in Lottery Scholarships

  1. Lynda Alonzo says:

    They are not thinking about all of the parents and seniors in high school this year already planning and submitting for scholarships and budgeting for college when they graduate in May of 2013. My daughter will have 46 college credits throught the WATC program, but may not be able to attend because we cannot afford an extra $2500 a year. We make too much to get federal aid, but not enough to be able to come up with so much more that we were projecting.

    Dont let them pull the rug out from under all the seniors out there right now!! If they have to tier the system, start by lowering it another 10% a year. Also, a 2 year college is much less expensive that a 4 year per credit and additional fees. They should receive a lower amount per year not the same..

    My daughter SHS Senior with WATC and good grades. She has worked very very hard the last two years for her college education. She is not a genius. She studies hard and is taking the ACT for the 5th time to try and raise her science and math. This is exactly the type of student the lottery scholarship was made for, and they are going to ruin the integrity of what was voted and approved by the people of Arkansas.

    Thank you for your time,

    Lynda Alonzo
    Fort Smith Arkansas

    .

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