Bill to Cut Scholarships Gets an Automatic Self-Destruct Trigger

The state legislature is moving ahead to make it harder to qualify for a lottery-financed scholarship. But the proposal got a rare self-destruct mechanism written into it today.

Under a bill from Senator Dolores Gresham, students must score both a 21 on the ACT and have a 3.0 grade point average to earn the full $4,000 a year HOPE scholarship.

Hit only one of those benchmarks, and the scholarship would drop by half.

Those against the change argue lottery income is up, ten million dollars for this year alone. So Gresham added an amendment that says if the lottery income stays high, her new law would automatically go away, in legislative language, “sunset,” prior to ever even taking effect in 2015.

“If the lottery corporation can sustain this success, we couldn’t be happier.”

But Gresham says if the flip side occurs – if lottery revenues slump – the cut in scholarship amounts would still take effect in Fall, 2015.

The version with the new “trigger” amendment which would undo the bill, was approved by a Senate committee this morning. The House Education Subcommittee is waiting until next week before they consider the self-destruct button.

The bill, SB 2514 Gresham/HB 2649 Brooks, passed the Senate Education Committee 7-2 and went to the Senate Finance Committee for a review.

The bill’s staff-generated fiscal note (PDF) is a pretty good summary of the original intent of the bill, minus the go-away trigger.

Over four years, Gresham’s system of reduced payments to some students would build up lottery fund reserves.

Claude Pressnell, president of Tennessee Independent Colleges and Universities Association, the public face of TICUA, the private colleges in the state, has followed the health of the lottery scholarship closely.

“The program is currently spending $18 million a year more than it’s taking in. Now the lottery corporation is projecting that it will have an additional $10 million a year to help offset that. So even with the amendment we’re still going to dealing with about an eight-million-dollar a year deficit.”

“What the amendment does, is it says that if the ten million dollars does come true, and it stays at about that level, on-going, that by 2015 they’ll sunset the bill and the changes will not take place.”

One of the things Pressnell likes about Gresham’s original bill is that it makes more money available for poor students, without regard to their score on the American College Test or their grade point average.

“Part of the proposal was to take $10 million a year for ten years, and put that money into the need-based aid program, and that has also gone away.”

That program is administered by the Tennessee Student Assistance Corporation, and their constituency includes a lot of “first-in” students.

“They’d be the first generation, first one, ever, in either extended family, to ever go to college. And so that’s the program that has the greatest potential of transforming access to higher education.”

There’s a perception, Pressnell says, that private schools are only interested in students with resources – the wealthy. But TICUA member schools have used scholarship eligibility to help make their schools more diverse, he says.

“If you take a look at the Tennesseans who are enrolled in the private colleges in the state of Tennessee, 29 percent of those students are minority students, and 48 percent of those students receive the federal Pell grant, which is the grant available for needy, low-income families.

“At our public university level, about 28 percent of their students are Pell-eligible. So a lot of our [private] campuses are interested in first generation, low income students, and they provide a significant amount of aid to that particular population, in order to provide access to those students.”

Private schools also have more resources than public schools and contribute as much as 70 percent of their needy students’ grants from endowments and other sources not available to the public universities, he says.

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