Bright Futures, and other lottery-based scholarship programs, are funded by the poor but benefit the middle- and upper-classes.
Published: Sunday, January 4, 2004 at 6:01 a.m.
Last Modified: Saturday, January 3, 2004 at 9:23 p.m.
Since its inception, in 1993, Georgia's HOPE scholarship program has spent more than $2 billion in lottery dollars to help more than 730,000 Georgia students attend college. Furthermore, HOPE has been the model for several other state merit-based scholarship plans, including Florida's Bright Futures.
But a new study by the University of Kentucky's Center for Poverty Research sheds light on the regressive nature of HOPE - a regressivity that is almost certainly shared by Florida's plan.
On the one hand, the center found low income African-Americans supply a disproportionate share of the lottery dollars that finance HOPE. As the study puts it, "the literature is remarkably consistent on some basic characteristics of the typical player: male, low-income, low educated and African-American. Consequently, lotteries are a regressive form of taxation, one that places a relatively greater burden on the poor."
On the other hand, HOPE awards have so increased the demand for admissions that the University of Georgia, Georgia Tech and other top Georgia institutions have raised their SAT score requirements.
"Because the SAT is one of the main criteria for admission at Georgia and Georgia Tech, and African-Americans as a group score lower on the SAT, they are disadvantaged when seeking admissions to those universities, which have seen their average freshman SATs rise during the HOPE period."
Concludes the study, "evidence suggests HOPE has made it more difficult for African-Americans to matriculate at the state's most selective institutions because of the scholarship's effect on college stratification by SAT scores. Since the program is financed by a state lottery, its costs are disproportionately borne by lower-income and African-American families who spend a larger share of their incomes on the lottery than more affluent and white families.
"However, because high school academic achievement and family income are positively correlated, the HOPE scholarship tends to benefit students from middle- and upper-income households."
In other words, lottery-driven, merit-based scholarships like Georgia's HOPE - and almost certainly Florida's Bright Futures - tend to be reverse subsidies: Low income families subsidize the college educations of the children of the middle and upper class, even as they find it more difficult to get their own children into top flight colleges because the popular scholarship programs drive up admissions requirements.
In addition to being socially unjust, such lottery-driven scholarships also tend to be fiscally unsustainable in the long run. Georgia is already facing the prospect of having to drastically cut back or dramatically overhaul HOPE because the demand for scholarships threatens to outstrip the ability of lottery players to finance the program. Florida will very soon be facing the same dilemma.
As a further irony, lawmakers attempt to control the costs of lottery-fueled scholarships by artificially suppressing tuition at institutions like the University of Georgia and the University of Florida - a move that will ultimately result in a decreased quality in the educational offerings at such institutions.
Hopefully, as lawmakers in Georgia, Florida and elsewhere begin to restructure their lottery-driven scholarship programs they will attempt to address the unfairness of taxing the poor to educate the better-off. One way to do that would be to make eligibility hinge less on merit and more on need.
If low income, poorly educated lottery players are going to continue to provide most of the dollars for programs like HOPE and Bright Futures, their children ought to at least get more of the benefit from those scholarship programs.
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