After long and loud efforts to keep the HOPE scholarship financially secure, Georgia legislators pulled off a last-minute deal that added a new cost to operating the popular lottery-funded program.
A provision written into a bill at the very end of the legislative session last month will cost HOPE an extra $4.5 million a year by giving scholarships to part-time private college students.
The annual $1,500 scholarships will go for the first time to about 3,000 students taking six to 11 credit hours each semester, according to state estimates. That would cover about 1,000 HOPE scholarships at the University of Georgia.
Gov. Sonny Perdue is expected to sign the bill into law by Monday.
Some legislators who voted for the HOPE funding package say they didn't realize it contained a provision that will increase costs. There was no serious debate of the private-school issue when the HOPE bill passed.
"Why did we do that?" asked Rep. Tom Bordeaux (D-Savannah). "That means when money runs short, you've used the money on a private school."
But officials of private colleges and sympathetic legislators said it's a question of equity. HOPE-eligible students attending public schools like UGA and Georgia Tech part time receive tuition money for the credit hours they take.
"We just felt if this was available to Georgia students attending public colleges, it would also be fair to give it to the same students attending the private colleges," said Henry Hector, president of the Georgia Foundation for Independent Colleges, which lobbies for private schools.
The add-on was not recommended by the state HOPE Study Commission, which was charged with finding ways to ensure that the program doesn't run out of money. The commission was led by Sen. Bill Hamrick (R-Carrollton) and Rep. Louise McBee (D-Athens), who backed the private school provision during the 2004 legislative session.
'Some powerful backing'
Last year, some state officials predicted HOPE and the pre-kindergarten program, both of which are funded by revenue from the Georgia Lottery, would begin draining their reserves by 2006 or 2007. While lottery sales continue to climb, officials say HOPE's expenses are rising faster, fueled by rising college enrollment and increases in tuition.
Full-time public college students with HOPE scholarships get full tuition, mandatory fees and a book allowance if they have a B average.
Private school students may receive a flat $3,000-a-year grant if they attend full time and have a B average. That comes to more money than some public school students receive for college expenses.
Last month, lawmakers adopted a bill that stiffened the requirements from a B to a 3.0 grade-point average. The bill also allows the state to phase out payments toward books and fees if HOPE's year-end balance were to decline. And the legislation capped the amount the state will pay toward mandatory student fees.
The changes as enacted could eventually save HOPE at least $180 million a year.
The 3.0 requirement applies to private college students, but the book and fee changes do not, because those students receive a flat grant that does not differentiate between tuition and other expenses.
The provision to add part-timers to the private school assistance program was originally in a bill sponsored by McBee that passed the House but not the Senate in 2003. McBee and Hamrick supported adding it to HOPE legislation near the end of the 2004 General Assembly session and the measure passed on the final day.
Hamrick argued that private college expenses are not driving concerns about HOPE's financial future. HOPE costs for private college students have risen $10 million over the past five years to $45 million, according to state figures. In comparison, HOPE tuition costs for public college students are expected to increase by $49 million next year alone.
Hamrick said private colleges have clout in the General Assembly. "It boils down to political support, whether it be the trustees of the school or legislators who represent the schools in their district," he said. "They have some powerful backing."
Lawmakers from House Speaker Terry Coleman (D-Eastman) and House Rules Chairman Calvin Smyre (D-Columbus) to Senate Appropriations Chairman Jack Hill (R-Reidsville) either sit on the boards of private colleges or have done so in the past. Coleman and Hill have served on the Mercer University School of Medicine's board, and Smyre has been on the Morehouse School of Medicine's board.
Gary Henry, a Georgia State University researcher who has studied HOPE for more than a decade, called the private school add-on "subsidy creep."
Several side scholarships — such as one for Mercer engineering students — have been added to the HOPE program, further raising costs.
"It's going to bankrupt HOPE," Henry said.
"When you look at the add-on scholarships, the additional amount of money for private schools, that's the difference between balancing the books and running a deficit in future years."