Plans for a new round of college tuition hikes have changed the financial equation for state officials who thought they had solved the HOPE Scholarship's money problems.

Now, lawmakers are wondering whether the tuition hikes — the first expected to be considered next week — will force them to revisit a program they worked for months to "reform" during the 2004 legislative session.

SCHOLARSHIP PAYOUTS Cost of Georgia Student Finance Commission's lottery-funded scholarship programs, including HOPE: Fiscal year--Cost 2000--$222 million 2001--$268 million 2002--$357 million 2003--$376 million 2004--$422 million 2005*--$500 million 2006**--$541 million *Budgeted **Proposed before possible mid-year tuition increase Source: Office of Planning and Budget, Georgia Student Finance Commission

The proposed 10 percent midyear tuition hike for the University System of Georgia that the state Board of Regents will consider would cost HOPE about $10 million this fiscal year, which ends June 30, and $20 million next fiscal year. In addition, the system could tack on another 10 percent or so this spring, potentially adding another $20 million to next year's cost.

State officials were projecting an 8 percent growth rate of some $40 million in the $500 million HOPE program for fiscal 2006, starting July 1, 2005, even before the midyear tuition hikes were proposed. But scholarship expenses could jump to more than 10 percent, just a year after lawmakers approved legislation to hold down costs.

"We have been fortunate that lottery revenues have been going up," said Rep. Ben Harbin (R-Evans), a member of the House Appropriations Committee. "But if the Board of Regents continues to dip into that bucket, it is going to run out of money."

Some lawmakers speculate that rising costs could force the state to change the HOPE payouts. The scholarship pays tuition and provides book and fee money to public college students who maintain at least a B average.

Georgia parents are taking notice.

Susan Sloane, a Loganville retiree, has seen HOPE help send two of her children through college.

"I feel that I am lucky, right now, that my youngest is about to graduate from college because I don't think HOPE will be around much longer," Sloane said.

Curt Rabun of Evans, an operator at the Plant Vogtle nuclear power facility in Burke County, has one daughter in high school and a son in college. He, too, isn't sure about the future of HOPE.

"I think [the Regents] see the money there, and they are just going to raise tuition to get it," Rabun said. "Pretty soon, it's not going to be there for what it was intended. It may be just supplemental. It will be 50 percent of the cost, then 20 percent.

"I don't think the parents of first-graders are looking at having HOPE. I don't think those parents are counting on HOPE."

Tougher standard

HOPE is funded by the state lottery. Ticket sales set a record last fiscal year by increasing 4 percent in the 12 months through June 30. But university and technical college enrollment and the number of scholarship recipients have ballooned in recent years. And college tuition rose, as the University System tried to make up for state funding cuts.

Because expenses were growing faster than lottery revenue, state lawmakers passed legislation on the final day of the 2004 session to create a tougher 3.0-grade-point-average requirement and to freeze the amount of HOPE payments for fees. The law also would eliminate book and fee payments, gradually, if the HOPE fund dipped for three years.

The Student Finance Commission, which administers HOPE, projected a $40 million increase in spending on the lottery-funded scholarship programs for fiscal 2006, which begins July 1. Shelley Nickel, president of the commission, said those projections were developed before the Board of Regents began talking about a midyear tuition increase, and that they were based on a 5 percent tuition hike next spring. "Depending on what they actually do, we're in the ballpark," Nickel said.

However, state Senate Higher Education Chairman Bill Hamrick (R-Carrollton), said the Regents' increases are coming faster than anticipated. Hamrick said legislators would review HOPE cost projections during the 2005 session.

'Artificial budget crisis'

The latest scare began in August, when Gov. Sonny Perdue notified state agencies that they would have to cut $179 million because he decided not to use an accounting gimmick — moving an employee payroll from one fiscal year to the next — to balance the state's budget. The University System's share of the cut is $68 million.

To make up some of the money, the system quickly started talking about a 10 percent tuition increase. About 40 percent of the dollars involved in the tuition increase would come from HOPE, according to one estimate.

"The outrageous part about all of this is it doesn't have to happen," said Speaker Pro Tem DuBose Porter (D-Dublin), a member of the House Higher Education Committee. "The governor created an artificial budget crisis.

"He tried to raid the HOPE scholarship program during the session. I am not sure if this isn't an underhanded way to do the same thing."

Perdue's budget proposal during the 2004 session slashed $125 million worth of HOPE book and fee payments to students.

However, the governor noted that he was merely following the recommendations of a task force set up to find ways to cut costs. He later restored the funding.

The governor said he is concerned how the University System's tuition hikes will affect parents and students, and the HOPE program.

"I want affordable college education," Perdue said.

He argues that colleges need to cut spending instead of raising tuition, and many of his fellow Republicans in the General Assembly agree.

"Their solution for everything is to raise tuition," said Harbin of the Appropriations Committee. "They are eventually going to kill the HOPE scholarship."