Document View

In more than a quarter of the states--particularly in the South--broad-based merit scholarships have swiftly shoved need-based programs aside. Politicians have found that the merit plans resonate with the public, which has become disenchanted with tuition increases that regularly dwarf the inflation rate, and legislators hope that the plans can accomplish what decades of need-based aid have not--namely, keeping smart students from defecting to other states for college and careers.

LAST OCTOBER, as Gov. Roy E. Barnes of Georgia celebrated the 500,000th recipient of the state's popular HOPE scholarship with a two-day, eightcollege tour, a few members of Georgia's Board of Education huddled-to figure out how to fix what they saw as a major flaw in the program.

They were disturbed by statistics showing that many recipients of the merit scholarship-which pays all or part of tuition at any institution in the state-couldn't cut it once they reached college. Nearly 6 of 10 HOPE recipients in college failed to maintain a B average-the cutoff to get the award and keep it. Ten percent of the students were enrolled in remedial courses. The board members' solution? Abolish the B-average requirement, and instead determine eligibility through tests given to students at the end of each high-school course.

The proposal was politically risky. It could have meant that thousands fewer scholarships would be given out every year.

But its supporters saw faint hope in comments from the lawmaker who directs legislation for Governor Barnes on the floor of Georgia's House of Representatives. State Rep. Charlie Smith said publicly in December that he would be willing to consider the idea.

A few days later, he changed his mind. "I heard from folks immediately who asked if I had lost my mind," says Representative Smith, a Democrat. "It's less painful to jump off a cliff than to change HOPE. "

In 1993, Georgia pioneered a revolutionary force in the delivery of state financial aid: The state said it would pay the college tuition of any student who met a fairly modest standard of achievement. Until then, encouraged largely by federal matching dollars, most states had reserved their limited aid budgets for financially needy students. Today, only five populous states have large commitments to need-based aid.

In more than a quarter of the states-- particularly in the South-broad-based merit scholarships have swiftly shoved need-based programs aside. The 13 states with broad, merit-based programs plan to spend $709.4-million on awards to about 320,000 students this academic year. Eight of the programs are less than three years old. Need-based aid in the 13 states, including federal matching dollars, totaled just $325.2-million in 1998-99, the most recent data available.

Politicians have found that the merit plans resonate with the public, which has become disenchanted with tuition increases that regularly dwarf the inflation rate. And legislators hope that the plans can accomplish what decades of needbased aid have not-namely, keeping smart students from defecting to other states for college and careers.

PRESSURE TO KEEP TUITION LOW

But delivering on those promises has been neither easy nor cheap. In a few states-including Arkansas and New Mexico-the cost of the programs has exploded beyond initial projections, and state officials are trying to figure out how to keep them running as the economy cools. In several other states-including Florida and Louisiana-college leaders say they can't get legislators to agree to tuition increases because such rises would just push up the scholarships' costs. And virtually every state with a merit program is denying recipients a generous handout from the federal government: People who don't have to pay tuition can't benefit from a new law allowing them to deduct those costs from their federal income taxes.

What's more, the scholarships are routinely bashed by financial-aid experts and some college leaders who point out that because academic achievement is closely linked to income, and the programs generally are open to students at all economic levels, the spoils disproportionately go to children of the wealthy. In Michigan, lowincome and minority students are suing the state because its scholarship program relies heavily on a standardized test on which whites tend to score higher than do black or Hispanic students.

And in Georgia and elsewhere, there is the question of whether the merit awards have actually raised academic standards-- or just allowed many mediocre students to get an awfully cheap education.

PROGRAMS THAT ARE TOO POPULAR

But the biggest problem with the scholarships may be simply that the public loves them too much. College officials and lawmakers alike complain that the merit programs have become so popular that they" are impossible to change. For some state policymakers, the scholarships are becoming to middle-class parents what Social Security is to an older generation.

"If it isn't an entitlement yet in folks' minds, then it's getting pretty close," says Bruce D. Hamlett, executive director of the New Mexico Commission on Higher Education. "It's clear that these have become very popular programs."

And they're spreading. Indiana, South Dakota, Virginia, and Wyoming may consider their own merit-award proposals this spring. In West Virginia, the new Democratic governor, Bob Wise, has pledged to find money for a scholarship plan that the Legislature passed-but did not provide dollars for-in 1998. And in South Carolina, Gov. Jim Hodges plans to push ahead this month with a lottery, approved by voters in November, that will pay for an expansion of that state's existing merit-scholarship program.

The proposal comes even as Mr. Hodges tries to plug a $500-million hole in the state budget with a proposed 15-percent cut in spending. Most college officials in the state don't blame the governor for wanting to respect the will of the voters. But given the dire budget picture, colleges already expect to cut their own spending and raise tuition-proposals that will, in effect, minimize the benefits of the expanded merit awards.

"The lottery will make it easier for students to come here," says James F. Barker, president of Clemson University. "But if they don't have a quality education waiting for them, then we've missed the boat."

KEEPING STUDENTS IN THE STATE

According to their champions, merit scholarships have helped states keep their brightest students, allowed public colleges to admit more students with good grades and test scores, and increased the overall number of students in college. But states have produced little hard evidence of those successes--except for Georgia. It has used a bevy of statistics and reports over the past seven years to counter criticisms that HOPE has led to grade inflation in college or has crowded out minority students, for instance. (No on both counts, according to researchers.)

Just last week, professors here at the University of Georgia released a study that found a sharp increase in the number of top students enrolling in Georgia's colleges-- both public and private-since HOPE was enacted. Three-fourths of the state's highschool graduates who scored better than a 1500 on the sAT now attend a Georgia institution, compared with just 23 percent before HOPE. And researchers credited those students with helping to lift the state's overall college enrollment by 11 percent during the same period, including a 24-percent jump for black students.

Georgia officials ascribe their success with HOPE to a program that started out small and expanded only when money was available from the state lottery. Glenn Newsome, executive director of the Georgia Student Finance Commission, which oversees state aid programs, says that since 1993, 42 states have contacted his agency seeking advice on starting merit awards. "If you want to send the message that academic achievement is important, this is the way to do it," Mr. Newsome says. "That message has resonated deeper and further than we ever imagined."

GIVE SOMETHING, YOU GET SOMETHING'

The father of the HOPE scholarship, former Gov. Zell Miller, says he wanted to build a program modeled on the G.I. Bill, which he used to attend college. "The HOPE scholarship is based on the same simple premise as the G.I. Bill," says the Marine Corps veteran, who is now a Democratic senator from Georgia. "If you give something, you get something."

On the University of Georgia campus here, 96 percent of the in-state freshmen are on the HOPE scholarship. Keeping it, however, is a lot more difficult than getting it. In 1999-2000, 4 of every 10 HOPE recipients at Georgia lost the scholarship because they failed to maintain a B average in their freshman year or left the university.

As a result, keeping HOPE has become a top goal of many undergraduates here. About 4,500 out of the campus's 31,000 students sought tutoring last semester, up 16 percent from the fall of 1999. And in just the last three years, the number of students taking study-skills courses has jumped nearly 70 percent, to about 1,600 this academic year.

In one such course last month-called "Learning to Learn"-students presented end-of-the-semester projects on note-taking strategies and discussed ways to prepare for final examinations. Students receive a grade in the course that counts toward their overall average. Twelve of the 19 students in the class were HOPE scholars.

Abigail Greene, a freshman exercise-science major, says she signed up for the course after her initial grades here were much lower than the 3.9 grade-point average she had earned in high school. So far, she's just a hair below the B average needed to keep her scholarship. "I don't want to go back home and say I lost HOPE," she says. "In a way, HOPE is like a parent."

DO THEY KNOW HOW TO STUDY?

Many professors here criticize the number of students who matriculate not knowing how to study. The professors say that grade inflation in high school is not to blame; it's just that Georgia's high schools are not rigorous enough. Even many HOPE recipients at the University of Georgia "haven't read widely and have poor writing skills," says Mike Moran, an associate professor and codirector of the university's Freshman English Program. "They were spoon-fed in high school."

Besides the academic concerns, critics of the merit programs say they're not really aiding the students who financially need the most help. In New Mexico, for instance, 64 percent of the scholarship funds go to students whose families make $50,000 a year or more; only 15 percent of the money goes to those earning $20,000 or less. The state's median household income was about $32,000 in 1999, according to Census Bureau figures. An analysis of Nevada's scholarship program found that the biggest winners of its awards were families in Southern Nevada's affluent neighborhoods.

"When an orthopedic surgeon in Miami came up to me and said his twin daughters had full merit scholarships to the University of Florida, that's when I knew these scholarships were wrong," says Charles B. Reed, the chancellor of the California State University System, who opposed Florida's merit awards when he headed that state's public-university system. He favors programs that take into account merit and need, such as California's decision last summer to double the size of its aid program, to some $1.2-billion a year.

Another worry among financial-aid experts is that states with merit programs have been adding few, if any, new dollars to their need-based programs. Georgia stopped paying for need-based grants altogether in 1999-2000. State officials say a change in HOPE regulations that year allowed needy students who received a federal Pell Grant to apply their HoPE award to costs beyond tuition. Nonetheless, Mr. Newsome, Georgia's financial-aid chief, has asked Governor Barnes for $1-million this year to revive the need-based program.

HELP FOR THE WEALTHY?

Last June, the American Civil Liberties Union filed a federal lawsuit charging that Michigan's merit-scholarship program discriminated against minority students and students from low-income families because eligibility was based on scores on a state achievement test.

The test was never designed to be a standard for the scholarships, the complaint said, but was meant to measure school performance. As a result, test scores varied widely, with wealthy, suburban districts consistently reporting higher scores, on average, than urban or rural districts. The plaintiffs-six students---are seeking an injunction to stop Michigan from awarding the second round of scholarships this spring.

Michigan, like Nevada, pays for its scholarships with money from the legal settlement that it reached with the nation's tobacco companies. Other states pay for their scholarships through lottery revenues or a line item in the state budget.

But paying for the awards isn't expected to get any easier. In most states, the eligibility standards are relatively easy to meet. And nationally, the number of students graduating from high school is at a record high and is expected to continue rising. As a result, officials in some states are scrambling to find additional dollars for their awards.

Whether such an expansion makes sense as policy is another question. New Mexico, for example, paid out some $6.2-million in scholarships in 1998-99about three-fourths of its merit-scholarship budget that year-to students who could have qualified for the federal tax credit, says Kristin D. Conklin, a senior policy analyst at the National Governors' Association.

New Mexico could use the extra dollars. Last spring, state legislators decided to take more money from lottery revenue to help their cash-strapped scholarship program, which has faced deficits in nearly every year since its creation, in 1997. The scholarships had received only 40 percent of lottery revenue; now the revenue is evenly split between public-school construction and the merit awards. Even with the fix, officials predict a $9-million deficit in 2002.

"This was one of those good ideas that moved too quickly without any long-term impact analysis," says Mr. Hamlett, of the state's higher-education commission. He favors dedicating all lottery revenue to the scholarships, although even that step would buy the program only a few more years of solvency.

RISING COSTS

In Louisiana, the price tag of its merit program, known as Tops, has risen from $53.8-million in 1998-99 to $91-million this year. That's almost half of the increase that state higher-education officials say they need to move Louisiana to the regional average in financing higher education. But TOPS is much more popular among lawmakers than the colleges themselves, and with the advent of another tight budget year, the scholarships are likely to be a higher priority. Also, the Legislature is reluctant to raise tuition, because when it goes up, lawmakers must find more money for the merit awards.

Some officials in Louisiana want Tops awards to be a flat amount that is not tied to tuition. A few lawmakers, meanwhile, say the problem could be solved by increasing the minimum ACT score needed for the grant, from 20 to at least 21. "Tops should be looked at as an incentive to excel, not as a government handout," says State Sen. Jay Dardenne, a Republican.

Yet changing the criteria for the scholarships is not easy. Just ask Linda C. Schrenko, Georgia's education superintendent, who helped lead the effort last fall to do away with the B-average requirement. Even though the legislature could still adopt the plan, she has about given up.

"If you want to change HOPE, you're labeled anti-HOPE," she says. "And no one with a program this popular can survive labeled anti-HOPE."