Many changes loom on the horizon for the Tennessee lottery scholarship program.
This year officials expect to award a record amount of HOPE scholarship money to more than 100,000 students at a cost of $287 million, said Tim Phelps, associate executive director for grants and scholarship programs at the Tennessee Student Assistance Corporation.
“The scholarship helps students and reduces the amount of student loans they have to take out,” he said. “They have a much better start to their college career, it lowers their debt burden and that helps them when they jump into the work force.”
The state lottery scholarship program typically spends $260 million to $270 million each year and is expecting to face a budget deficit because expenditures continue to rise, Mr. Phelps said.
Officials are talking about cutting scholarship award amounts, reducing individual scholarship programs or making the scholarships harder to get, Mr. Phelps said. To stay afloat this year, the state may dip into its $350 million lottery reserve fund.
“Those are the alternatives that everyone will be looking at,” he said.
At the same time Gov. Phil Bredesen and legislators are interested in expanding scholarship programs, especially as more former students return to school in the recession and colleges face record enrollments.
More than 100 lottery-related bills were filed this year, and one of most popular ideas is to increase the HOPE scholarship award for community college students from $2,000 to $3,000.
Gov. Bredesen included the proposal in his plan for higher education reform called Complete College Tennessee. He said it would encourage more students to begin a degree. Some legislators agree.
“If you increase the financial incentives, that is going to bump up the prestige of community colleges and the incentive for people to go there,” said state Sen. Andy Berke, D-Chattanooga, a member of the Senate Education Committee.