Using 20th-century tools for 21st-century students doesn't work
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The Georgia Budget & Policy Institute recently released an evaluation on the much vaunted and duplicated Georgia HOPE Scholarship. They reported that while it has led to an increase in enrollment, it has not benefitted lower-income and students of color in substantial numbers.

If the goal is to just boost enrollment, then the scholarship remains a success. But if the state intends to enroll students not historically served by higher education, the Georgia HOPE scholarship is not the best mechanism for achieving statewide priorities.

The Georgia HOPE Scholarship is part of a suite of grants and scholarships, all of which are entirely funded by the state's lottery system. Criteria include graduating from high school with at least a 3.0 GPA and maintaining this GPA in college. Another requirement is that recipients enroll in advanced courses in high school.

Of note and concern, the HOPE scholarship does not cover remedial college courses. Since current expenses are increasing faster than lottery revenues, criteria for HOPE have been tightening and will continue to become more limiting.

The report found that HOPE (and the more restrictive Zell Miller Scholarship) served 36 percent of students in Georgia's higher education system. Of those, 30 percent were low-income students, 20 percent were black, 36 percent Hispanic, 46 percent Asian, and 45 percent white. Based on the findings of the report, Georgia will face an increasingly uphill challenge meeting statewide priorities based on demographic changes and present public policy finance for higher education.

Georgia's population expanded by 18 percent between 2000 and 2010. Racial and ethnic minorities drove much of this growth; the state is now majority-minority. The state has more than double the national average of black residents. Between 2000 and 2010, its Hispanic population increased by 66 percent. The Western Interstate Commission for Higher Education (WICHE) predicts that between 2012-2013 and 2031-2032, the underrepresented minority population in high schools will increase from 50 percent to 58 percent. White enrollment will decline from 50 percent to 42 percent.

Students from disadvantaged backgrounds — those who will comprise the future enrollment of colleges as well as the workforce — are precisely those students poorly served by merit aid such as the Georgia HOPE scholarship. A higher proportion of these students begin college underprepared and lacking many of the resources (financial, social and otherwise) that their wealthier peers possess.

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That Georgia HOPE and likeminded programs fail to cover developmental education is a critical shortcoming, as many such students will be placed in remedial courses.

Finance policies do not exist in a vacuum. Increases in tuition typically follow decreases in state appropriations for operations, which in turn should lead to increases in financial aid. Yet in Georgia — as in most states — financial aid from the state and institutions rarely rises in tandem with tuition. According to the State Higher Education Executive Officers Association (SHEEO), state appropriations per full-time equivalency (FTE) peaked in 2000 ($13,904, adjusted for inflation) in Georgia. In 2015, they dropped to $7,930, a 43 percent decline. Net tuition as a total percentage of the average Georgia institution's revenue in 2005 was 14.4 percent. In 2015, it was 36.8 precent.

Clearly, the cost of higher education has been passed on to the consumer.

Georgia is the tip of the national iceberg in terms of demographic shifts and minority serving institutions (MSIs). It boasts nearly 30 MSIs (historically black colleges and universities, or HBCUs, and predominantly black institutions, or PBIs). There are 124 MSIs in the 11 states that provide less than 50 percent of need-based financial aid (about 20 percent of all MSIs nationwide). These states (nearly all of which are in the South and Southwest) include Arkansas, Florida, Georgia, Kentucky, Louisiana, New Mexico, Nevada, South Carolina, South Dakota, Tennessee and West Virginia.

According to the National Center for Education Statistics, the majority of financial aid was in the form of federal grants (particularly Pell Grants). The percentage of students receiving federal financial aid increased from 52 percent in 2000 to 71 percent in 2014. Institution aid increased from 25 percent to 33 percent. State financial aid increased by the lowest amount: 39 percent to 46 percent. The form of financial assistance that increased the most was student loans. Twenty-eight percent of students used loans in 2000, compared to 48 percent in 2014.

According to Will Doyle at Vanderbilt University, the majority of state spending on financial aid is in the form of merit aid. He calculated that need-based aid increased by 43 percent between 2000 and 2011. During this same timeframe, merit-based aid increased by 350 percent.

Clearly, state lawmakers have a taste for non-need based aid.

As MSIs become a more substantial portion of higher education in most states, state lawmakers must consider how financial aid can most effectively and efficiently target those that need it most. Some may point to the Pell Grant as the paragon of need-based financial aid. But while Pell Grants continue to be the primary financial aid component targeting low-income students, the award has not kept pace with the rising costs of college or falling family median income throughout the country. According to the Congressional Budget Office, the purchasing power of the Pell Grant fell by 67 percent between 1979 and 2012.

More than a dozen states adopted HOPE-inspired merit aid programs, most of which are funded via a state lottery. Justification usually hinges on stemming brain drain. Most states seem to succeed in that mission.

Yet little empirical research on merit aid yields results pointing to success in increasing attainment. There is scant evidence of a connection between merit aid programs and recipients of this aid graduating to the state's workforce.

Tying state financial aid to a state's gambling habits seems a dubious mechanism for tackling college affordability and growing an educated workforce. Policymakers can't solve 21st-century problems with 20th-century solutions. States such as Georgia must develop finance policies that tackle the affordability problem from every angle (tuition, appropriations and financial aid).

To do otherwise will further stratify higher education and sweep the concept of social mobility into the dustbin of American history.

William Casey Boland is a Ph.D. candidate at the University of Pennsylvania's Graduate School of Education and a research assistant at the Penn Center for Minority Serving Institutions. Marybeth Gasman is professor of higher education at the University of Pennsylvania and director of the Penn Center for Minority Serving Institutions.


The views expressed by contributors are their own and not the views of The Hill.