Lottery Scholarship Proposal

Recommendations from the Joint House and Senate ad hoc work group

Scholarship Ideas Give everyone who graduates high school a scholarship for

college Give scholarships for currently enrolled students Allow students to earn back scholarship if they lose it for

poor performance Target workforce needs Provide for only the neediest Provide for only those who showed academic acumen Pay for graduate school for some fields Pay one amount for two-year and a higher amount for four-

year schools Provide transfer scholarships Pay for non-traditional students Pay for adults returning for college Provide a little money for everyone Provide enough money to make a difference

How do we prioritize?

What should we do first?

How do these interplay with existing scholarships?

What would have the greatest impact for our citizens and the state?

What does Arkansas need?

To do half of these would cost:

$400,000,000

Scholarship Criteria Encourage certain behavior:

Reward college preparation: Smart Core, ACT/SAT, good grades Encourage enrollment and continued enrollment Encourage graduation Encourage students near college graduation to finish Encourage adults to enter or return to college

Lawful Resident, Arkansas resident for 1 year Designed to:

Be financially pragmatic until lottery revenues are maintained Increase Arkansas’s % of adults with postsecondary credentials Increase graduation rate Increase graduates per year Be Fair

Easy for the student/parent to know about and apply for

Hard to lose Is not so complex that it requires extensive

institutional staffing, etc

Principles for Scholarship Administration

Several Directions we could go

Most important:Maximize success within our budget Minimum $54 Million from the lottery

Current Academic Challenge Positives:

Rewards preparation for college: Smart Core, ACT/SAT, good grades

Academic Challenge students retain and graduate at a higher rate than other students

Disadvantages: Not aligned with Smart Core Students lose scholarship because:

Maintain 2.75 College GPA

Income limit

Scholarship #1 Revised Academic Challenge

Expand/Revise Remove Income limit Align with Smart Core Alter qualifying requirement from sliding scale of HS

GPA and ACT scores to: HS GPA 2.5 or Equivalent of ACT 19

Reduce continuation requirement from College GPA of 2.75 to 2.5

Provides static amount for all four years Could increase as lottery revenues allow

Revised Academic ChallengeTo qualify a student must:

Graduate from an Arkansas HS and have GPA 2.5 or Equivalent of ACT 19 and enroll directly into college

Successfully complete Smart Core Home School and GED students must earn at

least a 19 ACT or equivalent To maintain the scholarship the student must:

Maintain a College GPA of 2.5 Take 15 hours or more per term (traditional)

Can receive the scholarship for 8 semesters or until receives a bachelor’s degree (whichever comes first)

Award increases as lottery revenues allow.

Increase participation of direct-from-high-

school students from 3,400 to 11,707 annually

Increase total participation rate from 8,087

to 33,490

Revised Academic Challenge

Revised Academic Challenge Projections

Assumptions28,000 HS Graduates13% opt out of Smart

Core: 24,36054% attain at least a 19

or attain 2.50 HS GPA: 13,154

Out migration of freshmen is 11%:

11,707

Also, encourage completion of current students Pool of scholarships -- minimum $6,250,000

Non-traditional scholarships for students who do not start college right out of high school and have not been continuously enrolled.

College Seniors (90 credit hours) who showed their academic talent.

Earn-in scholarships for existing students

Future goale is to expand funds available for these scholarships --dependent on lottery revenues.

New opportunities with Academic Challenge

Academic Challenge Expenditures 2010-2014

Earn-in

Revised

Current

Earn-in $6,250,000 $6,250,000 $6,250,000 $6,250,000

Revised $24,145,688 $40,323,298 $56,753,121 $67,904,254

Current $16,653,750 $11,463,000 $6,083,000 $0

Year 1 Year 2 Year 3 Year 4

Academic Challenge Expenditures 2010-2014

Earn-in

Revised

Current

Earn-in $6,250,000 $6,250,000 $6,250,000 $6,250,000

Revised $24,145,688 $40,323,298 $56,753,121 $67,904,254

Current $16,653,750 $11,463,000 $6,083,000 $0

Year 1 Year 2 Year 3 Year 4

EarningsOver Expenses

{

`

Guide for future increases

Scholarship Amount

Traditional Students

(4yr pipeline - 33,490 students)

Currently enrolled students,

Earn-in students, Potential Re-entry

Non-trads

Lottery $ Needed Less $ Funding from

Challenge $20M

1,250/2,500 67,904,254 6,250,000 54,154,254 1,500/3,000 81,485,105 6,250,000 67,735,105 1,750/3,500 95,065,956 6,250,000 81,315,956 2,000/4,000 108,646,806 6,250,000 94,896,806 2,250/4,500 122,227,657 6,250,000 108,477,657 2,500/5,000 135,808,508 6,250,000 122,058,508 2,750/5,500 149,389,359 6,250,000 135,639,359 3,000/6,000 162,970,210 6,250,000 149,220,210

4-Year PipelineIncreases with prior year unspent funds

Multiple Opportunities and Responsibilities

Future priorities to be set by legislatureNon-traditionalEarn-in Currently enrolled Increase in award amount

“It's Hard to Plan for the Future” Johnnie Manzari: November 19, 2006