LITTLE ROCK — With two years of data suggesting some unintended consequences, state legislators are studying ways to fine-tune the funding formula for state lottery scholarships.
Among the problems: Too many students are opting to go to four-year universities, too few are able to maintain scholarship eligibility and too little funding is available for the students most likely to succeed.
Among the solutions being considered: A formula that increases scholarship amounts annually based on achievement and banking scholarship money for future use by those students who opt to attend two-year colleges first.
“It’s the completers that we want, and if we put the money there it sends a message,” said Rep. Johnnie Roebuck, D-Arkadelphia, chairman of the House Education Committee.
Rep. Nate Bell, R-Mena, said the goal is to “put money back into the pockets of students who are achieving and who are accomplishing what we want them to, which is moving toward a good job.”
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“The good thing about this is, there is broad bipartisan support for the concept,” Bell said. “Now obviously the devil is in the details, but I think at this point, it’s clear that we are going to be able to do something, probably not until 2013, but we clearly have the ability to improve the situation, and we need to.”
Increasing the number of college graduates in Arkansas has been a goal of the Legislature and Gov. Mike Beebe for some time. In 2008, a task force led by Roebuck recommended that the percentage of college graduates in the state be raised to the regional average by 2015.
The Southern Regional Education Board reports that among Southern states, 25.5 percent of people ages 25 or older have bachelor’s degrees or higher, compared with 19 percent in Arkansas.
In his January state-of-the-state address to the Legislature, Beebe called for doubling the number of college graduates in Arkansas by 2025.
Last week, state Interim Higher Education Director Shane Broadway told members of the House and Senate education committees that a review of data collected on the first two years of lottery-funded scholarships showed 49 percent of freshmen who received an award failed to retain it for the next year.
Lawmakers also were told that the percentage of students choosing four-year colleges over two-year schools has risen from 60 percent to 80 percent since the first lottery scholarships were awarded for the fall 2010 semester. Lottery scholarship amounts originally were $5,000 a year to attend four-year institutions and $2,500 for two-year schools. This year, the Legislature reduced the awards to $4,500 and $2,250.
Also mentioned during the meeting was that non-traditional students — those who wait a few years after graduating high school to attend college, or attended briefly, left and now have returned — have a much higher scholarship retention rate. However, there is a waiting list of 5,800 nontraditional students to get scholarships because the Legislature capped the amount available for them at $12 million annually.
“Certainly there is a lot of interest in (nontraditional students) because they faired pretty well in terms of graduating and renewing,” Broadway said in an interview. “Their (renewal) percentages were obviously a lot higher than some of the other categories.”
He said the state Department of Higher Education has been asked by several lawmakers in recent weeks to calculate how many students would receive lottery scholarships based on differing lottery amounts.
“They want to know if we changed the rate to this, what does it do, what impact does it have,” Broadway said.
In seeking answers, he said, the department is developing calculations based on a number of factors, including setting a scholarship limit at $2,000 the first year and increasing it by $1,000 each year and setting the rate for freshmen and sophomores at one amount, say $3,000, and at $5,000 for juniors and seniors.
Broadway and Roebuck both noted that the old Arkansas Academic Challenge Scholarship, which was replaced by the lottery scholarships in 2009, was distributed based on achievement. Freshmen received $2,500, sophomores $3,000, juniors $3,500 and seniors $4,000.
“I would certainly support going back to the original Academic Challenge Scholarship awards and that was always to increase the amount as you stay,” Roebuck said. “It awarded retention.”
Another idea some have suggested, Broadway said, is distributing the money the way scholarships are distributed in Illinois. Like Arkansas, Illinois distributes more scholarship money to students attending four-year schools than two-year schools.
However, this fall the Illinois Student Assistant Commission, the state agency that runs that state’s scholarship program, instituted a new spending formula at nine four-year colleges, both public and private, in partnership with one or two regional community colleges. The four-year schools offer either dual enrollment or duel admission to qualified students who begin college at the partnering two-year school.
Students then receive the same amount they would normally receive for attending the two-year school, but the difference between that amount and what they would have received at a four-year college is banked and made available in their final two years toward their bachelor’s degree.
Rep. Tiffany Rogers, D-Stuttgart, suggested Arkansas consider the Illinois plan.
The change would not only award students for achievement, she said, but would possibly reduce the pressure on some younger students to immediately attend a four-year school when they might be better served starting at a two-year school.
Another alternative, she said, would be to award the same amount to freshmen and sophomores and then a higher amount to junior and seniors.
“I think it would award success and award completion,” she said.
Bell said he liked some of Rogers’ ideas.
“One of the things that is clear right now is that we’ve got the 80 percent to 20 percent mix now when it was 60 percent to 40 percent, and we need to deal with it,” said Bell, a supporter of two-year schools. That 40 percent of freshmen failed to retain their scholarship is a strong indicator that “ a lot of these kids probably need to go to school closer to their home,” Bell said.
“We need to make sure these students get the biggest bang on their investment and I think dollar for dollar our higher education dollar is spent more efficiently in the community college,” he said.
Broadway and Bell both said that changing the scholarship amounts and factoring in the number of first-year students who fail to retain their scholarships could make scholarship funds available to more nontraditional students.
Ed Franklin, executive director of the Arkansas Association for Two Year Colleges, said awarding more scholarships to nontraditional students is key.
“If we are going to change the state economically, then the way we’re going to do it is by retraining existing adults,” he said. “That is quicker and that’s the quickest way to change the economy.”
Franklin said his organization has visited with a number of lawmakers about possible changes to the way lottery scholarships are distributed. Many of the suggestions being made were discussed when the lottery-funded scholarship program was being planned in 2008 and 2009, he said.
“We now have some data,” Franklin said. “We know what it shows, so now is the time to relook at the Lottery Scholarship and say, ‘how do we most effectively use those dollars … to get the outcomes we want?’”