Gov. Matt Bevin often touts that his administration worked with state lawmakers to stop the longtime Frankfort practice of diverting Kentucky Lottery proceeds away from need-based scholarships to bolster the General Fund.
That is true, but there still will be fewer need-based scholarships for low-income students next year. This spring, in last-minute maneuvers affecting the state’s two-year budget, lawmakers approved paying for new scholarship programs using lottery proceeds, which means less money for need-based aid.
That’s why all the student government presidents at Kentucky’s public and private schools recently sent Bevin a letter, urging him and the General Assembly to keep what’s known as the “Powerball Promise” — a 1998 law that says all lottery proceeds must go to three merit and need-based aid scholarship programs, with $3 million given to statewide literacy programs.
“The purpose of the Powerball Promise, as this allocation of funds is known, is to use Kentucky lottery revenue to directly aid our commonwealth’s students by making a postsecondary degree more financially achievable,” the letter said. “Let us be clear: the Powerball promise is not being fulfilled as it stands now. We call on our state representatives and the governor to follow the law and invest in the students who are Kentucky’s future.”
As the legislative session ended in April, Bevin vetoed a provision in House Bill 10 that would have provided an additional $40 million to the state’s two need-based aid programs.
Meanwhile, other budget moves mean that some scholarship programs previously funded through the General Fund will now be paid using about $32 million in lottery proceeds. In addition, another $40 million in lottery funds will go to two new programs, Work Ready Scholarships and Dual Credit Scholarships. Work Ready Scholarships will help community college students with the “last dollar,” meaning the remaining debts they have for education after other scholarships have been used. Dual Credit Scholarships will pay for high school students to earn college credits.
According to the Kentucky Higher Education Assistance Authority, which administers all state scholarship programs, more than 4,000 eligible low income students won’t receive help to attend school in fiscal year 2018 because of the budget maneuvering. The need-based programs have not gotten their full allotment of money since 2008.
In the current fiscal year, which began July 1, KHEAA requested $127.8 million and received $104.8 million for both need-based programs, about $12 million more than the previous year. For next year, the requested was $130 million and the amount appropriated was only $97.5 million.
Even when the programs get their complete allotment, tens of thousands of low-income students who quality for aid never get it. In 2016, the state awarded 44,900 CAP grants and 11,100 KTG awards, but the money ran out before another 65,198 eligible students got anything.
The lottery, as directed in the 1998 law, also pays more than $200 million for the Kentucky Education Excellence Scholarships, which are payments guaranteed to Kentucky high school students based on their academic performance. That program is fully funded each year.
In a reply to the student presidents, Bevin spokeswoman Amanda Stamper counted the $40 million being spent on the new dual credit and work ready scholarships as need-based aid, although neither program requires participants to meet an income threshold. Both programs will help students avoid debt, she said.
“There is overlap because students are able to take these college classes in high school instead of taking out loans,” she said.
Jay Todd Richey, student government president of Western Kentucky University and the chairman of the Board of Student Body Presidents, said his group is pleased that all lottery funds are finally being spent on scholarships for Kentucky students, but “the prioritization of workforce development scholarships at the expense of need-based financial aid still signifies that students who want to major outside of STEM (science, technology, engineering and math) are not a priority. That is not a commonwealth we want. We want one where our citizens are both prepared for the 21st century workforce and are ready to make a positive societal difference regardless of their area of study.”
Dustin Pugel, a research and policy associate for the liberal-leaning Kentucky Center for Economic Policy, said college is still financially out of reach for too many Kentucky students.
“This is why we were so disappointed when the governor vetoed what would have been full funding for the state’s only need-based scholarships for the first time in 10 years,” Pugel said. “If we’re serious about building an economy that works for all of us, we’ve got to get serious about making higher education more affordable.”