Big changes proposed for Kentucky’s largest college scholarship program

A legislative proposal could mean big changes to Kentucky’s largest college scholarship program, expanding it beyond college to a host of other academic programs.

House Bill 247 would expand the popular scholarship program known as KEES (Kentucky Educational Excellence Scholarship), letting students use money they earn based on high school grades to pay for dual-credit college classes taken in high school, technical workforce education classes, and even the materials they might need for apprenticeship programs with private employers.

KEES was set up in 1998 using Kentucky Lottery proceeds. It allows students to earn monetary amounts for the grades they earned in high school. The higher their GPA, the more money they earn. That money is then sent directly to the public and private Kentucky colleges and universities those students attend, helping pay their bills for tuition, housing, food or books, provided they maintain a 2.5 GPA.

The idea was to get students to work harder in high school, attend an in-state college, and work harder in college to keep the money flowing.

The maximum payout is $500 a year for a 4.0 GPA in high school, for a total scholarship of $2,000. There also are bonuses for high scores on certain exams, including ACT, SAT, Advanced Placement, International Baccalaureate and Cambridge Advanced International.

The awards became a popular fixture of college-going students and parents all over the state, always fully funded by legislators, even as they let other scholarship programs run out of money. In 2017, KEES provided $113 million to about 70,000 students.

These proposed changes, sponsored by Rep. James Tipton, R-Taylorsville, are a priority of Gov. Matt Bevin, although state officials declined to comment on the goals of the bill.

“Employers tell us their big challenge is having an educated, trained workforce,” Tipton said. “We’re trying to leverage those dollars so we can get the most impact out of them.”

Tipton said the bill had two main goals: to allow more students to take dual-credit classes, and to spread KEES dollars beyond college-bound kids. “If you’ve got a student who may not be as academically inclined, they can take enough dual-credit to get a certificate in welding, they can come out of high school and have a tool to be gainfully employed,” he said.

Tipton said legislative staff are working on a fiscal note to assess the bill’s costs.

Former state Rep. Carl Rollins, who recently retired as executive director of the Kentucky Higher Education Assistance Authority, said he fears the bill will expand the program beyond its financial capacity.

“This will end KEES as we know it,” said Rollins, who oversaw the state agency that administers KEES and other lottery-funded scholarship programs. “That’s mostly because it makes it so difficult to understand, and because it’s outrageously expensive.”

The bill would:

▪ Lower academic standards. It sets up a new range of grants that now start with an automatic grant to $150 for a 2.0 GPA or below. Currently, the grants begin at $125 a year for a 2.5 GPA.

▪ Allow high schools students with a 2.5 GPA or above to earn money every year, rather than receive a cumulative award after they graduate. In addition to college, the money could be used for dual-credit programs, and select state-accredited workforce development programs and state-registered apprenticeship programs at for-profit companies. The state operates a separate scholarship program for dual-credit courses that would be phased out. Any workforce training programs must be in one of Kentucky’s high-demand work sectors: advanced manufacturing, business services/information technology, construction, health care and transportation/logistics.

▪ Restrict KEES money used by college students to tuition, fees and books. Currently, if any money is left after those costs, the student receives a check that can be used for housing and food. The scholarship would also be considered “last dollar in,” which means that if a student has their tuition, books and fees paid for by other scholarships and grants, the KEES money would return to the state.

▪ All students would have to fill out a federal student-aid form known as the FAFSA. KEES money could also be used to pay for AP, IB or Cambridge exams, although the state pays for many of those exams already.

Rollins said he is particularly worried about the “dollar in” provision and the restricted use, which he thinks might disproportionately hurt low-income community college students. For example, a student might receive a Pell grant and a College Access Program grant for low-income students, which could pay for all of their tuition, books and fees at community college. However, they would no longer receive a residual amount from KEES for food, housing, transportation, and the numerous other costs that are part of the total “cost of attendance.”

In addition, while lawmakers have always funded KEES, they have never fully funded two need-based aid programs administered by KHEAA. Rollins and other advocates worry that those two programs will suffer if KEES is expanded. Already, the College Access Program for low-income public college students and the Kentucky Tuition Grant program for low-income students at private schools turn down tens of thousands of qualified applicants each year because they run out of money so quickly.

“The need-based scholarships already receive less than their statutory amount while KEES is fully funded,” said Ashley Spalding, a senior policy analyst at the Kentucky Center for Economic Policy. “We should be further investing in the state’s need-based financial aid programs, which are critical to college access and success for low-income Kentuckians, and certainly not shifting funding away from them.”

Perry Papka, senior policy director for the Prichard Committee for Academic Excellence, said he looks forward to state officials explaining their aims for the bill. It’s not yet clear when the bill will appear before the House Education Committee for a full vetting by lawmakers.

“The bill appears to make fundamental shifts to our longstanding, main scholarship programs in Kentucky, and I think there are a lot of questions that need to be answered before we go forward,” he said.

Tipton said he’s waiting for more information about the costs, and will be willing to make needed changes.

“My goal is to provide the maximum opportunities for our students that we can,” he said.

This story was originally published January 31, 2018 at 3:39 PM with the headline "Big changes proposed for Kentucky’s largest college scholarship program."