HOPE's inner-city squeeze

Now more than ever, the HOPE scholarship is taxing low-income minorities to pay for middle-class education

For a stunning example of how changes to the popular HOPE scholarship program are taking their toll on inner-city schools, all you have to do is look at Atlanta's underperforming Crim High School – and compare it with Gwinnett County's high-achieving Mill Creek High School.

At Crim, a school that's 99 percent African-American, a mere 47 seniors were eligible two years ago for the HOPE scholarship, which requires that students graduate with a 3.0 grade-point average. This year, after legislative changes to HOPE (Helping Outstanding Pupils Educationally) altered the way grades are averaged, the number of scholarship-worthy Crim seniors sank to three.

Meanwhile, in a suburb 40 miles north – where education is better funded and demographics lean toward lily-white – Mill Creek is one of the few schools in metro Atlanta to actually see a rise in the number of seniors who can cash in on HOPE. Two years ago, 151 Mill Creek students were eligible for the scholarship. This year, 223 are.

The dire numbers at Crim are the result of a change adopted three years ago by state lawmakers in anticipation of declining HOPE revenues. They voted to change the way grade-point averages would be calculated to skim away the bottommost rung of HOPE-eligible students.

At the time of the vote, the forecast was that the change would impact a disproportionate number of HOPE-eligible African-Americans – roughly 44 percent – versus only 30 percent of whites.

"What Perdue and the Republicans couldn't do through the front door they've done through the back door," says state Sen. Vincent Fort, D-Atlanta. "We realized what would happen, and it's coming to fruition."

According to state figures, the city of Atlanta is losing 53 percent of HOPE-eligible students – compared to Gwinnett's 29-percent loss.

The irony is that while HOPE caters more and more to middle-class suburbanites, it's the parents of Crim students – and not the parents of Mill Creek ones – who are shelling out more of their income to cover the scholarship's costs. That's because HOPE is paid for by the Georgia Lottery.

"Once you decide you're going to fund public activities with a lottery, you are going to be funding them on the backs of people who tend to be lower income and people with less education, which in the South also means disproportionately black," says Christopher Cornwell, a professor at UGA's Terry College of Business who's extensively studied HOPE. "That's just a reality."

In 1992, Georgians narrowly passed a constitutional amendment to allow a state lottery to fund educational programs. The following year, Georgia's first lottery ticket was sold – and the first HOPE scholarship was awarded. Ticket sales then went through the roof, generating $1.13 billion in the lottery's first year – more than any state lottery at that point. About 43,000 students received the scholarship in its first year.

Lottery proceeds were so robust that HOPE, which initially required that a student's annual household income not exceed $66,000, was expanded in 1994 to include students whose parents earned up to $100,000. About 98,000 students got the scholarship that year. As the lottery continued to outperform expectations, the income cap was abandoned altogether in 1995 – and the number of HOPE recipients rose to 123,000.

In the ensuing decade, more and more students clamored for the scholarship. As of this year, HOPE has paid for the college education of 1 million Georgians.

It should have come as no surprise that in 2003, lawmakers began to fear the popularity of HOPE would soon surpass the revenue generated by the lottery. Nor should it have shocked anyone that lawmakers, believing they had to shrink HOPE's rolls, chose not to reinstitute the income caps that limited HOPE recipients in its early days.

According to Cornwell, most legislators wouldn't dare estrange all those wealthy and powerful constituents. "You've created entitlements for large sections of the population," he says. "It's politically very difficult to take them away."

Instead, the Legislature passed a law in 2004 that would change the way high school grade-point averages are calculated when being considered for HOPE – with the intent of cutting recipients by about a third and saving more than $40 million per year.

Previously, the grade-point average was based on a scale of 100. But starting this year, GPAs are calculated on a letter, or four-point, scale. So there's no longer any difference, say, between a 71 and 79. Both are C's. A student who once was judged on grades of 77, 79 and 86 (averaging out to 81, or a firm B average) is now considered a C student, and is no longer eligible for HOPE.

The change was more palatable – or perhaps more confusing – than another, politically unpopular option: to determine HOPE eligibility based on SAT scores. That would have cut even more HOPE-eligible African-Americans, according to lawmakers and the state's HOPE Scholarship Joint Study Commission.

As it turns out, though, the cuts to HOPE were unnecessary. In July, lottery officials announced that sales in the prior year exceeded $3.4 billion, outperforming all previous years. Thus the state's working class and poor families continue to subsidize the education of middle-class kids, creating what Fort describes as an unjust phenomenon. He calls it "reverse Robin Hood."

The senator says lawmakers who might have once believed the cuts were necessary should step up and admit they aren't. "It would only be logical and right to do away with the change in the grade-point scale," Fort says, "so you can bring all those other folks in who you would've eliminated otherwise."

He also says he's considering legislation that would undo the changes.

Yet a reversal of the changes might not be necessary. Cornwell says that over the next few years, it's possible that the schools hardest hit by the change will start to inflate students' grades so that they drift into HOPE territory. Even without conscious coordination, that kind of adaptation is likely, he says.

Cornwell is more concerned with the loss of Georgia's "good but not great" students to out-of-state colleges – and about HOPE's role in the growing divide between Georgia's top-notch universities and its second-tier ones.

Since its inception, HOPE has served as an incentive to keep Georgia's high-achieving high school seniors in state. As a result, flagship schools Georgia Tech and UGA have became more competitive. In fact, Georgia is one of just two Southern states to have two schools on U.S News & World Report's most recent top-20 list of public institutions.

The rising standards at Georgia's flagship schools are forcing many students who might once have been accepted there to attend less competitive but still prestigious out-of-state colleges.

Cornwell says Georgia's university system is more castelike than it's been in 30 years.

"The pecking order of schools, in terms of selectivity, has become more refined," he says. "Because HOPE has been so successful at keeping kids in state, the very best ones are going to queue up at [the University of] Georgia or Georgia Tech."

There's an inherent danger in public universities that serve only the elite: They no longer serve the public.

UGA in particular has increasingly become a school for the privileged, Cornwell says, both academically and economically. Studies aside, the increasing affluence of UGA students has been easy to spot – though not so easy to address.

"The student body at UGA is very different than it was 15 years ago," Cornwell says. "All you have to do is drive around and notice the cars in the parking lot."