Cuts in Lottery Scholarships Challenge Arkansas Colleges

by Luke Jones  on Monday, Jun. 3, 2013 12:00 am  

While the Arkansas Scholarship Lottery seeks to compensate for slumping sales, the state’s colleges and universities are struggling to help incoming freshmen compensate for a decrease of $2,500 in their lottery-funded scholarships.

The Academic Challenge Scholarship is awarded by the Arkansas Department of Higher Education and funded largely by the lottery. When it started in the 2010-11 school year, the scholarship awarded $5,000 to eligible students attending a four-year college and $2,500 to two-year students.

The next year, the award dropped to $4,500 and $2,250 for new recipients while remaining at the higher level for the first group of students. It stayed the same for 2012-13.

But for the upcoming school year, 2013-14, incoming freshmen at either four-year or two-year schools will receive only $2,000. The scholarship amount for eligible students at four-year schools will increase by $1,000 for each of the next three years, meaning students who make adequate progress toward degrees and maintain the required GPA can get $5,000 a year as seniors.

Shane Broadway, executive director of ADHE, said the Legislature recommended the smaller award and new stacking system as an alternative to the scholarship fizzling out entirely.

“The General Assembly didn’t have much choice,” he said. “They would have to reduce award amounts in the regular session in order to maintain the viability of this scholarship program in the long term.”

What happens to the scholarship in the long term all depends on net lottery proceeds, Broadway said (see sidebar).

What’s certain is that, as of last week, about 11,000 students had accepted the scholarship for fall 2013, 2,000 had been offered the scholarship but hadn’t accepted, and 5,000 more had started an account but hadn’t completed their information. All applications had to be in by June 1.

(To see what the Arkansas Lottery Commission plans to do to make up its diminished revenue, see New Jackpot Game Boosting Lottery Revenue After Drop.)


Colleges have the constitutional authority to make their own decisions on what to do with the scholarship changes, provided they follow the state law forbidding colleges to spend more than 20 percent of tuition on academic scholarships.

Tuitions in many Arkansas colleges have been rising, citing cost-of-living increases for faculty, payroll bumps and construction or improvement projects, among other reasons. But some Arkansas colleges have found space in their budgets for one-time supplements to make up for the Challenge’s shortfall. One is the University of Central Arkansas in Conway.



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