Cuts in Lottery Scholarships Challenge Arkansas Colleges

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.)

Supplements

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.

“If a student does qualify for the lottery scholarship at UCA, we are offering a one-time $750,” said Jeff Pitchford, UCA’s vice president for university and government relations.

UCA’s tuition rose 3.59 percent. Undergraduates living on campus pay $245.28 per credit hour. The $750 is available only for fall 2013, Pitchford said, and won’t be renewed for the following year. But the scholarship’s significant decrease was enough to spur UCA’s administration into action, he said.

“And the parents, you know, would need to make that adjustment for the short amount of time before this fall,” he said.

Depending on the school’s enrollment, the supplement could cost UCA between $1 million to $1.2 million.

“The funds for this would come out of our existing scholarship budget and is not new money,” Pitchford said, adding that the recent tuition increase wasn’t connected to the supplement.

Similarly, the University of Arkansas at Fayetteville is offering a one-time $1,000 scholarship to students who have already accepted the Challenge scholarship. In May, UA and the rest of the schools in the University of Arkansas System raised tuition 3.5 percent for undergraduates. UA’s tuition is $211.77 per credit hour for resident undergraduates.

Suzanne McCray, vice provost for enrollment services and dean of admissions at UA, said the college has tried to reach out with “as much scholarship money as it can,” but there’s no school in the state that can completely fill that gap.

She also said the money isn’t coming from the higher tuition — UA had some saved-up funds in its scholarship reserve. The total cost for UA won’t be known until enrollment numbers come in.

“We think it’s very hard, of course, for students who are hoping to have that funding when they’re coming to college,” McCray said. “They’re having to rethink some things and plan differently. I think it was a very hard hit for freshmen in particular because of the way it’s stacked.”

Freshmen who accepted the Challenge scholarship and who have a high school GPA of at least 3.25 and an ACT score of 24 or better qualify for the supplemental scholarship, McCray said.

“But if they already have other funding, we’re not supplementing that,” McCray added.

Some other schools that have announced plans to supplement the scholarship include Central Baptist and Hendrix colleges in Conway, Philander Smith College in Little Rock, Southern Arkansas University in Magnolia, the University of the Ozarks in Clarksville and Williams Baptist College in Walnut Ridge.

No Supplements

In cases where universities aren’t offering supplemental awards, some are trying to get the word out about other options.

Arkansas State University in Jonesboro touted its Arkansas Promise Scholarship, which is provided by the school to incoming freshmen.

“We started when the lottery started and at the time we had been paying $2,000 a year,” said Rick Stripling, vice chancellor for student affairs. “And at the time, that really filled a gap as far as tuition goes.”

Since that time, he said, the Promise award has stayed the same while the Challenge award dropped.

By fall 2014, however, ASU will need to figure out if changes need to be made.

“We may take a look and see what the value is doing sometime in the next recruitment cycle,” he said. “When we get closer to the fall, we’ll begin looking at what we think has worked and what’s not worked.”

ASU Jonesboro in May raised tuition 3.3 percent.

Tuition and fees for an undergraduate living on campus is about $239 per credit hour.

The University of Arkansas at Little Rock is working to get the word out about other scholarships available that could supplement the lottery’s. UALR charges $191 per credit hour for in-state resident undergraduates, its website says.

“We’re doing our very best to work with students to identify private scholarships or other financial aid that might be able to help them so they can pay all of the bills they’re going to be encountering as a result of the increased need,” said Dean Kahler, vice chancellor for enrollment development at UALR.

He said UALR is trying to address scholarship issues earlier in the recruiting process.

“One of the things that’s really helpful to students and families is if you know what the cost of going to college or university is up front and start planning for it,” he said.

But UALR isn’t offering anything extra to fill that gap.

“UALR already has some really, really strong scholarship programs,” Kahler said. “We’re known really well across the state for having some strong scholarship programs, and we feel those are very competitive in the state. We didn’t feel like having to add additional scholarship money was the right way to go, since we’ve already got what we think are exceptional scholarships.”

Arkansas Challenge Scholarship Amounts 2010-2013

Source: Arkansas Department of Higher Education