Friday, January 7, 2011

Losing Hope

Looks like the HOPE gravy train here in Georgia is about to jump track.

ATHENS, Ga. — Students here at the University of Georgia have a name for some of the fancy cars parked in the lots around campus. They call them Hopemobiles. But there may soon be fewer of them.

The cars are gifts from parents who find themselves with extra cash because their children decided to take advantage of a cherished state perk — the Hope scholarship. The largest merit-based college scholarship program in the United States it offers any Georgia high school student with a B-average four years of free college tuition.

But the Hope scholarship program is about to be cut by a new governor and Legislature facing staggering financial troubles

“Undoubtedly, this is, in every sense of the word, a very strongly ingrained entitlement for a certain segment of voters, and politicians are indeed reluctant to touch it,” said Christopher Cornwell, a professor of economics at the University of Georgia, who has studied the effect of the Hope scholarship on the state, including an analysis of the positive impact the scholarship has had on car sales.
We also refer to HOPE here in Athens as "Helping Our Pubs Enjoy" since the discretionary income many of these students arrive with is spent on the nightlife downtown.

What the article didn't mention, however, is that the HOPE was a means-tested scholarship to begin with. In 1993, you could get it only if you had the B average AND your total family income was less than $50,000 a year. They raised it to $100,00 in '94, and then eliminated the income cap entirely in '95 because the lottery proved to be so popular, they couldn't give the money away fast enough.

The result is that successive incoming freshman classes here at UGA had substantial percentages of students coming from households making more than $100,000. While means-testing the scholarship would create a political fallout of tsunami proportions, the fact remains that most of the students, at the flagship anyway, can pay for the ride themselves.

Whether their parents understand that is a different matter.
Cathy Ottley, a part-time office manager, and her husband, a management consultant, are raising three children in Marietta, north of Atlanta. One is a sophomore at the University of Georgia, courtesy of the Hope scholarship. A daughter who is a high school senior had her heart set on the University of North Carolina but has come to see an in-state college as the practical way to go. And then there is the youngest, a high school freshman with a promising future in athletics. Without the scholarship, Ms. Ottley said, college for her children would be a stretch at best.

“This just gives you options,” she said. “I don’t have peace about kids just starting out at 22 with $200,000 in debt for their education.”
Well, we're hardly Harvard when it comes to tuition and costs. I believe the in-state tuition and fees at UGA is around $8,500 per year, a bargain by any stretch of the imagination (UNC Chapel Hill, with which UGA is often compared, charges nearly $12,000 per). At most, you're looking at less than $40,000 produce an in-state graduate ($75,000 if you want to throw in meal plans, room and board, books, our downtown restaurants and pubs, etc.).

But this isn't about practical economics as much as it is the massive entitlement program for the middle class that HOPE has become. To means-test the scholarship again would produce cries of "class warfare!" and result in the torches and pitchforks coming out in the conservative suburbs of Atlanta.

Noted irony: those darn, big government programs are the worst, unless, of course, it benefits you.

Bonus irony: the majority of people who play the lottery are working or lower class. Which means the poor pay for the rich to go to college.

But it sounds like they'll make some equitable decision. Proposals include a "flat rate" for every student, while parents may have to cancel their "HOPEmobiles" and lay out a small percentage.

Another novel idea might be students actually having to work a part-time job in order to get by. I know, shut up!

Welcome to the era of "austerity" (as if we've been drinking and dancing through the last three years of the recession).

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