Report

Abstract

The HOPE (Helping Outstanding Pupils Educationally_ scholarship program, which began in 1993, is one of the most popular public policies ever enacted in the state of Georgia. This lottery-funded program pays for tuition, fees, and books at any public college or university in the state for any Georgia student who graduates from high school with a B or better grade point average (GPA). To keep the scholarship, students must maintain the B or better GPA in college. The program's popularity has spread well beyond Georgia's borders; at least a dozen other states have instituted similar broad-based merit scholarship programs, and most state legislatures have considered legislation to start similar programs. The federal HOPE tax credit, established in 1997, took its name from Georgia's program, though the originally-proposed merit-based component of the program was not enacted.

In light of its popularity, HOPE raises a number of important policy questions regarding both the program itself and its funding source, the Georgia Lottery for Education:

(1) What effect has the HOPE Scholarship program had on student performance in high school?

(2) What effect has the HOPE Scholarship program had on student performance in college?

(3) Who pays for and who benefits from the Georgia lottery and the programs it funds?

(4) Has the scholarship program caused inflation in the cost of higher education in Georgia?

This report describes the HOPE Scholarship program and the Georgia Lottery for Education, summarizes a series of studies examining the program, offers recommendations for the design of merit-based financial aid programs, and suggests topics for further research.