Lottery scholars at a high

Agency projects 36,014 awards

The state Department of Higher Education expects to award Arkansas Academic Challenge Scholarships to more than 36,000 students this fiscal year, and that’s more than were awarded in each of the previous seven fiscal years in which the lottery has helped pay for college.

Department Deputy Director Tara Smith presented the Legislative Council’s lottery oversight subcommittee on Thursday with the department’s projection that it will award lottery scholarships worth $97.3 million to 36,014 students in fiscal 2018. The fiscal year started July 1.

So far, the largest number of students to receive these Academic Challenge Scholarships in a fiscal year was the 35,303 who received $112.8 million in scholarships in fiscal 2014, according to Smith’s report. The largest monetary amount handed out in a fiscal year was the $132.9 million distributed to 33,522 students in fiscal 2013, the report said.

The scholarships are financed with the Arkansas Scholarship Lottery’s net proceeds, plus $20 million a year in state general revenue and $20 million from a lottery reserve fund to cover temporary cash shortfalls. The reserve fund is later replenished with lottery proceeds.

The department’s projections for this fiscal year are up from fiscal 2017’s figures, both in number of scholarships and dollar amount.

In fiscal 2017, the department distributed $86.2 million in Academic Challenge Scholarships to 33,225 students. That represented a drop from its distribution totaling $96.5 million to 34,654 students in fiscal 2016.

For fiscal 2017, the eligibility standards were changed and the scholarship size for first-year students was cut by the 2015 Legislature. Act 1105 of 2015 — sponsored by Sen. Jimmy Hickey, R-Texarkana — required high school graduates, starting in the class of 2016, to have ACT scores of at least 19 or the equivalent on comparable college entrance exams to be eligible for the scholarships.

High school graduates had previously been required to have completed the Smart Core Curriculum and achieved either a high school grade-point average of at least 2.5 or a minimum score of 19 on the ACT or its equivalent.

Under Act 1105, the scholarship size for recipients was reduced from the previous $2,000 to the current $1,000 for the freshman year at two- and four-year colleges. The scholarship sizes were increased by $1,000 to $4,000 for the sophomore year at four-year colleges and to $3,000 for the sophomore year at two-year colleges. Scholarships are $4,000 for juniors and $5,000 for seniors at four-year colleges.

Proponents of Act 1105 said it would be provide an incentive for students to successfully complete the first year of college and help guard against the scholarship program running short of funds. Critics of the measure countered that it would hurt poor and minority-group students.

In July, the department projected that it would disburse between $88.9 million and $90.5 million in Academic Challenge Scholarships in fiscal 2018. Thursday, it raised that projection to $97.3 million.

Asked to explain the increase, Smith cited several factors.

“We had a higher retention rate [and] we didn’t have those in the estimates yet [in July],” she said after the legislative subcommittee’s meeting. She said a larger share of recent high school graduates are remaining eligible for the scholarship after their first year of college; the rate increased from 60 percent to 67.5 percent over the past year.

“Our biggest growth is our entering freshmen out of the traditional student population,” she said. The number of incoming freshmen who have been awarded the scholarship for fiscal 2018 is 13,352 — up from 10,894 in fiscal 2017 — but not all of them have accepted the scholarship yet, Smith said.

The department also started accepting scholarship applications on Oct. 1 for the first time, and “we also had an extension in the deadline date [until June 15] because of the changes that happened in the [legislative] session, she said.

In addition, the department worked with the Arkansas Department of Education and “basically created accounts for all the public school students that had a transcript in the system and … it made it a lot of easier for them to go through the process of applying for the Academic Challenge Scholarship,” Smith said.

In fiscal 2017, 20,527 scholarship recipients remained eligible to continue receiving the aid, while 6,538 students dropped the scholarship and 6,160 completed their eligibility, largely by graduating, according to Smith’s report to lawmakers.

The students who maintained their eligibility for the scholarship in fiscal 2017 had an average high school grade-point average of 3.6, an average ACT score of 24, an average college GPA of 3.18, an average of 30 hours of earned credit and an average of $4,278 in income, the report showed. The report also said their parents’ income averaged $78,861.

The students who dropped the scholarship in fiscal 2017 had an average high school grade-point average of 3.21, an average ACT score of 22.1 and an average college GPA of 2.36. They earned 18 hours of credit, made an average of $3,919 in income, and had parents whose income averaged $61,255, according to the report.

The students who completed their eligibility for the scholarship in fiscal 2017 had an average high school GPA of 3.58, average ACT score of 23.9 and average college GPA of 3.37. They earned 28 hours of credit, made an average of $7,361 in income and had parents whose income averaged $55,439, Smith’s report showed.

Sen. Joyce Elliott, D-Little Rock, pressed Smith for her conclusions based on her five-page report.

“I still feel that we are probably dropping more students,” Smith said. “We can make improvements in the areas of our students remaining to be eligible.

“There are some students where we can send the award letter out to them and have them read it, but still for some reason don’t grasp that ‘I have to complete this many hours in order to remain eligible.’ We’ve already started out beefing up our communications to send more reminders out to students to say, ‘this is what you have to have in order to be able to maintain eligibility,’ as well as partnering with our institutions to make sure they are communicating that same information,” she said.

Smith said first-year students are required to take 12 hours their first semester, 15 hours the second semester and earn a minimum 2.5 GPA for the full school year to maintain their scholarships.

In addition, Smith said, “We do have certain [racial and ethnic] groups that drop out at higher rates than others, and we’ll have to explore what we can do to partner with the institutions to try to improve that with our attainment rates of students in the scholarship program.”

Elliott said she wants the colleges to be more proactive in determining why students are dropping their scholarships.

“We keep getting the same statistics about the ethnic groups, and it seems to me rather than keep getting that information and throwing up our hands or beating our chests and wondering what we can do. We just need to get to the nitty-gritty of talking to students,” she said. “It likely might be very different from institution to institution, and for us not to follow up and get that to me is maybe not intended negligence, but, if we want to achieve our goals, we just have to find out what is going on with people.”