Why Georgia Grants Give Students HOPE

During his senior year in high school, Brian Leigh had dreams of leaving Athens, Ga., and attending Northwestern University or Notre Dame. But the lure of a free education at the University of Georgia kept him at home.

"I stayed here because I plan to be a doctor, and if I can go to school free and not incur so much debt early on, that would be more money I wouldn't have to pay back later," says Mr. Leigh, now a college senior majoring in genetics and pre-med.

Leigh's free education is courtesy of Georgia's HOPE Scholarship Program, a lottery-funded initiative that guarantees Georgia residents with good grades ree tuition at any of the state's colleges or universities.

Since its inception in 1993, the HOPE program (Helping Outstanding Pupils Educationally) has helped put 240,000 students through school, increased college enrollments, and boosted the state's education system.

Now President Clinton has made a federal version of HOPE scholarships a key ingredient in his $51 billion education package. While some educators see the plan as a way to expand access to higher education, others question whether it can be replicated on a national level. Some also fear that it could drive up college costs.

"We're talking apples and oranges," says Larry Gladieux, executive director for policy analysis at the College Board. "The Georgia program is a scholarship program; the Clinton program is a tax cut. Billions of dollars will go toward this tax-relief plan that simply will not help ... those with the greatest need."

In Georgia, Gov. Zell Miller (D) started HOPE as a way to improve the state's dismal education record. Under the program, students who graduate from high school with a 3.0 grade-point average (a B average) and maintain that in college are eligible for free tuition all four years. Students also receive a $100 stipend each quarter for books. Even those who attend a private university in Georgia get an annual grant of $3,000.

The impact the program has had is enormous, advocates say. Students who otherwise wouldn't be able to afford college are now able to attend. And good students who before selected schools out of state are electing to stay here. As a result, some colleges have become increasingly selective.

The University of Georgia, for instance, has tightened admission requirements. Nearly one-third of its 30,000 students receive the HOPE scholarship; 97 percent of last fall's incoming freshmen did. The program pays qualifying students about $3,000 a year at UGA, which equals the cost of tuition and books for one year.

Many say the biggest effect HOPE has had is outside the university system. "It's begun to transform Georgia into a state with an education culture," says UGA president Charles Knapp. "HOPE sends a message to primary and secondary schools that education is important."

The president's HOPE plan differs from Georgia's in two distinct ways. First, Georgia's program is funded through the state lottery, which has contributed $314 million in tuition and fees. Mr. Clinton's is a tax-based program, prompting some to suggest that it's nothing more than another entitlement. It also covers two years of college instead of four.

Specifically, Clinton's HOPE offers students a $1,500 tax credit. They would be eligible the second year if they had maintained a 2.75 GPA the first year. The plan also offers a $10,000 tax deduction for the first two years.

Many see the HOPE proposal - and Clinton's entire education package - as a watershed event that will increase access to college for families.

"It's an extraordinary moment," says David Warren, president of the National Association of Independent Colleges and Universities in Washington. "Two years ago we were looking at a $20 billion deduction of student financial aid. Now we're looking at a [huge] increase," he says. "This is the first time the tax code can be seen as a mechanism for helping to finance one's college expenses."

But critics argue that the plan would not help people with the most need - only those who would make the expenditure for college anyway and make enough money to benefit from a tax break.

"I think tinkering with the tax code has a lot of unintended consequences," says Mr. Gladieux. "It's going to be a complicated business to sort this out and make sure it's done right without fraud. There's a better way to deliver federal assistance and that's through the existing grant, loan, and work-study programs. They're not perfect, but ... they do a pretty good job of directing benefits to those who have the greatest need."