Why Even the Lottery Can't Afford College

Scholarships funded by state lotteries can't keep up with tuition growth.

(Photo: Buena Vista Images/Getty Images)

Suzi Parker is a journalist whose work also appears in The Christian Science Monitor and Reuters.

Lottery winners aren't the only people who score when people purchase tickets at local gas stations and liquor stores. Money made from lotteries funds all sorts of community-boosting programs, and in some states that includes college scholarships.

Millions of students across the country have attended college thanks to lottery players. New Mexico, for instance, has helped about 90,000 students attend college since 1996 through its Legislative Lottery Scholarships. But scholarships like these are in jeopardy because the money coming into the programs can't keep pace with the rise in college tuitions.

According to Watchdog.org, New Mexico will spend about $67 million on scholarships, but only an estimated $40 million will come into the program. This discrepancy is likely to spark a fierce battle in the state legislative session that starts this week. At issue: whether to use taxpayer dollars from the state’s general fund to make up for what the lottery can no longer cover.

“I’m not in favor of that,” Rep. Jim White, a Republican legislator from Albuquerque, told Watchdog.org. “I don’t think that’s a function of government, to pay for college educations. We already pay the universities in the state to the tune of $900 million. Fourteen percent of our overall general fund budget goes to the higher [education] institutions.”

Democratic lawmakers, however, do favor such action. “So what we’re going to have to do is bite the bullet and put some general fund money in there," Rep. Henry “Kiki” Saavedra, a Democratic legislator from Albuquerque, told Watchdog.org. "We have to do something because look at who [the scholarship program] helps.” 

The program currently pays 100 percent of tuition for eight consecutive semesters of eligibility, beginning with the second semester of college enrollment. Recipients must maintain a 2.5 GPA, and the scholarship may be used at 25 public colleges, junior colleges, or universities in New Mexico.

Critics, including students, say New Mexico lawmakers should have solved the problem before it became a crisis. Students around the state created their own proposals for the lottery scholarships and presented them last September at a Lottery Scholarship Summit at the University of New Mexico.

David Maestas, New Mexico State University's student president, recommended raising the minimum grade point average from 2.5 to 2.75, reducing the number of consecutive semesters for scholarship use from eight to seven (three for students at two-year colleges), and changing the grant to a flat sum rather than a promise-to-pay tuition, whatever that tuition might be.

It's unclear if legislators will listen to the students' recommendations or even come up with a solution. If they don't, the state’s Department of Higher Education will have to figure out how to distribute the $40 million available. That will be bad news for the more than 13,000 students who currently receive scholarship money, as it would result in major reductions in payouts.

New Mexico is not alone in its struggles. Arkansas, which didn’t legalize a lottery until 2009, announced last week that it lost money on a game for the first time ever. The state will likely have to decrease its scholarship dollars for this fiscal year. So far, about 30,000 Arkansas students each year since 2009 have received scholarships funded with lottery dollars. Last year the legislature restructured the way scholarships are awarded to ensure that there is sufficient money in the program to pay for scholarships for all eligible students.

In 1993, Georgia became the first state to create scholarships from lottery proceeds. That first year, Georgia brought in a national record of $1.13 billion, providing $360 million for three education programs. But even Georgia has fallen on hard times, with skyrocketing tuition and stagnant lottery business to blame.

To avoid using public funds to make up the shortfall, the Georgia legislature created a two-tiered scholarship system with more stringent requirements. State education experts say the new requirements represent a significant barrier for entry that will have the greatest effect on those who can afford college the leastlow-income and minority students.

This article was created as part of the social action campaign for the documentary TEACH, produced by TakePart's parent company, Participant Media, in partnership with Bill and Melinda Gates.

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