Michael Collins has a review of the clash between Gov. Bill Haslam and U.S. Rep. Steve Cohen, D-Memphis, over Tennessee Promise scholarships:
“It sounds good — it’s a PR delight,” the Memphis Democrat said. But, “Plato wouldn’t like it. It doesn’t make sense.”
Cohen’s concerns start with the way Tennessee Promise was funded — by taking millions of dollars in reserves from the lottery-funded Hope program. Stripping the money from Hope leaves those scholarships with no room for growth and eventually will kill the program, said Cohen, who as a state senator shepherded the legislation paving the way for the Tennessee Lottery and the Hope program.
What’s more, Cohen argues, Tennessee Promise essentially punishes students who have made decent grades by taking scholarship money away from Hope and giving it to students who haven’t distinguished themselves academically and who are unlikely to complete their degree.
Tennessee Promise was funded by transferring $312 million in reserves from the lottery-funded Hope program and putting it into a new “irrevocable trust” endowment for free tuition at two-year schools. The $312 million is expected to generate interest that will help fund Tennessee Promise in coming years. Future lottery reserves also will be directed into the Tennessee Promise trust.
The transfer of lottery funds into the Tennessee Promise trust left $110 million in lottery reserves for Hope and other programs — $10 million more than state law dictates remain in the reserves.
…State officials insist the lottery will continue to bring in enough money to pay for Hope scholarships, which totaled $279 million in the 2013-2014 academic year.
“This won’t hurt Hope,” said Mike Krause, executive director of Tennessee Promise.
Eligible students can still receive $16,000 in Hope scholarships over four years, just as they could before Tennessee Promise was created, Krause said. The only thing that’s different is how the money is distributed.
The state Legislature decided last year to reduce the Hope awards for freshmen and sophomores to $3,500 per year, down from $4,000 per year. But Hope awards for juniors and seniors were increased to $4,500 per year, a $500 increase each year.
Reducing the scholarship awards in the first two years and increasing them for the last two years was meant to give students an incentive to persist in their studies, “which we think is important,” Krause said.
As for Cohen’s argument that directing future surplus lottery money into Tennessee Promise will ultimately doom that program, Krause says no.
“The Hope lottery scholarship,” Krause said after a long pause, “is going to continue to serve students very effectively.”
Note: Sample previous posts HERE and HERE.