SAVANNAH, GA (WTOC) - Thousands of Georgians are drowning in student loan debt. Some didn’t even get the degree they borrowed thousands of dollars to get.
According to the non-profit watchdog, Student Borrower Protection Center Nationwide, 44 million Americans have student loans. A fourth of them are behind on their payments. Even more shocking, the outstanding loan debt across the country is around $1.5 trillion.
Georgia has a special scholarship for in-state students called HOPE, but is the Georgia Lottery Commission doing all it can? At least one lawmaker thinks they can give more.
Some would say Georgia has one of the best scholarship programs in the country. The HOPE scholarship, on average, covers about 60 percent of tuition. However, not long ago, it covered closer to 100 percent. There is renewed debate now at the Capitol about how to restore it to full funding.
Ishin Baniya is set to graduate college in a year. He is one of thousands of students who chose to come to what-was-Armstrong for a cheaper education.
“The education that you receive at like a private college and public, it’s not much of a difference, but the loans you have and the interest and the years that it takes to pay it back later on, that makes a lot of difference,” said Baniya, an international student from Nepal.
Of course, Armstrong is now part of Georgia Southern, but the affordability is the same. The state’s merit-based HOPE scholarship is funded by the lottery. However, despite increasing revenue, it covers less tuition for students than it did just a few years ago.
One possible reason is that the University System of Georgia has added almost 30,000 students in 10 years, meaning more people are taking advantage of HOPE.
“All of that is a good thing, but all of that demand has made it more difficult for us to keep up, so in spite of our growing revenues and more and more money going to HOPE scholarships, we’ve still got an erosion in the percentage for each kid,” said Rep. Jesse Petrea, a Republican representing Skidaway Island.
State law outlines how the Georgia Lottery Commission pays out their revenue. They’re supposed to give as close to 35 percent of revenues as possible to education. However, data WTOC got shows they’ve only given about 25 percent for at least the last five years. The difference in 2018 equaled about $390 million. Over five years, that’s close to $2 billion.
Rep. Petrea thinks the lottery commission could be more efficient.
“We might not can get to 35 percent, which is what we set out to be, but maybe we can get to 30 percent,” Petrea said.
He doesn’t think the commission is mismanaging money, but he said the legislature could pay more from the general fund as well.
The latest budget analysis shows Georgia lawmakers added $78 million to a reserve fund that sits at more than $1.1 billion. The hundreds of millions in reserves are necessary to fund the scholarship program in another recession, according to some lawmakers.
Petrea said it’s also up to legislators to monitor rising tuition costs in Georgia for schools in the University System of Georgia. Over the last 10 years, the average tuition increase system-wide is about three percent. In that same time, the average inflation rate was lower at about 1.7 percent. However, in just the last three years, the tuition increases have been lower than inflation.
The University System said that doesn’t tell the whole story though. When the great recession hit, the system lost more than $1.2 billion in state funding. They say the increases are to keep the schools competitive. They also point to the low tuition costs compared to similar schools across the region.
For students on campuses like this, they’ll keep choosing the cheaper option over student loan debt.
“You are getting so much bang for your buck coming to at least a university that this place is,” said John Wonacott.
In response to the percentage given for education, the lottery commission pointed WTOC to their FAQ page that says: “When Georgia’s lottery legislation was drafted 25 years ago with a 35 percent target, it represented more of the draw games that payout at a lower percentage than the scratch-off games… The “as nearly as practical” language… allowed the lottery to be flexible and change with the marketplace.”
They point to Texas and Oklahoma as two states that were hurt by a legislatively mandated percentage, going on to say, “case study after case study details the potential for unintended negative consequences of slashing prize payouts to boost profit.”
Another hot topic to fund HOPE is casino gambling. Representative Ron Stephens is behind the movement for that. His latest effort proposes putting the issue on the ballot for voters to decide. He points to a recent poll showing widespread support for the opportunity to vote on the issue at the ballot box.
“Even the staunch Republicans, 76 percent by the latest poll for us, say we want to vote. Some want to vote yes; some want to vote no,” Stephens said. “They ought to have the opportunity to do that.”
Petrea and many other Republicans and Democrats are not fans of the gambling.