As soon as the next academic year, some Indiana high school graduates could receive a state-sponsored scholarship of $5,000 a year to attend Ball State University. However, there is a catch.
These students would have to remain in Indiana to work for three years after they graduate from college.
Indiana Gov. Mitch Daniels' plan to slow "brain drain" by privatizing the Hoosier Lottery and using the profits for aiding higher education was introduced to the state legislature Thursday by Senator Jim Merritt, R-Indianapolis.
Essentially, the bill has two parts: Hoosier Hope Scholarships and World-Class Scholars Fund.
Despite concerns of legislators and experts, Daniels is pushing forward by considering a contract with Morgan Stanley, a Wall Street investment firm, to help form a plan to lease the state lottery, according to the Indianapolis Star.
Ball State University President Jo Ann Gora, as well as the other Indiana college presidents, supports Daniels' proposal.
"I think the bigger risk is that the lottery will be privatized and not be used for higher education at all," Gora said. "I'm supportive of the idea of 'let's encourage our young people to stay in-state.'"
HOOSIER HOPE SCHOLARSHIPS
Considerable debate has surrounded whether the proposal will achieve its purposes.
One goal of Daniels' plan is to keep Indiana students in the state for college and work, Daniels' press secretary Jane Jankowski said.
About 55 percent of Indiana college students stay in the state after graduating, and Indiana ranks 44th in the nation in the number of its population older than 25 years of age with a bachelor's degree, according to Daniels' plan.
Daniels' proposal would use 60 percent of the proceeds from privatizing the Hoosier Lottery to pay for about 1,700 Hoosier Hope Scholarships, which would provide Indiana high school graduates merit-based awards. Students attending four-year universities could receive $5,000 a year, and students attending a two-year college could receive $2,500 a year.
In order to qualify, students would need to be Indiana high school graduates and have high SAT or ACT scores, as well as a high grade point average. Once awarded the scholarship, students must maintain a 3.0 or higher GPA and complete their degree in the major's specified time period.
The scholarships, however, would be more like forgivable loans because students would have to repay them if they did not stay in Indiana to work for three years after graduating.
DEBATING SUCCESS
Jankowski said the proposal would make a huge difference in reducing the number of college graduates who leave the state.
Don Heller, an associate professor and senior research associate for the Center for the Study of Higher Education at Pennsylvania State University, said he had doubts about the proposal.
"I question whether it's really just more of a symbolic program than one that's going to have an impact on the economy," Heller said. "Why bother?"
There are more direct ways to attract college graduates, such as tax incentives, he said.
"I think the governor's proposal is going to look and sound much better politically than I've suggested," Heller said. "I don't think the way he's going about doing it is the most effective way to go about it."
Heller expressed concern that the scholarship would be going to wealthy students who wouldn't need it to afford college.
Gora said people assume students who do better in high school are from higher-income families, but that there is not necessarily any empirical data to support that idea.
"There is nothing in the proposal that precludes the selection commission from factoring in need as one of the components along with merit," Gora said. "No one is saying that need should not be one of the factors."
Gora and Jankowski said need-based awards are already offered on a national and state level,such as Pell grants or Indiana's 21st Century Scholars.
"Indiana is the No. 5 state in the country in terms of providing assistance to need-based students," Jankowski said.
Student Government Association President Asher Lisec said she would like to see the scholarships go to students on financial middle ground. Students who don't already have large scholarships should be given preference, she said.
Heller also questioned whether the program could be considered a success or worth the investment if students stayed for the required three years and then left.
"If the governor can come up with a way to ensure students actually stay in state after college he may accomplish his goal," Heller said. A similar program in Maryland, however, was abandoned by its governor because the graduates were too difficult to track, he said.
Jankowski said there was no plan yet for how to track the graduates in the program. The governor will work with the State Student Assistance Commission to address these issues, she said.
"I don't think three years is too long to wait or to ask someone to stay in the state and look seriously for positions," Gora said. "I was the person who encouraged the governor to reduce it from five [years] to three."
Lisec said she thought many students do not have the means to attend college, and they would be willing to take advantage of the Hoosier Hope Scholarships despite the requirements attached.
No one knows for sure how students will react to the program.
"I think that the idea of giving scholarships to high school students to promote higher education is a good idea," Lisec said, "but before students should sign up for it, they should understand the commitment they are making."
LOOKING AT GEORGIA
Daniels said he based this proposal on a program in Georgia, also called Hope Scholarships.
The Georgia Hope Scholarship, which started in 1993 and pays a student's full tuition to a public state university, is offered to Georgia students who earn a 3.0 GPA or higher in high school.
Unlike Daniels' program, Georgia's Hope Scholarship does not have any requirements to work in-state after graduation.
"Keeping Georgia students in Georgia schools was not really one of the original stated goals of the program," Wagers Chenault of the Georgia Student Finance Commission said, "but it has certainly turned out that way. We have seen that students are more likely to stay in Georgia since Hope has begun. And more of our higher-achieving high school students have stayed in Georgia."
Although no research has been done about whether the program has grown the job market, he hears all the time that both businesses and families moved to Georgia because of Hope.
"Although Hope is strictly a merit-based program, it does give a lot of money to lower-income students," Chenault said.
He said a study determined that 2003-04 Hope scholarships paid $117 million to students who were also recipients of the Pell Grant, which focuses on low-income students. Chenault said 32 percent of all Hope recipients are from low-income families.
WORLD-CLASS SCHOLARS FUND
The second part of Daniels' proposal would use the remaining 40 percent of profits from privatizing the Hoosier Lottery to create the World-Class Scholar Fund, which is supposed to attract top-notch researchers to Indiana universities.
The fund would create grants for public universities that would pay for researcher salaries and beginning costs for programs. In order to decide who would receive the World-Class Scholars money, a Commission of Higher Education, made up of members from private, public and academic fields, would be formed. All grants received must be matched by the university receiving them.
According to Daniels' plan, state investments in four-year public universities return about $5.61 per dollar.
The intended result of the plan is to bolster the state's economy by growing the workforce and creating new sources of money.
"The idea is that businesses locate where there is a talented workforce," Gora said. "I think part of that is to try to increase the percentage of citizens who have a college degree and make Indiana a more attractive place to locate."
Gora said she thought Ball State could compete with other Indiana schools in attracting Hoosier Hope Scholars.
"In truth, we have considerable overlap with these schools now anyway," Gora said, "and we believe the kind of curriculum we offer, that focus on the undergraduate experiences, is one that will attract highly talented students."
Ball State might not, however, benefit as much from the World-Class Scholars Fund for attracting expert faculty and researchers, Gora said.
"I think Ball State will have a harder time competing for those dollars because we don't have the doctorate programs in the hard sciences that will bring in the money," Gora said.
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