When the legislature in the state of Georgia last changed the Hope Scholarship for the 2011-2012 school year, the Hope tuition coverage amount was set to 90% of the previous year’s (that would be 2010-2011) tuition rate. Along with this change, the Georgia state legislature removed the stipend for books and mandatory Hope qualified fees that were included in the award. The book fee support was set at $300/year and the mandatory Hope qualified fees which were different based on each individual college or university.
With respect to the Hope scholarship tuition award, I will set the 2010-2011 tuition rate at 1.00 since it is the base line used for future tuition awards. Next each subsequent year’s tuition award amount will be calculated. It is a little complicated since tuition rates increase every year due to tuition inflation and the Hope Scholarship award amount is tied to a fixed tuition amount from the 2010-2011 school year, the actual Hope Scholarship award amount must be normalized to account for the tuition inflation rate occurring every year since 2010-2011 and the fixed 90% of the 2010-2011 tuition rate.
School Year Hope Scholarship Coverage
2010-2011 1.0 (Tuition) Plus mandatory Hope qualified fees and $300 in book allowance
2011-2012 tuition increase of 3.0% or 1.03 in terms of 2010-2011 tuition
2011-2012 =0.9/1.03 or 0.8738 (Normalized to 2010-2011) No mandatory Hope qualified fees and No book allowance
2012-2013 tuition increase of 2.5% above 2011-2012 for most universities but higher for UGA (5%), Ga Tech (6%), and Ga State (3.5%). I will use the University of Georgia rate of 5% since this is the largest university in the state of Georgia. Given this, in terms of 2010-2011, the rate is 1.0 * (1.03) * (1.05) or 1.0815
2012-2013 0.9/1.0815 or 0.8322 (Normalized to 2010-2011)
In terms of percent of tuition, it looks like this:
School Year Hope Scholarship Coverage
2010-2011 100%
2011-2012 87.38% (Note, the coverage was never 90% due to inflation rate in tution of 3% from 2010-2011 to 2011-2012)
2012-2013 83.22%
This is only the tuition amount and does not include the $300 book fee and Hope qualified mandatory fees that were eliminated in the 2011-2012 term.
As you can see, tuition inflation is quickly eroding the tuition coverage and the rate of the Georgia Hope Scholarship tuition coverage continues to drop each year due to the multiplicative effect of year over year tuition inflation. Also, each college and university is adding to or increasing mandatory fees which becomes an additional component not covered by this exercise.
We can easlily project the Georgia Hope Scholarship tuition award amount for the next five years. If the tuition rate increases 5% year over year, the coverage looks like this:
School Year Hope Scholarship Coverage
- 2010-2011 100%
- 2011-2012 87.38%
- 2012-2013 83.22%
- 2013-2014 79.26%
- 2014-2015 75.48%
- 2015-2016 71.89%
- 2016-2017 68.46%
- 2017-2018 65.20%
In other words the Georgia Hope Scholarship will support less than two thirds of the tuition rate by 2017-2018 which is a short 7 years from the 90% of the 2010-2011 tuition pegged by the Georgia state legislature. If the University System of Georgia continue the 5% year over year tuition rate of inflation for an additional 5 more years, the Georgia Hope Scholarship tuition coverage will drop to around 50% of the tuition rate in the 2022-2023 school year. This does assume that lottery funds actually provide the money required and that the state of Georgia does not change the Hope program.
What does this mean for the Hope Scholarship? Either the Hope tuition coverage will need to be reset to a percentage of a future school term tuition amount, or the requirements for the Hope Scholarship will need to be tightened considerably to reduce the number of eligible students being awarded the Hope, or the University System of Georgia will need to stop the over the top inflationary spending which drives up tuition rates higher the normal inflation.
