State struggles to make good on Millennium Scholarship

It's about what's possible. That's how Judy Humphrey, a guidance counselor at Reno's Hug High School, describes the effect state-funded, merit scholarships have had on her students.

Humphrey is encouraged to see students thinking about college as early as middle school and not focusing on the hurdles.

"Now they can see it as a possibility because money is not the issue they thought it was," she said.

But for Nevada's Millennium Scholarship program - bankrolled entirely by dwindling tobacco settlement cash and based on achievement, not need - money is the issue.

Like more than a dozen other states, Nevada promised big things to high school students - and their parents - back when state lotteries, legal settlements or the hot economy promised big checks to state coffers.

Georgia, New Mexico, Washington, Nevada and other states offered merit scholarships to students who maintained a benchmark grade point average, regardless of their finances. Georgia's HOPE scholarship - funded with lottery money - was the model.

In recent years, many of the states have had to tweak that promise - and it hasn't been easy.

Faced with unexpected numbers of eligible students, West Virginia raised its cutoff ACT score. When lottery money fell short of projections, Georgia Gov. Sonny Perdue pushed to link the scholarships to SAT scores. Backlash followed. The state, instead, tightened GPA requirements, limited its contribution to fees and mandated tighter monitoring of recipients

Such decisions required some soul-searching.

"These are popular programs," said Dane Linn, education director at the National Governor's Association. "When states started to implement them they weren't in the fiscal crises many are now, and they did not give as much thought as they do today about whether or not they're meeting the goals the set out to accomplish.

"Money starts to get tight and people start to ask who should qualify, are the students able to keep the scholarship, are they taking high school courses at the college level?"

Nevada legislators are preparing to ask those questions for the second time.

In 2003, when it became clear that fewer smokers nationwide meant fewer dollars for Nevada, the state raised the bar for eligibility from a 3.0 GPA to 3.25 after 2006, and required students to maintain a higher average in order to hold on to the scholarship.

But the minor changes didn't buy much time. State Treasurer Brian Krolicki recently said that if lawmakers didn't act, the fund would soon go broke.

Gov. Kenny Guinn, the program's architect, has proposed bonding to save the program as it is. He hasn't proposed using much-in-demand surplus state funds to help it. Legislators of both parties intend to use the opportunity to rethink how - and to whom - the tuition funds are allocated.

Democrats here say they'll push to distribute the funds based on need - placing parent's income ceiling at around $60,000.

"We're trying to get to the kid who would want to go to college, but wouldn't otherwise get the scholarships," said Assemblywoman Chris Giunchigliani, D-Las Vegas.

From its inception, Washington's program has capped income for a family of four at about $89,000. Other state have discussed means tests with little success, said Don Heller, a professor of education at Pennsylvania State who recently issued a report on merit scholarships for Harvard's Center for Project.

"Politically, legislators found it hard to do. These programs are popular with upper-income and middle-income taxpayers. It's their kids who are getting a free ride at UNLV, University of Florida or the University of Georgia, whereas in the past the only financial aid a lot of these student would qualify for is loans."

The Harvard report also found that in Massachusetts, Florida and Michigan white students qualified at about five times the rate of Hispanic and black students.

But the scholarship serves several purposes. In many states, including Nevada, the money was supposed to entice student to stay in states and block the "brain drain."

To that end, the programs appear to be succeeding. In Nevada, the percent of recent high school graduates moving directly on to state colleges and universities has risen 15 percent since 1998.

What happens once they're there is also a cause for concern. Several states, Linn said, found that many merit scholars were struggling to do the work. In Nevada, 35 percent of millennium scholars lost their eligibility in the first semester by falling below the GPA cut-off.