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Solutions for the Future Sustainability and Availability of Florida Bright Futures David Mariutto University of Central Florida
Solutions for the Future 2 Introduction The Florida Bright Futures Scholarship was created and passed into law in 1997 as a means to keep Florida’s most intelligent students in-state for college, hopefully retaining them for local employment in the future. The scholarship was also created to help high-achieving students from low-income households afford a postsecondary education—replacing the usual need-based loans and the occasional federal Pell Grant with merit-based scholarships. However, another motivator for Bright Futures was the politics of the Florida Lottery in the 1990s. The lottery was proposed to Florida residents as a way to raise money for public education, as it was being developed and eventually passed in 1988. However, the lottery quickly became a political nightmare for Florida legislators, as taxpayers failed to see any significant improvements in classroom size or technology. In this sense, Florida Bright Futures was as much of an education initiative as it was a public relations one, as it sought to repair the image of the Florida Lottery and its perceived ineffectiveness. Over time, Bright Futures has not been able to stay within its financial means; this year, the scholarship has surpassed its lottery resources by $113 million. This money had to come out of the state’s general revenue fund; as a result, less money is available to cope with Florida’s $3 billion 2010 budget shortfall. This money came out of general revenue to prevent cuts in Educational Enhancement Trust Fund (EETF) dollars for K-12 and postsecondary institutions (Colavecchio, 2009). Florida is not the only state to exhibit issues with lottery-funded programs. 23 of 42 states that have lotteries set aside all of its proceeds for education. However, after a lottery’s initial implementation, the financial benefits for education are high, but steadily drop over time. This is because many states tend to become “addicted” to lottery money by using it to fund constant needs, rather than special or one-time projects and programs. Georgia’s lottery is
Solutions for the Future 3 often regarded as the most successful in the nation because the state avoids this problem by making the administration of the program and its funds completely independent of the state’s general assembly. Florida’s lottery is run on a model that is more of a mixture between Georgia’s and those of other states (Buchanan, 2007). Proceeds from Flow of EETF Dollars Florida Lottery ticket sales are allocated on a priority basis: first to school construction bonds and the Bright Futures scholarship, then K-12 and postsecondary institutions. However, any money allocated to these recipients are not setaside for any specific purpose or program (OPPAGA, 2005). Since 1997, Bright Futures has grown enormously in size and cost. The program cost the Lottery $70 million to operate in 1997, but in 2009 cost $430 million. Approximately 170,000 students benefited from a Bright Futures scholarship that year, up from 55,000 in 1997. However, the growth in Bright Futures is not distributed equally amongst its reward Source: (OPPAGA, 2005) categories. The program awards three different scholarships. In
order of award level, from greatest to least, these are: Florida Academic Scholars (FAS), Florida Medallion Scholars (FMS), and the Florida Gold Seal Vocational Scholars (GSV) award. Since 1997, the number of FAS recipients has almost doubled, from 18,619 to 35,729. The number of GSV recipients has actually shrunk, from 10,665 in 1997 to just 1,636 today. In stark contrast to these two awards, FMS has seen extraordinary growth, from 13,035 recipients in 1997 to 132,001 today, an increase of over tenfold (Office of Student Financial Assistance, 2009).
Solutions for the Future 4 The large increase in beneficiaries of the award can be due to a number of factors. First, FAS recipients who fail to meet the renewal requirements for their reward after their first year of postsecondary education become eligible for FMS, instead of being dropped altogether from the program. In addition, FMS is the easiest to obtain for Florida high school graduates planning to attend 4-year postsecondary institutions, requiring a 3.0 weighted high school GPA and 970 SAT score for the initial award, and a 2.75 college GPA thereafter. FMS also serves more than three times as many recipients, and cost the EETF more twice as much as FAS to operate in 2009, despite its lower per-student cost. This is a tremendous shift in spending from 1997, when FAS cost the EETF almost 3 times as much as FMS to operate (OSFA, 2009). Finally, after the creation of the scholarship, it was quickly discovered by legislators as early as 1998 that changes would need to be made to hold back the program’s growth. However, because of the strong popularity of the scholarship amongst students and parents, many legislators have been reluctant to take the politically risky move of proposing changes (Rado, 1998). There are a number of adverse affects such growth in Bright Futures has had on the state of Florida. As mentioned previously, Bright Futures has become a fiscal problem Source: (OSFA, 2009)
Solutions for the Future 5 because its growing cost has now exceeded the available funding from the EETF, forcing the state to dip into its general revenue to cover the rest of the cost. This occurred because of a combination of the increasing cost of the scholarship and declining lottery ticket sales as a result of the economic downturn (Colavecchio, 2009). The existence of Bright Futures has also had a strong impact on the cost of tuition at state colleges and universities in Florida. Under original arrangements before the 2009 legislative session, the Bright Futures scholarship covered a fixed percentage of each student’s tuition and fees. Because of this, any increase in the cost of attendance would also drive up the cost of the scholarship. As a result, state legislators, who are in charge of setting tuition in Florida, were inclined to keep the cost of attendance down to hold back the increasing cost of Bright Futures (Colavecchio, 2008). After 2009, the Florida Legislature changed Bright Futures to award a specific amount per-credit hour. Despite this recent change in policy, the scholarship continues to run in the red. Because of the state budget deficit and the negative impacts the growth of the scholarship has caused, reform of Bright Futures cannot wait. Criteria Used for Evaluation When evaluating potential solutions to restructure the scholarship for long-term sustainability, there is a set of criteria that must be considered. These include: Total Cost Savings The amount of money changes to the scholarship will save the state is an important consideration because the tremendous cost of the program is the root of the need for reform. Impact on Current Students Many students in Florida, particularly at state universities, rely on the scholarship to help pay, or in some cases, completely cover their tuition. Any changes that decreases the amount of
Solutions for the Future 6 money they are awarded may adversely affect their ability to pay, and in turn, their education. For example, some scholarship recipients may need to get a job as a result of their lower award. In addition, changing the standards for retaining the award in the middle of a student’s education might cause many students to unexpectedly lose their award entirely. Impact on Future Students Students currently in high school may have a general picture of what their grades will be like when they graduate, and may already be anticipating a particular reward. Changing the standards or award amount may change their postsecondary plans, possibly on short notice. Economic and Racial Equity of Change 19.7% of Bright Futures recipients in 2003 had financial need, but did not qualify for federal student aid. In addition, statistics show increasing some standards may adversely affect racial minorities more than other groups. (OPPAGA, 2003) Long-Term Viability For a set of reforms to be considered a valid solution, they must ensure the continued existence of Bright Futures without adversely affecting the state’s budget or the lottery funding of K-12 schools. This means that proposed changes to the scholarship must save the state more than $113 million and ensure the number of recipients will remain at a reasonable number over time. Potential Alternatives There are a number of tools that policy makers can use to address this issue. Many of these can be used in conjunction with each other; there is no need to choose just one. First, requirements for initial eligibility for award money can be raised. This is an option that has been put on the table on numerous occasions since 1998, but has never gained wide approval. As a
Solutions for the Future 7 result of doing so, fewer students would receive scholarships each year. However, these students will also be more academically successful than recipients in the past. The current minimum SAT score for the FMS is a 970, a score that is below the Florida average of 995 (College Board, 2009). Raising initial standards would address both cost and selectivity concerns. However, analysis of potential policy has shown that an increase in SAT and ACT standards would have a much stronger impact on racial minorities than an increase in minimum GPA. For instance, raising the FMS GPA benchmark from 3.0 to 3.25 would disqualify 24% of African-American, 22% of Hispanic, and 21% of Caucasian students from receiving funds. In comparison, raising the SAT benchmark from 970 to 1050 would disqualify 55% of African-Americans, 46% of Hispanics, and 36% of Caucasians—a much wider racial gap (OPPAGA, 2003). Raising the FMS SAT benchmark from 970 to 1050 would save approximately $27.87 million for the EETF (OPPAGA 2010). In comparison, raising the GPA standard from 3.0 to 3.25 would save $14 million1 ($11.1 million in 2004-2005). These are the largest benchmark increases evaluated by OPPAGA for analysis. While raising these benchmarks would have no effect on current students, future students would be affected in their ability to meet the new requirements. Current high school students, in particular, may be most negatively affected because the standards are changed while they have already started developing their GPA. In addition, raising the GPA required for the annual renewal of the award may be considered. Currently, a 2.75 GPA in college is required to renew a FMS scholarship each year. Raising these standards can both decrease costs and ensure that the recipients are continuing to perform as expected once they enter college. It is estimated that raising the GPA required for
Present-day initial GPA policy savings determined using 2004-2005 OPPAGA savings estimates compiled with 2008-2009 student data from the Florida Office of Student Financial Assistance. This proportional estimate assumes tuition and average student performance remain constant. (OPPAGA, 2004) and (OSFA, 2009)
Solutions for the Future 8 renewal from 2.75 to 3.0 for FMS recipients can save the state an impressive $40.6 million2 ($23.8 million in 2002-2003). Because FAS recipients simply are moved to FMS if they fail to meet renewal requirements, the potential savings are not nearly as great; are estimated to be only $5.1 million with a GPA increase from 3.0 to 3.25 ($3.7 million in 2002-2003).3 Future students may be affected by this requirement by the time they reach college. Current students would be affected only if the Legislature chooses to implement the policy immediately for all students. If currently enrolled students are affected, a significant number of students may lose their scholarship without an opportunity to improve their grades in response to the new requirements. However, if the new requirements only affect students enrolling in classes the first time, it will take at least four years for the maximum amount of savings to appear (OPPAGA 2004). Cutting the size of the award across the board may also be considered. Already, the Legislature has capped the per-student cost of the award by moving from a percentage-based system to one that disperses a fixed amount of funds on a per-credit hour basis. However, cutting the size of Bright Futures for all has the potential to be a very politically unpopular move because of its widespread effect on all students. The amount of money the state would save depends on how much the award is cut in size. Because this change affects all students, all stakeholders would technically be affected equally. However, 41% of Bright Futures recipients have remaining financial need, but do not qualify for federal aid. If the size of the scholarship is
Present-day renewal GPA policy savings determined using 2002-2003 OPPAGA savings estimates compiled with 2008-2009 student data from the Florida Office of Student Financial Assistance. This proportional estimate assumes tuition and average student performance remain constant. (OPPAGA, 2004) and (OSFA, 2009) 3 Present-day renewal GPA policy savings determined using 2002-2003 OPPAGA savings estimates compiled with 2008-2009 student data from the Florida Office of Student Financial Assistance. This proportional estimate assumes tuition and average student performance remain constant. (OPPAGA, 2004) and (OSFA, 2009)
Solutions for the Future 9 cut, these students’ ability to attend college may be affected due to the increased cost of attendance out of pocket (OPPAGA, 2003). The implementation of a need-based component to Bright Futures is another possibility for reform. Some argue that many recipients of the scholarship don’t actually need it to attend college, and therefore, are not truly deserving of the scholarship. Others argue that the receipt of the scholarship by students from high-earning families fulfills part of the original mission of Bright Futures: to keep high-achieving students in Florida. Establishing an income cap of $88,820 a year for the families of scholarship recipients would save the state a little more than $6 million. A cap at the state’s median income, $38,820, would save $32.5 million. Needless to say, such a policy alternative disparately impacts those who are wealthier than most Floridians. Current students would not be affected unless the legislature decides to retroactively apply to the new rule to them. However, doing so might not impact the ability of most of the students affected to continue attending their institution, provided the cap is above $75,000 (Students with family incomes up to $75,000 may have unmet financial need) (OPPAGA, 2004). Stakeholders Because of the importance of the scholarship to students as well as the negative effects it has had on the state’s budget, there are numerous stakeholders in the Bright Futures program. One of the most evident already heavily covered earlier are current and future college students. Because many of the potential reforms to the scholarship are likely to cut a significant amount of students from funding, they are likely to oppose many changes. However, there is a distinction to be made between changes that current and future students will support. Students already attending postsecondary institutions will be most likely to support increases in initial eligibility requirements because they are not affected. Future students and their parents, on the other hand,
Solutions for the Future 10 will be the most resistant to change because they have the potential to be affected by all alterations to existing policy. Additionally, since the implementation of Bright Futures, achievement in high school has risen. If the initial qualifying requirements for Bright futures are raised high enough for it to be seen by some as “impossible,” it may discourage students from working harder to achieve, reversing this trend (OPPAGA, 2010). Taxpayers and the general public, excluding parents, are indirect recipients to the benefits of a more educated public and include purchasers of the lottery tickets that keep the scholarship running. Thus, they are also stakeholders in Bright Futures policy. They may be more likely to support changes to Bright Futures that include the raising of eligibility and renewal standards. In addition, a populist opinion may take hold in this group, which would call for a need-based component or income cap being added to the program. In essence, this group is likely to be in favor of any reform that decreases cost but keeps as many students attending college in Florida as possible. Finally, as the providers of the education recipients of the scholarship receive, as well as the final recipients of some EETF funds, state colleges and universities have an important interest in Bright Futures policy. Over time, Bright Futures has caused the number of highachieving students in Florida staying in-state for a college education to rise. This has played a role in the rise in academic selectivity at state universities since the program’s start. State universities will unlikely support changes that have the potential to revoke an existing student’s scholarship, because such a policy may cause students to end their enrollment due to affordability issues. An increase in renewal standards would be an example of such a policy. A full 25% of current students who fail to renew their scholarship do not return to class the next semester (OPPAGA, 2005). In addition, 41.3% of FMS scholars lose their award at some point
Solutions for the Future 11 in their undergraduate career (OPPAGA, 2010). An increase in renewal standards could potentially drive up further the number of students affected by this benchmark (assuming no change in qualifying standards). The University of Florida in particular may not support an income cap, as the median income of students’ families there is $100,000 a year, and 97% of their in-state student body receives a Bright Futures Scholarship. Implementing an income cap may lead to a loss of in-state talent at the university as these students consider out-of-state options more heavily (Colavecchio, 2009). Proposed Solution There is no silver-bullet for the reform and long-term sustainability of the Bright Futures scholarship. This can only be achieved by a comprehensive package of different solutions that bring down the cost while affecting current recipients as little as possible in an equitable fashion. With this in mind, an increase in GPA benchmarks, and a comparatively minimal increase in FMS standardized test standards is one of these potential contributing solutions. An estimated $18.2 million can still be saved by raising the SAT benchmark to 1020, rather than 1050. This would bring the benchmark to above the state’s average while minimizing differences in racial equity (OPPAGA, 2010). Under this minimal increase, fewer minorities will be cut from the scholarship, compared to the much wider race gap an increase to a score of 1050 would cause. As mentioned previously, raising the FMS GPA standard to 3.0 will save the state $40.6 million. Alterations to FAS may also be considered, however, any changes to it will not save nearly as much as the FMS reforms because students dropped from FAS remain eligible for FMS, still costing the state a significant amount of money. Changes to FMS standards achieve significant cost savings and maintain a descent level of racial and economic equity. While these reforms
Solutions for the Future 12 impact the awards of current and future students, the number affected is less that those who would be impacted by an across-the-board cut of the size of the award (OPPAGA, 2003). Another across-the-board cut in the size of the scholarship is not recommended. While it can save the state money and is economically equitable, the solution does not sustain the scholarship in the long-term because it does not address the rising number of FMS recipients, the root cause of the rise in cost of Bright Futures. In addition, such a cut could have sudden, negative effects on current students’ ability to pay the higher out-of-pocket cost of tuition. This researcher also does not recommend an income cap. The total cost savings will not be significant unless the cap is set close to the median income. It also has the potential to impact a significantly larger number of students and does not affect all stakeholders equally. As many as 41% of recipients would become ineligible for a reward if the cap is set at the median income (OPPAGA, 2004). In addition, an income cap is not a solution for long-term viability. Instead, it is a short-term solution that decreases the number of eligible students but does not stop the trend of growth in FMS recipients that new academically-based requirements can. Conclusion Raising qualifying and renewal standards, directed particularly towards the FMS award, will significantly cut back on the number of eligible recipients. Doing so may have negative effects on both current and future students if implemented immediately, instead of slowly, because students would have little warning to adjust their performance to meet the new requirements. If a student’s GPA is used as a primary determinant in awarding scholarships over standardized test scores (meaning the GPA threshold is typically harder to achieve), it would ensure that racial or economic inequality is kept to a minimum as a result of this change. State Colleges and Universities could possibly experience a slight increase in dropouts if these
Solutions for the Future 13 changes are applied to students already attending classes, as a result of those who fail to meet renewal requirements. In addition, they may also encounter a decrease in the quantity, but not quality, of high school students who apply for admission. Despite these negatives, high achieving students would continue to receive significant funding, as opposed to across-the-board reward cuts. In addition, if applied to only incoming students, the many of the potential negatives no longer apply. Reforming Bright Futures will also ensure state educational institutions continue to receive their share of EETF Lottery funds, which may otherwise run dry if no reform takes place. Therefore, raising initial and renewal standards, with some restrictions and caveats, may be the best solution for reforming Bright Futures. Researcher’s Note Due to time and funding limitations, the extent of alternatives evaluated was limited, even after contact with OPPAGA was established and certain statistics were updated for 2010. Greater resources and access to data would allow for the deeper examination of other potential solutions or methods of implementation, such as the creation of additional reward tiers. Refinement of this analyst’s present-day savings projections may also be made possible. In addition, there may be further examination into the effects of increases in renewal GPA benchmarks on different ethnicities, as no clear data demonstrating a positive or negative affect was available. With currently available data, however, it may be postulated that because increases in GPA standards in high school have minimal disparities in effects between races, the same would apply to collegiate GPAs as well.
Potential savings that result from changes in both initial GPA and SAT/ACT requirements may not be added together as a second change would affect some of the same students as the first.
Solutions for the Future 14 Policy Matrix
Savings Raise Initial GPA Raise Initial SAT/ACT Raise Renewal GPA Need-Based Component Overall Cuts
Key: √- Meets Criteria X- Does Not Meet Criteria
Current Students √ √ X O X
Future Students X X √ O X
Equality Viability √ X √ X √ √ √ √ X X
√ √ √ O O
O- Varies on degree and method of policy implementation Need-Based Component (NBC) X Savings- Dependant on where income cap is set or how need is determined. NBC X Current/Future Students- Dependant on whether the Florida Legislature decides to apply the policy to students already enrolled in college, for maximum immediate savings. Also dependant on where the cap is set, as any cap below $75,000 per-year may leave some students with unfulfilled need. Overall Cuts X Savings- Dependant on how heavily the program is cut. If it is cut too little, it may be less effective than other solutions.
Solutions for the Future 15 References Buchanan, B. (2007). Rolling the dice. American School Board Journal, 194(5), 25-27. Retrieved from http://ezproxy.lib.ucf.edu/login?URL=http://search.ebscohost.com/login.aspx?direct=true &db=aph&AN=24690782&site=ehost-live Colavecchio, S. (2008, February 23). Most back state tuition hike, poll finds. St.Petersburg Times (Florida), pp. 1B. Colavecchio, S. (2009, May 6). Future Dim for Bright Futures. St.Petersburg Times ( Florida ), pp. 1B. College Board. (2009). State profile report--florida Retrieved from http://professionals.collegeboard.com/profdownload/FL_09_03_03_01.pdf Office of Student Financial Assistance. (2009). Annual report to the commissioner Retrieved from http://www.floridastudentfinancialaid.org/ssfad/pdf/annualreportcurrent.pdf OPPAGA. (2003). Bright futures contributes to improved college preparation, affordability, and enrollment Retrieved from http://www.oppaga.state.fl.us/Reports/pdf/0317rpt.pdf OPPAGA. (2004). Most bright futures scholars perform well and remain enrolled in college Retrieved from http://www.oppaga.state.fl.us/Reports/pdf/0423rpt.pdf
Solutions for the Future 16 OPPAGA. (2005). Bright futures: Policy issues and options Retrieved from http://www.oppaga.state.fl.us/Reports/pdf/2-1605_bright%20futures_policy%20issues%20&%20options.pdf OPPAGA. (2010). Bright futures scholarship program Retrieved from http://www.oppaga.state.fl.us/monitordocs/presentations/2-410_Bright_Futures_Scholarship_Program/2-410_Bright_Futures_Scholarship_Program_frame.htm Rado, D. (1998, March 27). Raising the bar, lowering the cost. St.Petersburg Times ( Florida ), pp. 1A.