Lottery says it can pay for added college scholarships

The S.C. lottery will be able to pay for college scholarships for qualifying high school seniors despite more students being eligible for the state aid, the top S.C. lottery official told legislators Tuesday.

"What I can tell you is we're doing everything we can to make sure we don't have a decline (in revenue) at all," said Hogan Brown, interim executive director of the S.C. Education Lottery.

A drop in lottery revenues could force the state to dip even further into its general fund budget to pay for more college scholarships.

In the past, the state has dipped repeatedly into its general fund to pay for those scholarships because the lottery's profits have not been high enough to support aid promised to students. Taxpayers have made up the difference, totaling $460.7 million in six recent years.

Some are fearful that a dramatic change in the state's K-12 grading scale could result in more than 6,000 added students qualifying for scholarships, creating a greater drain on the general fund, funded by the state's sales and income taxes.

"(That) is not good because, when we take it from the general fund, somebody else is losing out," said state Rep. Rita Allison, R-Spartanburg.

Already, some legislators are unhappy that the state keeps injecting more money into lottery scholarships, rather than spending the money on poor schools, for instance.

At a House budget meeting last year, state Rep. Gilda Cobb-Hunter, D-Orangeburg, said she was incensed the Legislature would put any more money toward scholarships. "We have yet to honor the commitment that we owe to the Abbeville plaintiffs," she said, referring to the 1993 lawsuit filed by the poor, rural school system.

And the state's scholarship subsidy could increase because of the change in the state's K-12 grading scale.

Last year, the state moved to a 10-point grading scale, similar to Georgia and North Carolina, making thousands more high school seniors eligible for Life and Palmetto Fellows scholarships.

To qualify for a $5,000-a-year Life scholarship, a student must have a 3.0 grade-point average — a "B" average — and meet other requirements.

For a Palmetto Fellows scholarship, worth $6,700 to $10,000 a year, a student must have a 3.5 GPA, a mix of "As" and "Bs." Or students can qualify for the scholarship by earning a 4.0 GPA and scoring well on college entrance exams.

Because of the change in the grading scale, however, getting an "A" or a "B" and qualifying for scholarships now is easier.

An "A" now is a grade from 90 to 100 and a "B" is from 80 to 89. Previously, an "A" was a grade of 93 to 100 and a "B" was an 85 to 92.

Unless lawmakers make the scholarships more difficult to get, the change in the grading scale initially would have resulted in 6,333 added students being eligible for scholarships worth $14.5 million.

To offset any potential shortfalls, Brown said the lottery is putting more money into advertising — online and on cable TV — to attract new players. Brown has asked the lottery's governing board to allocate around $226,000 more toward advertising.

The lottery also is planning to introduce a new game in fiscal year 2018 called "Gigantics," a large $10 scratch-off ticket. Brown said the lottery hopes the new ticket will increase sales.

State Sen. Harvey Peeler, R-Cherokee, said Tuesday he is "very comfortable" with the way the lottery is operating. "After hearing from director Brown today, I'm more comfortable than ever."

Making it easier to get a scholarship

Changes in SC's K-12 grading scale will make it easier for students to get a lottery scholarship

3.0 GPA: To get a Life scholarship, a student has to have a "B" average. Formerly, a "B" was a score from 85 to 92 points. Now, it's from 80 to 89.

3.5 GPA: To get a Palmetto Fellows scholarship, a student has to have a mix of "As" and "Bs." Not only is a "B" easier to make now, but an "A" is easier to get, too. Now, it is a grade from 90 to 100. Formerly, it was from 93 to 100.

6,333: Added number of students who would have qualified for scholarships if the new grade scale had been in effect last year

$14.5 million: Value of those added scholarships

Source: Lottery says it can pay for added college scholarships