From the Arkansas Statehouse...

Senate readies new rules for scholarship spending.

In Education on 23 February 2009 at 6:39 pm

As the legislature prepares to deal with an influx of lottery-funded money for scholarships, the Senate Education Committee has approved a measure that will change the way state colleges and universities allocate their own funds for tuition grants.

The bill, sponsored by Sen. Gilbert Baker, appears in part to be a reaction to the expansion of presidential discretionary scholarships at the University of Central Arkansas during President Lu Hardin’s administration. Those awards generally had vague criteria and were sometimes given on the basis of political favoritism.

The bill would reduce the percentage of money state schools can spend on scholarships relative to their total tuition collections. 30% of tuition is the current scholarship threshold, though there is no enforcement mechanism in the law. Sen. Baker’s measure would limit scholarship spending to 20% of tuition in 2013-2014. It would also impose fiscal penalties on schools exceeding that amount.

Sen. Baker said the bill is intended to limit what he called a “bidding war” for students among Arkansas universities. It is also meant to prepare for an increase in statewide scholarships via the lottery, he said.

According to numbers Sen. Baker provided, Arkansas Tech is the only state school to have recently overshot the legal limit, with its scholarship expenditures amounting to 31.1 percent of tuition collections. UCA spent 26.3 percent of tuition on scholarships over the same period.

Sen. Baker said the Department of Higher Education opposes the proposed caps, but no one challenged the bill in committee.

Though the bill clearly changes how state colleges and universities allocate scholarships, less obvious is what its practical effect will be should the governor eventually sign it. Unlike current law, Sen. Baker’s bill allows schools to subtract from their scholarship totals money given to students who are eligible for a maximum Pell Grant. The students need not be receiving the grant. At a school with a large number of low-income students, then, it is conceivable that the amount of money spent on scholarships will increase.

There was confusion in the Education Committee today as to whether the bill requires schools to report athletic scholarships in their scholarship totals. Sen. Baker first said it does, then changed his position when someone pointed out that athletic scholarships are not explicitly listed among money that must be counted. However, a separate section of the bill says all scholarships must be counted that do not get a specific exemption; athletic scholarships do not. The section in question — lines 27-30 on page two for those of you keeping score at home — seems intended to reduce the type of criteria-free scholarships that have been awarded at UCA in recent years. But it appears also to force reporting of athletic scholarships that is not currently required.

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