The Arkansas Scholarship Lottery: Playing to Pay for College

The Arkansas Scholarship Lottery (ASL) was established in 2009 as a way to provide college scholarships for residents of the state. Since its inception, the ASL has distributed over $800 million dollars in scholarships to help Arkansans achieve their educational dreams. However, there are both pros and cons to consider when it comes to lottery-funded scholarships.

How the Arkansas Scholarship Lottery Operates

The ASL is run by the Arkansas Lottery Commission, a five-member board appointed by the governor. Online and retail ticket sales generate revenue that is then used to fund four lottery-tied scholarship programs:

Arkansas Academic Challenge Scholarship

This is the ASL’s flagship program, aimed at helping Arkansas high school graduates attend a public or private university in the state. To qualify, students must complete the state’s core curriculum and score at least a 19 on the ACT. Scholarship amounts vary depending on GPA and test scores but can reach up to $8,000 per year for four years. Over 150,000 students have received this scholarship to date.

Workforce Challenge Scholarship

For adults seeking to upskill or learn new job skills, the Workforce Challenge provides financial aid for two-year technical or certificate programs at public colleges. Students must maintain a 2.0 GPA and complete the program within two years to renew the scholarship each semester. Nearly 20,000 non-traditional students have benefited from this program.

Governor’s Scholarship

High-achieving high school seniors with a 3.5 GPA or higher and 27+ ACT can get this scholarship, covering full tuition and fees for any public university in Arkansas. Only around 100 students each year receive this highly competitive award.

Arkansas Concurrent Challenge

Scholarship

This scholarship helps offset costs for high school juniors and seniors taking college courses for credit. It pays up to $100 per credit hour for concurrent courses, giving students a jumpstart on their postsecondary credentials. More than 90,000 students have participated to date.

The ASL also contributes additional funding each year to the state’s General Revenue fund, supporting broader postsecondary initiatives beyond just scholarships. In total, the lottery returns around 30% of revenue back to the state in the form of education funding and scholarships. The rest covers prizes, retailer commissions, and operational expenses.

Research on the Impacts of Lottery Scholarships

Since its 2009 launch, researchers have studied the effects and outcomes of the ASL on higher education trends and the Arkansas economy. Some key findings:

Increased College Enrolment and Completion

Early studies found positive correlations between the rise of lottery scholarships and higher postsecondary participation rates across Arkansas. Enrolment grew 13% by 2011 at public universities, compared to just 6% nationally. By making college affordable, scholarships incentivised more students to pursue a credential beyond high school.

Completion rates also increased as scholarship recipients had financial support to see their education through to graduation. Around 40% of Academic Challenge Scholars complete a bachelor’s degree within six years, above the national average. The scholarships appear effective at improving both access to and success in college.

Shifted Enrolments Between States

Border counties in neighbouring states like Tennessee, Missouri, and Oklahoma saw declines in traditional-aged college students as more chose to stay in Arkansas with scholarship aid. The funding motivated some students who may have otherwise attended an out-of-state public university. However, private colleges in Arkansas reported enrolment impacts as some chose more affordable public options.

Encouraged Attendance at Four-Year Institutions

Prior to the ASL launch, Arkansas’ community colleges enrolled a disproportionate share of students compared to other states. Lottery money encouraged more high school graduates to immediately enroll at a four-year university instead of starting at community college. This shift brings both benefits and drawbacks to consider regarding college pathways and completion.

Boosted the Arkansas Economy

By retaining more college-educated workers, the state realised the economic spillover effects of scholarship funding. A 2015 study estimated $317 million in increased earnings and taxes between 2010-2014 due to ASL-supported credentials alone. Growing the skilled workforce attracts businesses and creates higher-paying jobs across various sectors.

Impact Depends on Scholarship Design

Not all lottery-funded programs achieve the same outcomes. Research indicates that merit-based scholarships like the Academic Challenge see stronger effects than need-based aid alone. Well-defined eligibility and renewal policies aid retention. Programs must balance access, affordability, and incentives to help different student groups complete degrees. Strategic design influences a lottery scholarship’s ability to meet education and workforce goals.

As the ASL continues operating, scholars continue tracking its evolving influence on Arkansas. Areas of ongoing study include long-term degree attainment, economic mobility for recipients, impacts on enrolment equity, and comparisons against changing financial aid policies in nearby states. Data will offer deeper insights into both intended and unintended consequences over time.

Controversies and Concerns

While the ASL aims to boost education, some critiques argue that lottery-based scholarships introduce ethical issues and risks to consider:

Predatory on Lower-Income Players

Critics argue lotteries disproportionately prey on low-income citizens by exploiting hope for a windfall, even if mathematical odds are stacked against winning substantial prizes. Problem gambling also disproportionately impacts those with fewer resources. Scholarship funding sources should not come at the cost of potential harm to vulnerable communities.

Regressive Tax Policy

Lotteries function as a type of regressive tax, where the burden (percentage of income spent on tickets) falls heaviest on those least able to afford it. Low-income families in Arkansas may spend more of their discretionary income on lottery compared to wealthier residents due to relative costs. This revenue source redistributes wealth in reverse.

Windfall for Colleges, Not Students

While public universities in Arkansas gain significant budget boosts from lottery proceeds, scholars argue most direct benefits goto middle- and upper-income families already able to afford college, not those with the greatest financial need. Enrollment increases may also allow universities to raise tuition rates without deterring demand.

Scholarship Design Flaws

The Academic Challenge’s merit formula may favor more privileged students from stronger high schools. Drop-off rates suggest renewal policies create “use it or lose it” pressures instead of promoting completion. Not all technical programs qualify for the workforce scholarship despite job opportunities. Strategic flaws could undermine equity goals.

Long-Term Dependence

If lottery profits decline due to market saturation or competition from expanded gambling, the ASL may struggle to maintain scholarship funding levels without raising prices or cutting eligibility. This replaces stable education appropriations with a volatile revenue stream states, and students cannot always rely on.

Overall, reasonable people of good faith disagree with the Arkansas Scholarship Lottery model. There remain open questions about balancing worthy education goals against public policy concerns regarding state-run gambling and regressive taxation. Constant improvement and oversight aim to maximise benefits while mitigating risks as much as possible over time.

Frequently Asked Questions

Here are answers to some commonly asked questions about the ASL and its scholarship programs:

How do I apply for a lottery scholarship?

Students apply through the online scholarship portal on the Arkansas Department of Higher Education website. Be sure to complete the Free Application for Federal Student Aid (FAFA) first to determine financial need. Application deadlines for fall enrollment are in early spring. Maintain academic eligibility like required GPAs and credits earned each year to renew scholarships.

Are there income limits to qualify?

No, ASL scholarships do not consider family income or financial need directly. The Academic Challenge uses merit criteria like GPAs, ACT scores and high school curriculum while Workforce scholarships focus on technical program enrollment. The concurrent program simply requires course enrolment at a partner high school.

What if I don’t go to a public Arkansas college?

Only the Governor’s Scholarship covers full tuition at private non-profit colleges in the state. Academic Challenge recipients attending an approved private school get a percentage of the scholarship amount determined each year. Students must still meet renewal criteria to keep receiving lottery aid regardless of institution type.

Can non-Arkansas residents get a lottery scholarship?

No, to be eligible for any ASL scholarship program, you must be a U.S. citizen, an eligible non-citizen, and an Arkansas resident. Residency is determined based on your permanent home address and intent to remain in the state indefinitely after graduating high school. Scholarships are only valid at Arkansas schools.

What happens if I withdraw from or fail classes?

Lottery scholarships are contingent on maintaining satisfactory academic progress each year as defined by the Department of Higher Education. Dropping below full-time enrolment status or a term GPA below 2.0 could cause you to lose the scholarship. Only one probationary semester is allowed before losing eligibility if the standards are below.

Is there a lifetime limit on receiving scholarship funds?

The Academic Challenge and Workforce scholarships are limited to four semesters or the equivalent number of credit hours required for a bachelor’s degree, whichever comes first. Concurrent and Governor’s programs do not have limits, but recipients must still meet annual requirements to renew funding each eligible year.