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Lottery sales boosted by many who dont use education programs
Research shows race, education factor into who plays games
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Gambling on hope

As college students head back to classes with a reduced HOPE scholarship, The Times takes a look at the finances of that scholarship, the state’s pre-kindergarten program and the Georgia lottery that funds them.

Today: For lucky few, small investments mean big payoffs.

HOPE is a burden carried mostly by Georgia’s lower income, its uneducated and its minorities.

The lottery-funded scholarship awarded on the basis of academic merit mostly props up those in economic classes above the ones who pay for it.

These conclusions have been drawn multiple times in research that University of Georgia demographer Doug Bachtel says show disparities that have existed “since Biblical times.”

“One only needs to look at some demographic data and just go to a convenience store and see who the folks are that are buying the lottery tickets,” Bachtel said. “They’re not wearing three-piece suits and carrying briefcases ... this is not some sort of statistical fluke here.”

Just this year, a study by the Georgia Department of Audits and Accounts found that “families of HOPE recipients at public universities are slightly better off than the general population.”

And research in the last decade has shown the players of state lotteries — including Georgia’s lottery games — are disproportionately minorities with low incomes and low levels of education.

In Georgia, a 10-year-old survey by the Carl Vinson Institute of Government found that race and education were bigger factors in lottery play than income. But two economists in the University of Georgia’s Terry College of Business found that counties with higher income levels received over 40 percent more HOPE college scholarships than counties at the lowest income level.

“(HOPE) didn’t substantially increase access to higher education,” said David Mustard, an associate professor of economics who co-authored the study. “...Who plays the lottery? Empirically, more poorly educated people. They spend a greater fraction of their income on that ... Students from those families are less likely to receive and retain the scholarship over a longer period of time.”

Bachtel, too, says his research shows per capita lottery spending increases in rural South Georgia counties where poverty levels are highest.

“They’re spending like over $500 per year per person on the lottery,” Bachtel said.

The price of lottery tickets has helped pay for pre-kindergarten programs and post-secondary educations in Georgia since 1993.

Between July 2009 and June 2010, some 250,000 students benefited from the lottery scholarship program, which provided more than $600 million that school year, according to the study by the Georgia Department of Audits.

The type of lottery funding sought or awarded was closely aligned with household income.

Of the Georgians who received money to complete a GED diploma in that year, 51 percent came from households with a collective income of $20,000 or less.

Those who used HOPE Grant to attend technical college were largely under the $60,000 income level as well.

But HOPE scholarships, which pay for tuition to colleges and universities in Georgia, were mostly accessed by families of higher incomes.

Fewer than half of the college students who used the HOPE scholarship to attend a public college or university had household incomes of $60,000 or less.

But those students whose families earned between $60,001 and more than $200,000 that year received almost 52 percent of the scholarships.

One reason could be that the good grades required to receive the HOPE scholarship are partly a result of parental guidance, Bachtel said.

Students of single-parent, low-income households might be less likely to receive that guidance, he said.

“It takes a tremendous amount of parental guidance to keep the kids studying and away from the TV sets and doing their homework,” Bachtel said. “Some of those things don’t necessarily go hand-in-hand with folks living below the poverty level.”

But also, children tend to follow in the paths of their parents. A child of higher income parents is more likely to grow up to live that lifestyle and vice versa, Bachtel says.

“Rocket scientists beget rocket scientists and high school dropouts beget high school dropouts,” Bachtel said. “It runs in families and neighborhoods.”

The Carl Vinson Institute survey found that lottery-funded pre-kindergarten programs disproportionately are used by black people and lottery players, however.

Joseph McCrary, who compiled the research for Carl Vinson’s study, would still speculate that, overall, white people of the middle and upper class are more likely to benefit from lottery funds.

“The pre-K and HOPE Grant (which pays for technical college) were a little better spread out,” McCrary said. “I’m not going to say they were disproportionately benefiting people in lower incomes, but they seemed to be better spread out.”

In the study, McCrary suggested ways to level the playing field. He and his colleagues suggested that lottery funds be used to create educational and mentoring services for those who are behind their peers academically.
Bachtel agreed.

“There really needs to be some mentoring programs associated with it,” Bachtel said. “...It’s going to take some people to take those kids under their wing and help them with their schoolwork and their study habits.”

McCrary suggested “means testing” for those who used the funds to attend four-year colleges, providing less funding to students above certain income thresholds.

An income cap was actually removed from the scholarship in 1996, five years before the McCrary’s report was published.

This year when Georgia lawmakers were seeking to reform the scholarship program to stem the consequences of revenue losses in the state lottery, Democrats suggested bringing the income limits back.

Republicans rebuffed the effort, however, saying that the scholarship program was never created to send low-income students to college. Instead, the scholarship was meant to reward hard-working students.

The program that was eventually passed into law, reorganized the scholarship, cutting benefits for most students and raising the grade requirements for students who sought full HOPE funding.
But those who paid for it stayed the same.

Though he says he is not “against the HOPE scholarship,” Bachtel calls the lottery a sort of “poor people’s income tax.”

And he says the hype over what opportunities the scholarship opens up tends to drown out the fact that the scholarship fund is paid for, many times, by poor people whose only benefit is the unlikely event that they hit the jackpot.

“It’s a disease; it’s gambling,” Bachtel said. “...And it appears that with the HOPE scholarship, it just makes it OK.”