Lottery Scholarship Funds ‘Not Great’ According to Administrators

Tennessee Lottery games (Photo by the Tennessee Lottery)

Tennessee Higher Education Commission Chief of Staff Lou Hanemann provided members of the Senate Education Committee with a dire warning on Wednesday about the financial condition of funding for the Tennessee Education Lottery Scholarship programs.

The current lottery scholarship fund covers 13 programs, including the HOPE scholarship, Tennessee Reconnect, Tennessee Promise, and high school dual enrollment, serving roughly 170,000 students across the state.

“In the current financial fiscal year, the financial situation for the lottery is not great,” said Hanemann. “We think that this year we might come up pretty flat, and so no major corrections need to happen right away, but we are very concerned about the fiscal outlook for the lottery for expenditures and revenues for out years.”

This is not the first time the Higher Education Commission has issued a warning about the lottery scholarship fund. Last year, education officials warned lawmakers of a potential $20 million shortfall for this fiscal year.

Tennessee could also see a reduction in lottery revenues if Alabama approves a lottery there.

Dual Enrollment Growth

A significant portion of the financial concern stems from the growth of the dual-enrollment grant, which allows high school students to take college courses. Nearly 27,000 more students received the grant last school year than in 2020-21, and the costs to serve those students have increased by more than 189 percent.

Hanememan’s report on lottery scholarship funding concerns came during debate on a bill to expand dual enrollment to Tennessee sophomores.

Senator Joey Hensley, R-Hohenwald, told lawmakers on the Senate Education Committee that the proposed expansion would allow an estimated 541 sophomores to take a dual enrollment class.

The committee unanimously advanced the legislation, despite some members’ reservations about the continued expansion of lottery programs amid potential funding shortfalls.

“I certainly understand the concern with the lottery, and I share those concerns,” said Hensley. “But I think it is good policy because it does allow more students to get dual eligible credits.”