Introduction
Governor Brian Kemp’s proposed 2025 budget allocates $3.4 billion for the Board of Regents and $486 million for the Technical College System of Georgia.
University System of Georgia
Funding for the teaching portion of the university system’s operating budget is set to increase to $195 million. Major highlights include:
- $92 million for 4% of cost-of-living adjustments for full-time state employees
- $66 million to restore the fiscal year 2024 USG funding formula
- $22 million in increased funds for employers’ share of health benefits
- $7 million to increase funds for the Teachers Retirement System to reflect an increase in the employer contribution rate from 19.98% to 20.78%
- $823,926 in transfer funds for a Fort Valley State University Land Grant match requirement supporting the school’s teaching program
Other programs under the Board of Regents, including the Agricultural Experiment Station, Cooperative Extension Service and Public Libraries, increased by $5.2 million primarily due to the cost-of-living adjustments.
Technical College System of Georgia
The proposed 2025 budget for technical colleges is $486 million, a decrease of $13 million from fiscal year 2024. Below are the detailed changes made to the budget:
Technical Education
- Total budget: $419 million
- $10 million increase for a 4% cost-of-living adjustment for full-time, benefit-eligible state employees
- $9.4 million increase for a 3% increase in enrollment ($8,988,608) and a 70% increase in square footage ($444,954)
Adult Education
- Total budget: $24 million
- $218,537 for a 4% cost-of-living adjustment for full-time, benefit-eligible state employees
- $5 million for Workforce EXCELerator pilot program aimed at providing qualifying private institutions with funds for adult education high school diploma attainment
Workforce Development
- Total budget: $10.2 million
- $643,706 increase in funds for customized recruitment to support the state’s expanding electric vehicle industry workforce
- $409,475 decrease in funds transferred to the Department of Labor due to terminated lease agreements for employment services worksites
2025 Fiscal Year Budget for Lottery-Funded Programs
Governor Brian Kemp’s proposed 2025 budget includes $1.49 billion for Georgia’s lottery-funded pre-kindergarten (pre-K), HOPE (Helping Outstanding Pupils Educationally) and other financial aid programs. Approximately $1 billion is allocated for HOPE and $490 million is earmarked for pre-K education.
By the Numbers
Overall, the fiscal year (FY) 2025 budget for lottery-funded HOPE programs decreased by $49 million. Listed below are notable lottery-funded program changes for fiscal year 2025:
-
University System of Georgia (USG): Decreased funds to meet the projected need for the HOPE Scholarship program to cover 100% of tuition
- $9 million change
-
Technical College System of Georgia (TCSG): Decreased funds to meet the projected need for the HOPE Grants program
- $3.2 million change
-
Private Colleges in Georgia: Decreased funds to reflect expected program expenditures at a HOPE Private Award rate of $2,496 and a HOPE Zell Private Award rate of $2,985
- $16 million change
Financial Aid Program Changes
Two lottery-funded programs, College Completion Grants and the Tuition Equalization Grants (TEGs), remained fiscally flat. College Completion Grants, which provide need-based financial aid to eligible students to complete remaining credential requirements, are constant at $10 million. TEGs, which promote the private segment of Georgia higher education by providing non-repayable grants to Georgians who attend eligible private post-secondary institutions, also saw no change, and remains at $24 million.
One lottery program, the HOPE high school equivalency exam, which encourages recipients to pursue education beyond high school at an eligible post-secondary institution in Georgia, decreased by $845,510, totaling $500,000 for FY 2025. Despite no increase in 2024, the governor’s proposed budget includes a $15 million increase for Dual Enrollment in FY 2025.
HOPE Financial Aid Programs
HOPE is comprised of several different programs: HOPE and Zell Miller Scholarships, HOPE and Zell Miller Grants, HOPE Career Grants, and HOPE High School Equivalency Exam Grant Program.
The HOPE Scholarship is for students seeking associate or bachelor’s degrees. For the 2023-2024 academic year, the HOPE scholarship covers the full tuition based on the prior year’s tuition rate for students with a 3.0 grade point average (GPA) in core academic courses. The Zell Miller Scholarship covers full tuition for the current year’s tuition rate for students with a 3.7 high school GPA and who also score at least 1200 on the SAT or 26 on the ACT college admission exams.
To qualify for HOPE and Zell Miller Scholarships, students must also take four rigorous courses (e.g., Advanced Placement or Dual Enrollment). To maintain the scholarship, students are required to maintain a 3.3 cumulative college GPA.
The HOPE Career Grant is an award on top of the HOPE/Zell Miller Grant for students enrolled in certain certificate and diploma program areas identified as strategically important to the state’s economic growth.[1] The HOPE High School Equivalency Exam Grant Program is designed to assist with the cost of Georgia’s High School Equivalency Exam. The purpose of this program is to encourage Georgia’s High School Equivalency Exam recipients to pursue education beyond the high school level at an eligible postsecondary institution located in Georgia.
Lottery Reserves
Fiscal year 2023 appropriations deductions totaled $1.4 billion in the education lottery reserve.[2] Total reserves now stand at $2.2 billion. Lawmakers require a shortfall reserve of 50% of the prior year’s lottery proceeds to sustain the education lottery reserves. In 2023, the Georgia Revenues and Reserves Report revealed that the required shortfall reserves totaled $737 million once proceeds, surplus and interest were accounted for.[3] An additional $1.9 billion remains in the unrestricted education lottery reserves.[4]
Lottery Utilization and Access Barriers
Investing in Georgia students is critical as Georgia ranks third in the nation for student loan debt per borrower. This crisis led to over 1.6 million borrowers in the state for a total of $69 billion of student loan debt.[5] The student loan debt crisis disproportionately impacts students of color, with Black students in the University System of Georgia (USG) borrowing at higher rates than other racial and ethnic groups.
Student loan debt and working multiple jobs can be major obstacles for students trying to earn their degree. These burdens can slow the pace of degree completion and make it more likely that students will pause enrollment (“stop out”) or drop out altogether. Utilizing the education lottery reserves to create a comprehensive need-based grant program can mitigate student loan debt by providing equitable financial aid across the state.
This is a logical next step, as the lottery proceeds have seen consistent exponential growth since 2008. In the 2022-23 fiscal year, the education lottery earned $72 million in interest alone. The current total lottery reserves have nearly doubled since 2020, from $1.3 billion to $2.2 billion.
In the 2023 Legislative Session, lawmakers introduced House Resolution 281 to establish a House Study Committee on lottery revenues and reserves. The purpose of this resolution was to identify opportunities to advance the educational needs of Georgia’s pre-kindergarten students by reducing class size, increasing teacher pay and establishing a financial aid program to make college accessible to students who are financially marginalized.
If HR 281 passes in the upcoming Legislative Session, lawmakers should prioritize comprehensive need-based financial aid to ensure that students are equipped with the financial resources to complete their post-secondary education. This budget option could help improve college affordability and demonstrate Georgia’s commitment to supporting all students in accessing higher education opportunities.
Why Budget Equity Matters in Public Higher Education
A post-secondary credential such as a certificate or two-year or four-year degree has become increasingly necessary to obtain gainful employment. As such, students in Georgia depend on lawmakers to center policies that keep post-secondary education affordable and accessible.
Georgia lawmakers have opposed comprehensive need-based aid over the last thirty years, as one of two states that does not provide need-based aid to students. In contrast, Georgia is unique because it leads the nation in merit-based scholarship funding. This policy incongruency has caused students who are financially marginalized to lack the necessary resources for post-secondary education. As such, merit-based aid can exacerbate racial disparities and has failed to make Georgia a more educated state. [6]
In the fall of 2021, the University System of Georgia (USG) reported that 67% of Asian students and 60% of white students received the HOPE Scholarship, while only 50% of Hispanic students and only 33% of Black students enrolled in USG were awarded HOPE.
Multiple research studies have shown that merit-based scholarship programs like the HOPE Scholarship do not help alleviate historical race and class gaps in college attendance.[7] This policy gap, coupled with the consistent public higher education underfunding has left many students facing barriers to accessing college.
An underfunded public college system is another obstacle that students of color must contend with in their pursuit of higher education. The state of Georgia currently funds 57% of public higher education, leaving students responsible for the remaining 43%. The Board of Regents is required to fund 75% of public higher education costs, but since 2001 this promise has not been fulfilled. The current University System of Georgia funding formula underfunds public colleges by almost $120 million, missing an important opportunity to improve equity across USG.
Underfunding public higher education and recognizing that the HOPE Scholarship is not equitable, let alone sufficient, demonstrates a need for a more affordable pathway to higher education. If Georgia invests in both equitable financial aid and funds public higher education fairly, students can rely less on student loans and focus more on completing college to prepare for the workforce.
Endnote
[1] Georgia Student Finance Commission. (2023). Programs and regulations. https://gsfc.georgia.gov/programs-and-regulations
[2] State Accounting Office. (2023). 2023 report of Georgia revenues and reserves. Retrieved October 23, 2023, from https://sao.georgia.gov/swar/grr.
[3] Ibid
[4] Ibid
[5] Hanson, M. (2022b, April 3). Student loan debt by state [2023]: average + total debt. Education Data Initiative. https://educationdata.org/student-loan-debt-by-state
[6] Lee, J. (2021, November 3). A Need-Based Financial Aid Program for Georgia. Georgia Budget and Policy Institute. https://gbpi.org/a-need-based-financial-aid-program-for-georgia/ (Citing Cummings, K., Laderman, S., Lee, J, Tandberg, D., & Weeden. D. (2021, May). Investigating the impacts of state higher education appropriations and financial aid. State Higher Education Executive Officers Organization. https://sheeo.org/wp-content/uploads/2021/05/SHEEO_ImpactAppropationsFinancialAid.pdf
[7] Heller, D. E. (2002). The policy shift in state financial aid programs. In J. C. Smart (Ed.), Higher education: Handbook of theory and research (Vol. XVII, pp. 221–262). New York: Agathon.
