• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Kentucky Center for Economic Policy

Kentucky Center for Economic Policy

   

  • About Us
  • Press Room
  • Donate

Research That Works for Kentucky

  • Topics
    • Budget & Tax
    • Criminal Justice
    • Economic Security
    • Education
    • Health Care
    • Jobs & The Economy
  • Types
    • News
    • Op-Ed
    • Research

   

  • About Us
  • Press Room
  • Donate

Copyright © 2021 KyPolicy Privacy Policy Terms & Conditions Sitemap

Analysis

Fact Sheet: Need-Based Financial Aid Dollars Being Diverted to General Fund

Dustin Pugel | February 23, 2016

For years millions of scholarship dollars have been diverted away from Kentucky’s need-based financial aid programs to the General Fund.

Studies have shown that need-based financial aid:
• Increases college enrollment among low- and moderate-income students.
• Increases college persistence and the number of credits earned.

More On Budget & Tax: Tax Breaks for Facebook, Amazon and Google? Beshear Vetoes Bill Meant to Lure Data Centers

Kentucky has two need-based financial aid programs funded by the lottery. According to state law, lottery funding should be split 3 ways:
•  Literacy programs receive $3 million off the top.
•  The merit-based scholarship, the Kentucky Educational Excellence Scholarship (KEES), receives the next 45 percent.
•  The need-based scholarships, College Access Program (CAP) and the Kentucky Tuition Grant (KTG), receive the remaining 55 percent to be allocated between them.

In 2015 the Lottery Corporation gave the state $221.5 million (this does not include unclaimed prize money). If the money had been used as originally intended:
• $3 million would have gone to literacy programs (which it did);
• $98.3 million would have gone to the merit-based scholarship Kentucky Educational Excellence Scholarship (KEES actually got $101 million from these funds, plus an extra $8.6 million in unclaimed prize money);
• And the need-based CAP & KTG scholarships should have received $120.1 million (CAP & KTG actually got $92.1 million).

Combined, CAP & KTG were shorted by $28.1 million, which is equal to over 15,000 fewer students having access to money for college. If enacted, the proposed 2016-2018 budget would use $35.3 million in 2017 and $38 million in 2018 intended for CAP & KTG to fund other priorities. This would be more than has ever been diverted from need-based scholarships before.

In 2015, 95,018 Kentuckians were deemed eligible for CAP funding based on their Free Application for Federal Student Aid (FAFSA).
• However, just 38,587 were awarded the scholarship due to a lack of funds. Meaning 3 out of every 5 CAP eligible students were turned away.
• 1 out of every 3 KTG eligible students was turned away for the same reason.

Lottery Funds Diverted from CAP & KTG

fact sheet graph

Source: KCEP analysis of Kentucky Office of the State Budget Director and KHEAA data.

Lottery Scholarship Fact Sheet

FacebookTweetLinkedInEmail

Primary Sidebar

Get KyPolicy news updates in your inbox

Sign Up

Sidebar

Perspectives

American Rescue Plan Is a Lifeline for Kentuckians

The 2021 General Assembly Can Meet the Moment with Policies that Advance Racial Equity

Letter to the Kentucky House of Representatives on Raising the Inadequate Tax Rate on HHR Slot Machines

Voucher Would Drain Much-Needed Resources from Kentucky’s Public Schools

Coalition Letter to Kentucky General Assembly: End the Tax Break on Slot Machines

Other Budget & Tax Items

KY house 1

Analysis

Corporations Were the Primary Focus of One-Time Monies in General Assembly

Analysis

Governor Should Veto Expensive, Poorly Targeted Tax Breaks for Remote Workers and Data Centers

Analysis

Legislature Spends Additional Federal and General Fund Monies on Session’s Last Day

Ky. Policy

Footer

Research that works for Kentucky

433 Chestnut Street, Berea, KY 40403

Phone: 859-756-4605

General information and inquiries: info@kypolicy.org

   

Help us make the facts free and accessible to everyone. That’s how Kentucky will thrive.

Donate

  • Topics
    • Budget & Tax
    • Criminal Justice
    • Economic Security
    • Education
    • Health Care
    • Jobs & The Economy
  • Work
    • News
    • Op-Ed
    • Research
  • About Us
  • Press Room
  • Contact

Get KyPolicy news updates in your inbox

Sign Up

Copyright © 2021 KyPolicy Privacy Policy Terms & Conditions Sitemap

made by P&P
Share this ArticleLike this article? Email it to a friend!

Email sent!