Shane Broadway, interim director of the state Higher Education Department, explains that this is fallout from state money shortfalls. The department, which had been spending accumulated fund balances to support a wide range of scholarship programs, has spent down the surplus in part because of a rising demand for undergraduate scholarship help. Higher Ed asked the legislature for an additional $7 million to continue all 24 scholarship programs at existing levels. It got only $2 million and legislators directed that all that money go to the Governor's Distinguished Scholarship program, 300 top students who get $10,000 a year. That program was going to be cut by two-thirds without the money and students digitally bombed legislators with complaints.
Somewhat overlooked in the fight to save those scholarships was the department's broad range of other scholarship aid that now must produce $5 million in savings.
It will mean sharp cuts in the 77 entering slots that had been provided in past years in dentistry, podiatry, veterinary medicine, chiropractic, osteopathic medicine and optometry. There are a range of subsidies — all shown at this Higher Ed link. Broadway said, for example, that subsidies for slots at vet school could drop from 12 to 5. (Each school decides which Arkansas students will receive the benefit, not the state of Arkansas.) The final number will depend on how many students already receiving aid continue in school. Enough are completing chiropractic studies, for example, that Broadway anticipates that the state might even be able to fund additional entering chiropractic slots. Broadway said he'd been broadcasting widely, including with a disclaimer on the website, the possibility of cuts in programs.
Professional schools aren't the only area where students will feel cuts. The reductions also will affect scholarship for children of people in the military and for children of law officers who died in the line of duty.
I hope to have a detailed list of projected cuts shortly.
UPDATE: Here are the projected cuts. Broadway cautions they are not firm figures.
On the jump is a note Broadway wrote during the legislative session when a parent raised a question about scholarship cuts. It explains circumstances in more detail:
Around 2007, the Higher Education Grants fund had a fund balance of about $55 million dollars. It was decided that we needed to expand the eligibility criteria and add slots to programs in order to get that money in the hands of students. Each year we receive $47 in general revenue, has been that amount for as long as I can remember. We currently administer around 20 different programs including the Governor’s Scholars program. Since the 2007 session the fund balance started to go down because more students were accessing the scholarship dollars. It was projected at the time that the fund balance would go down slowly and eventually be spent down around 2017. Two things happened. First the lottery passed and we converted our system from a paper system to an on-line application that told the student that they may be eligible for more than just one scholarship, so that drove up the number of students qualifying for other programs, which accelerated the fund balance down quickly. The second one that had the most impact is that a decision was made to move $20 million of the fund balance over to a Lottery Reserve account for if a problem arose with lottery proceeds and number of students on the Academic Challenge scholarship. We came close to having to utilize the reserve this semester, but fortunately did not have to, but it is set aside and no longer part of the grants fund. Doing that then changed the date of the balance going down from 2017 to 2014.
So in order to keep the students currently on the various scholarships funded until they complete and to keep the programs adding additional students next fall we requested in our budget request an additional $7million dollars. That additional general revenue would keep us at the currently level of awards that we presently have. Without it, we will have to reduce each program proportionately to stay within our $47 million of general revenue. Based on projections right now that are subject to change, we anticipate that we will be able to award 75-100 Governor’s Distinguished Awards next fall, that is down from 300 in most years. So without new funding there will be an impact, it will also impact students wanting to attend dental school, optometry school, students of military and law enforcement parents killed or disabled in the line of duty etc.
We have been working on this for the past couple of years, trying to ease down some of the programs as much as possible. We presented the information in the fall budget hearings and really before then, all of the institutions were alerted last summer and at every chance I have had before the General Assembly we have explained the situation. We have met with the Education Committee Chairs and Vice-Chairs, the Budget Chairs, Senate and House leadership and Governor. As you know budgets are tight with all of the discussions focused on many issues right now. But we are doing all we can to make sure we are a part of the discussion. One thing to point out is that the legislature is not considering further cuts to our budget, they cannot cut us below the $47 million we already receive or they will run afoul of the constitutional amendment on Lottery and the language about supplanting scholarships. So they are not considering cuts as was mentioned in the email. The cut would be the ending of the fund balance through a series of events.