Kevin Intros Historic Scholarship Plan

Today, Senator Kevin Coughlin introduced a package of legislation to create the largest scholarship program ever proposed in Ohio. Senate Bill 224 and Senate Joint Resolution 9 pave the way for a bold and innovative move to transform Ohio into an economic powerhouse. Below is a summary of the plan.

A Better Educated Workforce. A College Degree in Reach of More Ohioans.

Where we are

• Ohio ranks 41st in the percentage of people over 25 with bachelors degrees.
• Ohio ranks 28th in personal income per capita.
• Too many Ohioans are being priced out of a college education.

Where we need to be

• Ranked in the top one-third of states with a college-educated population.
• Ranked in the top one-third in incomes.
• A state where a college degree in within reach of more Ohioans.
• A state that is recognized for having an educated workforce, ready to work on day one.

The Ohio Promise Scholarship

An achievement-based scholarship program that provides substantial financial aid to Ohioans attending in-state public and private institutions of higher learning. Once fully implemented, about 87,180 students will receive the scholarship each year.

Eligibility

Students are eligible for the scholarship if they:
• Rank in the top 33.3% of their high school graduating class. Scholarships will pass down to the next eligible students in line so that 33.3% of all Ohio high school graduating classes will receive the award.
• Pass all parts of the Ohio graduation test
• Are a resident of Ohio for at least two years preceding their high school graduation
• Graduate from high school with a diploma
• Complete the core curriculum

Students are not eligible if they:

• Are not attending a public or private four-year or two-year institution in Ohio
• Are attending college outside of Ohio
• Already have secured grants equal to or greater than the scholarship.

Scholarship Renewal

Scholarships may be renewed for up to three additional years provided that the student:
• Maintains at least a 3.0 GPA in college
• Completes the minimum credits to be classified as full time each term

If a students loses eligibility while in college, they may regain eligibility only once.

Scholarship Amounts

Four-year public and private institutions: $7,000 or tuition (lesser)
Four-year branch campuses: $4,250 or tuition (lesser)

Two-year community colleges: $2,750 or tuition (lesser)

* for private institutions, if the difference between existing scholarships/grants and $20,000 is less than $7,000 the amount of the Ohio Promise Scholarship will be adjusted to fill that gap.

Program Funding

The Ohio Promise Scholarship will be provided from the investment earnings of a trust fund established and managed by the Treasurer of State. The principle will be established by investing the proceeds of the sale or lease of the Ohio Lottery and the lease of the Ohio Turnpike to private operators.

Based on similar arrangements in other U.S. states and foreign countries, Ohio can reasonably expect to secure $9 billion on the sale of the Ohio Lottery and $6 billion on the lease of the Ohio Turnpike. After paying down the Turnpike’s debt, that leaves $14 billion for the scholsrahip trust fund.

If the fund is left to mature for two years before awarding the first scholarships and the fund earns at least a 5% return annually, the program can be fully funded by investment income alone.

Legislative Package Needed to Make This a Reality

1) Senate Joint Resolution 9 (1) allowing the Ohio Lottery to be operated by a private entity, and (2) allowing the proceeds of the sale of the lottery to be used for college scholarships. Note: No change is proposed to the annual payout required by law to k-12 education.

2) Senate Bill 224 (1) establishing the scholarship program and the fund, (2) requiring the sale of the Ohio Lottery, (3) abolishing the Ohio Lottery Commission, (4) transfers the Charitable Gaming Oversight function back to Attorney General, (5) requiring the lease of the Ohio Turnpike, (6) Abolishing the Ohio Turnpike Commission and, (7) establishing appropriate oversight.

Other notes on the scholarship program set-up

• Scholarship is for first-time freshmen direct to college from high school
• If a student completes two years at a community college and are eligible for scholarship renewal, the scholarship follows them to a qualified 4-year institution.
• The Ohio Board of Regents is directed to recommend to the legislature what financial assistance programs can be eliminated as a result of the Ohio Promise
Scholarship to avoid duplication and produce savings to the GRF.

• The Department of Education and Board of Regents are directed work with the Treasurer of State to establish the program.
• The Treasurer of State shall implement the scholarship program, invest and administer the fund, determine eligibility of students, and process all awards.
• Only up to one quarter of one percent of the money in the scholarship fund may be used to implement and administer the program.
• All interest money is to be credited to the fund.
• The scholarships may only be funded by interest income. The principal shall not be spent.
• The scholarship amount may be adjusted down if, in any given year, the Treasurer of State determines that the amount of interest in the fund cannot fund the number of eligible students at the rate set in statute.
• Requires Treasurer to adopt rules for notification by high schools and universities of eligible students.
• Upon receipt of notification of eligibility, OBM must establish an individual account for each eligible student. Each academic year the student is eligible, the Treasurer will direct OBM to credit to the account an amount equal to the scholarship under the program for that academic year.
• Each year a student is eligible, the Treasurer shall cause an electronic transfer of scholarship process from the student’s account to the institution the student is attending.

“For too many Ohioans, being smart enough isn’t good enough. Too many people are being priced out of a college tuition, or left with crippling debt when they graduate.

“More than any workforce development program we can create, this plan will send a signal to employers everywhere that Ohio is open for business. Seeing 87,000 kids through college each year will guarantee employers that an educated workforce awaits them here, ready to work on day one.

“The most ambitious financial aide package ever proposed in our state, the Ohio Promise Scholarship is the kind of courageous move we need to make in order to get Ohio working again.”

- Senator Kevin Coughlin