Tennessee Education Lottery Scholarship Program Annual Report

1. Tennessee Higher Education Commission Tennessee Education Lottery Scholarship Program Annual Report Tennessee Higher Education Commission April 28, 2011

2. Tennessee Higher Education Commission Program Overview

3. Tennessee Higher Education Commission Tennessee Education Lottery Scholarship (TELS) Program • Merit-based, lottery-funded scholarship program; • Implemented in 2004; • Program reached maturity in 2008-09; • Mostly for traditional-aged students; • Unique in that it has a need-based component; and • Awarded a cumulative $1.6 billion to 532,000 students (unduplicated) over time.

4. Total State Grant Aid (Merit plus Need) per Undergraduate FTE at Public and Private Institutions (2008-09) Source: National Association of State Student Grant and Aid Programs (NASSGAP)

5. Tennessee Higher Education Commission Tennessee Education Lottery ScholarshipEligibility Criteria, 2010-11

6. Scholarship Renewal Requirement 3.00 2.75 Provisional Track (3.0 Term GPA also required) Cumulative College GPA 48 72 96 24 Cumulative Credit Hours (Attempted) Tennessee Higher Education Commission

7. Tennessee Higher Education Commission Program Expenditures and Revenue

8. Tennessee Higher Education Commission Scholarship Recipients 2004-05 through 2009-10 (Actual) and 2010-11 through 2014-15(Projected) Projected Source: TSAC. Projection data as reported to the State Funding Board on April 12, 2011.

9. Tennessee Higher Education Commission TELS Expenditures and Revenue Trends:2004-05 through 2009-10 (Actual) and 2010-11 through 2014-15(Projected) Projected Source: Tennessee Department of Finance and Administration Note: Assumes no change in current policy

10. Tennessee Higher Education Commission Net Available Current Revenue of TELS Program: 2003-04 through 2009-10 (Actual) and 2010-11 through 2014-15 (Projected) Projected Source: Tennessee Department of Finance and Administration Note: Assumes no change in current policy.

11. Tennessee Higher Education Commission Lottery for Education Reserve: 2003-04 through 2009-10 (Actual) and 2010-11 through 2014-15 (Projected) Projected Source: Tennessee Department of Finance and Administration Note: Assumes no change in current policy.

12. Tennessee Higher Education Commission Purchasing Power of Lottery Scholarship

13. Tennessee Higher Education Commission Historical Trend in Base HOPE Maximum Award Amount Source: TSAC

14. Tennessee Higher Education Commission Purchasing Power of Lottery Scholarship (HOPE Maximum Award Amount Relative to Tuition and Fees*) * Unweighted average tuition and fees at public institutions. Source: THEC

15. Tennessee Higher Education Commission Recipient Demographics and Academic Background

16. Tennessee Higher Education Commission Fall 2010 Freshmen by Race/Ethnicity Note: Data include public institutions only; First-time freshmen were defined as Tennessee residents age 19 or younger enrolled in Fall 2010 as first-time freshmen. TELS recipients are limited to HOPE, GAMS, ASPIRE, or Access awardees only. Source: THEC SIS

17. Tennessee Higher Education Commission 2010 Lottery Scholarship Receipt by Family Income Source: TSAC Free Application for Federal Student Aid (FAFSA) Data

18. Tennessee Higher Education Commission Percent of Eligible First-time Freshmen Attending on a Lottery Scholarship 65 percent of Fall 2010 traditional-age Tennessee resident first-time freshmen in public institutions attended on a lottery scholarship. Notes: Tennessee resident first-time freshmen who were 19 or younger; public institutions only. HOPE, GAMS, ASPIRE, and Access awards only. Source: THEC SIS

19. Tennessee Higher Education Commission Percent of Eligible First-time Freshmen Attending on a Lottery Scholarship by Institution, Fall 2010 4-yr public 2-yr public Notes: Tennessee resident first-time freshmen who were 19 or younger; public institutions only. HOPE, GAMS, ASPIRE, and Access awards only. Source: THEC SIS

20. Tennessee Higher Education Commission Academic Preparation Qualification Standards Met by Fall 2010 First-Time Freshman TELS Recipients This analysis concerned HOPE and ASPIRE recipients only. Only students for whom both ACT and HS GPA were reported were included in this analysis. Both public and private institutions are included in the analysis. Source: THEC SIS

21. Tennessee Higher Education Commission Scholarship Renewal

22. Renewal Criteria • First 24 and 48 Credit Hour Benchmarks: Cumulative 2.75 GPA • 72 and thereafter: Cumulative 3.0 GPA • Provisional Track: Cumulative 2.75 GPA and Term 3.0 GPA (Applicable to students with 72 or above credit hours only) Scholarship Terminating Events: • 5 years of scholarship; or • Earn a baccalaureate degree (whichever comes first)

23. Tennessee Higher Education Commission 2nd Year Scholarship Renewal Rates by TELS Award Type Notes: FTF = first time freshmen; Both public and private institutions are included. Source: THEC SIS

24. Tennessee Higher Education Commission 2nd Year Scholarship Renewal Rates by High School Standards Met Fall 2009 First-Time Freshman TELS Recipients* This analysis concerned HOPE and ASPIRE recipients in public and private institutions. Only students for whom both ACT and HS GPA were reported were included in this analysis. Source: THEC SIS

25. Tennessee Higher Education Commission 2nd Year Scholarship Renewal Rates by Income Level Fall 2009 First-Time Freshman TELS Recipients This analysis concerned HOPE and ASPIRE recipients in public and private institutions as these two programs require the same academic standards. Only students for whom income were reported were included in this analysis. Sources: THEC SIS and TSAC FAFSA Data

26. Tennessee Higher Education Commission Fall 2006 First-time Freshmen Longitudinal Scholarship Renewal Rates (All Award Types*) *HOPE, GAMS, ASPIRE and Access. Fall 2010 does not reflect students who graduated. Source: THEC SIS

27. Tennessee Higher Education Commission Retention and Graduation

28. Tennessee Higher Education Commission College Retention Rates* Fall 2005 Lottery Recipients ** vs. Non Recipients *Public institutions only; **HOPE, GAMS, ASPIRE, and Access awards Source: THEC SIS

29. Tennessee Higher Education Commission 6-year Graduation Rate for TELS Recipients by Postsecondary Sector Note: The graduation rates concerned HOPE, GAMS, ASPIRE, and Access recipients, regardless of whether they lost the scholarship before graduation. Vanderbilt University is excluded from Independent Institutions. Source: THEC SIS

30. Tennessee Higher Education Commission 6-year Graduation Rate for TELS Recipients by Scholarship Type Note: The graduation rates concerned HOPE, GAMS, ASPIRE, and Access recipients, regardless of whether they lost the scholarship before graduation. Data include TICUA institutions. . Vanderbilt University is excluded from Independent Institutions. Source: THEC SIS

31. Tennessee Higher Education Commission Graduation Rate with TELS Intact by Postsecondary Sector Note: Graduation rate on TELS = # of TELS recipients who received associate’s or bachelor degree with their scholarships intact/TELS first-time freshmen. Vanderbilt University is excluded from Independent Institutions. Source: THEC SIS

32. Tennessee Higher Education Commission Graduation Rate with TELS Intact by Scholarship Type Note: Graduation rate on TELS = # of TELS recipients who received associate’s or bachelor degree with their scholarships intact/TELS first-time freshmen. Includes both public and private institutions. Source: THEC SIS

33. Tennessee Higher Education Commission Summary of Findings • Holding current policy constant, annual TELS program expenditures will continuously exceed annual revenues; • The lottery reserve fund will continue to decline by $16 to $20 million every year; • The most recent scholarship renewal rate in the second year was 54 percent, almost the same level as the previous year’s renewal rate; • The 6-year graduation rate for TELS recipients was 54 percent; and • 35 percent of TELS freshmen graduated with their scholarships intact.