By Michael A. Fletcher
Washington Post Staff Writer
Tuesday, June 4, 2002; Page A03

A growing number of states, seeking to attract top students to public universities and increase access to higher education, have launched broad programs that reward students who earn high grades with scholarships. But those programs are increasingly drawing criticism because most recipients are middle-class -- and sometimes affluent -- students who would have gone to college anyway.

The scholarship programs, inaugurated in Georgia in 1993 and now available in 13 states, are helping to remake higher education by raising admissions standards at leading public universities and enticing top students to stay in state. They are also providing needed financial help to hard-pressed middle-class families.

But the programs are raising concerns about the propriety of using large sums of public money to subsidize the education of students who were already college-bound and might be able to afford it anyway. In at least one state, Georgia, rising admissions standards and the demise of affirmative action are squeezing black students out of the top public universities, leaving them to attend less prestigious branches of the system, researchers said.

"Who's most likely to get a B, rich kids or poor kids?" asked Tom Mortenson, a senior scholar at the Pell Institute for the Study of Opportunity in Higher Education,aWashington research organization. "In any academic ranking, the affluent tend to cluster near the top and the poor kids cluster at the bottom."

In some states, lawsuits have been filed challenging merit scholarship plans. Georgia legislators have reconfigured the state's HOPE scholarship program to increase scholarship money for lower-income students.

Defenders of the scholarship programs note that college costs are also burdensome for middle-class families. The programs provide tangible rewards to students who work hard in school, fueling student aspirations, they say.

"We wanted to keep our best and brightest students in Georgia," said Glenn Newsome, executive director of the Georgia Student Finance Commission, which has awarded $1.5 billion in state lottery revenue to HOPE scholarship recipients. "If you make a B average, this state says it is going to pay your tuition. That really has driven the whole notion of academic achievement down deeper than I ever thought."

Newsome said HOPE has prompted more students to concentrate on maintaining good grades. Because students must maintain B averages in college to keep their scholarships, they have more incentive to do well there.

HOPE pays the college tuition -- at any public university in the state -- of students who maintained B averages in high school. The program also provides $3,000 a year to eligible students who attend private colleges in state.

"I have not seen anything that so resonates with young people and their parents," Newsome said.

Indeed, the enactment of the HOPE scholarship has pushed up admissions standards at the state's flagship schools, making those slots more difficult to obtain.

Three out of four of the state's high school graduates who had combined SAT scores of better than 1500 choose to attend college in the state, compared with 23 percent before the scholarship program was initiated. Overall, SAT scores at the university have increased by 52 points, to 1201 (out of a possible 1600), since the scholarship was inaugurated.

But those new standards, coupled with the court-ordered elimination of race-conscious admissions, are contributing to a smaller proportion of African American students on the state's flagship campuses.

At the University of Georgia, 207 of the 4,092 entering freshmenin 2001 were African Americans. Despite an increase in the number of blacks going to college in Georgia over the past decade, they represent just 5.7 percent of the students at the university. Before HOPE began, they accounted for 6 percent.

"The program has widened the gap in college attendance between blacks and whites," said Susan Dynarski, a Harvard University researcher who has studied the HOPE program. "It also has widened the gap between those from low- and high-income families."

In Michigan, where in 1999 8 percent of blacks and 34 percent of whites qualified for the state's $2,500 scholarships, the American Civil Liberties Union has filed suit challenging the program. The lawsuit contends that Michigan's scholarship program unfairly pegs the awards to the state's standardized exam.

On such tests, whites and Asian Americans typically outperform Hispanics and African Americans, and students in wealthy, suburban districts consistently earn higher scores, claiming the bulk of the scholarship money.

The Michigan exam was designed to measure school performance, not the fitness of students for the state's $2,500 scholarships, the suit alleges.

In Florida, civil rights activists are considering filing a complaint with the U.S. Department of Education challenging the state's Bright Futures Scholarship Program, which pays full or partial tuition for students based on a combination of their high school grades, and ACT or SAT scores. There, 9 percent of blacks and 32 percent of whites qualified for the scholarships.

Similar disparities have been reported in South Carolina's $5,000-a-year Palmetto Fellows scholarship program, which bases awards on a combination of student grades and college admissions test scores. Only 2.1 percent of the state's scholarship winners were black or Hispanic, although they made up a third of those in the state taking the SAT, according to FairTest, a Massachusetts-based group that opposes high-stakes testing.

College admissions exams "aren't meant to measure high school achievement, and they don't," said Victor Viramontes, staff attorney for the Mexican American Legal Defense and Educational Fund. "These tests are basically a guess at what students will do in the future."

The proliferation of broad, merit-based scholarship programs modeled on HOPE has coincided with a tilt in federal higher education policy toward the middle class, several studies have found.

Tuition and fees at four-year public colleges have increased by 40 percent over the past decade as state spending on merit and other "nonneed" programs soared by 206 percent, according to the National Association of Student Financial Aid Administrators. Need-based spending, meanwhile, rose 41 percent during the same period.

A string of federal laws enacted in recent years has provided tax incentives for families that can afford to put aside money in college savings plans. Last year, Congress passed a law allowing married taxpayers with combined annual incomes as high as $130,000 to deduct as much as $3,000 in tuition expenses from their federal taxes.

"No question about it, politicians have been falling all over themselves to send subsidies to middle- and upper-income families," said David W. Breneman, dean of the Curry School of Education at the University of Virginia.

A study released last month by the National Center for Public Policy and Higher Education, a San Jose-based research group, found that over the past two decades middle-class and poor families have been using a growing share of their incomes to send children to college.

The study also noted that the average Pell Grant, a federal tuition subsidy for low-income students, now pays for 57 percent of the average tuition at public four-year colleges, compared with 98 percent in 1986.

More families than ever are relying on student loans to cover the gap. While the College Board reported that a record $74 billion in financial aid was available to students last fall, loans accounted for 58 percent of that amount. In 1980, loans accounted for 41 percent of students' financial aid packages.

"The whole idea of subsidies for the middle class and of rewarding students for working hard and getting good grades appeals to a lot of people," said Patrick M. Callan, president of the National Center for Public Policy and Higher Education. "But the problem is that it doesn't seem to influence behavior in terms of whether or not people go to college. This is an awful lot of money spent for results that are just politically comfortable."

David B. Mustard, an assistant economics professor at the University of Georgia, said that when he began teaching at the school five years ago, he was struck by the impressive SUVs driven by many of his students.

The shiny new vehicles, he discovered through interviews and research into students' car-purchase patterns, were often gifts from parents grateful that their children chose to attend college in Georgia rather than expensive private schools elsewhere.

"I started asking students how they decided to come to school here, and the first person I asked said she was bribed," said Mustard, a professor at the university's Terry College of Business. "Her parents explicitly said they were going to buy her a car if she came here. I heard the same story again and again."

William L. Kirby III, a HOPE scholarship recipient, just completed his freshman year at the University of Georgia. He knew all along that he would attend college, with or without the scholarship.

"The University of Georgia was definitely high up on my list," said Kirby, a political science major and son of a Columbus, Ga., lawyer. "But for a lot of my friends, [the scholarship] was the factor that kept them in state. Without it, they would have gone to school elsewhere."

Kirby's parents applaud the program, saying that the financial benefits it provides to families such as theirs are only part of its appeal.

"After enactment of HOPE, I saw a change in students," said Jean Kirby, William Kirby's mother and a former high school teacher. "A lot of them started spending time calculating their GPA."