State Treasurer Brian Krolicki told the board of Regents Thursday the Millennium Scholarship program will rapidly run out of money unless changes tighten up eligibility or the state begins to augment tobacco-settlement money that now pays for it.
Without changes, he said, the Legislature will need to put in up to $45 million to the program, which provides up to $10,000 toward four years of college for every Nevada high school graduate with a 3.0 or better grade-point average.
"It's an extraordinarily successful program," said Krolicki, pointing out nearly 60 percent of qualified graduates use the scholarship for college.
"But the bottom line is, it can no longer sustain itself as it's currently structured and funded."
He said expenditures have risen to half again the amount originally projected; at the same time, the amount the state gets from the tobacco settlement is falling below projections.
"People are smoking less. That's good news. But that means we get less money under the terms of the agreement."
One of the proposed changes - what Krolicki called "tough love." - would mean those who fall below the requirements in a semester would lose the scholarship, not just until they raise grades but forever. Students can fall below requirements by taking less than 12 credits or failing to get the minimum grade-point average.
"Now about half the students who lose it regain it. Good for them," he said. "But that is a dramatic difference in cash. One strike, and you're out - I believe that is something you can do."
Regent Steve Sisolak said, "One strike and you're done seems so severe."
Regent Marcia Bandera said she was worried the changes would make the program "too tight." She said the scholarship was "to encourage the average Joe and Jill to go to college. I'd hate to make this an elitist scholarship."
Regent Jill Derby made it clear she would like to give students more than one chance if they lose the scholarship.
Western Nevada Community College President Carol Lucey said she and the other community college presidents would like to present a plan to ensure access to the scholarship program for their students before changes are made.
Krolicki said he has a plan to provide a significant one-time pot of money to support the scholarship program another 10 years or more. He said he will present plans to the 2005 Legislature to securitize unclaimed property revenues.
He said securitizing half the annual $20 million in revenue the state gets from unclaimed property would provide a one-time windfall of about S100 million.
"With that and the changes as outlined today, we can get enough legs to the Millennium Scholarship to last through 2015," he said.
Securitization is what he proposed to the Legislature in both 2001 and 2003. The Assembly rejected that proposal.
Contact Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.
RECOMMENDED CHANGES
The following recommendations will be discussed during the regents' September meeting:
• Raising the grade-point average needed to get the scholarship. That process has already started, and the requirement will be a 3.25 GPA in two years.
• Raising the GPA needed to keep the scholarship from 2.0 to 2.6.
• Pay for a maximum of 12 credits a semester. Students taking more than that would have to pay the difference. There is now no limit to credits per semester.
• Eliminate the scholarship during the summer semester, thus saving about $1.5 million a year. It would be available only in spring and fall semesters.
• Change residency requirements so high school students have to attend school in Nevada three or four years, instead of the current two years, to be eligible.
• Those who fall below the requirements in a semester - either by taking less than 12 credits or failing to get the minimum GPA - would lose the scholarship.