Georgia invests an additional $255 million in fiscal year 2023 budget for college affordability
Two of the biggest investments and policy changes in higher education this year come from the fiscal year 2023 budget, which will come into effect on July 1, 2022: state funding of Special Institutional Fees (SIF) and an increase from HOPE prices in some schools to cover 90 percent of tuition. Combined, these two measures could mean significant savings for college students starting in the fall. For example, a University of Georgia student receiving HOPE would see a savings of $2,040 over two semesters: $900 from the removal of special institutional fees from their tuition bill and $1,140 from an increase in HOPE scholarships. .
State funding of special institutional fees allows students in the university system to save 40% on mandatory fees
The fiscal year 2023 budget includes $230 million for the University System of Georgia (USG) to remove the Special Institutional Fees tuition fees and student bills. General state funds will cover SIF for colleges and universities this year.
- The University System of Georgia enacted the Special Institutional Tax in 2009 to compensate for lost revenue due to state budget cuts.
- The SIF supports the general operating expenses of colleges and universities. This way, it acts like tuition and not like other fees that support specific services, like a health center.
- In 2021-22, students paid colleges and universities a total of $230 million for these fees. SIF was generally the biggest fee, accounting for around 40% of mandatory fees.
All students in the university system pay special institutional fees at a fixed rate per semester, including part-time students enrolled in five credit hours or more. This makes the total cost of a degree more expensive for part-time students, who make up one in three students at USG. Graduate students also pay SIF on their research and teaching allowances.
Setting HOPE at 90% of tuition helps students at technical colleges and six USG schools
The budget also includes a significant policy change for lottery-funded HOPE scholarships and grants, set HOPE prices at 90% of tuition fees. This change does not affect students attending private colleges and universities.
Since 2011, HOPE Scholarships and Grants cover a portion of student tuition, but the percentage differs from year to year and school to school. HOPE scholarships cover 76% of tuition fees for students pursuing certificates and degrees at technical colleges. The scholarship ranges from a minimum of 75% of tuition at Georgia Institute of Technology to a maximum of 94% at Georgia Highlands College and East Georgia State College. The budget maintains HOPE rates at colleges and universities where the scholarship now covers more than 90% of tuition.
The Georgia Student Finance Commission estimates that increasing HOPE scholarships to 90% of tuition will help approximately 75,000 students, based on fiscal year 2021 enrollment. This includes more than 32,000 college students. techniques and nearly 43,000 students at six schools in the University System of Georgia (USG). HOPE scholarships at 20 colleges and universities in the university system were already at least 90% and will not be affected by this change.
Overall, about 37% of the increased lottery funds will go to about 32,000 technical college students and 34% to about 11,000 University of Georgia students.
The HOPE rate change will affect a diverse group of students. Approximately 56% of HOPE recipients in the university system are white, 21% black, 10% Latino, 7% Asian, and 5% multiracial. In the technical college system, 48% are black, 41% white, 7% Hispanic/Latin, 2% multiracial, and 1% Asian.
HOPE rate change affects approximately 75,000 students
|Estimated number of students affected||HOPE Increase
|Technical Colleges – HOPE Scholarship (Certificates or Diplomas)||24,815||$210||$5,211,150|
|Technical Colleges – HOPE Scholarship (Associate Degrees)||7,460||$210||$1,566,600|
|University of Georgia||10,999||$570||$6,269,430|
|Georgia State University||15,666||$195||$3,054,870|
|Georgia Gwinnett College||3,501||$45||$157,545|
|North Georgia University||8,263||$15||$123,945|
|Georgia Institute of Technology||2,051||$780||$1,599,780|
*Augusta University scholarships will increase by $150 on the Health Sciences campus and $60 on the Summerville campus.
Source: Estimates for affected students and HOPE increase provided by the Georgia Student Finance Commission; totals calculated by GBPI.
Note: Estimates are based on enrollment for fiscal year 2021; actual counts may differ once fiscal 2023 is complete and usage figures are finalized.
Why did HOPE cover different percentages of tuition at different schools?
In fiscal year 2012, the state set all HOPE awards at 90% of tuition. Since then, the Georgia Student Finance Commission has raised HOPE awards at a consistent rate across colleges and universities, but individual schools have raised tuition at different rates. At some schools, like the University of Georgia and the Georgia Institute of Technology, tuition has grown much faster than HOPE prices.
For example, from fiscal year 2012 to fiscal year 2022, tuition per semester at Georgia Tech increased by $1,488, while HOPE awards increased by $658.50. In contrast, at Middle Georgia State University, tuition increased by $317 per semester, while the HOPE price increased by $377.70. Higher tuition increases at Georgia Tech have resulted in a drop in the percentage covered by HOPE scholarships. Therefore, increasing the HOPE scholarship to 90% of tuition provides an advantage to Georgia Tech students, but not to Middle Georgia State University students.
Impact on lottery funds
To increase lottery-funded HOPE awards to 90% across all schools, the FY 2023 budget allocates an additional amount $20 million for the HOPE scholarships and $4.6 million more for HOPE scholarships at the Georgia Student Finance Commission, which administers HOPE.
This policy change reverts to the pre-2011 design of tying HOPE grants to tuition fees, but at a 90% lower rate. When lawmakers amended HOPE, they said the decoupling of HOPE and tuition was intended to control costs and ensure its financial viability.
The effects on HOPE’s future credits are unclear. The Zell Miller Scholarship, which covers full tuition, has seen the fastest growth. Zell Miller Scholarships have seen an average annual cost growth of 16% between fiscal year 2014 and fiscal year 2020, and student growth of 13%. HOPE scholarships for students at public colleges and universities have seen an average annual cost growth of 5% and student growth of 2%.
Lottery credits show a surplus each year, which is transferred to the lottery reserves held by the Treasury. For example, $71 million in lottery dollars was unspent at the end of fiscal 2021. Current lottery reserves dedicated to HOPE deficits total $619 million, with $1 billion more.
In addition to these two exciting funding changes, the legislature passed the following legislation with corresponding budget items related to higher education in Georgia:
- HB 1435 creates a need-based graduate scholarship. The fiscal year 2023 budget redirects $10 million in lottery funds from Student Access Loans to these grants.
- SB 397 changes the HOPE GED program to HOPE HSE (High School Equivalency). The new program will pay for GED and HiSET (High School Equivalency Test) exam fees for applicants, and the budget includes a related increase of $923,843.
- SB 379 expands learning across the state, and the budget includes an additional $1.3 million.
- HB 1013 proposes a variety of mental health care reforms, including the addition of mental and behavioral health professions to the existing service cancellable education loan program, which will allow individuals to cancel a portion of their loans for each year of practice in Georgia. The budget includes $10 million for these loans.
Students should see the impact of these legislative and budget changes in the fall. State funding of SIF and the increased HOPE rate could mean more than $2,000 in savings next year for some students, as well as up to $2,500 in completion scholarships. Students and the state share the responsibility of paying for higher education, and state revenues and lottery funds must remain strong to sustain both of these changes. Using funds to strengthen colleges and universities and increasing grants and scholarships are two positive steps that support college affordability.
 Based on Fall 2018 HOPE recipients. One percent categorized as “Other”.
 Based on HOPE scholarship recipients in the 2019 academic year. One percent categorized as “Other”.