TENNESSEE EDUCATION LOTTERY SCHOLARSHIP PROGRAM ANNUAL REPORT Recipient Outcomes Through Fall 2012 Prepared by the Tennessee Higher Education Commission TENNESSEE HIGHER EDUCATION COMMISSION The Tennessee Higher Education Commission is the state's coordinating agency for higher education. Guided by the Public Agenda for Tennessee Higher Education, THEC oversees an array of finance, academic, research and consumer protection initiatives that promote student success and support the State's completion agenda for postsecondary education. THEC actively seeks to develop policy recommendations, programmatic initiatives, and partnerships that increase educational attainment in the state while improving higher education access and success for all Tennesseans. COMMISSION MEMBERS Mr. Charles W. Bone, Hendersonville, 6th Congressional District Mr. Evan Cope, Vice Chair, Murfreesboro, 4th Congressional District Mr. Gregory Frye, voting ex-officio, University of Tennessee, Martin Mr. Tre Hargett, Secretary of State Ms. Sharon Hayes, Brownsville, 8th Congressional District Mr. Greg Isaacs, Knoxville, 2nd Congressional District Mr. Adam Jarvis, non-voting ex-officio, East Tennessee State University Mr. Cato Johnson, Vice Chair, Bartlett, 7th Congressional District Mr. Jon Kinsey, Vice Chair, Chattanooga, 3rd Congressional District Mr. David Lillard, Jr., State Treasurer Dr. Gary Nixon, Executive Director, State Board of Education, non-voting ex-officio Mr. A C Wharton, Secretary, Memphis, 9th Congressional District Mr. Robert White, Chair, Johnson City, 1st Congressional District Mr. Justin Wilson, State Comptroller Vacant, 5th Congressional District OVERVIEW OF REPORT This report is prepared pursuant to T.C.A. §49-4-903(b), which directs the Tennessee Higher Education Commission (THEC) to: “...provide assistance to the general assembly and to the Tennessee Student Assistance Corporation (TSAC) by researching and analyzing data concerning the scholarship and grant programs created under this part, including, but not limited to, student success and scholarship renewal.” The Tennessee Education Lottery Scholarship (TELS) program was designed to meet the unique needs of the state of Tennessee while also incorporating the hallmark elements of existing merit-based aid programs in other states. Developed through a process involving elected officials and members of the academic community, the TELS program aims to address the following broad public policy objectives: Improve academic achievement in high school through scholarship incentive (GAMS, HOPE, ASPIRE); Provide financial assistance as a means of promoting access to higher education (ASPIRE, Access); Retain the state’s “best and brightest” students in Tennessee colleges and universities (GAMS); and Enhance and promote economic and community development through workforce training (Wilder-Naifeh). The Tennessee Education Lottery began operations on January 20, 2004. Lottery proceeds fund scholarships for Tennessee students attending eligible public or private institutions and universities across the state. Initial qualification and renewal criteria for the program were set in 2003. The legislature adjusted the qualification criteria in 2005 and the renewal criteria in 2008. Additionally, the legislature added a Non-traditional Student Grant and Dual Enrollment Grant in 2005 and several smaller provisions in 2006 and 2008. Finally, lottery scholarship coverage for summer school enrollments of six credit hours or more began in summer 2012 for students who first received the scholarship in fall 2009 or after. Table of Contents Technical Notes & Definitions …… i Executive Summary …… iii Section 1: Program Overview …… 1 Program Overview: Key Findings …… 2 Table 1 Tennessee Education Lottery Scholarship Eligibility and Renewal Criteria, 2011-12 …… 3 Table 2 Major Legislative Changes in Tennessee Education Lottery Scholarship Program, 2004 to Present …… 4 Table 3 Lottery for Education Reserve Balance at June 30, Fiscal Years 2003-04 - 2011-2012 (in Millions) …… 5 Figure 1 Lottery for Education Reserve Balance at June 30, Fiscal Years 2003-04 - 2011-2012 (in Millions) …… 5 Table 4 Scholarship Recipients and Dollars Awarded by Scholarship Program, 2004-05 to 2011-12 …… 6 Table 5 Maximum Award Amount of HOPE as a Percent of Average Tuition & Fees for Public Institutions, …… 7 2004-05 - 2012-13 Figure 2 Maximum Award Amount of HOPE as a Percent of Average Tuition & Fees for Public Institutions, …… 7 2004-05 - 2012-13 Table 6 Distribution of Scholarship Recipients and Dollars by System, 2007-08 - 2011-12 …… 8 Table 7 Distribution of Scholarship Recipients by System and Scholarship Program, Fall 2012 …… 9 Table 8 Distribution of First-time Freshmen Scholarship Recipients by System and Scholarship Program, …… 10 Fall 2004 - Fall 2012 Figure 3 Growth of TELS First-time Freshmen and Percent of TELS First-time Freshmen by System, Fall 2004 …… 11 - Fall 2012 Figure 4 Distribution of TELS First-time Freshmen by Scholarship Program, Fall 2004 - Fall 2012 …… 12 Table 9 TELS Freshmen as a Percent of All First-time Freshmen by System, Fall 2004 - Fall 2012 …… 13 Figure 5 TELS Freshmen as a Percent of All First-time Freshmen by System, Fall 2004 - Fall 2012 …… 14 Table 10 TELS Receipt by Postsecondary Sector, Fall 2004- Fall 2012 …… 15 Section 2: Recipient Demographics …… 17 Recipient Demographics: Key Findings …… 18 Table 11 Lottery Scholarship Receipt by Gender and Ethnicity, Fall 2004 - Fall 2012 …… 19 Figure 6 First-time Freshmen Lottery Scholarship Receipt by Ethnicity, Fall 2004 - Fall 2012 …… 19 Table 12 Lottery Scholarship Receipt by Family Adjusted Gross Income (AGI), Fall 2004 - Fall 2012 …… 20 Figure 7 Lottery Scholarship Receipt by Family Adjusted Gross Income (AGI), Fall 2004 - Fall 2012 …… 21 Table 13 Median Family AGI of TELS First-time Freshmen by System and Scholarship Program, Fall 2004 - …… 22 Fall 2012 Table 14 Median Family AGI of TELS First-time Freshmen by Ethnicity, Fall 2004 - Fall 2012 …… 22 Figure 8 Median Family AGI of TELS First-time Freshmen by Ethnicity (2012 Dollars), Fall 2004 - Fall 2012 …… 23 Table 15 HOPE and ASPIRE First-time Freshmen Recipients by Initial Qualifications Met and System, Fall …… 24 2012 Figure 9 HOPE and ASPIRE First-time Freshmen Recipients by Initial Qualifications Met and System, Fall …… 25 2012 Table 16 HOPE and ASPIRE First-time Freshmen Recipients by Initial Qualifications Met and Selected …… 26 Demographics, Fall 2012 Figure 10 Proportion of HOPE and ASPIRE First-time Freshmen Recipients by Initial Qualifications Met, …… 27 Gender and Ethnicity, Fall 2012 Table 17 Percent of TELS First-time Freshmen who took at least one Remedial/Developmental Course by …… 28 System and Scholarship Program, Fall 2004 - Fall 2012 Table 18 Average Credit Hours Attempted by TELS Recipients by Student Level and Scholarship Program, …… 29 Fall 2012 Table 19 Percentage of TELS Recipients Enrolled Part-time by Student Level and Scholarship Program, Fall …… 30 2012 Table 20 Percentage of TELS First-time Freshmen Eligible for a Pell Grant as a First-time Freshman by …… 31 System, Fall 2004 - Fall 2012 Table 21 Percentage of TELS First-time Freshmen Receiving a Tennessee Student Assistance Award as a …… 32 First-time Freshman by System, Fall 2004 - Fall 2012 Table 22 Percentage of TELS First-time Freshmen with at least one Parent with an Associate’s Degree or …… 33 Higher by System, Fall 2004 - Fall 2012 Table 23 Academic Profile of Incoming TELS First-time Freshmen by System and Scholarship Type, Fall 2004 …… 34 - Fall 2012 Section 3: Scholarship Renewal …… 37 Renewal Requirements …… 38 Scholarship Renewal: Key Findings …… 39 Table 24 1-year Scholarship Renewal Rates by Original Scholarship Program and System, TELS First-time …… 40 Freshmen, Fall 2011 Figure 11 1-year Scholarship Renewal Rates by System, TELS First-time Freshmen, Fall 2004 - Fall 2011 …… 41 Figure 12 1-year Scholarship Renewal Rate by Scholarship Type, Fall 2004 - Fall 2011 TELS First-time …… 42 Freshmen Table 25 1-year Scholarship Renewal Rates by Gender, System, Original Scholarship Program, Fall 2011 …… 43 First-time Freshmen Table 26 1-year Scholarship Renewal Rates by Ethnicity, System, and Original Scholarship Program, Fall …… 43 2011 First-time Freshmen Table 27 1-year Scholarship Renewal Rates by AGI and Original Scholarship Program, Fall 2011 TELS First- …… 44 time Freshmen Table 28 1-year Scholarship Renewal Rates by Qualifications Met (HOPE and ASPIRE Only), Fall 2011 TELS …… 45 First-time Freshmen Figure 13 1-year Scholarship Renewal Rate by Qualifications Met (HOPE and ASPIRE Combined), Fall 2004 - …… 46 Fall 2011 TELS First-time Freshmen Table 29 1-year Scholarship Renewal Rates for Students with and without Remedial Credit by Original …… 47 Scholarship Type and System, Fall 2011 TELS First-time Freshmen Table 30 1-year Scholarship Renewal Rates by ACT Composite Score and High School GPA, Fall 2011 TELS …… 48 First-time Freshmen Table 31 1-year Scholarship Renewal Rates by ACT Composite Score and High School GPA, Fall 2011 TELS …… 49 First-time Freshmen, Male Recipients Table 32 1-year Scholarship Renewal Rate by ACT Composite Score and High School GPA, Fall 2011 TELS …… 50 First-time Freshmen, Female Recipients Table 33 1-year Scholarship Renewal Rate by ACT Composite Score and High School GPA, Fall 2011 TELS …… 51 First-time Freshmen, Caucasian Recipients Table 34 1-year Scholarship Renewal Rate by ACT Composite Score and High School GPA, Fall 2011 TELS …… 52 First-time Freshmen, African American