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Brown Investigates Lottery Funding in Higher Ed


Pearson Brown, McBee doctoral student and state policy intern at SHEEO, recently wrote an issue brief in SHEEO’s State Higher Education Finance project.

The brief, titled “Analyzing Lottery Proceeds as an Aspect of State Support for Higher Education,” details how lottery funding is utilized by states to support higher education through state financial aid and institutional appropriations.

Since the birth of modern state lotteries in 1964, 45 states have operated a lottery and transferred a portion of the proceeds to at least one beneficiary, including higher education. According to the North American Association of State and Provincial Lotteries, lotteries transfer around 24% of their total revenue to beneficiaries, but these formulas and recipient causes vary from state to state.

States use lottery revenue to support a host of public programs, including capital projects, health and human services, and all levels of education. Some states focus solely on K-12 education with the funding while others prioritize higher education and all levels.

SHEF and SHEEO worked together to contact 30 states, receiving data back from 24 states where 14 confirmed their state uses lottery funding to support higher education. In FY20, Georgia transferred around 955 million dollars from lottery revenue directly to support financial aid efforts for higher education, widely known as the Helping Outstanding Pupils Educationally program.

Brown recommends that "SHEEO agencies should consider how a state lottery’s revenue distribution protocols affect the amount of financial support that higher education receives from its state’s lottery."

Brown also recommends examining institutions and student population benefits from lottery transfers. This broader context allows for a better understanding of a lottery’s capacity to financially contribute and whether state higher education systems should consider allocating funds to areas better suited for one-time supplements.

Brown states that this report, and its implications, will help state higher education leaders and policymakers to advocate for funding parameters for overlooked areas and explore insights on revenue streams that SHEF’s report does not measure. 

Full brief at:

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