The subsidized lunch variable attains statistical significance at the .001 level in
models using each of the four dependent variables (three base award variables
and the average supplemental award).
2
The relationship between receiving a
subsidized lunch and earning a KEES award by school is substantively larger for
the average bonus awards variable than it is for the average base award. A school
with 25 percent of its students receiving free or reduced-price lunch would have
average supplemental awards of about $59 greater than a school with 75 percent
of its students receiving subsidized lunches. The gap would average $14 for the
average base award, while the difference in the number of students earning
awards would be about 8 percent between the schools.
Racial makeup has an effect on the earning of base awards by school but does
not have a statistically significant effect on the supplemental award average. As
expected based on the correlation results presented in Table 4, schools with a
higher percentage of minority students have lower average base awards, fewer
awards earned, and a lower total of base awards per student. Statistical
significance is attained at the .01 level (one-tail test) for each of the three base
award models. For example, a school with a student body that is 75 percent
Caucasian will, on average, have 8 percent more of its students earning KEES
awards than a school that is 25 percent Caucasian. The difference in the average
size of base award is about $17.
Gender composition is a statistically significant factor (at the .05 level) only in
the percentage of students who earn KEES awards. A 3 percent increase in the
percentage of female students translates into about a one percent increase in the
percentage of students who earn KEES awards per school.
Aggregate school level results provide support that, like other merit-based
scholarships, the KEES program is regressive in its award structure and that the
graduated award structure compounds the regressivity across Kentucky’s public
schools. Schools with fewer students receiving free or reduced-price lunch have a
higher percentage of students receiving awards and have higher average awards
than schools with more students receiving subsidized lunches. This is consistent
with individual data gathered by the Kentucky Higher Education Assistance
Authority and the Kentucky Legislative Research Commission (LRC, 2003).
Racial composition of schools also effects the distribution of base awards.
Schools with a higher percentage of minority students receive fewer and smaller
awards.
Diminishing Returns
Even if KEES has had some success in attaining its goals so far, the impact of
KEES is declining and will continue to decline over time due to two factors. First,
the program is fully funded by the Kentucky Lottery. For the fiscal year that
ended in June 2005, the Kentucky Lottery saw a decline in revenues and the
projected amount of dividend transfers from the lottery to the state fell about
$10 million short of expectations. Part of the decline can be traced to the
creation of the Tennessee Lottery.
Second, and more significantly, KEES awards are not indexed for inflation.
Many other programs, including the Georgia HOPE Scholarship, provide full or a
percentage of tuition for qualified recipients, rather than a fixed dollar amount.
Thus, the HOPE Scholarship and similar programs are automatically indexed for
increases in college tuition.
2. Controls for the different locales as defined by the U.S. Census were included in the OLS Regression models. Since no particularly strong or interesting patterns
emerged, they are not presented here.
36 Journal of Student Financial Aid Volume 39 • Number 1 • 2009
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