INDIANAPOLIS – An exhaustive study of Indiana’s college scholarship programs could result in key changes for the state’s growing and underfunded 21st Century Scholars program.

More than 100,000 students have used the program since its inception in 1990. Students in sixth through eighth grades who qualify for free and reduced-price lunches can enroll in the program by signing a pledge to stay drug-free and to maintain at least a 2.0 grade-point average in exchange for four years of free tuition at an Indiana public university.

But the program is growing faster than the state can afford.

Its budget had a $30 million shortfall this two-year cycle and will need a large boost in the next biennium.

The program’s costs could nearly triple by 2017, according to a report commissioned by the State Student Assistance Commission of Indiana and the Commission for Higher Education.

“Our challenge is balancing fiscal realities with the need to help a growing number of Hoosiers access and complete college,” Higher Education Commissioner Teresa Lubbers said.

“That requires taking a hard look at Indiana’s financial aid system, preserving the aspects of the current system that are working well, and putting in place safeguards that increase students’ chances for success while ensuring the best possible return on taxpayer dollars.”

When the budget provided by legislators hasn’t been enough to meet the need, state officials have taken money from other scholarship programs and have reduced the average grant to students.

“For those of us who work in the fiscal area, we almost feel a moral imperative to fix things because we know we don’t have all the money to help those becoming eligible,” said Rep. Jeff Espich, R-Uniondale. “We have to more evenly and fairly spread the money.”

Espich is on the State Budget Committee, which heard the report Wednesday.

The study found the 21st Century Scholars program has been successful in enrolling students and in raising the high school graduation rate of those students.

But there is no significant evidence that the program has helped the scholars graduate from college.

That leads to one recommendation from the report: Raise the minimum high school grade-point average to 2.5 to ensure the scholars have the aptitude and desire for college.

The report also said that one in five scholars do not meet the financial eligibility requirements once they get to college. That 20 percent of students use roughly 33 percent of the program’s dollars.

Espich said the problem is that the students qualify when they sign up in junior high school but there is not another check on financial need when they go to college.

“There are definitely loopholes in that program that have to be closed,” he said.

The report calls for legislators to consider additional eligibility verification in a student’s senior year.

Rep. Peggy Welch, D-Bloomington, said her biggest concern about the program is sustainability, and she suggested that perhaps the state should treat it more like a long-term pension program.

Currently, lawmakers pass the budget for the program every two years.

“Right now, we just give what we can every two years,” Welch said. “But it’s an entitlement program. We have to pay.”

nkelly@jg.net