Georgia to Introduce Need-Based Financial Aid

As a college counselor for public high schools in Atlanta, Ashley Young heard the same story time and time again from parents and students: Cost was the biggest barrier to higher education for a majority of students, despite the fact that Georgia public colleges have some of the lowest tuition costs in the nation.

She remembered wiping students’ tears as they struggled to figure out how they would pay for college.

She quickly realized the issue wasn’t just an individual challenge but a broader policy issue; Georgia was one of just two states in the nation with no need-based financial aid program, the other being New Hampshire. Later, she learned about an unrestricted reserve of Georgia Lottery funds—which now totals over $1.7 billion—that is intended to go toward education in the state.

“I could not, for the life of me, just compute: How is this money just sitting? And at that moment, I just had students’ names popping in my mind and having a real social awakening moment because I was like, this feels so unfair. How is this possible?” said Young, who is now a senior education analyst at the Georgia Budget and Policy Institute.

In 2020, during COVID-19 shutdowns, Young began to push for legislation that would create a need-based aid program in the state, later creating a consortium known as Georgians for College Affordability. Now, her vision is finally slated to become a reality: In a budget passed last week, the Georgia State Legislature allocated $300 million to an endowed fund for the program, known as the DREAMS Scholarship. The budget also includes $25 million in scholarships for fall 2026.

While momentum was building in Georgia to create some form of need-based aid, Georgia governor Brian Kemp gave the effort a key boost when he included $325 million for it in his budget proposal. In his State of the State address in January, he noted that Georgia is already “the national leader in merit-based aid for higher education.”

“But in this era of high prices and new challenges for those graduating from high school, we also recognize the advantage need-based financial assistance can give to those who would not otherwise be able to access higher education. Like their peers who have the means to attend college, these students have great dreams for rewarding careers and impactful lives. But they do not always have hope that those dreams can become reality,” he said.

“I believe we owe it to every child to ensure they start out on a level playing field, no matter their ZIP code,” he continued, before announcing the proposal for the DREAMS program.

As the budget worked its way through the State Legislature, it faced pushback from lawmakers, who attempted to cut the allocation down to just $100 million. But after Kemp added $1.4 billion to the spending plan, lawmakers restored the full $325 million.

Although the funding has been secured, the particulars of the scholarship’s implementation are still in the works, with advocates for college affordability continuing to fight against a provision that students who receive the award would be required to work or volunteer part-time.

The success builds on legislation from a year prior, when Georgians for College Affordability managed to pass legislation that created a Senate study committee to investigate the viability of such a program. That committee released its final report late last year, recommending the creation of a comprehensive need-based aid program that draws from the lottery funds. But it wasn’t clear that those recommendations would bear fruit so quickly.

Advocates, institutions and students alike lauded the legislation.

“The only barrier that I faced throughout my time [in college] was the financial barrier,” said Javari Carlton, a first-generation student and a senior at Clark Atlanta University, a historically Black university in Atlanta. “This bill would be [transformative] for students such as myself who relied heavily on student aid and scholarships, grants and loans to get through college. To know this budget has been passed for these need-based scholarships is definitely a victory, but I think this is just one step into us making tremendous change in the education sector and ensuring students like myself can get a proper education without having to face the financial barrier.”

In a statement, the University System of Georgia’s chancellor, Sonny Perdue, called the scholarship a “historic step to expand access, strengthen the workforce and support families in every region with an investment that reflects a bold vision for the state’s future and a deep belief in what Georgia students can achieve.”

‘Why Is This a Big Deal?’

The aid will supplement Georgia’s existing HOPE Scholarship, a generous merit-based aid program that began in 1993 and covers the full cost of tuition. In 2024, the program awarded $841 million in scholarships and grants to more than 178,000 students. Recipients of the HOPE award must have earned a 3.0 GPA in high school and are required to maintain that GPA in college to qualify.

The success of that scholarship is one of the reasons it’s been hard to pass need-based aid, said Ray Li, policy counsel for education equity at the Legal Defense Fund, who has been involved in the push for need-based aid since 2025. Some Republican legislators who opposed the DREAMS Scholarship didn’t understand why students would need more support on top of the existing HOPE program, he said.

“They’re like … ‘Why is this a big deal? When I went to college, I did the HOPE Scholarship and I worked like 10 hours a week and I paid for college,’” he said. “They didn’t understand what the costs are now.” Legislators also touted that Georgia was already an affordable state for higher education, with the sixth-lowest tuition costs of any state in the U.S.

But advocates noted that, despite this, Georgia students still take out high rates of student loans; Georgia has the second-highest student loan debt per borrower in the nation, Li said in a hearing with the Senate committee that studied the scholarship. On average, Pell Grant recipients in the state have over $11,000 in unmet financial need annually, requiring them to work, which can negatively impact their academic success and their ability to participate in extracurricular activities or internships.

He also noted that aid programs with GPA, test score or course requirements, like the HOPE Scholarship and the state’s Zell Miller Scholarship, can be out of reach for many students who need the aid most, such as students in rural communities whose high schools may not offer all the courses required to earn a HOPE award. In total, about 56 percent of Georgia students do not receive the HOPE Scholarship, and of those who do receive it, about 42 percent will lose that scholarship while in college. Black, rural and low-income students receive these scholarships at disproportionately low rates.

Li stressed that the HOPE Scholarship only covers tuition and fees, so students have to find another way to pay for other costs, like housing, food, books and transportation.

The lack of access to financial aid often leads students to attend less expensive universities even when they aren’t a good fit, he told legislators, and many even leave the state for institutions with better financial aid.

“This leads to brain drain in the state, where some of the most talented students are leaving the state because it’s cheaper to go somewhere else, and they’re never returning to the Georgia economy,” he said.

Dustin Weeden, associate vice president at the State Higher Education Executive Officers Association, said that state need-based aid programs can be important for helping students afford college who otherwise may not have gone at all.

“It actually is a really good investment in state dollars; ultimately, what we’re all working toward is greater [college] attainment and meeting the workforce needs of the modern economy,” he said. “I think states have a very prominent role in college affordability.”

Working Out Details

Now that the funds for the DREAMS Scholarship have been allocated, legislators are working on figuring out how to administer the program. Currently, a bill that would cap the awards at $3,000 per student per year is moving through the Legislature, having passed in the House on Friday.

But the bill contains two provisions college affordability activists are opposed to. The first would prevent students at private colleges and universities from receiving the scholarship. The second is a work requirement that would mandate all DREAMS recipients work or volunteer.

Li said he finds the work requirement unfair; no similar need-based aid programs in the county have a similar provision, nor do any other Georgia scholarships.

“We think that that’s an unnecessary barrier to access here,” he said.

Lawmakers are still hashing out those details. Advocates are also hoping the fund will be expanded in future years. Li said Georgians for College Affordability projected that the program would require about $1.5 billion to cover the need of all Georgia students. But higher education leaders in the state are currently fundraising to expand the endowment, he said.

Although she’s excited that the program is so close to the finish line, Young said she won’t truly feel like she can celebrate until the legislation is signed.

“It will pass, because it’s the governor’s initiative, but we really don’t know until it’s final, final, final,” she said. “Even though my job has sent me champagne and we’ve gone out and we’ve celebrated, you still have your low-key reservations, because you just want everything to end smoothly.”