When the South Carolina Education Lottery passed in 2000, it did so largely on the back of claims that it would help fund scholarships that would enable more South Carolinians to attend college than ever before.

Eight years later, it is now more expensive for a potential student to attend college than ever before, as institutions of higher learning have increased tuition and fees nearly every year since the lottery passed — thereby erasing the benefits of the LIFE scholarships — forcing many students who receive lottery funds to pay more out-of-pocket now than they would have with no lottery whatsoever.

The first indictment of the South Carolina Lottery’s dubious impact on education came a year ago, when the South Carolina Policy Council’s Neil Mellen issued “Supplement not Supplant: Is South Carolina Spending Its Education Lottery Revenues Wisely?” The second came last month, when South Carolina received an “F” for college affordability in a report by the National Center for Public Policy and Higher Education titled “Measuring Up 2008.”

South Carolina’s system of lottery scholarships was based upon Georgia’s HOPE scholarships, touted at the time as a success and a key reason for voters to award the state a gambling monopoly. However, the Policy Council report notes that a Harvard economist who studied the impact of the HOPE scholarships in Georgia found that “schools, both public and private, responded to the new (indirect) infusion of money by ratcheting up spending and raising tuition, fees and other student charges,” the report states. “In some cases, the schools recouped nearly a third of the scholarship.”

Little surprise, then, that the same has happened in South Carolina. In a state already troubled with an ailing primary school system and widespread poverty, the national study reports that even after financial aid assistance, poor and low-income families must devote approximately 34 percent of their income to cover tuition and fees.

“While the Education Lottery was designed to cut the amount families paid for college, the infusion of money … has driven up tuition so high that its growth has actually outpaced the savings it initially offered to students in the form of scholarships,” the Policy Council report states.

In short, as students began receiving the scholarship money in 2001-02 — money that never was intended to cover the entire cost of tuition, unlike the Georgia model — colleges and universities began figuring ways to get more of it. The proof is clear: In the decade from 1991 through 2001, the average annual tuition increase at Clemson University was 3.53 percent. In the transition to the lottery (2001-02), tuition jumped 41.78 percent, and in the years since it has grown at a steady 13.3 percent increase per year.

At USC, the numbers are similar. From 1991-2001, tuition grew at a rate of 4.17 percent. In the transition year it jumped by 10.13 percent and has subsequently grown by 12.95 percent each year since.

How that affects students’ pocketbooks is simple. While the lottery funds did have an immediate impact in reducing students’ costs — at USC, the average LIFE scholarship recipient paid only about $250 out of pocket in 2002-03 as opposed to $1,400 the year before, and at Clemson similar figures exist — tuition and fees have grown to such an extent that for 2007-08, the average LIFE scholarship recipient at USC pays nearly $3,000 per year out of pocket. At Clemson, where tuition is higher than USC, a student who paid $1,000 out of pocket in 2002-03 paid nearly $4,500 in 2007-08.

“Only the infusion of scholarship money, funded by the Education Lottery, can account for this dramatic growth,” the report states, noting that since Lottery funds became available, the average annual growth in tuition at USC and Clemson is more than twice the national average.

The report also notes that since schools began receiving more money from scholarships, the state legislature has reduced  recurring state appropriations and has even gone so far as to use the lottery funds intended for students to pay for other essential instructional services, such as report cards, textbooks, it previously trimmed funding for. As state allocations for higher education have dwindled, university leadership has made the case that tuition hikes have been necessary in order to offset the losses.

Policy Council spokesman Bryan Cox says that argument doesn’t wash.

“State appropriations make up a very small amount of the total funding of a university,” Cox says. “Anyone who thinks tuition is directly tied to the level of state funding is missing the bigger picture.”