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How Poor Families Fund College for Wealthy Students

Eleven states earmark lottery revenue for public colleges and universities, and you’d think those schools would be thrilled about getting the money. Think again. A new analysis (PDF) by the American Association of State Colleges and Universities argues that lotteries aren’t a good way to fund public education because they’re like a reverse Robin Hood: taking from the poor and giving to students who least need the help. There are two sides to this equation. First, the source of the funds: Lotteries are essentially regressive taxes. “In almost every study performed by economists, findings show that as household income increases, the proportion spent on lotteries decreases,” the report says. So skewed is the payout that our colleagues at Bloomberg News ranked states along a “Sucker Index” to see which gamblers fair the worst. It’s worth noting that the highest Sucker score went to Georgia, whose lottery-funded HOPE scholarship program has been so successful in keeping high-caliber college students in-state that it’s become a model for other states.