Reducing the money they give to state schools. The stated funding source is lottery sales, but money is fungible. It's actually becoming fairly common Tennessee, New Mexico, Maryland, Georgia, Florida, Louisiana, New York, South Carolina, Missouri and West Virginia are among those sponsoring lottery-funded scholarship programs. http://www.scholarships.com/blog/financial-aid/lottery-schol...

Over time tuition costs begin to increase faster than lottery revenues.

Georgia has had the HOPE scholarship since 1993 (lottery funded), and since 2002 the amount covered has been steadily decreasing.

If student loan availability keeps increasing (causing tuition to rise), total tuition percentage paid by HOPE will be negligible

In theory, since it's a state school, wouldn't that just imply less money coming into the state ... in other words, an anticipated revenue shortfall due to how their enrollment is setup - but not necessarily something where anybody is cutting a check to cover the cost of the scholarship.