After months of debate, Georgia lawmakers have agreed on a plan designed to save the popular merit-based HOPE Scholarship program from a projected $434-million deficit within the next four years.

The proposal, which passed the state's General Assembly late Wednesday night, would set a tougher academic standard for students, freeze payments for student fees at this year's level, and establish a mechanism for cutting payments for books. Gov. Sonny Perdue, a Republican, is expected to sign the bill, even though it failed to include a provision that he wanted. That provision would have linked eligibility for the scholarship to SAT scores.

In a written statement, the governor said the legislature had "made great strides toward preserving the HOPE Scholarship for future generations."

The HOPE Scholarship was established in 1993 by Georgia's governor at the time, Zell Miller, a Democrat, and has been credited with keeping smart students from leaving the state to attend college. It gives each Georgia high-school graduate with at least a B average a full scholarship to attend a public institution in the state or a partial one for a private institution. Paid for by the state lottery, the program has awarded some 700,000 scholarships, worth $2.1-billion, over the past decade.

The program has also served as the model for more than a dozen other states that copied the idea in the 1990s, including the name in some cases.

But with lottery revenues flat and public colleges in Georgia raising their prices more than state officials ever expected, the program's financial health has declined in recent years. The cost of the program, for instance, increased by $100-million from 2000 to 2002, when its price tag ballooned to $360.7-million. As a result, the legislature appointed a special commission last year to study possible ways to salvage the program.

Among other changes approved by the General Assembly on Wednesday, the legislation would:

Replace the B-average requirement with a required 3.0 grade-point average by 2007. The state's 180 school districts now use various formulas to compute a student's average. Some schools use a 4.0 scale, while others use a 100-point scale. Nearly one-third of freshmen on HOPE scholarships last fall did not graduate from high school with a 3.0 average, which is normally considered a B.

Freeze payments for student fees other than tuition at this academic year's level. If lottery revenues drop for three consecutive years, the payments for fees would be eliminated.

Cut in half the $300 allowance for books, if lottery revenues decline after one year.

Eliminate the book allowance entirely if lottery revenues fall for two consecutive years.

State Rep. Louise McBee, chairwoman of the House Higher Education Committee and co-chairwoman of the HOPE study commission, said on Thursday that she was pleased with the bill.

"It's a good day for Georgia and its students," said the Democratic lawmaker.

But the Democratic lieutenant governor of Georgia, Mark Taylor, issued a statement arguing that there was no need to rush through changes to HOPE. Mr. Taylor, who is expected to run for governor in 2006, said making cuts to book and fee allowances while raising the academic bar "breaks our agreement with the people."

"Essentially," he said, "we are asking our students to work hard for less."