SB 5074 — Aligning eligibility for the college bound scholarship program with the state need grant program.

S-3667.1SUBSTITUTES-0128.1SENATE SENATE BILL 5074State of Washington65th Legislature2018Legislature2017 Regular SessionBy Senate Higher Education & Workforce Development (originally sponsored by Senators Frockt, Hasegawa, Carlyle, McCoy, Rolfes, Mullet, and Palumbo)READPalumboRead FIRSTfirst TIMEtime 01/19/18.AN01/11/17. ACT Relating to eligibility for state financial aid programs;

andReferred amendingto RCWCommittee 28B.118.010,on 28B.97.020,Higher 28B.145.030,Education.AN 28B.50.272,ACT 28B.92.060,Relating andto 28B.15.012.BEaligning ITeligibility ENACTEDfor BYthe THEcollege LEGISLATUREbound OFscholarship THEprogram STATEwith OFthe WASHINGTON:Sec. 1.  RCWstate 28B.118.010need andgrant 2017program; 3rd sp.s.

c 20 s 11 are each amended to read as follows:The office of student financial assistance shall design the Washington college bound scholarship program in accordance with this section and inamending alignment with the state need grant program in chapter 28B.92 RCW unless28B.118.010.BE otherwiseIT providedENACTED inBY thisTHE section.(1)LEGISLATURE "EligibleOF students"THE areSTATE thoseOF studentsWASHINGTON:Sec. 1.  RCW who:(a)28B.118.010 Qualifyand for2015 free3rd orsp.s. reduced-price lunches.

Ifc a36 students qualifies8 inare theeach seventhamended grade,to theread as follows:The office of student remainsfinancial eligibleassistance evenshall ifdesign the studentWashington doescollege notbound receivescholarship freeprogram orin reduced-priceaccordance luncheswith thereafter;(b)this Aresection dependentand pursuantin toalignment with the state need grant program in chapter 13.3428B.92 RCW and:(i)unless Inotherwise gradeprovided sevenin throughthis twelve;section.(1) "Eligible students" are those students who:(a) Qualify for free or reduced-price lunches.

or(ii)If Area betweenstudent qualifies in the agesseventh ofgrade, eighteenthe andstudent twenty-oneremains andeligible haveeven if the student does not graduatedreceive fromfree highor school;reduced-price lunches thereafter;

or(c)or(b) WereAre dependent pursuant to chapter 13.34 RCW andand:(i) wereIn adoptedgrade betweenseven thethrough agestwelve; of fourteen and eighteen with a negotiated adoption agreement that includes continued eligibility for the Washington state college bound scholarship program pursuant to RCW 74.13A.025.(2) Eligible students shall be notified of their eligibility for the Washington college bound scholarship program beginning in their seventh grade year.

or(ii) Are between the ages of eighteen and twenty-one and have not graduated from high school.(2) Eligible students shall be notified of their eligibility for the Washington college bound scholarship program beginning in their seventh grade year.

The pledge must be witnessed by a parent or guardian and forwarded to the office of student financial assistance by mail or electronically, as indicated on the pledge form.(b) A student eligible under subsection (1)(b) of this section shall be automatically enrolled, with no action necessary by the student or the student's family, and the enrollment form must be forwarded by the department of social and health services to the higher education coordinating board or its successor by mail or electronically, as indicated on the form.(4)(a) Scholarships shall be awarded to eligible students graduating from public high schools, approved private high schools under chapter 28A.195 RCW, or who received home-based instruction under chapter 28A.200 RCW.(b)(i) To receive the Washington college bound scholarship, a student must graduate with at least a "C" average from a public high school or an approved private high school under chapter 28A.195 RCW in Washington or have received home-based instruction under chapter 28A.200 RCW, must have no felony convictions, and must be a resident student as defined in RCW 28B.15.012(2) (a) through (((d))) (e).(ii) For eligible children as defined in subsection (1)(b) and (c) of this section, to receive the Washington college bound scholarship, a student must have received a high school equivalency certificate as provided in RCW 28B.50.536 or have graduated with at least a "C" average from a public high school or an approved private high school under chapter 28A.195 RCW in Washington or have received home-based instruction under chapter 28A.200 RCW, must have no felony convictions, and must be a resident student as defined in RCW 28B.15.012(2) (a) through (((d))) (e).For a student who does not meet the "C" average requirement, and who completes fewer than two quarters in the running start program, under chapter 28A.600 RCW, the student's first quarter of running start course grades must be excluded from the student's overall grade point average for purposes of determining their eligibility to receive the scholarship.(5) A student's family income will be assessed upon graduation before awarding the scholarship.(6) If at graduation from high school the student's family income does not exceed sixty-five percent of the state median family income, scholarship award amounts shall be as provided in this section.(a) For students attending two or four-year institutions of higher education as defined in RCW 28B.10.016, the value of the award shall be (i) the difference between the student's tuition and required fees, less the value of any state-funded grant, scholarship, or waiver assistance the student receives;

Any unused scholarship tuition units revert to the Washington college bound scholarship account.(12) Should the recipient terminate his or her enrollment for any reason during the academic year, the unused portion of the scholarship tuition units shall revert to the Washington college bound scholarship account.Sec. 2.  RCWaccount.--- 28B.97.020END and--- 2012 c 229 s 561 are each amended to read as follows:The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.(1) "Institution of higher education" means a college or university in the state of Washington that is accredited by an accrediting association recognized as such by rule of the student achievement council.(2) "Office" means the office of student financial assistance.(3) "Program" means the Washington higher education loan program.(4) "Resident student" has the definition in RCW 28B.15.012(2) (a) through (((d))) (e).Sec. 3.  RCW 28B.145.030 and 2014 c 208 s 3 are each amended to read as follows:(1) The program administrator, under contract with the council, shall staff the board and shall have the duties and responsibilities provided in this chapter, including but not limited to publicizing the program, selecting participants for the opportunity scholarship award, distributing opportunity scholarship awards, and achieving the maximum possible rate of return on investment of the accounts in subsection (2) of this section, while ensuring transparency in the investment decisions and processes.

Duties, exercised jointly with the board, include soliciting funds and setting annual fund-raising goals.

The program administrator shall be paid an administrative fee as determined by the board.(2) With respect to the opportunity scholarship program, the program administrator shall:(a) Establish and manage two separate accounts into which to receive grants and contributions from private sources as well as state matching funds, and from which to disburse scholarship funds to participants;(b) Solicit and accept grants and contributions from private sources, via direct payment, pledge agreement, or escrow account, of private sources for deposit into one or both of the two accounts created in this subsection (2)(b) in accordance with this subsection (2)(b):(i) The "scholarship account," whose principal may be invaded, and from which scholarships must be disbursed beginning no later than December 1, 2011, if, by that date, state matching funds in the amount of five million dollars or more have been received.

Thereafter, scholarships shall be disbursed on an annual basis beginning no later than May 1, 2012, and every October 1st thereafter;(ii) The "endowment account," from which scholarship moneys may be disbursed from earnings only in years when:(A) The state match has been made into both the scholarship and the endowment account;(B) The state appropriations for the state need grant under RCW 28B.92.010 meet or exceed state appropriations for the state need grant made in the 2011-2013 biennium, adjusted for inflation, and eligibility for state need grant recipients is at least seventy percent of state median family income;

and(C) The state has demonstrated progress toward the goal of total per-student funding levels, from state appropriations plus tuition and fees, of at least the sixtieth percentile of total per-student funding at similar public institutions of higher education in the global challenge states, as defined, measured, and reported in RCW 28B.15.068.

In any year in which the office of financial management reports that the state has not made progress toward this goal, no new scholarships may be awarded.

In any year in which the office of financial management reports that the percentile of total per-student funding is less than the sixtieth percentile and at least five percent less than the prior year, pledges of future grants and contributions may, at the request of the donor, be released and grants and contributions already received refunded to the extent that opportunity scholarship awards already made can be fulfilled from the funds remaining in the endowment account.

In fulfilling the requirements of this subsection, the office of financial management shall use resources that facilitate measurement and comparisons of the most recently completed academic year.

These resources may include, but are not limited to, the data provided in a uniform dashboard format under RCW 28B.77.090 as the statewide public four-year dashboard and academic year reports prepared by the state board for community and technical colleges;(iii) An amount equal to at least fifty percent of all grants and contributions must be deposited into the scholarship account until such time as twenty million dollars have been deposited into the account, after which time the private donors may designate whether their contributions must be deposited to the scholarship or the endowment account.

The board and the program administrator must work to maximize private sector contributions to both the scholarship account and the endowment account, to maintain a robust scholarship program while simultaneously building the endowment, and to determine the division between the two accounts in the case of undesignated grants and contributions, taking into account the need for a long-term funding mechanism and the short-term needs of families and students in Washington.

The first five million dollars in state match, as provided in RCW 28B.145.040, shall be deposited into the scholarship account and thereafter the state match shall be deposited into the two accounts in equal proportion to the private funds deposited in each account;

and(iv) Once moneys in the opportunity scholarship match transfer account are subject to an agreement under RCW 28B.145.050(5) and are deposited in the scholarship account or endowment account under this section, the state acts in a fiduciary rather than ownership capacity with regard to those assets.

Assets in the scholarship account and endowment account are not considered state money, common cash, or revenue to the state;(c) Provide proof of receipt of grants and contributions from private sources to the council, identifying the amounts received by name of private source and date, and whether the amounts received were deposited into the scholarship or the endowment account;(d) In consultation with the council and the state board for community and technical colleges, make an assessment of the reasonable annual eligible expenses associated with eligible education programs identified by the board;(e) Determine the dollar difference between tuition fees charged by institutions of higher education in the 2008-09 academic year and the academic year for which an opportunity scholarship is being distributed;(f) Develop and implement an application, selection, and notification process for awarding opportunity scholarships;(g) Determine the annual amount of the opportunity scholarship for each selected participant.

The annual amount shall be at least one thousand dollars or the amount determined under (e) of this subsection, but may be increased on an income-based, sliding scale basis up to the amount necessary to cover all reasonable annual eligible expenses as assessed pursuant to (d) of this subsection, or to encourage participation in baccalaureate degree programs identified by the board;(h) Distribute scholarship funds to selected participants.

Once awarded, and to the extent funds are available for distribution, an opportunity scholarship shall be automatically renewed as long as the participant annually submits documentation of filing both a free application for federal student aid (FAFSA) and for available federal education tax credits, including but not limited to the American opportunity tax credit, or if ineligible to apply for federal student aid, the participant annually submits documentation of filing a state financial aid application as approved by the office of student financial assistance;

and until the participant withdraws from or is no longer attending the program, completes the program, or has taken the credit or clock hour equivalent of one hundred twenty-five percent of the published length of time of the participant's program, whichever occurs first((, and as long as the participant annually submits documentation of filing both a free application for federal student aid and for available federal education tax credits, including but not limited to the American opportunity tax credit));

and(i) Notify institutions of scholarship recipients who will attend their institutions and inform them of the terms of the students' eligibility.(3) With respect to the opportunity expansion program, the program administrator shall:(a) Assist the board in developing and implementing an application, selection, and notification process for making opportunity expansion awards;

and(b) Solicit and accept grants and contributions from private sources for opportunity expansion awards.Sec. 4.  RCW 28B.50.272 and 2011 1st sp.s.

c 11 s 157 are each amended to read as follows:(1) To be eligible for participation in the opportunity grant program established in RCW 28B.50.271, a student must:(a) Be a Washington resident student as defined in RCW 28B.15.012 enrolled in an opportunity grant-eligible program of study;(b) Have a family income that is at or below two hundred percent of the federal poverty level using the most current guidelines available from the United States department of health and human services, and be determined to have financial need based on the free application for federal student aid (FAFSA), or if ineligible to apply for federal student aid, determined to have financial need by the office of student financial assistance based on a state financial aid application;

and(c) Meet such additional selection criteria as the college board shall establish in order to operate the program within appropriated funding levels.(2) Upon enrolling, the student must provide evidence of commitment to complete the program.

The student must make satisfactory progress and maintain a cumulative 2.0 grade point average for continued eligibility.

If a student's cumulative grade point average falls below 2.0, the student may petition the institution of higher education of attendance.

The qualified institution of higher education has the authority to establish a probationary period until such time as the student's grade point average reaches required standards.(3) Subject to funds appropriated for this specific purpose, public qualified institutions of higher education shall receive an enhancement of one thousand five hundred dollars for each full-time equivalent student enrolled in the opportunity grant program whose income is below two hundred percent of the federal poverty level.

The funds shall be used for individualized support services which may include, but are not limited to, college and career advising, tutoring, emergency child care, and emergency transportation.

The qualified institution of higher education is expected to help students access all financial resources and support services available to them through alternative sources.(4) The college board shall be accountable for student retention and completion of opportunity grant-eligible programs of study.

It shall set annual performance measures and targets and monitor the performance at all qualified institutions of higher education.

The college board must reduce funding at institutions of higher education that do not meet targets for two consecutive years, based on criteria developed by the college board.(5) The college board and office of student financial assistance shall work together to ensure that students participating in the opportunity grant program are informed of all other state and federal financial aid to which they may be entitled while receiving an opportunity grant.(6) The college board and office of student financial assistance shall document the amount of opportunity grant assistance and the types and amounts of other sources of financial aid received by participating students.

Annually, they shall produce a summary of the data.(7) The college board shall:(a) Begin developing the program no later than August 1, 2007, with student enrollment to begin no later than January 14, 2008;

and(b) Submit a progress report to the legislature by December 1, 2008.(8) The college board may, in implementing the opportunity grant program, accept, use, and expend or dispose of contributions of money, services, and property.

All such moneys received by the college board for the program must be deposited in an account at a depository approved by the state treasurer.

Only the college board or a duly authorized representative thereof may authorize expenditures from this account.

In order to maintain an effective expenditure and revenue control, the account is subject in all respects to chapter 43.88 RCW, but no appropriation is required to permit expenditure of moneys in the account.Sec. 5.  RCW 28B.92.060 and 2012 c 229 s 558 are each amended to read as follows:In awarding need grants, the office shall proceed substantially as follows: