(1) The board shall annually reserve funds for the body of students at each institution. The percentage of state need grant funds to be reserved equals the proportion of grant dollars needed to fund the eligible students who are enrolled, as reported on the interim/reconciliation report, at each school compared to the dollars needed to fund all state need grant eligible students enrolled in all participating schools.

(2) The board shall establish methods to reserve state need grant funds for:

(a) Former foster youth;

(b) Transfer students; and

(c) New institutions.