H-0503

AN ACT Relating to student scholarships; and adding a new chapter to Title 28B RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that it is of paramount importance to the state of Washington to encourage outstanding students to continue their higher education. By creating the community college conditional scholarship program, the legislature intends to assist the effort to retain students who have distinguished themselves through outstanding academic achievement in high school and students who can act as role models for children including those from lower economic or disadvantaged backgrounds. The legislature urges business, industry, and philanthropic community organizations to join with the state in making this program successful.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Conditional scholarship" means a loan that is forgiven in whole or in part if the recipient maintains the equivalent grade of at least a B average for each academic year in attendance at a community college or vocational school and completes their program of study at a community college within three years.

(2) "Community college" means a two-year college in the state of Washington which is accredited by an accrediting association and recognized as such by rule of the higher education coordination board.

(3) "Vocational school" means an institution that offers a vocational education as it is defined in RCW 28C.04.015.

(4) "Board" means the higher education coordinating board.

(5) "Eligible student" means a student who registers and completes at least twelve credit hours per academic quarter, or the equivalent, demonstrates achievement of at least the equivalent of a 3.0 grade point average for students entering a community college or vocational school directly from high school, is a needy student as defined in RCW 28B.10.802, and is a resident student as defined by RCW 28B.15.012 through 28B.15.015.

(6) "Forgiven" or "to forgive" or "forgiveness" means to complete a program at a community college or vocational school within three years with at least a 3.0 grade point average in lieu of repaying the loan.

(7) "Satisfied" means paid‑in‑full.

(8) "Participant" means an eligible student who has received a conditional scholarship under this chapter.

NEW SECTION. Sec. 3. The community college conditional scholarship program is established. The program shall be administered by the board. In administering the program, the board shall have the following powers and duties:

(1) Select students to receive conditional scholarships with the assistance of a screening committee composed of teachers and leaders in government, business, and education;

(2) Adopt rules and guidelines to implement this chapter;

(3) Publicize the program;

(4) Collect and manage repayments from students who do not meet their eligibility obligations under this chapter; and

(5) Solicit and accept grants and donations from public and private sources for the program.

NEW SECTION. Sec. 4. The board shall establish a planning committee to develop criteria for the screening and selection of recipients of the conditional scholarships. These criteria must emphasize factors demonstrating excellence including but not limited to superior scholastic achievement, leadership ability, community contributions, and the recipients must meet the definition of "needy student" under RCW 28B.10.802.

NEW SECTION. Sec. 5. The board may award conditional scholarships to eligible students from the funds appropriated to the board for this purpose, or from any private donations, or any other funds given to the board for this program. The amount of the conditional scholarship awarded an individual shall not exceed one thousand five hundred dollars per academic year. Students are eligible to receive conditional scholarships for a maximum of three years.

NEW SECTION. Sec. 6. (1) Participants in the conditional scholarship program incur an obligation to repay the conditional scholarship, with interest, unless they successfully complete each academic year and successfully complete their program of study within three years with at least the equivalent of a 3.0 grade point average.

(2) The terms of the repayment, including deferral of the interest, shall be consistent with the terms of the federal guaranteed loan program.

(3) The period for repayment shall be ten years, with payments accruing quarterly commencing nine months from the date the participant completes or discontinues the course of study.

(4) The entire principal and interest of the loan for each academic year shall be conditionally forgiven for that year for a participant who meets the requirements of subsection (1) of this section at the end of that academic year, or until the entire repayment obligation is satisfied. Should the participant stop attending a community college before the participant's loan is forgiven, payments on the unsatisfied portion of the principal and interest shall begin the next payment period and continue until the remainder of the participant's repayment obligation is satisfied.

(5) The board may defer payment requirements for a student in good standing who transfers to a four-year college or university and may continue to defer payments for two years or until the student graduates from the four-year college or university, whichever comes first. The board shall forgive the conditional loan, if the student graduates from the four-year college or university within two years of transferring from the community college.

(6) The board is responsible for collection of repayments made under this section and shall exercise due diligence in such collection, maintaining all necessary records to ensure that maximum repayments are made. Collection and servicing of repayments under this section shall be pursued using the full extent of the law, including wage garnishment if necessary, and shall be performed by entities approved for such servicing by the Washington student loan guaranty association or its successor agency. The board is responsible to forgive all or parts of such repayments under the criteria established in this section and shall maintain all necessary records of forgiven payments.

(7) Receipts from the payment of principal or interest or any other subsidies to which the board as administrator is entitled, which are paid by or on behalf of participants under this section, shall be deposited with the board and shall be used to cover the costs of granting the conditional scholarships, maintaining necessary records, and making collections under subsection (6) of this section. The board shall maintain accurate records of these costs, and all receipts beyond those necessary to pay such costs shall be used to grant conditional scholarships to eligible students.

NEW SECTION. Sec. 7. The board shall report to the legislature on the effectiveness of the conditional loan program for community and vocational school students by December 1, 1994.

NEW SECTION. Sec. 8. After consulting with the board, the governor may transfer the administration of this program to another agency with an appropriate educational mission.

NEW SECTION. Sec. 9. Sections 1 through 8 of this act shall constitute a new chapter in Title 28B RCW.

NEW SECTION. Sec. 10. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.