1909-S2

AN ACT Relating to higher education fiscal matters; amending RCW 28B.15.005, 28B.15.041, 28B.15.066, 28B.15.067, 28B.15.070, 28B.15.076, 28B.15.740, and 28B.50.095; reenacting and amending RCW 28B.15.031 and 28B.15.820; adding new sections to chapter 28B.15 RCW; creating new sections; repealing RCW 28B.15.202, 28B.15.402, and 28B.15.502; providing effective dates; and declaring an emergency.

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

PART 1 - TUITION AND FEES

NEW SECTION. Sec. 101. A new section is added to chapter 28B.15 RCW to read as follows:

The legislature finds that Washington faces a challenge of increasingly daunting proportions as the state attempts to preserve enrollment opportunities for current and future students at the state's colleges and universities. The need to expand access is virtually unquestioned. The state's economy is undergoing a fundamental restructuring from one that was heavily dependent on natural resource-based industries to one that is more dependent on emerging technologies, international trade, and entrepreneurial enterprises. Washington residents need additional education and work force training opportunities to be competitive in this new world. Yet, in the twenty years from the middle 1970's to the middle 1990's, higher education's share of the state budget has declined from about twenty-one percent to about ten and one-half percent of the state general fund. During that same era, enrollments in Washington's public baccalaureate institutions have been strictly controlled, and enrollments in community colleges declined for a time. Currently, Washington ranks second to last nationally in the percentage of its citizens who have an opportunity to attend a public baccalaureate college or university in the state. As the children of the baby boom generation mature, high school graduates will increase fifty percent above the numbers of students graduating in 1995. The members of the baby boom echo generation will begin applying to college in about 1997. Their numbers are expected to peak in the year 2010. Failure to provide postsecondary education and training opportunities for the members of the baby boom echo generation may well restrict their future earning power and constrict the state's opportunity to compete in a technologically complex world.

The legislature intends to preserve enrollment opportunities for current students and create additional opportunities for future students by restructuring the state's tuition and financial aid systems, working with institutions to decrease the amount of time it takes students to obtain a degree, and removing state laws that impede institutional effectiveness.

NEW SECTION. Sec. 102. TUITION FEES--UNIVERSITY OF WASHINGTON AND WASHINGTON STATE UNIVERSITY--BUILDING FEES. Total tuition fees for full-time students at the University of Washington and Washington State University for other than the summer term shall be as follows:

(1) Base tuition. Except as provided in subsection (2) of this section, base tuition fees shall be calculated as a percent of the per student undergraduate or graduate educational costs at the state universities as set forth in (a) through (f) of this subsection. However, if educational costs decrease, or increase at a rate less than four percent over the previous year's educational costs, base tuition fees shall increase a minimum of four percent each year above the tuition fees rate charged the previous year. If educational costs increase at a rate greater than six percent over the previous academic year's educational costs, base tuition fees shall increase a maximum of six percent each academic year above the tuition fees rate charged the previous year. The following calculations shall be used to determine base tuition under this section:

(a) For resident undergraduate students and all other resident students not in first professional, graduate, or law programs: Forty-one percent of undergraduate educational costs;

(b) For nonresident undergraduate students and all other nonresident students not in graduate or law programs: One hundred twenty-three percent of undergraduate educational costs;

(d) For nonresident graduate and law students: Seventy-four percent of graduate educational costs;

(e) For resident first professional students: One hundred sixty-seven percent of the tuition fees charged to resident graduate and law students; and

(f) For nonresident first professional students: One hundred sixty-seven percent of the tuition fees charged to nonresident graduate and law students.

(2) For the 1995-96 and 1996-97 academic years, base tuition fees for resident undergraduate students and all other resident students not enrolled in first professional, graduate, or law programs shall increase five percent each year above the rate charged during the previous academic year. For the 1995-96 and 1996-97 academic years, base tuition fees for all other students shall increase five percent each year above the rate charged during the previous academic year to students in the same tuition categories.

(3) Surcharge tuition. State universities may annually assess a surcharge in addition to base tuition fees. The amount of the surcharge assessed in any year shall not be included in base tuition fees in the next academic year. In any academic year, the maximum percentage surcharge levied on base tuition shall be as follows:

(a) For full-time resident undergraduate students and other full-time resident students not in first professional, graduate, or law programs, a maximum of ten percent. A surcharge under this subsection (3)(a) shall not be levied before the 1997-98 academic year;

(b) For full-time resident first professional, graduate, and law students, a maximum of twenty percent in each tuition category; and

(4) Building fees. The building fees for each academic year shall be based on the percent, as set forth in (a) through (f) of this subsection, of tuition fees specified in subsections (1) and (2) of this section:

(a) Resident undergraduate students and all other resident students not in graduate study or law programs or enrolled in programs leading to a first professional degree: Five percent;

(b) Nonresident undergraduate students and all other nonresident students not in graduate study or law programs or enrolled in programs leading to a first professional degree: Four and one-half of one percent;

(d) Nonresident graduate and law students not enrolled in a first professional degree program: Three and one-half of one percent;

(e) Resident first professional students: Five percent; and

(f) Nonresident first professional students: Three percent.

(5) As used in this section, "tuition category" means the separate tuition fees categories established in subsection (1) (a) through (f) of this section.

NEW SECTION. Sec. 103. TUITION FEES--REGIONAL UNIVERSITIES--BUILDING FEES. Tuition fees charged to all full-time students at the regional universities for other than the summer term shall be as follows:

(1) Base tuition. Except as provided in subsection (2) of this section, base tuition fees shall be calculated as a percent of the per student undergraduate or graduate educational costs at the regional universities as set forth in (a) through (d) of this subsection. However, if educational costs decrease, or increase at a rate less than four percent over the previous year's educational costs, base tuition fees shall increase a minimum of four percent each year above the tuition fees rate charged the previous year. If educational costs increase at a rate greater than six percent over the previous academic year's educational costs, base tuition fees shall increase a maximum of six percent each academic year above the tuition fees rate charged the previous year. The following calculations shall be used to determine base tuition under this section:

(a) Resident undergraduate students and all other resident students not in graduate study programs: Thirty-one and one-half of one percent of undergraduate educational costs;

(b) Nonresident undergraduate students and all other nonresident students not in graduate study programs: One hundred twenty-three percent of undergraduate educational costs;

(d) Nonresident graduate students: Ninety-two percent of graduate educational costs.

(2) For the 1995-96 and 1996-97 academic years, base tuition fees for resident undergraduate students and all other resident students not enrolled in graduate programs shall increase five percent each year above the rate charged during the previous academic year. For the 1995-96 and 1996-97 academic years, base tuition fees for all other students shall increase five percent each year above the rate charged during the previous academic year to students in the same tuition categories.

(3) Surcharge tuition. The regional universities may annually assess a surcharge in addition to base tuition fees. The amount of the surcharge assessed in any year shall not be included in base tuition fees in the next academic year. In any academic year, the maximum percentage surcharge levied on base tuition shall be as follows:

(a) For full-time resident undergraduate students and other full-time resident students not in graduate programs, a maximum of ten percent. A surcharge under this subsection (3)(a) shall not be levied before the 1997-98 academic year;

(b) For full-time resident graduate students, a maximum of twenty percent; and

(4) Building fees. The building fees for each academic year shall be based on the percent, as set forth in (a) through (d) of this subsection, of base tuition fees specified in subsections (1) and (2) of this section:

(a) Resident undergraduate students and all other resident students not in graduate study programs: Four percent;

(b) Nonresident undergraduate students and all other nonresident students not in graduate study programs: Four percent;

(d) Nonresident graduate students: Three percent.

(5) As used in this section, "tuition category" means the separate tuition fees categories established in subsection (1) (a) through (d) of this section.

NEW SECTION. Sec. 104. TUITION FEES--THE EVERGREEN STATE COLLEGE‑-BUILDING FEES. Tuition fees charged to all full-time students at The Evergreen State College for other than the summer term shall be as follows:

(1) Base tuition. Base tuition fees shall be calculated as a percent of the per student undergraduate or graduate educational costs at The Evergreen State College as set forth in (a) through (d) of this subsection. However, beginning with the 1996-97 academic year, if educational costs decrease, or increase at a rate less than four percent over the previous year's educational costs, base tuition fees shall increase a minimum of four percent each year above the tuition fees rate charged the previous year. Beginning with the 1996-97 academic year, if educational costs increase at a rate greater than six percent over the previous academic year's educational costs, base tuition fees shall increase a maximum of six percent each academic year above the tuition fees rate charged the previous year. The following calculations shall be used to determine base tuition under this section:

(a) Resident undergraduate students and all other resident students not in graduate study programs: Thirty-two percent of undergraduate educational costs;

(b) Nonresident undergraduate students and all other nonresident students not in graduate study programs: One hundred sixteen percent of undergraduate educational costs;

(d) Nonresident graduate students: One hundred forty-five and one-half of one percent of graduate educational costs.

(2) Surcharge tuition. Beginning in the 1997-98 academic year, The Evergreen State College may annually assess a surcharge in addition to base tuition fees. The amount of the surcharge assessed in any year shall not be included in base tuition fees the next year. In any academic year, the maximum percentage surcharge levied on base tuition shall be as follows:

(a) For full-time resident undergraduate students and other full-time resident students not in graduate programs, a maximum of ten percent;

(b) For full-time resident graduate students, a maximum of twenty percent; and

(3) Building fees. The building fees for each academic year shall be based on the percent, as set forth in (a) through (d) of this subsection, of base tuition fees specified in subsection (1) of this section:

(a) Resident undergraduate students and all other resident students not in graduate study programs: Four percent;

(b) Nonresident undergraduate students and all other nonresident students not in graduate study programs: Four percent;

(d) Nonresident graduate students: Three percent.

(4) As used in this section, "tuition category" means the separate tuition fees categories established in subsection (1) (a) through (d) of this section.

NEW SECTION. Sec. 105. TUITION FEES--COMMUNITY COLLEGES--BUILDING FEES. Total tuition fees at each community college for full-time students for other than the summer term shall be set by the state board for community and technical colleges as follows:

(1) Base tuition. Except as provided in subsection (2) of this section, base tuition fees shall be calculated as a percent of the per student undergraduate or graduate educational costs at the community colleges as set forth in (a) and (b) of this subsection. However, if educational costs decrease, or increase at a rate less than four percent over the previous year's educational costs, base tuition fees shall increase a minimum of four percent each year above the tuition fees rate charged the previous year. If educational costs increase at a rate greater than six percent over the previous academic year's educational costs, base tuition fees shall increase a maximum of six percent each academic year above the tuition fees rate charged the previous year. The following calculations shall be used to determine base tuition under this section:

(a) Resident students: Twenty-nine percent of undergraduate educational costs; and

(b) Nonresident students: One hundred twenty-three percent of undergraduate educational costs.

(2) For the 1995-96 and 1996-97 academic years, base tuition fees for resident students shall increase five percent each year above the rate charged during the previous academic year. For the 1995-96 and 1996-97 academic years, base tuition fees for nonresident students shall increase five percent each year above the rate charged during the previous academic year.

(3) Surcharge tuition. The community colleges may annually assess a surcharge in addition to base tuition fees. The amount of the surcharge assessed in any year shall not be included in base tuition fees in the next academic year. The amount of any surcharge is subject to guidelines adopted by the state board for community and technical colleges. In adopting its guidelines, the board shall consider the special needs of individual colleges within the system as well as the system as a whole. The board may permit surcharge amounts to vary among colleges. In any academic year, the maximum percentage surcharge levied on base tuition shall be as follows:

(a) For full-time resident students, a maximum of ten percent. A surcharge under this subsection (3)(a) shall not be levied before the 1997-98 academic year; and

(b) For full-time nonresident students, a maximum of thirty percent.

(4) Building fees. The building fees for each academic year shall be based on the percent, as set forth in (a) and (b) of this subsection, of tuition fees specified in subsections (1) and (2) of this section:

(a) Resident students: Eleven percent; and

(b) Nonresident students: Eight and one-half of one percent.

NEW SECTION. Sec. 106. A new section is added to chapter 28B.15 RCW to read as follows:

Each state university, regional university, and state college may charge a differential program fee in up to three degree programs. The basis for determining the fee may be: Higher than average costs of offering the program, differential tuition rates charged for that type of program at peer institutions, or other unique characteristics associated with the program.

NEW SECTION. Sec. 107. A new section is added to chapter 28B.15 RCW to read as follows:

It is the policy of the state of Washington that each state university, regional university, and state college, and the community and technical college system as a whole maintain or improve the percentage that resident students comprised of total budgeted full-time equivalent enrollments during the 1994-95 academic year. It is also the policy of the state of Washington that state general fund support for full-time equivalent students be used for resident students and for only those nonresident students who are within the percentage that nonresident students comprised of the budgeted full-time equivalent enrollment at each institution during the 1994-95 academic year. Additional nonresident students may be included above the budgeted enrollment level, at the option of the institution.

NEW SECTION. Sec. 108. A new section is added to chapter 28B.15 RCW to read as follows:

(1) As used in this section, "excess credit" means any credit taken by a resident undergraduate student or a resident student who is not enrolled in a first professional, graduate, or law program and who is attending a state university, regional university, or The Evergreen State College, if the student:

(a) Does not meet the requirements of (b) or (c) of this subsection but has accumulated more than one hundred fifteen percent of the number of credits required to complete the student's baccalaureate degree program; or

(b) Has an associate degree from a community college and has accumulated more than one hundred twenty-five percent of the number of credits required to complete the student's baccalaureate degree program; or

(c) Has accumulated more than forty-five quarter credits or their equivalent at a college or university other than a state university, regional university, or state college, each as defined in RCW 28B.10.016 and has accumulated more than one hundred twenty-five percent of the number of credits required to complete the student's baccalaureate degree program.

(2)(a) Except as provided in (b) of this subsection, state universities, regional universities, and The Evergreen State College may collect a surcharge from any resident student who is enrolled for excess credits. The amount of the surcharge may vary by credit or percentage thresholds, or may be based on special circumstances, each as established by the institution.

(b) Students who are required to take continuing education credits as a condition of licensure or state law shall be exempted from the excess credits surcharge for any credits taken as a result of the requirements.

(c) With the exception of students who are required to take continuing education credits as a condition of licensure or state law, no state general fund support shall be provided at state universities, regional universities, and The Evergreen State College for resident undergraduate students and other resident students not enrolled in first professional, graduate, or law programs if the students have accumulated more than one hundred fifty percent of the number of credits necessary to complete their baccalaureate degree programs.

Sec. 109. RCW 28B.15.005 and 1977 ex.s. c 169 s 33 are each amended to read as follows:

(1) "Colleges and universities" for the purposes of this chapter shall mean Central Washington University at Ellensburg, Eastern Washington University at Cheney, Western Washington University at Bellingham, The Evergreen State College in Thurston county, community colleges as are provided for in chapter 28B.50 RCW, the University of Washington, and Washington State University.

(2) "State universities" for the purposes of this chapter shall mean the University of Washington and Washington State University.

(3) "Regional universities" for the purposes of this chapter shall mean Central Washington University, Eastern Washington University and Western Washington University.

(4) "State college" means The Evergreen State College.

(5) "First professional program" means a program leading to one of the following degrees: Doctor of medicine, doctor of dental surgery, or doctor of veterinary medicine.

Sec. 110. RCW 28B.15.031 and 1993 sp.s. c 18 s 6 and 1993 c 379 s 201 are each reenacted and amended to read as follows:

The term "operating fees" as used in this chapter shall include the fees, other than building fees, charged all students registering at the state's colleges and universities but shall not include fees surcharges for excess credits under section 108 of this act, program fees under section 106 of this act, or fees for short courses, self-supporting degree credit programs and courses, marine station work, experimental station work, correspondence or extension courses, and individual instruction and student deposits or rentals, disciplinary and library fines, which colleges and universities shall have the right to impose, laboratory, gymnasium, health, and student activity fees, or fees, charges, rentals, and other income derived from any or all revenue producing lands, buildings and facilities of the colleges or universities heretofore or hereafter acquired, constructed or installed, including but not limited to income from rooms, dormitories, dining rooms, hospitals, infirmaries, housing or student activity buildings, vehicular parking facilities, land, or the appurtenances thereon, or such other special fees as may be established by any college or university board of trustees or regents from time to time. All moneys received as operating fees at any institution of higher education shall be deposited in a local account containing only operating fees revenue and related interest((~~: PROVIDED, That two and one-half percent of operating fees shall be retained by the institutions, except the technical colleges, for the purposes of~~)), except as provided in RCW 28B.15.820. Local operating fee accounts shall not be subject to appropriation by the legislature or allotment procedures under chapter 43.88 RCW.

Sec. 111. RCW 28B.15.041 and 1985 c 390 s 14 are each amended to read as follows:

(1) The term "services and activities fees" as used in this chapter is defined to mean fees, other than tuition fees, charged to all students registering at the state's community colleges, regional universities, The Evergreen State College, and state universities.

(2) Services and activities fees shall be used as otherwise provided by law or by rule ((~~or regulation~~)) of the board of trustees or regents of each of the state's community colleges, The Evergreen State College, the regional universities, or the state universities for the express purpose of funding student activities and programs of their particular institution.

(3) Student activity fees, student use fees, student building use fees, special student fees, or other similar fees charged to all full time students, or to all students, as the case may be, registering at the state's colleges or universities and pledged for the payment of bonds heretofore or hereafter issued for, or other indebtedness incurred to pay, all or part of the cost of acquiring, constructing or installing any lands, buildings, or facilities of the nature described in RCW 28B.10.300 as now or hereafter amended, shall be included within and deemed to be services and activities fees.

(4) The governing boards of each of the colleges and universities shall charge to and collect from each student a services and activities fee. Each governing board may increase the existing fee annually, consistent with budgeting procedures set forth in RCW 28B.15.045, by a percentage increase not to exceed the percentage increase in resident undergraduate tuition fees. The percentage increase shall not apply to that portion of the services and activities fee previously committed to the repayment of bonded debt. The services and activities fee committee provided for in RCW 28B.15.045 may initiate a request to the governing board for a fee increase.

(5) Services and activities fees consistent with subsection (4) of this section shall be set by the state board for community and technical colleges for summer school students unless the community college charges fees in accordance with RCW 28B.15.515.

Sec. 112. RCW 28B.15.066 and 1993 c 379 s 205 are each amended to read as follows:

It is the intent of the legislature that:

In making appropriations from the state's general fund to institutions of higher education, each appropriation shall conform to the following:

(1) The appropriation shall be reduced by the amount of operating fees revenue estimated to be collected from students enrolled at the state-funded enrollment level specified in the omnibus biennial operating appropriations act and the estimated interest on operating fees revenue, minus obligations under RCW 28B.15.820 and 43.99I.040, minus any revenue an institution may have raised by assessing a tuition fees surcharge as permitted in sections 102(3), 103(3), 104(2), and 105(3) of this act and minus the amount of waived operating fees authorized under RCW 28B.15.910;

(2) The appropriation shall not be reduced by the amount of operating fees revenue collected from students enrolled above the state-funded level, but within the over-enrollment limitations, specified in the omnibus biennial operating appropriations act; ((~~and~~))

(3) The general fund state appropriation shall not be reduced by the amount of operating fees revenue collected as a result of waiving less operating fees revenue than the amounts authorized under RCW 28B.15.910; and

(4) The general fund state appropriation shall not be reduced by the amount of revenue collected from tuition fees surcharges authorized under sections 102(3), 103(3), 104(2), and 105(3) of this act.

Sec. 113. RCW 28B.15.067 and 1992 c 231 s 4 are each amended to read as follows:

(1) Base tuition fees shall be established and adjusted annually under the provisions of this chapter beginning with the 1987‑88 academic year. Such fees shall be identical, subject to other provisions of this chapter, for students enrolled at either state university, for students enrolled at the regional universities ((~~and~~)), for students enrolled at The Evergreen State College, and for students enrolled at any community college. Base tuition fees shall reflect the undergraduate and graduate educational costs of the state universities, the regional universities, The Evergreen State College, and the community colleges, respectively, in ((~~the amounts prescribed in~~)) accordance with the provisions of this chapter.

(2) The total tuition fees established under this chapter shall not apply to high school students enrolling in community colleges under RCW 28A.600.300 through 28A.600.395.

Sec. 114. RCW 28B.15.070 and 1992 c 231 s 5 are each amended to read as follows:

(1) The higher education coordinating board, in consultation with the house of representatives and senate committees responsible for higher education, the respective fiscal committees of the house of representatives and senate, the office of financial management, and the state institutions of higher education, shall develop by December of every fourth year beginning in 1989, definitions, criteria, and procedures for determining the undergraduate and graduate educational costs for the state universities, regional universities, state college, and community colleges upon which tuition fees will be based.

(2) Every four years, the state institutions of higher education in cooperation with the higher education coordinating board shall perform an educational cost study pursuant to subsection (1) of this section. The study shall be conducted based on every fourth academic year beginning with 1989‑90. Institutions shall complete the studies within one year of the end of the study year and report the results to the higher education coordinating board for consolidation, review, and distribution.

(3) In order to conduct the study required by subsection (2) of this section, the higher education coordinating board, in cooperation with the institutions of higher education, shall develop a methodology that requires the collection of comparable educational cost data, which utilizes a faculty activity analysis or similar instrument.

Sec. 115. RCW 28B.15.076 and 1989 c 245 s 4 are each amended to read as follows:

The higher education coordinating board shall determine and transmit amounts constituting approved undergraduate and graduate educational costs to the several boards of regents and trustees of the state institutions of higher education by November 10 of each even-numbered year except the year 1990 for which the transmittal shall be made by December 17. Base tuition fees shall be based on such costs in accordance with the provisions of this chapter.

NEW SECTION. Sec. 116. A new section is added to chapter 28B.15 RCW to read as follows:

Subject to the limitations of RCW 28B.15.910, the governing board of each community college may charge such fees for ungraded courses, noncredit courses, community service courses, and self-supporting courses as it, in its discretion, determines, consistent with the rules of the state board for community and technical colleges.

PART 2 - FINANCIAL AID

Sec. 201. RCW 28B.15.740 and 1993 sp.s. c 18 s 28 are each amended to read as follows:

(1) Subject to the limitations of RCW 28B.15.910, the governing boards of the state universities, the regional universities, The Evergreen State College, and the community colleges may waive all or a portion of tuition and fees ((~~subject to the following restrictions:~~

(1) Except as provided in subsection (2) of this section, the total dollar amount of tuition and fee waivers awarded by the governing boards shall not exceed four percent, except for the community colleges considered as a whole, such amount shall not exceed three percent of an amount determined by estimating the total collections from tuition and services and activities fees had no such waivers been made, and deducting the portion of that total amount that is attributable to the difference between resident and nonresident fees: PROVIDED, That at least three-fourths of the dollars waived shall be)) for needy students who are eligible for resident tuition and fee rates pursuant to RCW 28B.15.012 and 28B.15.013((~~: PROVIDED FURTHER, That the remainder of the dollars waived, not to exceed one-fourth of the total, may be applied to~~)). Subject to the limitations of RCW 28B.15.910, the governing boards of the state universities, the regional universities, The Evergreen State College, and the community colleges may waive all or a portion of tuition and fees for other students at the discretion of the governing boards, except on the basis of participation in intercollegiate athletic programs((~~: PROVIDED FURTHER, That the waivers for undergraduate and graduate students of foreign nations under RCW 28B.15.556 are not subject to the limitation under this section~~)), not to exceed three-fourths of one percent of gross authorized operating fees revenue under RCW 28B.15.910 for the community colleges considered as a whole and not to exceed one percent of gross authorized operating fees revenue for the other institutions of higher education.

(2) In addition to the tuition and fee waivers provided in subsection (1) of this section and subject to the provisions of RCW 28B.15.455 ((~~and~~)), 28B.15.460, and 28B.15.910, a total dollar amount of tuition and fee waivers awarded by any state university, regional university, or state college under this chapter, not to exceed one percent, as calculated in subsection (1) of this section, may be used for the purpose of achieving or maintaining gender equity in intercollegiate athletic programs. At any institution that has an underrepresented gender class in intercollegiate athletics, any such waivers shall be awarded:

(a) First, to members of the underrepresented gender class who participate in intercollegiate athletics, where such waivers result in saved or displaced money that can be used for athletic programs for the underrepresented gender class. Such saved or displaced money shall be used for programs for the underrepresented gender class; and

(b) Second, (i) to nonmembers of the underrepresented gender class who participate in intercollegiate athletics, where such waivers result in saved or displaced money that can be used for athletic programs for members of the underrepresented gender class. Such saved or displaced money shall be used for programs for the underrepresented gender class; or (ii) to members of the underrepresented gender class who participate in intercollegiate athletics, where such waivers do not result in any saved or displaced money that can be used for athletic programs for members of the underrepresented gender class.

Sec. 202. RCW 28B.15.820 and 1993 c 385 s 1 and 1993 c 173 s 1 are each reenacted and amended to read as follows:

(1) Each institution of higher education, except technical colleges, shall deposit a minimum of two and one-half percent of revenues collected from tuition and services and activities fees in an institutional financial aid fund that is hereby created and which shall be held locally. Moneys in the fund shall be used only for the following purposes: (a) To make guaranteed long-term loans to eligible students as provided in subsections (3) through (8) of this section; (b) to make short-term loans as provided in subsection (9) of this section; or (c) to provide financial aid to needy students as provided in subsection (10) of this section.

(2) An "eligible student" for the purposes of subsections (3) through (8) and (10) of this section is a student registered for at least six credit hours or the equivalent, who is eligible for resident tuition and fee rates as defined in RCW 28B.15.012 through 28B.15.013, and who is a "needy student" as defined in RCW 28B.10.802.

(3) The amount of the guaranteed long-term loans made under this section shall not exceed the demonstrated financial need of the student. Each institution shall establish loan terms and conditions which shall be consistent with the terms of the guaranteed loan program established by 20 U.S. Code Section 1071 et seq., as now or hereafter amended. All loans made shall be guaranteed by the Washington student loan guaranty association or its successor agency. Institutions are hereby granted full authority to operate as an eligible lender under the guaranteed loan program.

(4) Before approving a guaranteed long-term loan, each institution shall analyze the ability of the student to repay the loan based on factors which include, but are not limited to, the student's accumulated total education loan burdens and the employment opportunities and average starting salary characteristics of the student's chosen fields of study. The institution shall counsel the student on the advisability of acquiring additional debt, and on the availability of other forms of financial aid.

(5) Each institution is responsible for collection of guaranteed long-term loans made under this section and shall exercise due diligence in such collection, maintaining all necessary records to insure that maximum repayments are made. Institutions shall cooperate with other lenders and the Washington student loan guaranty association, or its successor agency, in the coordinated collection of guaranteed loans, and shall assure that the guarantability of the loans is not violated. Collection and servicing of guaranteed long-term loans under this section shall be performed by entities approved for such servicing by the Washington student loan guaranty association or its successor agency: PROVIDED, That institutions be permitted to perform such servicing if specifically recognized to do so by the Washington student loan guaranty association or its successor agency. Collection and servicing of guaranteed long-term loans made by community colleges under subsection (1) of this section shall be coordinated by the state board for community and technical colleges and shall be conducted under procedures adopted by the state board.

(6) Receipts from payment of interest or principal or any other subsidies to which institutions as lenders are entitled, that are paid by or on behalf of borrowers of funds under subsections (3) through (8) of this section, shall be deposited in each institution's financial aid fund and shall be used to cover the costs of making the guaranteed long-term loans under this section and maintaining necessary records and making collections under subsection (5) of this section: PROVIDED, That such costs shall not exceed five percent of aggregate outstanding loan principal. Institutions shall maintain accurate records of such costs, and all receipts beyond those necessary to pay such costs, shall be deposited in the institution's financial aid fund.

(7) The governing boards of the state universities, the regional universities, and The Evergreen State College, and the state board for community and technical colleges, on behalf of the community colleges, shall each adopt necessary rules and regulations to implement this section.

(8) First priority for any guaranteed long-term loans made under this section shall be directed toward students who would not normally have access to educational loans from private financial institutions in Washington state, and maximum use shall be made of secondary markets in the support of loan consolidation.

(9) Short-term loans, not to exceed one year, may be made from the institutional financial aid fund to students enrolled in the institution. No such loan shall be made to any student who is known by the institution to be in default or delinquent in the payment of any outstanding student loan. A short-term loan may be made only if the institution has ample evidence that the student has the capability of repaying the loan within the time frame specified by the institution for repayment.

(10) Any moneys deposited in the institutional financial aid fund that are not used in making long-term or short-term loans may be used by the institution for locally-administered financial aid programs for needy students, such as need-based institutional employment programs or need-based tuition and fee scholarship or grant programs. These funds shall be used in addition to and not to replace institutional funds that would otherwise support these locally-administered financial aid programs. First priority in the use of these funds shall be given to needy students who have accumulated excessive educational loan burdens. An excessive educational loan burden is a burden that will be difficult to repay given employment opportunities and average starting salaries in the student's chosen fields of study. Second priority in the use of these funds shall be given to needy single parents, to assist these students with their educational expenses, including expenses associated with child care and transportation.

NEW SECTION. Sec. 203. It is the intent of the legislature to restructure the state's system of financial aid. Funding levels for the state's system of financial aid are subject to available funds. The restructured financial aid system shall be known as college promise. In designing college promise, the higher education coordinating board shall follow these goals:

(1) For all need-based financial aid programs under RCW 28B.10.790 through 28B.10.824 and chapters 28B.12 and 28B.101 RCW:

(a) Through a mix of federal, state, and other resources:

(i) Limit the debt of an undergraduate student to no more than one-half of a student's cost of attendance; and

(ii) Provide more self-help opportunities than grant aid to middle-income students, and approximately equal amounts of self-help opportunities and grant aid to low-income and lower middle-income students. Self-help opportunities include work-study and loans;

(b) In determining eligibility for state financial aid programs, shelter home equity on a family's principal place of residence, and shelter a reasonable portion of savings and farm or business net worth, each insofar as is permissible under state and federal law;

(d) Strive to preserve a range of educational options for needy students, including choice of institutions and programs;

(e) Recognize otherwise unfunded equipment and assistance needed to reasonably accommodate students with disabilities; and

(f) Deliver clear and timely information to current and future postsecondary students about the costs of attending college and available financial aid.

(2) For the state need grant program under RCW 28B.10.790 through 28B.10.824: As funds are available, expand the program to include new populations of resident students in the following priority order, ensuring that undergraduate students with the most demonstrated financial need receive full grants before less needy students receive any grant:

(a) Low-income undergraduates;

(b) Lower middle-income undergraduates;

(d) Resident graduate and professional students, following the income priorities established for undergraduate students.

(3) For the state work-study program under chapter 28B.12 RCW: Increase employment opportunities including off-campus job opportunities with off-campus community service employers.

NEW SECTION. Sec. 204. (1) By January 1, 1997, the higher education coordinating board, in consultation with the house of representatives and senate higher education and fiscal committees, and the institutions of higher education, shall develop a detailed implementation plan for college promise. In preparing the plan, the board shall follow the goals and priorities set forth in section 203 of this act. The plan shall include, but not be limited to:

(a) Specific program eligibility measures;

(b) Estimates of how many state residents would be eligible for assistance in the state need grant and state work-study programs under the goals adopted in section 203 of this act;

(c) Estimates of the costs for each state financial aid program, including the state need grant program under RCW 28B.10.790 through 28B.10.824; the state work-study program under chapter 28B.12 RCW; and the educational opportunity grant program under chapter 28B.101 RCW to accommodate any new aid applicants estimated under (b) of this subsection, as offset by nonstate sources of aid.

(2) The plan shall be deemed approved on June 30, 1997, unless legislation is enacted to alter the policies set forth in the plan. The board shall also propose to the legislature any changes to the laws governing state financial aid programs that it deems necessary to accomplish the purposes of college promise.

PART 3 - MISCELLANEOUS

Sec. 301. RCW 28B.50.095 and 1991 c 238 s 36 are each amended to read as follows:

In addition to other powers and duties, the college board may issue rules ((~~and regulations~~)) permitting a student to register at more than one community and technical college, provided that such student shall pay tuition and fees as if the student were registered at a single college, but not to exceed tuition and fees charged a full-time student as established ((~~by RCW 28B.15.502~~)) under chapter 28B.15 RCW.

NEW SECTION. Sec. 302. The following acts or parts of acts are each repealed:

(1) RCW 28B.15.202 and 1993 sp.s. c 18 s 8, 1993 c 379 s 202, 1992 c 231 s 7, 1985 c 390 s 19, 1982 1st ex.s. c 37 s 18, & 1981 c 257 s 6;

(2) RCW 28B.15.402 and 1993 sp.s. c 18 s 11, 1993 c 379 s 203, 1992 c 231 s 10, 1989 c 245 s 1, 1985 c 390 s 24, 1982 1st ex.s. c 37 s 19, & 1981 c 257 s 7; and

(3) RCW 28B.15.502 and 1993 sp.s. c 18 s 12, 1993 c 379 s 204, 1992 c 231 s 11, 1991 c 353 s 2, 1985 c 390 s 25, 1982 1st ex.s. c 37 s 10, & 1981 c 257 s 8.

NEW SECTION. Sec. 303. Captions and part headings used in this act do not constitute any part of the law.

NEW SECTION. Sec. 304. Sections 101 through 116, 201, 202, 204, and 301 through 303 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1995.

NEW SECTION. Sec. 305. Section 203 of this act shall take effect July 1, 1997.

NEW SECTION. Sec. 306. 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.