(1) All state four-year institutions of higher education shall be eligible for matching trust funds. Institutions may apply to the office for twenty-five thousand dollars from the fund when they can match the state funds with equal pledged or contributed private donations. These donations shall be made specifically to the graduate fellowship program, and shall be donated after July 1, 1987.
(2) Upon an application by an institution, the office may designate twenty-five thousand dollars from the trust fund for that institution's pledged graduate fellowship fund. If the pledged twenty-five thousand dollars is not received within two years, the office shall make the designated funds available for another pledged graduate fellowship fund.
(3) Once the private donation is received by the institution, the office shall ask the state treasurer to release the state matching funds to a local endowment fund established by the institution for the graduate fellowships.