BP BHEAD INT S

AN ACT Relating to financial aid; adding a new section to chapter 28B.10 RCW; and adding a new chapter to Title 28B RCW.

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

NEW SECTION. Sec. 1. It is the intent of the legislature to restructure and fully fund the state's system of financial aid, however, 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.

NEW SECTION. Sec. 2. (1) The higher education coordinating board shall restructure the state's financial aid programs into a comprehensive and coordinated system of assistance known as college promise. College promise shall expand and modify three existing programs for needy students: 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. In addition, college promise may include a demonstration project to assist needy students whose parents did not complete a degree or certificate from an institution of higher education. College promise shall be implemented beginning in the 1998-99 academic year.

(2) By January 1, 1998, 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 sections 3 and 4 of this act. The plan shall include, but not be limited to:

(a) Specific program eligibility measures and application procedures for the new populations of state financial aid recipients identified in section 3 of this act;

(b) Specific need analysis criteria and asset protection allowances;

(c) Estimates of how many state residents, both those who are currently enrolled in a college or university, and those not currently enrolled, would be eligible and would apply for aid under the expanded eligibility criteria identified in section 3 of this act. The estimates, developed in consultation with the office of financial management, the office of the superintendent of public instruction, and other agencies as appropriate, shall take into account state economic and demographic factors and other appropriate information;

(d) Estimates of where the new aid applicants identified under (c) of this subsection would choose to enroll by type of institution and level of program; and

(e) 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 (c) of this subsection, as offset by nonstate sources of aid. Separate cost estimates shall be made for each of the new aid populations identified under section 3 of this act.

(3) It is the intent of the legislature that the cost estimates completed under subsection (2) of this section shall be the basis for recommending funding levels for state financial aid programs for the 1998-99 academic year and each biennium thereafter.

(4) The methodologies used to estimate costs under subsection (2) of this section shall be used for the annual cost estimates required under section 5 of this act.

(5) The plan completed under subsection (2) of this section shall be deemed approved on June 30, 1998, 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.

NEW SECTION. Sec. 3. In restructuring the state's financial aid programs, 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.

(4) For students whose parents did not complete a higher education degree or certificate: Determine the feasibility of providing grants to needy first generation scholars.

NEW SECTION. Sec. 4. In implementing the goals for expanding financial aid to needy undergraduate students, the board shall be guided by the following matrix. The matrix defines income levels, and for each level, the funding priority, and the assistance mix goal. Income levels shall be adjusted annually for family size and changes in the state's median income. It is the intent of the legislature these goals not impair the ability of financial aid officers to adjust aid packages to meet the needs of students. However, it is the further intent of the legislature that financial aid officers, insofar as possible attempt to implement these goals.

Goals for Funding Needy Undergraduate Students

Classification: Low-income Lower middle-income Middle-income

Family

Income: 0-$20,864 $20,865-$31,296 $31,297-$52,160

(1991 dollars,

family of four)

Percentage Fifty percent Fifty-one to Seventy-six

of State seventy-five to one hundred

Median percent twenty-five

Income: percent

Priority for

Receiving

Grants: First Second Third

Assistance One-half One-half Up to one-third

Mix goal: grants grants grants

One-half One-half Two-thirds or more

work study work study work study

and loans and loans and loans

NEW SECTION. Sec. 5. By September 30th of each even-numbered year, the higher education coordinating board shall adopt an estimate of the amount of funding, annualized for each fiscal year, that will be needed during the ensuing biennium to fully fund each of the state's student financial aid programs including but not limited to: RCW 28B.10.210 through 28B.10.220, 28B.10.790 through 28B.10.824, chapters 28B.12, 28B.101, and 28B.102 RCW, and, if funded, the first generation scholars demonstration project. The board shall report its findings to the governor, and the house of representatives and senate fiscal and higher education committees.

NEW SECTION. Sec. 6. A new section is added to chapter 28B.10 RCW to read as follows:

In administering the state student financial aid program, also known as the state need grant program, under RCW 28B.10.790 through 28B.10.824, the higher education coordinating board shall proceed substantially as follows unless it determines that a modification is required in order to conform with federal law or to improve the administration of the program, consistent with the purposes of this chapter. The higher education coordinating board shall:

(1) Define and assist additional populations of needy students as funding becomes available, in the priorities described in section 3 of this act, and using income level classification definitions as described in section 4 of this act;

(2) In calculating eligibility for aid, where not otherwise inconsistent with federal or state law, shelter home equity on a family's principal place of residence and shelter a reasonable amount of savings and a reasonable portion of farm or business net worth, in order to equitably evaluate family ability to pay; and

(3) To the extent feasible, adjust the student budget of a needy student with disabilities to reflect otherwise unfunded equipment or assistance needed to reasonably accommodate the student in a postsecondary education or training program.

NEW SECTION. Sec. 7. (1) With the exception of institutions of higher education as defined in RCW 28B.10.016, any institution of postsecondary education that enrolls students receiving state-funded financial aid shall:

(a) For Washington residents, match the total amount of the state financial aid grant funds received by all enrolled students at that institution from the state need grant and equal opportunity grant programs, with an equal amount of institutionally raised grant funds from nongovernmental sources; and

(b) Enter into new or honor existing transfer agreements with institutions of higher education as defined in RCW 28B.10.016.

(2) The higher education coordinating board shall adopt rules to implement these requirements. The rules shall ensure that all institutional matching grant funds go to students who are needy as defined in RCW 28B.10.802(3) and who are residents of the state of Washington. As used in this subsection, "residents of the state of Washington" means that the students would be eligible to pay resident tuition rates under RCW 28B.15.011 through 28B.15.013 if they were enrolled at a state institution of higher education as defined in RCW 28B.10.016.

NEW SECTION. Sec. 8. The higher education coordinating board may design a demonstration project to assist needy first generation college students to obtain either a community or technical college degree or certificate, or a baccalaureate degree. Through the project, a needy student, as defined in RCW 28B.10.802(3), who attends a Washington institution of higher education that is accredited by an accrediting association recognized by the board by rule, and whose parents did not complete a degree or certificate from an institution of higher education, may receive a grant of up to fifteen hundred dollars per year, not to exceed the student's documented need. The grant may be renewable each year, if the student makes satisfactory academic progress. Grants awarded to any one student shall not exceed a cumulative total of nine thousand dollars for an individual pursuing a baccalaureate degree or five thousand dollars for a student pursuing a community or technical college degree or certificate. Before seeking funding for the program, the board shall submit to the governor and the legislature a plan for implementing the project. The plan shall include a provision for verification of student eligibility to participate in the demonstration project.

NEW SECTION. Sec. 9. Sections 1 through 5, 7, and 8 of this act constitute a new chapter in Title 28B RCW.