BILL REQ. #:  S-2037.4 

READ FIRST TIME 03/05/07.   

     AN ACT Relating to the Washington guaranteed scholarship program; amending RCW 28B.95.020; 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 intends to inspire and encourage all Washington students to dream big by creating a guaranteed four-year tuition scholarship program for students from low-income families. The legislature finds that, too often, financial barriers prevent many of the brightest students from considering college as a future possibility. Often the cost of tuition coupled with the complexity of finding and applying for financial aid is enough to prevent a student from even applying to college. Many students become disconnected from the education system early on and may give up or drop out before graduation. It is the intent of the legislature to alert students early in their educational career to the options and opportunities available beyond high school.

NEW SECTION.  Sec. 2   The higher education coordinating board shall design the Washington guaranteed scholarship program in accordance with this section.
     (1) "Eligible students" are those students who qualify for free or reduced-price lunches. If a student qualifies in the seventh grade, the student remains eligible even if the student does not receive free or reduced-price lunches thereafter.
     (2) Eligible students shall be notified of their eligibility for the Washington guaranteed scholarship program beginning in their seventh grade year. Students shall also be notified of the requirements for award of the scholarship.
     (3) To be eligible for a Washington guaranteed scholarship, a student must sign a pledge during seventh or eighth grade that includes a commitment to graduate from high school with at least a C average and with no felony convictions. The pledge must be witnessed by a parent or guardian and forwarded to the higher education coordinating board by mail or electronically, as indicated on the pledge form.
     (4)(a) Scholarships shall be awarded to eligible students graduating from public high schools, approved private high schools under chapter 28A.195 RCW, or who received home-based instruction under chapter 28A.200 RCW.
     (b) To receive the Washington guaranteed scholarship, a student must graduate with at least a "C" average from a public high school or an approved private high school under chapter 28A.195 RCW in Washington or have received home-based instruction under chapter 28A.200 RCW, must have no felony convictions, and must be a resident student as defined in RCW 28B.15.012(2) (a) through (d).
     (5) A student's family income will be assessed upon graduation before awarding the scholarship.
     (6) If at graduation from high school the student's family income does not exceed sixty-five percent of the state median family income, scholarship award amounts shall be as provided in this section.
     (a) For students attending two or four-year institutions of higher education as defined in RCW 28B.10.016, the value of the award shall be (i) the difference between the student's tuition and required fees, less the value of any state-funded grant, scholarship, or waiver assistance the student receives; (ii) plus five hundred dollars for books and materials.
     (b) For students attending private four-year institutions of higher education in Washington, the award amount shall be the representative average of awards granted to students in public research universities in Washington.
     (c) For students attending private vocational schools in Washington, the award amount shall be the representative average of awards granted to students in public community and technical colleges in Washington.
     (7) Recipients may receive no more than four full-time years' worth of scholarship awards.
     (8) Institutions of higher education shall award the student all need-based and merit-based financial aid for which the student would otherwise qualify. The guaranteed scholarship is intended to replace unmet need, loans, and, at the student's option, work-study award before any other grants or scholarships are reduced.
     (9) The first scholarships shall be awarded to students graduating in 2012.
     (10) The state of Washington retains legal ownership of tuition units awarded as scholarships under this chapter until the tuition units are redeemed. These tuition units shall remain separately held from any tuition units owned under chapter 28B.95 RCW by a Washington guaranteed scholarship recipient.
     (11) The scholarship award must be used within five years of receipt. Any unused scholarship tuition units revert to the Washington guaranteed scholarship account.
     (12) Should the recipient terminate his or her enrollment for any reason during the academic year, the unused portion of the scholarship tuition units shall revert to the Washington guaranteed scholarship account.

NEW SECTION.  Sec. 3   The office of the superintendent of public instruction shall:
     (1) Notify elementary, middle, and junior high school students, parents, teachers, counselors, and principals about the Washington guaranteed scholarship program; and
     (2) Work with the higher education coordinating board to develop application collection and student tracking procedures.

NEW SECTION.  Sec. 4   The higher education coordinating board shall:
     (1) With the assistance of the office of the superintendent of public instruction, implement and administer the Washington guaranteed scholarship program;
     (2) Develop and distribute, to all schools with students enrolled in grade seven or eight, a pledge form that can be completed and returned electronically or by mail by the student or the school to the higher education coordinating board;
     (3) Develop and implement a student application, selection, and notification process for scholarships;
     (4) Track scholarship recipients to ensure continued eligibility and determine student compliance for awarding of scholarships;
     (5) Subject to appropriation, deposit funds into the state educational trust fund;
     (6) Purchase tuition units under the advanced college tuition payment program in chapter 28B.95 RCW to be owned and held in trust by the board, for the purpose of scholarship awards as provided for in this section; and
     (7) Distribute scholarship funds, in the form of tuition units purchased under the advanced college tuition payment program in chapter 28B.95 RCW or through direct payments from the state educational trust fund, to institutions of higher education on behalf of scholarship recipients identified by the board, as long as recipients maintain satisfactory academic progress.

NEW SECTION.  Sec. 5   The higher education coordinating board may accept grants, gifts, bequests, and devises of real and personal property from any source for the purpose of granting financial aid in addition to that funded by the state.

NEW SECTION.  Sec. 6   The higher education coordinating board may adopt rules to implement this chapter.

Sec. 7   RCW 28B.95.020 and 2005 c 272 s 1 are each amended to read as follows:
     The definitions in this section apply throughout this chapter, unless the context clearly requires otherwise.
     (1) "Academic year" means the regular nine-month, three-quarter, or two-semester period annually occurring between August 1st and July 31st.
     (2) "Account" means the Washington advanced college tuition payment program account established for the deposit of all money received by the board from eligible purchasers and interest earnings on investments of funds in the account, as well as for all expenditures on behalf of eligible beneficiaries for the redemption of tuition units and for the development of any authorized college savings program pursuant to RCW 28B.95.150.
     (3) "Board" means the higher education coordinating board as defined in chapter 28B.76 RCW.
     (4) "Committee on advanced tuition payment" or "committee" means a committee of the following members: The state treasurer, the director of the office of financial management, the executive director of the higher education coordinating board, or their designees, and two members to be appointed by the governor, one representing program participants and one private business representative with marketing, public relations, or financial expertise.
     (5) "Governing body" means the committee empowered by the legislature to administer the Washington advanced college tuition payment program.
     (6) "Contractual obligation" means a legally binding contract of the state with the purchaser and the beneficiary establishing that purchases of tuition units will be worth the same number of tuition units at the time of redemption as they were worth at the time of the purchase.
     (7) "Eligible beneficiary" means the person for whom the tuition unit will be redeemed for attendance at an institution of higher education. The beneficiary is that person named by the purchaser at the time that a tuition unit contract is accepted by the governing body. Qualified organizations, as allowed under section 529 of the federal internal revenue code, purchasing tuition unit contracts as future scholarships need not designate a beneficiary at the time of purchase.
     (8) "Eligible purchaser" means an individual or organization that has entered into a tuition unit contract with the governing body for the purchase of tuition units for an eligible beneficiary. The state of Washington may be an eligible purchaser for purposes of purchasing tuition units to be held for granting Washington guaranteed scholarships.
     (9) "Full-time tuition charges" means resident tuition charges at a state institution of higher education for enrollments between ten credits and eighteen credit hours per academic term.
     (10) "Institution of higher education" means an institution that offers education beyond the secondary level and is recognized by the internal revenue service under chapter 529 of the internal revenue code.
     (11) "Investment board" means the state investment board as defined in chapter 43.33A RCW.
     (12) "State institution of higher education" means institutions of higher education as defined in RCW 28B.10.016.
     (13) "Tuition and fees" means undergraduate tuition and services and activities fees as defined in RCW 28B.15.020 and 28B.15.041 rounded to the nearest whole dollar. For purposes of this chapter, services and activities fees do not include fees charged 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.
     (14) "Tuition unit contract" means a contract between an eligible purchaser and the governing body, or a successor agency appointed for administration of this chapter, for the purchase of tuition units for a specified beneficiary that may be redeemed at a later date for an equal number of tuition units.
     (15) "Unit purchase price" means the minimum cost to purchase one tuition unit for an eligible beneficiary. Generally, the minimum purchase price is one percent of the undergraduate tuition and fees for the current year, rounded to the nearest whole dollar, adjusted for the costs of administration and adjusted to ensure the actuarial soundness of the account. The analysis for price setting shall also include, but not be limited to consideration of past and projected patterns of tuition increases, program liability, past and projected investment returns, and the need for a prudent stabilization reserve.

NEW SECTION.  Sec. 8   Sections 1 through 6 of this act constitute a new chapter in Title 28B RCW.