(1) Each four-year institution of higher education and the state board for community and technical colleges shall develop policies that ensure undergraduate students enrolled in degree or certificate programs complete their programs in a timely manner in order to make the most efficient use of instructional resources and provide capacity within the institution for additional students.

(2) Policies adopted under this section shall address, but not be limited to, undergraduate students in the following circumstances:

(a) Students who accumulate more than one hundred twenty-five percent of the number of credits required to complete their respective baccalaureate or associate degree or certificate programs;

(b) Students who drop more than twenty-five percent of their course load before the grading period for the quarter or semester, which prevents efficient use of instructional resources; and

(c) Students who remain on academic probation for more than one quarter or semester.

(3) Policies adopted under this section may include assessment by the institution of a surcharge in addition to regular tuition and fees to be paid by a student for continued enrollment.