Bill Summary for S 653 (2021-2022)

Summary date: 

Apr 8 2021

Bill Information:

View NCGA Bill Details2021
Senate Bill 653 (Public) Filed Tuesday, April 6, 2021
AN ACT CONSOLIDATING THE UNIVERSITY OF NORTH CAROLINA NEED-BASED FINANCIAL AID PROGRAM, THE EDUCATION LOTTERY SCHOLARSHIP PROGRAM, AND THE NORTH CAROLINA COMMUNITY COLLEGE GRANT PROGRAM INTO THE NORTH CAROLINA NEED-BASED SCHOLARSHIP FOR PUBLIC COLLEGES AND UNIVERSITIES.
Intro. by Ballard, Chaudhuri, Lee.

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Bill summary

Part I.

Adds new Part 5, The North Carolina Need-Based Scholarship for Public Colleges and Universities (Scholarship Program), in Article 23 of GS Chapter 116. Sets out the following requirements to be met for a student seeking a degree, diploma, or certificate at an eligible postsecondary institution to receive a scholarship: (1) qualify as a resident for tuition purposes under the specified criteria and in accordance with the coordinated and centralized residency determination process administered by the State Education Assistance Authority (Authority); (2) meet enrollment standards by being admitted, enrolled, and classified as an undergraduate student in a matriculated status at an eligible postsecondary institution, allowing the UNC President and President of the North Carolina Community College System to jointly agree to additional enrollment standards for the Program; and (3) submit a Free Application for Federal Student Aid (FAFSA) and demonstrate need. Defines an eligible postsecondary institution as a school that is a constituent institution of The University of North Carolina or a community college. Requires that for continued enrollment that the student meet achievement standards by maintaining satisfactory academic progress in a course of study in accordance with the standards and practices used for federal Title IV programs by the eligible postsecondary institution in which the student is enrolled. 

Sets out how many semesters a student may receive the scholarships. Sets scholarship amounts based on a schedule developed jointly by the President of The University of North Carolina and the President of the North Carolina Community College System, in consultation with the Authority. Requires the payment schedule to clearly define award amounts by type of eligible postsecondary institution and student financial need.

Requires the Authority to administer the scholarships and conduct periodic evaluations of expenditures under the Program to determine if allocations are used to ensure access to eligible postsecondary institutions and to meet the goals of respective programs. Requires the Authority to report annually beginning December 1, 2024, to the specified NCGA committee. Sets out what is to be included in the report, including the amount disbursed and number of students receiving funds. 

Establishes the Scholarship Reserve Fund for Public Colleges and Universities (Reserve Fund) consisting of: (1) funds appropriated by the NCGA for the Program from the Education Lottery Fund in the Current Operations Appropriations Act, (2) funds appropriated by the NCGA for the Program from the Escheat Fund in the Current Operations Appropriations Act, (3) funds appropriated by the NCGA for the Program from the General Fund in the Current Operations Appropriations Act, (4) all returned scholarship funds from the Program, and (5) all interest earned on these funds. Requires the creation of two reserves within the Reserve Fund, the University of North Carolina (UNC Reserve) and the North Carolina Community College System (CC Reserve) with the amount of funds in each reserve to be determined according to the payment schedules. Sets out funds that are to be in each of the reserves for the 2022-23 fiscal year. Money in the Reserve Fund remains available until expended. Sets out provisions governing the use of funds in the Reserve Fund for administrative costs.

Amends GS 116B-7 to require the Authority to deposit an amount specified in the Current Operations Appropriations Act from the Escheat Fund into the Reserve Fund each fiscal year to fund the Scholarship Program.

Requires by May 1, 2022, that the UNC President and the President of the North Carolina Community College System report the payment schedule required by this act and any recommended legislative changes for the Scholarship Program to the specified NCGA division and committees.

Requires the following to instead be appropriated to the Reserve Fund to fund scholarships beginning with the 2023-24 academic year: (1) $77,898,523 in recurring funds appropriated to the UNC Board of Governors for The University of North Carolina Need-Based Financial Aid Program and (2) $165,000 in recurring funds appropriated to the Community Colleges System Office for the North Carolina Community College Grant Program. 

Requires beginning with the 2022-23 fiscal year, of the funds appropriated from the Education Lottery for (1) the UNC Need-Based Financial Aid Program each fiscal year, the sum of $10,744,733 in recurring funds and (2) Scholarships for Needy Students, the sum $30,450,000 must instead be appropriated to the Reserve Fund beginning with the 2023-24 academic year.

Requires beginning with the 2022-23 fiscal year, of the funds allocated to the State Education Assistance Authority from the Escheat Fund for (1) the University of North Carolina Need-Based Financial Aid Program each fiscal year, the sum of $37,287,242 in recurring funds and (2) the North Carolina Community College Grant Program each fiscal year, $15,785,000 in recurring funds to instead be appropriated to the Reserve Fund. 

Appropriates $15,950,000 for 2021-22 from the General Fund to the Community Colleges System Office for the North Carolina Community College Grant Program to provide scholarships for students for the 2022-23 academic year. States the NCGA's intent to provide forward funding for these scholarships in a reserve under the Scholarship Program beginning with the 2023-24 academic year.

Requires the Authority, by October 15, 2022, to transfer any unexpended balances remaining in the reserves for the University of North Carolina Need-Based Financial Aid Program and the Education Lottery Scholarship to the Reserve Fund.

Effective January 1, 2022, and applies to scholarships awarded beginning with the 2023-24 academic year.

Part II.

Repeals Article 35A (College scholarships) of GS Chapter 115C.

Amends GS 116-209.19A by making conforming changes to the list of scholarships administered by the Authority.

Amends GS 115D-40.1 as follows. Removes the provision related to need-based assistance programs for community college students. Expands who may receive targeted financial assistance to include students enrolled in fewer than six credit hours per semester who otherwise qualify for need-based financial aid programs. Removes the cap on the amount of funds that can be allocated. Makes additional conforming changes.

Repeals GS 115D-40.2, which set semester limitations on eligibility for North Carolina Community College grants.

Repeals GS 116-25.1, which set semester limitations on eligibility for the University of North Carolina need-based financial aid grants.

Effective July 1, 2023.

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