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Introduced Version House Bill 2599 History

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Key: Green = existing Code. Red = new code to be enacted
H. B. 2599


(By Delegates Carmichael and Walters)
[Introduced February 18, 2009; referred to the
Committee on Education then Finance.]




A BILL to amend and reenact §18C-7-1, §18C-7-2, §18C-7-3, §18C-7-4, §18C-7-5, §18C-7-6, §18C-7-7 and §18C-7-8 of the Code of West Virginia, 1931, as amended, all relating to changing the PROMISE Scholarship Program to the PROMISE Forgivable Student Loan Program; and establishing deferment and forgiveness conditions.

Be it enacted by the Legislature of West Virginia:
That §18C-7-1, §18C-7-2, §18C-7-3, §18C-7-4, §18C-7-5, §18C-7-6, §18C-7-7 and §18C-7-8
of the Code of West Virginia, 1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 7. WEST VIRGINIA PROVIDING REAL OPPORTUNITIES FOR MAXIMIZING IN-STATE STUDENT EXCELLENCE FORGIVABLE LOAN PROGRAM.

§18C-7-1. Title.
This article shall be known and may be cited as the "West Virginia providing real opportunities for maximizing in-state student excellence (PROMISE) scholarship Forgivable Loan Program."
§18C-7-2. Legislative findings and purpose.
(a) The Legislature finds and declares that:
(1) West Virginia must have an educated work force in order to attract and retain the high wage, high skill jobs of the twenty-first century;
(2) A large percentage of West Virginia residents who graduate from the state's colleges and universities do not work in the state following graduation;
(3) The percentage of West Virginia's adult population over the age of twenty-five with at least a baccalaureate degree is less than fifteen percent and does not compare favorably with the member states of the Southern Regional Education Board average nor with the national average of twenty-five percent;
(4) Higher levels of education attainment result in higher levels of personal income over a lifetime;
(5) Students who acquire a baccalaureate degree will earn an estimated $1,000 more over their lifetimes than those who attain only a high school diploma. This translates into an increased tax base and economic development for West Virginia and more discretionary income for its citizens;
(6) Students at all education levels should have an incentive to perform at a high academic level;
(7) There is a need to provide parents with all tools possible to aid them in helping their children understand the importance of high academic achievement in high school and college;
(8) The PROMISE Scholarship Program is highly successful and should be maintained as a forgivable loan program with merit as its strongest component. The merit component:
(A) Provides an incentive for students to set high academic standards in high school;
(B) Encourages students to increase their high school achievement levels;
(C) Encourages students to enroll in more rigorous courses;
(D) Effects a culture change in West Virginia towards increased education attainment;
(E) Results in improved ACT scores in the state since the inception of the program; and
(F) Influences increased numbers of students, including those students who are the highest academic achievers, to remain in West Virginia to attend college.
(b) It is the purpose of this article to continue the West Virginia PROMISE Scholarship Program as the West Virginia Forgivable Loan Program to deal effectively with the findings set forth in this section.
(c) Nothing in this article guarantees:
(1) A PROMISE scholarship award or any specific amount of a PROMISE scholarship award to any student; or
(2) That the requirements necessary for a student to qualify for a PROMISE scholarship will not be changed by legislation or rule before the student is eligible to receive an award.
§18C-7-3. Definitions.
(a) "Eligible institution" means:
(1) A state institution of higher education as defined in section two, article one, chapter eighteen-b of this code;
(2) Alderson-Broaddus College, Appalachian Bible College, Bethany College, Davis and Elkins College, Mountain State University, Ohio Valley University, the University of Charleston, West Virginia Wesleyan College and Wheeling Jesuit University, all in West Virginia. Any institution listed in this subdivision ceases to be an eligible institution if it:
(A) Loses regional accreditation; or
(B) Changes its status as a private, not for profit institution.
(3) Any other regionally accredited institution in this state, public or private, approved by the board.
(b) "Board" means the West Virginia PROMISE Scholarship Forgivable Loan Board of the West Virginia PROMISE Scholarship Forgivable Loan Program as provided for in section four of this article.
(c) "Tuition" means the quarter, semester or term charges imposed by a state institution of higher education and all mandatory fees required as a condition of enrollment by all students.
(d) "Enrolled" means either currently enrolled or in the process of enrolling in an eligible institution.
§18C-7-4. Appointment of the PROMISE Forgivable Loan Board; compensation; proceedings generally.

(a) The West Virginia PROMISE Scholarship Forgivable Loan Board is comprised of 15 members. Any member appointed by the Governor prior to the effective date of this section may continue to serve the term for which the member has been appointed: Provided, That by April 1, 2007, and thereafter, the membership of the board is comprised as follows:
(1) The chairperson of the commission or a designee who is a member of the commission;
(2) The chancellor of the commission or his or her designee;
(3) The State Superintendent of Schools or his or her designee;
(4) The Secretary of Education and the Arts;
(5) The State Treasurer or his or her designee;
(6) The President of the West Virginia Association of Student Financial Aid Administrators;
(7) The Executive Director of the Governor's Workforce Investment Division;
(8) Eight at-large members, appointed by the Governor with the advice and consent of the Senate:
(A) One of the eight at-large members has knowledge, skill and expertise in state and federal student financial aid policy and management;
(B) Seven of the eight at-large members represent the state's business and economic community and have knowledge, skill and experience in an academic, business or financial field.
(C) The eight at-large members shall be residents of the state. No more than five of the eight at-large members may be from the same political party. No more than three of the eight at-large members may be from the same congressional district.
(b) At-large members serve a term of four years and may be reappointed at the expiration of their terms. In the event of a vacancy among at-large members, the Governor shall appoint a person representing the same interests to fill the unexpired term. A person appointed to fill a vacancy shall be appointed only for the remainder of that term and is eligible for reappointment. Unless a vacancy occurs due to death, resignation or removal pursuant to subsection (e) of this section, an at-large member of the board shall continue to serve until a successor has been appointed and qualified as provided in subsection (a) of this section. All terms are for four years.
(c) Members of the board shall serve without compensation, but shall be reimbursed by the Office of the Secretary of Education and the Arts for expenses, including travel expenses, actually incurred by a member in the official conduct of the business of the board at the same rate as is paid the employees of the state.
(d) The Secretary of Education and the Arts is the chairperson and presiding officer of the board. A majority of the members of the board constitute a quorum for the transaction of business.
(e) The at-large members appointed by the Governor may be removed by the Governor for official misconduct, incompetence, neglect of duty or gross immorality and then only in the manner prescribed by law for the removal by the Governor of the state elective officers in accordance with section five, article six, chapter six of this code.
§18C-7-5. Powers and duties of the West Virginia PROMISE Forgivable Loan Board.

(a) Powers of board. --
In addition to the powers granted by any other provision of this article, the board has the powers necessary or convenient to carry out the purposes and provisions of this article including, but not limited to, the following express powers:
(1) To adopt and amend bylaws;
(2) To propose legislative rules to the commission for promulgation in accordance with the provisions of article three-a, chapter twenty-nine-a of this code to effectuate the purposes of this article;
(3) To invest any of its funds at the board's discretion, with the West Virginia Investment Management Board in accordance with the provisions of article six, chapter twelve of this code. Any investments made under this article shall be made with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Fiduciaries shall diversify plan investments to the extent permitted by law so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so;
(4) To execute contracts and other necessary instruments;
(5) To impose reasonable requirements for residency for students applying for the PROMISE scholarship Forgivable Loan. Except as provided in section four, article one of this chapter, the requirements shall include that an eligible student must have met the following requirements:
(A) Completed at least one half of the credits required for high school graduation in a public or private high school in this state; or
(B) Received instruction in the home or other approved place pursuant to section one-b, article eight, chapter eighteen of this code for the two years immediately preceding application.
(C) This subdivision may not be construed to establish residency requirements for matriculation or fee payment purposes at state institutions of higher education;
(6) To contract for necessary goods and services, to employ necessary personnel and to engage the services of private persons for administrative and technical assistance in carrying out the responsibilities of the scholarship Forgivable Loan Program;
(A) The board is encouraged to utilize the employees of the Vice Chancellor for Administration to provide administrative and technical assistance.
(B) Any services provided for the board by such employees remain under the direction and authority of the vice chancellor.
(7) To solicit and accept gifts, including bequests or other testamentary gifts made by will, trust or other disposition, grants, loans and other aid from any source and to participate in any federal, state or local governmental programs in carrying out the purposes of this article;
(8) To define the terms and conditions under which scholarships forgivable loans are awarded with the minimum requirements being set forth in section 6 of this article; and
(9) To establish other policies, procedures and criteria necessary to implement and administer the provisions of this article.
(b) Duties of board. --
In addition to any duty required by any other provision of this article, the board has the following responsibilities:
(1) To operate the program in a fiscally responsible manner and within the limits of available funds;
(2) To operate the PROMISE Scholarship Forgivable Loan Program as a merit-based program;
(3) To raise academic eligibility requirements before taking any other steps to limit student awards should projections indicate that available funds will not be sufficient to cover future costs; and
(4) To maintain contact with graduates who have received PROMISE scholarships forgivable loans and to provide a written statement of intent to recipients who are selected to receive a PROMISE scholarship Forgivable Loan after the effective date of this section notifying them that acceptance of the scholarship forgivable loan entails a responsibility to supply:
(A) Information requested by the board to determine the number and percentage of recipients who:
(i) Continue to live in West Virginia after graduation;
(ii) Obtain employment in West Virginia after graduation; and
(iii) Enroll in post-graduate education programs and the name of the state in which each post-graduate institution is located; and
(B) Such other relevant information as the board may reasonably request to implement the provisions of this subdivision.
(5) To analyze the data collected pursuant to subdivision (4) of this subsection, and:
(A) Report the findings to the Joint Standing Committee on Education by January 10, 2007, and annually thereafter; and
(B) Make recommendations annually to the Joint Standing Committee on Education regarding any actions the board considers necessary or expedient to encourage PROMISE forgivable loan recipients to live and work in the state after graduation.
§18C-7-6. PROMISE Forgivable Loan Program requirements; legislative rule.

(a) A PROMISE scholarship Forgivable Loan annual award meets the following conditions:
(1) Equals but does not exceed the cost of tuition for a student enrolled in a state institution of higher education;
(2) Equals an amount determined by the board, but not to exceed the cost of tuition at state institutions of higher education, for a student enrolled in an eligible institution that is not a state institution of higher education; and
(3) Is used by an eligible institution to supplement, but not to supplant, a tuition and fee waiver for which the individual is eligible pursuant to section five, six or seven, article ten, chapter eighteen-b of this code.
(b) The total cost of all scholarships forgivable loans awarded by the board in any year may not exceed the amount of funds available to the board during that fiscal year.
(c) An individual shall meet the following conditions in order to be eligible to receive a PROMISE scholarship Forgivable Loan award:
(1) Submit a scholarship forgivable loan award application to the board:
(A) Within two years of graduating from high school or within two years of acquiring a General Equivalency Degree if provided instruction in the home or other approved place pursuant to section five, six or seven, article ten, chapter eighteen-b of this code; or
(B) Within seven years of initially entering military service, and within one year of discharge from such military service, if the individual has entered the United States armed services within two years after graduating from high school;
(2) Apply for and submit to the board a free application for Federal Student Aid;
(3) Maintain a grade point average of at least 3.0 on a 4.0 grading scale in the required core and elective course work necessary to prepare students for success in post-secondary education at the associate and baccalaureate degree levels as determined by the board, if the individual has completed not more than one semester or term at an institution of higher education, excluding credits earned in advanced placement, international baccalaureate, dual credit and comparable courses while the student is enrolled in high school;
(4) Maintain appropriate academic progress toward the completion of a degree at the undergraduate education level as determined by the board if the individual has completed more than one semester or term at an institution of higher education, excluding credits earned in advanced placement, international baccalaureate, dual credit and comparable courses while the student is enrolled in high school;
(5) Meet additional objective standards as the board considers necessary to promote academic excellence and to maintain the financial stability of the fund;
(6) Enroll in an eligible institution. Any student enrolled at an eligible institution who receives a PROMISE scholarship Forgivable Loan award may retain and renew the scholarship Forgivable Loan to complete his or her undergraduate education at that institution, or any other eligible institution:
(A) If the institution at which the student is enrolled loses its status as an eligible institution pursuant to the provisions of subdivision (2), subsection (a), section three of this article; and
(B) If the student meets all other renewal requirements of this code and of board rules.
(7) It is the intent of the Legislature that the board shall strongly encourage prospective candidates for the PROMISE scholarship Forgivable Loan to perform at least twenty hours of unpaid community service while in high school to help prepare them for success in post-graduate education. The community service may include, but is not limited to, participation with nonprofit, governmental or community-based organizations designed to:
(A) Improve the quality of life for community residents;
(B) Meet the needs of community residents; or
(C) Foster civic responsibility.
(d) The board shall recommend a legislative rule to the commission to implement the provisions of this article. The commission shall promulgate a legislative rule in accordance with the provisions of article three-a, chapter twenty-nine-a of this code.
(1) The rule shall include at least the following provisions:
(A) The amount of a PROMISE scholarship Forgivable Loan award may not exceed the cost of tuition at state institutions of higher education;
(B) The amount of a PROMISE scholarship Forgivable Loan award in combination with aid from all other sources may not exceed the cost of education at the institution the recipient is attending. This provision does not apply to members of the West Virginia National Guard, recipients of an Underwood-Smith teacher scholarship, and recipients of a West Virginia engineering, science and technology scholarship;
(C) Additional objective standards as the board considers necessary:
(i) To promote academic excellence;
(ii) To maintain the financial stability of the fund; and
(iii) To operate the program within the limits of available funds.
(D) Provisions for making the highest and best use of the PROMISE Scholarship Forgivable Loan Program in conjunction with the West Virginia Prepaid Tuition Trust Act set forth in article thirty, chapter eighteen of this code;
(E) A provision defining the relationship of PROMISE scholarship Forgivable Loan awards to all other sources of student financial aid to ensure maximum coordination. The provision shall include the following:
(i) Methods to maximize student eligibility for federal student financial aid;
(ii) A requirement that PROMISE scholarship Forgivable Loan awards not supplant tuition and fee waivers; and
(iii) Clarification of the relationship between the PROMISE Scholarship Forgivable Loan Program, tuition savings plans and other state funded student financial aid programs;
(F) A method for awarding scholarships forgivable loans within the limits of available appropriations, including circumstances when program funds are not sufficient to provide awards to all eligible applicants. The board may not utilize any of the following methods:
(i) Making a scholarship Forgivable Loan award for an amount less than the cost of full tuition for a student enrolled in a state institution of higher education; or
(ii) Eliminating any current recipient from eligibility;
(G) A method for applicants to appeal determinations of eligibility and renewal.
(H)
A determination to permit forgivable loan recipients to defer repayment of the amount of their forgivable loans, in whole or in part, as long as they are enrolled in and successfully completing a course of study in an eligible institution or if they choose to work inside the state after graduation and file a West Virginia resident personal income tax return. If a graduate lives and works in this state for four years after graduation, the total amount of the forgivable loan shall be forgiven;
(2) The rule may provide for or require the following at the board's discretion:
(A) Requiring repayment of the amount of the scholarship Forgivable Loan, in whole or in part, if a scholarship recipient chooses to work outside the state after graduation: Provided, That rule may not require a recipient to repay a scholarship Forgivable Loan, in whole or in part, unless the prospective recipient has been informed of this requirement in writing before initial acceptance of the PROMISE scholarship Forgivable Loan award.
(B) Targeting a portion of the scholarship Forgivable Loan funds to be used for applicants enrolled in an engineering, science, technology or other designated program;
(C) Determining what other sources of funding for higher education are to be deducted from the PROMISE scholarship Forgivable Loan award; and
(D) Providing additional criteria as determined by the board.
(3) The Legislature finds that an emergency exists and, therefore, the board shall file a rule to implement the provisions of this section as an emergency rule pursuant to the provisions of article three-a, chapter twenty-nine-a of this code. The rule is subject to the prior approval of the Legislative Oversight Commission on Education Accountability.
§18C-7-7. West Virginia PROMISE Forgivable Loan Fund created.
(a) The special revenue fund in the State Treasury designated and known as the "PROMISE Scholarship Fund" is continued as the "Forgivable Loan Fund". The fund consists of:
(1) All appropriations to the fund from the West Virginia lottery, video lottery and taxes on amusement devices;
(2) All appropriations by the Legislature for the PROMISE Scholarship Forgivable Loan Fund;
(3) Any gifts, grants or contributions received for the PROMISE Scholarship Forgivable Loan Program; and
(4) All interest or other income earned from investment of the fund.
(b) The allocations to the fund are subject to appropriation by the Legislature. Nothing in this article requires any specific level of funding by the Legislature nor guarantees nor entitles any individual to any benefit or grant of funds.
(c) For the fiscal year beginning July 1, 2006, it is the intent of the Legislature that the aggregate of the amount of moneys transferred to the fund pursuant to section eighteen-a, article twenty-two, chapter twenty-nine of this code and such other amounts of public moneys that may be transferred to the fund by appropriation of the Legislature, shall equal but may not exceed $40 million. For each fiscal year thereafter until and including the fiscal year ending June 30, 2011, it is the intent of the Legislature that this aggregate be an amount two percent greater than the aggregate established by this subsection for the prior fiscal year. For the fiscal year beginning July 1, 2011, and in each fiscal year thereafter, it is the intent of the Legislature that this aggregate not exceed the aggregate established by this subsection for the fiscal year beginning July 1, 2011.
(d) The board may expend the moneys in the fund to implement the provisions of this article.
§18C-7-8. PROMISE Forgivable Loan Supplemental Fund recreated, and promulgation of rules.

(a) The Legislature recognizes that the PROMISE scholarship Forgivable Loan program may lead to an increased number of individuals attending the state institutions of higher education, and therefore, it may contribute to increases in expenses greater than the additional tuition income generated by increased enrollment. Therefore, there is hereby created a special revenue fund in the State Treasury which shall be designated and known as the "PROMISE scholarship Forgivable Loan Supplemental Fund." The fund shall consist of all appropriations to the fund and all interest earned from the investment of the fund and any gifts, grants or contributions received by the fund. The board shall expend the moneys in this fund to implement the provisions of this article and may only expend the moneys for state institutions of higher education.
(b) The board shall promulgate rules for administering the fund in accordance with article three-a, chapter twenty-nine-a of this code. The rules shall include the following:
(1) Provisions for distributing the moneys from the fund to state institutions of higher education: Provided, That the funds shall be divided among the state institutions of higher education in a reasonable manner to reflect the actual distribution of PROMISE scholarship Forgivable Loan students among the institutions; and
(2) A procedure for submitting a budget request to the Governor: Provided, That nothing in this article shall require any appropriation by the Legislature.


NOTE: The purpose of this bill is to change the PROMISE Scholarship Program to the PROMISE Forgivable Student Loan Program and to establish deferment and forgiveness conditions.


Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
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