1Providing for middle income student debt reduction <-through the 
2establishment of a Ready to Succeed Scholarship Program; and
3imposing powers and duties on the Pennsylvania Higher
4Education Assistance Agency.

5The General Assembly of the Commonwealth of Pennsylvania
6hereby enacts as follows:



9Section 101. Short title.

10This act shall be known and may be cited as the <-Middle Income 
11Student Debt Reduction <-Ready to Succeed Scholarship Act.

12Section 102. Definitions.

13The following words and phrases when used in this act shall
14have the meanings given to them in this section unless the
15context clearly indicates otherwise:

1"Agency." The Pennsylvania Higher Education Assistance

3"Approved institution of higher education." Any institution
4of higher learning that is approved by the agency<-. to 
5participate in the State grant program and is domiciled and 
6headquartered with its principal location in this Commonwealth.

<-7"Family financial data." Income information submitted to the
8agency by a middle income student applicant, an applicant's
9parents and stepparent and the applicant's spouse, as required
10under 22 Pa. Code § 121.44 (relating to required family
11financial data).

12"Financial need." The need of a full-time student or half-
13time student satisfying the middle income requirement of this

15"Full-time student." A student carrying a full-time academic
16workload the equivalent of any of the following:

17(1) Twelve semester credits.

18(2) Four hundred and fifty clock hours of instruction
19per academic term.

20(3) If the schedule of a program of study offered on a
21clock-hour basis does not permit the equivalent of 450 clock
22hours of instruction per academic term, 24 clock hours of
23instruction per week.

24"Grant program." A grant program administered by the agency
25under this act.

26"Half-time student." A student with at least half the
27academic workload of a full-time student.

28"Middle income requirement." As follows:

29(1) A middle income student whose family financial data
30indicates an annual family income of at least $80,000 but not

1more than $110,000 and has demonstrated financial need as
2determined by the agency.

3(2) Beginning July 1, 2014, the agency shall annually
4adjust the middle income requirement amounts under paragraph
5(1) to reflect any upward changes in the Consumer Price Index
6for All Urban Consumers for the Pennsylvania, New Jersey,
7Delaware and Maryland area in the preceding 12 months.

8"Middle income student." A full-time or half-time student
9satisfying the middle income requirement.

10"Parent." A middle income student's mother, father or legal

<-12"Program." The Ready to Succeed Scholarship Program
13established under this act.

14"State grant." A grant or scholarship awarded under the act
15of January 25, 1966 (1965 P.L.1546, No.541), referred to as the
16Higher Education Scholarship Law.

17Section 103. Legislative purpose.

18The General Assembly finds as follows:

19(1) Since 1965, the Pennsylvania Higher Education
20Assistance Agency has provided over 5,000,000 financial aid
21awards to needy Pennsylvania students attending and pursuing
22a postsecondary education through its administration of the
23PHEAA grant program.

24(2) The income limits for the agency's student financial
25assistance program, however, are set at a range that
26precludes many middle income students from the opportunity of
27receiving a State grant to pursue their postsecondary

29(3) With the cost of higher education increasing,
30financial aid should be expanded to reduce debt on middle

1income students.

2(4) It is the intent of this General Assembly and the
3purpose of this act to establish a <-targeted State grant 
<-4scholarship program to assist the Commonwealth's students
5from middle-income families and give them the opportunity to
6continue their program of self-improvement in an approved
7institution of higher education of their choice.

8(5) The <-grant program created shall augment and not
9replace other State-supported financial aid.



12Section 201. Administration.

13This act shall be administered by the agency.

14Section 202. Agency.

15(a) Powers and duties.--The agency shall have the following
16powers and duties:

17(1) To prepare and supervise the issuance of public
18information concerning the provisions of the grant program.

19(2) To prescribe the form and regulate the submission of
20applications for grants.

21(3) To determine if an applicant meets middle income
22requirements and is eligible for a grant under this act.

23(4) To select qualified recipients.

24(5) To award the appropriate grants.

25(6) To determine eligibility for, and annual renewal of,

27(b) Authorization.--The agency is authorized to make
28necessary rules, consistent with this act, for the efficient
29exercise of the functions under subsection (a).

30Section 203. Additional responsibilities.

1The agency shall assume the same duties, responsibilities and
2relationships for this act as for the following:

3(1) The act of August 7, 1963 (P.L.549, No.290),
4referred to as the Pennsylvania Higher Education Assistance
5Agency Act.

6(2) The act of January 25, 1966 (1965 P.L.1546, No.541),
7referred to as the Higher Education Scholarship Law.



10Section 301. Eligibility.

11A student shall be eligible for consideration for a grant if
12the student meets all of the following criteria:

13(1) Middle income requirements established under this

15(2) Citizen requirements of 22 Pa. Code § 121.2
16(relating to citizenship).

17(3) Domicile requirements of 22 Pa. Code § 121.57
18(relating to higher education grant domicile).

19(4) Graduation requirements of 22 Pa. Code § 121.21
20(relating to requirement for higher education grant

22(5) Character and academic promise, as established by
23the agency.

24Section 302. Choice.

25The grant recipient shall be free to attend any approved
26institution of higher education of the recipient's choice and
27apply the grant toward the agency's allowable education costs of
28that institution. The institution shall not be required to
29accept the grant recipient for enrollment, but may require
30compliance with its admission requirements, standards and


2Section 303. Special provisions.

3(a) Nondiscrimination.--Grant awards must be made without
4regard to the applicant's race, creed, color, sex, national
5origin or ancestry.

6(b) Eligibility.--Students who are declared eligible for
7first year undergraduate awards but do not receive a grant
8because they are not able to demonstrate that they meet the
9middle income requirements may be awarded a grant during their
10undergraduate study at any time that they are able to
11demonstrate that they meet the eligibility requirements under
12this act. Nothing under this act shall preclude a student who
13fails to meet the middle income requirement from applying for or
14receiving a grant, loan or award from the agency.

15(c) Limit.--Undergraduate awards granted during the first
16year shall be limited to students currently enrolled or accepted
17for enrollment at an approved institution of higher education.
18Awards shall be based on the level of appropriation provided
19annually by the Commonwealth's enacted budget for this program
20and as determined by the agency. Awards shall be renewable under
21Chapter 6 and agency policy.

22(d) Age.--Any middle income student qualifying for a grant
23may not be disqualified because the student is under 18 years of
24age. For the purpose of applying for and receiving grants, an
25individual under 18 years of age shall be deemed to have full
26legal capacity to act and shall have all the rights, powers,
27privileges and obligations of an individual of full age.

28(e) Other grants.--If a student fails to meet the middle
29income requirements under this act, but meets the requirements
30of another grant, loan or award issued by the agency, the agency

1shall notify the student applicant of the other grant, loan or
2award that the student may be eligible for and direct the
3student's application to the appropriate administrative office
4within the agency for consideration, except that a student
5eligible for an award under this act may not simultaneously be
6eligible for a Pennsylvania State Grant award.



9Section 401. Grouping of applicants.

10The agency shall select from among current applicants those
11students currently enrolled or accepted for enrollment in an
12approved institution of higher education who, in the agency's
13sole discretion, are successfully pursuing a course of study or
14who have been accepted as first year undergraduate students and
15who need financial assistance to complete their educational

17Section 402. Grant awards.

18(a) Amount.--The amount of the grant to a middle income
19student shall be determined on the basis of the financial need
20of the applicant, the funds available for grants and the number
21of eligible applicants for grants.

22(b) Need analysis procedures.--Grants awarded to eligible
23middle income student applicants shall be determined according
24to the need analysis procedures established annually by the
25agency and published in the State Higher Education Grant Program
26Manual as required under 22 Pa. Code § 121.47 (relating to State
27Higher Education Grant Program Manual). Financial need shall be
28computed according to policies established by the agency.



1Section 501. Appropriation and financial need.

2(a) Appropriation.--For fiscal year 2013-2014, the sum of
3$36,000,000 is appropriated to the agency for middle income
4higher education grants. Funding for the middle income higher
5education grant program shall be provided from an annual
6appropriation by the General Assembly.

7(b) Financial need.--All middle income student grant awards
8will be based on the applicant's financial need. The minimum
9grant award for middle income students shall be determined
10annually by the board of directors of the agency. The maximum
11grant for middle income students shall be established annually
12by the board of directors of the agency at a level so as to keep
13expenditures within the funds available through reenactment of
14appropriations relating to the forward funding of the PHEAA
15grant program as provided for under the act of March 28, 1974
16(P.L.228, No.50), referred to as the Higher Education Assistance
17Continuation Law, and from funds appropriated or made available
18from Federal, State or other sources for grants during a fiscal

20(c) Limitation.--The total State financial assistance may
21not exceed the financial need of the applicant or the annual
22limits established under the authority of this act and the act
23of August 7, 1963 (P.L.549, No.290), referred to as the
24Pennsylvania Higher Education Assistance Agency Act. If awards
25exceed available resources, applicants shall be funded as the
26agency shall determine.



29Section 601. Use of grants.

30(a) Renewal.--

1(1) Each grant shall be renewable until the program of
2study is completed, but may not exceed an additional three
3full-time academic years or its equivalent beyond the first
4year of the award or an additional four academic years for
5students enrolled in five-year undergraduate programs of
6study approved by the agency. Additional years may be
7consecutive or nonconsecutive years.

8(2) Qualifications for renewal shall include maintaining
9satisfactory academic standing, making normal progress toward
10completion of the course of study and continued eligibility
11as determined by the agency, including legal Pennsylvania

13(b) Transfer.--If a grant recipient transfers from one
14eligible institution to another, the recipient's grant shall be
15transferable only with the approval of the agency.

16(c) Additional grants.--The agency shall have the right to
17use the unused grant funds for additional grants in any fiscal
18year and in any category.

19(d) Payments.--Payments of grants shall be made by the
20agency in accordance with this act and the rules and regulations
21established by the agency. If the recipient terminates
22enrollment during the academic year, the unused portion of the
23grant shall be returned to the agency by the institution
24according to the institution's own policy for issuing refunds.



27Section 701. Procedure.

28(a) Grounds.--The agency may deny financial assistance to a
29middle income student that meets any of the following:

30(1) Is convicted of any of the offenses listed under 22

1Pa. Code § 121.6 (relating to denial of eligibility for
2financial assistance).

3(2) Has been expelled, dismissed or denied enrollment by
4an approved institution of higher education.

5(3) Has defaulted on a loan under 22 Pa. Code § 121.4
6(relating to denial of eligibility to loan defaulters).

7(b) Appeal.--A middle income student who is denied financial
8assistance may follow appeal procedures under 22 Pa. Code §
9121.7 (relating to notice of denial and preliminary review
10procedures) and 22 Pa. Code § 121.8 (relating to applicant and
11recipient appeals and hearings).

12(c) Information.--Each approved institution of higher
13education shall, within ten business days, furnish to the
14agency, the name and address of a student who is a resident of
15this Commonwealth and who is expelled, dismissed or denied
16enrollment or of whom the approved institution of higher
17education has knowledge that the student has been convicted of
18an offense under subsection (a)(1).

19(d) Refund.--Whenever a recipient fails to complete a term,
20the agency shall initiate refund procedures under 22 Pa. Code §
21121.51 (relating to refund of State higher education grants).

22(e) Status.--Any institution of higher learning which
23refuses to execute an agreement with the agency to comply with
24subsection (c) shall be denied the status of an approved
25institution of higher education under this act.



28Section 901. Effective date.

29This act shall take effect July 31, 2013, or immediately,
30whichever is later.



3Section 201. Establishment.

4The Ready to Succeed Scholarship Program is established
5within the agency.

6Section 202. Agency.

7(a) General rule.--The agency may use funds appropriated for
8the purposes of this act from the General Fund and may accept
9donations from all public and private sources, including the
10Federal Government, to provide scholarships to eligible students
11pursuing postsecondary education at an approved institution of
12higher education.

13(b) Guidelines.--The agency, in consultation with the
14Department of Education, shall administer and establish
15guidelines for the program.

16(c) Awards.--Scholarship awards under the program shall be
17established by the agency based upon available resources.



20Section 301. Eligibility.

21The Department of Education shall consult with the agency to
22identify and provide guidelines for student eligibility and
23renewal criteria. Student eligibility at a minimum shall

25(1) Total annual household income which does not exceed
26$110,000. With each new award year, the agency shall annually
27adjust the total annual household income threshold under this
28paragraph to reflect any upward changes in the Consumer Price
29Index for All Urban Consumers (CPI-U) for the Pennsylvania,
30New Jersey, Delaware and Maryland area.

1(2) At least half-time enrollment in a program of study
2approved by the agency.

3(3) Demonstration of outstanding academic achievement.

4(4) Compliance with all requirements of the State grant
5program administered by the agency, notwithstanding the
6financial need requirements of the State grant program.



9Section 901. Effective date.

10This act shall take effect in 60 days.