AN ACT

 

1Providing for middle income student debt reduction.

2The General Assembly of the Commonwealth of Pennsylvania
3hereby enacts as follows:

4CHAPTER 1

5GENERAL PROVISIONS

6Section 101. Short title.

7This act shall be known and may be cited as the Middle Income
8Student Debt Reduction Act.

9Section 102. Definitions.

10The following words and phrases when used in this act shall
11have the meanings given to them in this section unless the
12context clearly indicates otherwise:

13"Agency." The Pennsylvania Higher Education Assistance
14Agency.

15"Approved institution of higher education." Any institution
16of higher learning approved by the agency.

1"Family financial data." Income information submitted to the
2agency by a middle income student applicant, an applicant's
3parents and stepparent and the applicant's spouse, as required
4under 22 Pa. Code § 121.44 (relating to required family
5financial data).

6"Financial need." The need of a full-time student or half-
7time student satisfying the middle income requirement of this
8act.

9"Full-time student." A student carrying a full-time academic
10work load the equivalent of any of the following:

11(1) Twelve semester credits.

12(2) Four hundred and fifty clock hours of instruction
13per academic term.

14(3) If the schedule of a program of study offered on a
15clock-hour basis does not permit the equivalent of 450 clock
16hours of instruction per academic term, 24 clock hours of
17instruction per week.

18"Grant program." A grant program administered by the agency
19under this act.

20"Half-time student." A student with at least half the
21academic work load of a full-time student.

22"Middle income requirement." As follows:

23(1) A middle income student whose family financial data
24indicates an annual family income of at least $80,000 but not
25more than $110,000 and has demonstrated financial need as
26determined by the agency.

27(2) Beginning July 1, 2014, the agency shall annually
28adjust the middle income requirement amounts under paragraph
29(1) to reflect any upward changes in the Consumer Price Index
30for All Urban Consumers for the Pennsylvania, New Jersey,

1Delaware and Maryland area in the preceding 12 months.

2"Middle income student." A full-time or half-time student
3satisfying the middle income requirement.

4"Parent." A middle income student's mother, father or legal
5guardian.

6Section 103. Legislative purpose.

7The General Assembly finds as follows:

8(1) Since 1965, the Pennsylvania Higher Education
9Assistance Agency has provided over 5,000,000 financial aid
10awards to needy Pennsylvania students attending and pursuing
11a postsecondary education through its administration of the
12PHEAA grant program.

13(2) The income limits for the agency's student financial
14assistance program, however, are set at a range that
15precludes many middle income students from the opportunity of
16receiving a State grant to pursue their postsecondary
17endeavors.

18(3) With the cost of higher education increasing,
19financial aid should be expanded to reduce debt on middle
20income students.

21(4) It is the intent of this General Assembly and the
22purpose of this act to establish a targeted State grant
23program to assist the Commonwealth's students from middle-
24income families and give them the opportunity to continue
25their program of self-improvement in an approved institution
26of higher education of their choice.

27(5) The grant program created shall augment and not
28replace other State-supported financial aid.

29CHAPTER 2

30GRANT PROGRAM

1Section 201. Administration.

2This act shall be administered by the agency.

3Section 202. Agency.

4(a) Powers and duties.--The agency shall have the following
5powers and duties:

6(1) To prepare and supervise the issuance of public
7information concerning the provisions of the grant program.

8(2) To prescribe the form and regulate the submission of
9applications for grants.

10(3) To determine if an applicant meets middle income
11requirements and is eligible for a grant under this act.

12(4) To select qualified recipients.

13(5) To award the appropriate grants.

14(6) To determine eligibility for, and annual renewal of,
15grants.

16(b) Authorization.--The agency is authorized to make
17necessary rules, consistent with this act, for the efficient
18exercise of the functions under subsection (a).

19Section 203. Additional responsibilities.

20The agency shall assume the same duties, responsibilities and
21relationships for this act as for the following:

22(1) The act of August 7, 1963 (P.L.549, No.290),
23referred to as the Pennsylvania Higher Education Assistance
24Agency Act.

25(2) The act of January 25, 1966 (1965 P.L.1546, No.541),
26referred to as the Higher Education Scholarship Law.

27CHAPTER 3

28ELIGIBILITY

29Section 301. Eligibility.

30A student shall be eligible for consideration for a grant if

1the student meets all of the following criteria:

2(1) Middle income requirements established under this
3act.

4(2) Citizen requirements of 22 Pa. Code § 121.2
5(relating to citizenship).

6(3) Domicile requirements of 22 Pa. Code § 121.57
7(relating to higher education grant domicile).

8(4) Graduation requirements of 22 Pa. Code § 121.21
9(relating to requirement for higher education grant
10applicants).

11(5) Character and academic promise, as established by
12the agency.

13Section 302. Choice.

14The grant recipient shall be free to attend any approved
15institution of higher education of the recipient's choice and
16apply the grant toward the agency's allowable education costs of
17that institution. The institution shall not be required to
18accept the grant recipient for enrollment, but may require
19compliance with its admission requirements, standards and
20policies.

21Section 303. Special provisions.

22(a) Nondiscrimination.--Grant awards must be made without
23regard to the applicant's race, creed, color, sex, national
24origin or ancestry.

25(b) Eligibility.--Students who are declared eligible for
26first year undergraduate awards but do not receive a grant
27because they are not able to demonstrate that they meet the
28middle income requirements may be awarded a grant during their
29undergraduate study at any time that they are able to
30demonstrate that they meet the eligibility requirements under

1this act. Nothing under this act shall preclude a student who
2fails to meet the middle income requirement from applying for or
3receiving a grant, loan or award from the agency.

4(c) Limit.--Undergraduate awards granted during the first
5year shall be limited to students currently enrolled or accepted
6for enrollment at an approved institution of higher education.
7Awards shall be based on the level of appropriation provided
8annually by the Commonwealth's enacted budget for this program
9and as determined by the agency. Awards shall be renewable under
10Chapter 6 and agency policy.

11(d) Age.--Any middle income student qualifying for a grant
12may not be disqualified because the student is under 18 years of
13age. For the purpose of applying for and receiving grants, an
14individual under 18 years of age shall be deemed to have full
15legal capacity to act and shall have all the rights, powers,
16privileges and obligations of an individual of full age.

17(e) Other grants.--If a student fails to meet the middle
18income requirements under this act, but meets the requirements
19of another grant, loan or award issued by the agency, the agency
20shall notify the student applicant of the other grant, loan or
21award that the student may be eligible for and direct the
22student's application to the appropriate administrative office
23within the agency for consideration, except that a student
24eligible for an award under this act may not simultaneously be
25eligible for a Pennsylvania State Grant award.

26CHAPTER 4

27SELECTION

28Section 401. Grouping of applicants.

29The agency shall select from among current applicants those
30students currently enrolled or accepted for enrollment in an

1approved institution of higher education who, in the agency's
2sole discretion, are successfully pursuing a course of study or
3who have been accepted as first year undergraduate students and
4who need financial assistance to complete their educational
5programs.

6Section 402. Grant awards.

7(a) Amount.--The amount of the grant to a middle income
8student shall be determined on the basis of the financial need
9of the applicant, the funds available for grants and the number
10of eligible applicants for grants.

11(b) Need analysis procedures.--Grants awarded to eligible
12middle income student applicants shall be determined according
13to the need analysis procedures established annually by the
14agency and published in the State Higher Education Grant Program
15Manual as required under 22 Pa. Code § 121.47 (relating to State
16Higher Education Grant Program Manual). Financial need shall be
17computed according to policies established by the agency.

18CHAPTER 5

19FUNDS

20Section 501. Appropriation and financial need.

21(a) Appropriation.--For fiscal year 2013-2014, the sum of
22$36,000,000 is appropriated to the agency for middle income
23higher education grants. Funding for the middle income higher
24education grant program shall be provided from an annual
25appropriation by the General Assembly.

26(b) Financial need.--All middle income student grant awards
27will be based on the applicant's financial need. The minimum
28grant award for middle income students shall be determined
29annually by the board of directors of the agency. The maximum
30grant for middle income students shall be established annually

1by the board of directors of the agency at a level so as to keep
2expenditures within the funds available through reenactment of
3appropriations relating to the forward funding of the PHEAA
4grant program as provided for under the act of March 28, 1974
5(P.L.228, No.50), referred to as the Higher Education Assistance
6Continuation Law, and from funds appropriated or made available
7from Federal, State or other sources for grants during a fiscal
8year.

9(c) Limitation.--The total State financial assistance may
10not exceed the financial need of the applicant or the annual
11limits established under the authority of this act and the act
12of August 7, 1963 (P.L.549, No.290), referred to as the
13Pennsylvania Higher Education Assistance Agency Act. If awards
14exceed available resources, applicants shall be funded as the
15agency shall determine.

16CHAPTER 6

17GRANT RENEWAL

18Section 601. Use of grants.

19(a) Renewal.--

20(1) Each grant shall be renewable until the program of
21study is completed, but may not exceed an additional three
22full-time academic years or its equivalent beyond the first
23year of the award or an additional four academic years for
24students enrolled in five-year undergraduate programs of
25study approved by the agency. Additional years may be
26consecutive or nonconsecutive years.

27(2) Qualifications for renewal shall include maintaining
28satisfactory academic standing, making normal progress toward
29completion of the course of study and continued eligibility
30as determined by the agency, including legal Pennsylvania

1residency.

2(b) Transfer.--If a grant recipient transfers from one
3eligible institution to another, the recipient's grant shall be
4transferable only with the approval of the agency.

5(c) Additional grants.--The agency shall have the right to
6use the unused grant funds for additional grants in any fiscal
7year and in any category.

8(d) Payments.--Payments of grants shall be made by the
9agency in accordance with this act and the rules and regulations
10established by the agency. If the recipient terminates
11enrollment during the academic year, the unused portion of the
12grant shall be returned to the agency by the institution
13according to the institution's own policy for issuing refunds.

14CHAPTER 7

15DENIAL

16Section 701. Procedure.

17(a) Grounds.--The agency may deny financial assistance to a
18middle income student that meets any of the following:

19(1) Is convicted of any of the offenses listed under 22
20Pa. Code § 121.6 (relating to denial of eligibility for
21financial assistance).

22(2) Has been expelled, dismissed or denied enrollment by
23an approved institution of higher education.

24(3) Has defaulted on a loan under 22 Pa. Code § 121.4
25(relating to denial of eligibility to loan defaulters).

26(b) Appeal.--A middle income student who is denied financial
27assistance may follow appeal procedures under 22 Pa. Code §
28121.7 (relating to notice of denial and preliminary review
29procedures) and 22 Pa. Code § 121.8 (relating to applicant and
30recipient appeals and hearings).

1(c) Information.--Each approved institution of higher
2education shall, within ten business days, furnish to the
3agency, the name and address of a student who is a resident of
4this Commonwealth and who is expelled, dismissed or denied
5enrollment or of whom the approved institution of higher
6education has knowledge that the student has been convicted of
7an offense under subsection (a)(1).

8(d) Refund.--Whenever a recipient fails to complete a term,
9the agency shall initiate refund procedures under 22 Pa. Code §
10121.51 (relating to refund of State higher education grants).

11(e) Status.--Any institution of higher learning which
12refuses to execute an agreement with the agency to comply with
13subsection (c) shall be denied the status of an approved
14institution of higher education under this act.

15CHAPTER 51

16MISCELLANEOUS PROVISIONS

17Section 5101. Effective date.

18This act shall take effect July 31, 2013, or immediately,
19whichever is later.