(1) An applicant awarded a first-year scholarship or a renewal scholarship is not restricted in the choice of the institution in this state which he or she desires to attend if the institution is an eligible postsecondary institution under rules promulgated by the Michigan higher education assistance authority, except that a student shall not use a scholarship award at an institution whose primary purpose is to prepare students for ordination or appointment as a member of the clergy of a church, denomination, or religious association, order, or sect. An applicant awarded a first-year scholarship or a renewal scholarship is not restricted in the choice of the course of study he or she wishes to pursue.

  (2) An approved institution chosen by the applicant is not required to accept the applicant for enrollment, or once having admitted the applicant, to continue the applicant’s enrollment. The approved institution accepting the enrollment of a state competitive scholarship award winner shall notify the authority of the recipient’s enrollment and shall submit annually to the authority reports which are required and necessary to administer this act.