[Effective Until 7/1/2024]

(a) This section shall be known and may be cited as the “Tennessee Promise Scholarship Act of 2014”.

Terms Used In Tennessee Code 49-4-708

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Dependent: A person dependent for support upon another.
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Irrevocable trust: A trust arrangement that cannot be revoked, rescinded, or repealed by the grantor.
  • Reporter: Makes a record of court proceedings and prepares a transcript, and also publishes the court's opinions or decisions (in the courts of appeals).
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(b) As used in this section:

(1) “Continuous enrollment” has the same meaning as defined in § 49-4-902; except that a student enrolled in a Tennessee college of applied technology shall be enrolled in accordance with the institution’s requirements;
(2) “Eligible high school”:

(A) Has the same meaning as defined in § 49-4-902; and
(B) Includes a high school located in a neighboring state in a county contiguous to this state;
(3) “Eligible postsecondary institution” means:

(A) A postsecondary institution that was eligible for the Tennessee education lottery scholarship, as defined in § 49-4-902, on July 1, 2013, and remains eligible thereafter; and
(B) A private, nonprofit technical school that:

(i) Has had its primary campus domiciled in this state for at least seventy-five (75) consecutive years;
(ii) Is accredited by the council on occupational education; and
(iii) In addition to offering diploma, certificate, and associate degree programs, offers a baccalaureate degree through an articulation agreement with a regionally accredited postsecondary institution;
(4) “Eligible program of study”:

(A) Means, beginning with the fall semester of the 2021-2022 academic year:

(i) A curriculum of courses leading to a certificate or diploma at a Tennessee college of applied technology; or
(ii) A federal Title IV-eligible curriculum of courses leading to a certificate, diploma, or associate degree at an eligible postsecondary institution; and
(B) Does not include courses taken at a four-year postsecondary institution prior to a student’s admission in, or that were taken by a student to fulfill prerequisite requirements for, a curriculum of courses described in subdivision (b)(4)(A)(i) or (ii);
(5) “Full-time student” means a student who is enrolled in a minimum of twelve (12) semester hours, or a student who is enrolled in a full-time program at a Tennessee college of applied technology. “Full-time student” includes a student with a documented learning disability who receives accommodations because of the student’s disability and who is unable to take twelve (12) semester hours per semester as a direct result of the student’s disability; provided, that the student takes the maximum number of semester hours that is established by the eligible postsecondary institution as feasible for the student to attempt;
(6) “Gift aid” means financial aid received from the federal Pell grant, the Tennessee education lottery scholarship, or the Tennessee student assistance award;
(7) “Home school student” means:

(A) A Tennessee resident who completed high school in a home school program prior to July 1, 2021, meeting the requirements of § 49-6-3050(a)(2), (a)(3), or (b); or
(B) A Tennessee resident who completed high school in a home school program on or after July 1, 2021;
(8) “Resident” means a student classified as a resident of this state pursuant to § 49-8-104;
(9) “Semester” has the same meaning as defined in § 49-4-902;
(10) “Tennessee Promise scholarship student” means a student admitted to and enrolled in an eligible program of study; and
(11) “TSAC” means the Tennessee student assistance corporation.
(c) TSAC shall administer the Tennessee Promise scholarship program for residents of this state seeking an associate’s degree, certificate or diploma from an eligible postsecondary institution under the following terms and conditions:

(1)

(A) To be eligible for the scholarship a student shall be admitted to, and enrolled full-time in, an eligible postsecondary program in the fall term following:

(i) Graduation from an eligible high school;
(ii) Completion of high school as a Tennessee home school student;
(iii) Obtaining a high school equivalency credential approved by the state board of education; provided, that the student obtains the high school equivalency credential approved by the state board of education prior to the student reaching nineteen (19) years of age; or
(iv) Graduation from an out-of-state secondary school operated by the government of the United States, accredited by the appropriate regional accrediting association for the state in which the school is located, or accredited by an accrediting association recognized by the foreign nation in which the school is located. This subdivision (c)(1)(A)(iv) shall apply only to a dependent child of a military parent, as defined in § 49-4-926. Notwithstanding the definition of resident in subdivision (b)(8), this subdivision (c)(1)(A)(iv) shall apply to dependent children as described in § 49-4-926(c);
(B) Exceptions to initial enrollment may be made for extenuating circumstances as provided in rules promulgated by TSAC; and
(C) Notwithstanding subdivision (c)(1)(A), if a student who graduates early from an eligible high school, or who completes high school at an eligible home school early, or who obtains a high school equivalency credential approved by the state board of education before the spring semester immediately preceding the student’s initial fall enrollment, and the student is admitted to, and enrolled full-time in, an eligible postsecondary program, then the student is eligible for the scholarship;
(2) Students applying for the scholarship shall complete the Tennessee Promise scholarship application for their initial year of enrollment in accordance with the schedule determined by TSAC. Students shall complete the free application for federal student aid (FAFSA) each academic year in which they seek to receive the Tennessee Promise scholarship;
(3) To continue to receive a Tennessee Promise scholarship at an eligible two-year or four-year postsecondary institution, a student shall maintain a minimum cumulative grade point average of 2.0 as set forth in the rules promulgated by TSAC. To continue to receive a Tennessee Promise scholarship at a Tennessee college of applied technology, a student shall maintain satisfactory academic progress as determined by the institution;
(4) Scholarship recipients shall participate in mentoring and community service programs under the rules promulgated by TSAC. TSAC shall develop the selection and renewal criteria for students and shall have the authority to work with outside organizations to develop the most effective means for delivering the scholarships. In selecting outside organizations for participation in the Tennessee Promise scholarship program, TSAC shall give preference to locally established entities that meet designated standards specified by the program’s promulgated rules;
(5) A Tennessee Promise scholarship at a Tennessee public two-year postsecondary institution or Tennessee college of applied technology shall be the cost of tuition and mandatory fees at the eligible postsecondary institution attended less all other gift aid. Gift aid shall be credited first to the student’s tuition and mandatory fees;
(6) Notwithstanding subdivision (c)(5), the amount of the Tennessee Promise scholarship at an eligible four-year public postsecondary institution or an eligible private institution shall be the average cost of tuition and mandatory fees at the public two-year postsecondary institutions less all other gift aid. Gift aid shall be credited first to the average tuition and mandatory fees as described in subdivision (c)(5);
(7) A Tennessee Promise scholarship student who has an approved medical or personal leave of absence from an eligible postsecondary institution may continue to receive the scholarship upon resuming the student’s education at an eligible postsecondary institution so long as the student continues to meet all applicable eligibility requirements. The sum of all approved leaves of absence shall not exceed six (6) months, except as provided for in rules promulgated by TSAC;
(8)

(A) A student shall be eligible for the Tennessee Promise scholarship until the occurrence of the first of the following events:

(i) The student has earned a certificate, diploma or associate degree; or
(ii) The student has attended an eligible postsecondary institution as a Tennessee Promise scholarship student for five (5) semesters if the institution is on a semester system, or its equivalent if the institution is on a system other than a semester system. Such semester limit shall not include an approved leave of absence;
(B) A student with a documented learning disability shall be eligible for the Tennessee Promise scholarship until the occurrence of the first of the following events:

(i) The student has earned a certificate, diploma or associate degree; or
(ii) The student has attended an eligible postsecondary institution as a Tennessee Promise scholarship student for the minimum number of semesters the eligible postsecondary institution establishes as feasible for the student to complete the course work for the certificate, diploma, or associate degree the student is attempting to obtain, if the institution is on a semester system, or its equivalent if the institution is on a system other than a semester system. Such semester limit shall not include an approved leave of absence;
(9)

(A) To be eligible for a Tennessee Promise scholarship, a student shall maintain continuous enrollment as a full-time student in each semester while receiving the scholarship;
(B) The requirement of subdivision (c)(9)(A) that a Tennessee Promise scholarship student maintain continuous enrollment does not apply to a Tennessee Promise scholarship student who is on a medical or personal leave, as approved by the student’s eligible postsecondary institution;
(10) Notwithstanding the requirement of subdivisions (c)(1) and (9)(A) that a Tennessee Promise scholarship student maintain full-time enrollment, a student who does not have a documented learning disability may enroll in fewer than twelve (12) semester hours if required by the academic program in which the student is enrolled. A student with a documented learning disability shall enroll each semester in the maximum number of semester hours that is established by the eligible postsecondary institution as feasible for the student to attempt; and
(11) TSAC is authorized to promulgate rules to establish deadlines for applications, and appeal procedures for the denial or revocation of the scholarship, and to otherwise effectuate the purposes of this part. The rules shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
(d) The Tennessee Promise scholarship endowment fund is created. The Tennessee Promise scholarship endowment fund shall be established and funded under the following terms and conditions:

(1) This fund shall be an irrevocable trust that the state treasurer shall administer. The attorney general and reporter shall approve the terms of the trust instrument. The trust shall consist of the Tennessee Promise endowment account and the Tennessee Promise scholarship special reserve account;
(2) The trustees of the trust shall be as follows:

(A) The governor, or a member of the governor’s cabinet or a cabinet-level staff member who is designated by the governor;
(B) The state treasurer or the treasurer’s designee;
(C) The comptroller of the treasury or the comptroller’s designee;
(D) The secretary of state or the secretary’s designee;
(E) The commissioner of finance and administration or the commissioner’s designee;
(F) The chair of the finance, ways and means committee of the house of representatives or the chair’s designee;
(G) The chair of the finance, ways and means committee of the senate or the chair’s designee; and
(H) One (1) member appointed by the governor who shall serve at the pleasure of the governor;
(3) The state treasurer shall serve as the chair of the trustees and shall preside over all meetings and proceedings of the trustees;
(4) The trust may invest in any security or investment in which the Tennessee consolidated retirement system is permitted to invest; provided, that investments by the trust shall be governed by the investment policies and guidelines adopted by the trustees of the trust in accordance with this part. The state treasurer shall be responsible for the investment and reinvestment of trust funds in accordance with the policies and guidelines established by the trustees;
(5) The trust shall be initially funded in fiscal year 2014-2015 by a deposit of:

(A) The program-generated revenues of TSAC invested as a part of the chairs of excellence endowment fund established by § 49-7-501 and pursuant to chapter 98 of the Public Acts of 2013, and any income earned from the investment of such funds; and
(B) The balance of the lottery for education account established in accordance with § 4-51-111(b), but excluding the general shortfall reserve subaccount provided in § 4-51-111(b)(3) and the sum of ten million dollars ($10,000,000);
(6) The initial deposit shall constitute the principal of the trust. Subsequent transfers to the trust and trust income, as defined in this section, shall not increase, or constitute an addition to, the principal of the trust, but shall be placed in the Tennessee Promise scholarship special reserve account provided in subdivision (d)(9);
(7) Beginning in fiscal year 2014-2015, all funds in the lottery for education account, established in § 4-51-111(b), in excess of the sum of the general shortfall reserve subaccount provided in § 4-51-111(b)(3) and ten million dollars ($10,000,000), shall be transferred on at least an annual basis to the Tennessee Promise scholarship special reserve account, or more frequently as determined by the state treasurer and the commissioner of finance and administration. Such transfers shall occur after all required expenditures have been made for Tennessee education lottery scholarship programs, Tennessee student assistance awards, and administrative expenses, and after any required deposits into the general shortfall reserve subaccount have been made. The Tennessee Promise scholarship special reserve account shall be a part of the trust, and the funds in the special reserve account may be commingled with, co-invested with, and invested or reinvested with the other assets of the trust;
(8) The principal of the trust shall not be expended for any purpose. Trust income shall be expended only to fund the Tennessee Promise scholarship program and pay expenses incurred in administering and investing the trust assets. Trust income means the income from the trust’s investment portfolio from whatever source derived, including, but not limited to, interest, dividends, and realized capital gains or losses;
(9) Any trust income not allocated or distributed to the beneficiaries of the Tennessee Promise scholarship program shall be maintained in a Tennessee Promise scholarship special reserve account and may be subject to future allocations and distributions in accordance with this section;
(10) Any funds transferred for the Tennessee Promise scholarship program after the initial deposit in subdivision (d)(5), including matching funds or future appropriations made by the general assembly, shall be placed in the Tennessee Promise scholarship special reserve account of the trust. Unexpended funds remaining in the trust in any fiscal year, whether principal or funds in the Tennessee Promise scholarship special reserve account shall not revert to the general fund;
(11) The funds transferred to this trust may be commingled with, co-invested with, and invested or reinvested with other assets transferred to the trust. All or a portion of the trust may be invested, reinvested and co-invested with other funds, not a part of the trust, which are held by the state treasurer, including, but not limited to, assets of the Tennessee consolidated retirement system and the state pooled investment fund established pursuant to title 9, chapter 4, part 6. The state treasurer shall account for such trust funds in one (1) or more separate accounts in accordance with this section and other law;
(12) Notwithstanding any law to the contrary, all funds placed in the Tennessee Promise scholarship special reserve account shall be available for allocation and distribution as authorized herein only to the extent that funds are available in the Tennessee Promise scholarship special reserve account, and the state shall not be liable for any amount in excess of such sum. All requests for withdrawals for the payment of program funding that are presented to the state treasurer shall be used only to fund the Tennessee Promise scholarship program. Such requests for withdrawals shall not be commingled with requests for withdrawals presented to the state treasurer for any other purpose, and the individual or entity requesting the withdrawal of funds shall attest to the same upon presentation of the request for withdrawal to the state treasurer; and
(13) The provisions of the irrevocable trust are provided in this subsection (d), but the trust shall not include the provisions contained in other subsections of this section, which shall be subject to amendment by legislative enactment.
(e) TSAC and the Tennessee higher education commission shall provide assistance to the general assembly by researching and analyzing data concerning the scholarship program created under this part, including, but not limited to, student success and scholarship retention. TSAC and the Tennessee higher education commission shall publish its findings annually in the report required by § 49-4-903(b).
(f) The comptroller of the treasury, through the comptroller’s office of research and education accountability, shall review and study the Tennessee Promise scholarship program to determine the effectiveness of the program. The study shall be done in the third year of the program and every four (4) years thereafter. The comptroller of the treasury shall report the findings and conclusions of the study to the speakers of the senate and house of representatives and the members of the education committee of the senate and the education administration committee of the house of representatives.
(g) The TSAC board of directors shall appoint a special advisory committee comprised of representatives from existing college access programs in the state. The committee shall take steps necessary to eliminate barriers to access to scholarships and hold mentoring organizations to the highest standard in serving the students receiving the scholarship. Members of the committee shall serve without compensation.
(h)

(1) To encourage public school teachers to volunteer to be mentors in the Tennessee Promise scholarship program, teachers may be granted credit for up to one (1) day of in-service each year for becoming mentors and completing all required mentorship tasks. The one (1) day of credit for mentoring shall count as one (1) day of in-service for those days in which a teacher is permitted to choose the in-service activity.
(2)

(A) To encourage retired teachers to volunteer to be mentors in the Tennessee Promise scholarship program, participation in the Tennessee state employee discount program, except for the tuition waivers granted to state employees under § 8-50-114 and tuition discounts granted to children of state employees under § 8-50-115, shall be granted to retired teachers who become mentors and complete all required mentorship tasks.
(B) Retired teachers who mentor Promise recipients shall be eligible for the Tennessee state employee discount program, as provided in subdivision (2)(A), for one (1) year following the completion of all required mentorship tasks for an academic year.
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