AB 486

This bill prohibits an institution of higher education from reducing gift aid that the institution has offered to a student because the student has received a private scholarship from a Wisconsin-based entity, unless certain circumstances apply. The bill applies to University of Wisconsin System institutions, Wisconsin technical colleges, and private, nonprofit institutions that are members of the Wisconsin Association of Independent Colleges and Universities. “Gift aid” is defined in the bill to mean all financial aid that is not a loan or work-study program, including grants, scholarships, tuition waivers, and third-party payments. “Private scholarship” is defined to mean a scholarship of $5,000 or less awarded by a Wisconsin-based entity but does not include an award funded by an entity that is affiliated with the institution of higher education.

Under the bill, an institution of higher education may reduce the amount of gift aid it offers to a student athlete as a result of a private scholarship award if the reduction must be done in order to comply with the individual or team financial aid restrictions of a governing national intercollegiate athletic association. The institution of higher education may also reduce the amount of a student’s offered gift aid as a result of a private scholarship award if the student’s total gift aid from all sources exceeds the student’s financial need and if the institution first alerts the student that the student may request a reassessment of a certain metric of how the institution of higher education calculates the student’s financial need. Before reducing the amount of a student’s offered gift aid, an institution of higher education must first attempt to reduce or replace other kinds of gift aid that the student has been offered, subject to applicability and to the extent that such action is permitted by the federal Department of Education.

The bill also requires an institution of higher education to make a sincere attempt to ask the provider of a private scholarship to rescind and re-award to a student a private scholarship in a way that does not constrain how the institution applies it to the student’s cost of attendance or to ask for a private scholarship award provider to clarify the way in which a private scholarship may be used. A private scholarship provider is not required to comply with the institution’s requests.