Date: October 25, 2005

To: Commissioner Stearns

From: Bruce Marks

RE: Proposed Governor's Postsecondary Scholarship Program Policy

The Governor's Postsecondary Scholarship Council, working with MGSLP, is requesting Board of Regent approval of the attached Governor's Postsecondary Scholarship policy. To aid in that approval process, I've prepared this memo to explain some of the more confusing aspects of the proposed policy.

The proposed policy is a balance between the legal requirements of the statute, input from the Governor's office, and the administrative limitations of MGSLP. It represents a collaborative effort between the Governor's office, the Office of Public Instruction, MGSLP, OCHE (specifically Cathy Swift) and the Council.

In this policy, the Board of Regents delegates authority to select scholarship recipients to MGSLP. After discussing timing issues and whether it was practical for the Board to review individual recipients prior to the actual awarding of scholarships, we concluded it best to have the Board delegate this authority to MGSLP. MGSLP will provide informational lists to the Board reporting the awards it has made each year.

The Governor's Postsecondary Scholarship Program (GPSP) is made up of 7 different types of scholarships that are based upon specific areas of study and the type of postsecondary institution the student will attend. The proposed policy divides these 7 types of scholarships into 3 categories: Merit-based awards to graduating high school seniors, merit-based awards available to at large applicants, and need-based awards. Different logic is used for each of these categories.

For merit-based awards to graduating high school seniors, we copy the philosophy we presently use to select MUS Honor Scholarship recipients. We work closely with each of Montana's accredited high schools to find the student with the highest GPA. The highest ranked student attending an MUS school receives the Honor Scholarship. Under this proposed policy, the next two highest ranking, eligible students will receive a four and two year Governor's scholarship, respectively.

Students hoping for an at-large merit scholarship must apply to MGSLP. Although there are only 110 at-large scholarships available, total applications could easily exceed 1,000 each year. At-large applications will create a significant workload issue for MGSLP, but we believe it's the most appropriate way to reach the home-schooled, non-traditional, and other low-income Montanans the scholarship was created to assist.

In order to award need-based scholarships, we need the help of our financial aid offices. To determine financial need, students complete the Free Application for Federal Student Aid (FAFSA). The results of the FAFSA are only shared with the postsecondary institutions the students have indicated they wish to attend (and in some cases, a central repository but there is no central repository in Montana). The results of the FAFSA indicate Expected Family Contribution (EFC). Since we have to know EFC and the financial status of a student to meet the requirements of the statute, only a financial aid office can identify those students who would qualify for a need-based scholarship.

The policy allocates need-based scholarships as determined by the number of FTE students enrolled at each 2-year school, or in the case of a 4-year school, the number of students enrolled in 2-year programs. Each postsecondary institution is guaranteed a minimum of 5 need-based scholarships, per the direction of the Council.

The policy is fairly lengthy due primarily to the amount of detail included in the original bill. We initially considered a separate policy for each of the three categories of scholarships, but disliked the repetition and combined length that three policies would have created.