Alaska House passes bill to protect the state’s college scholarship fund

JUNEAU, Alaska (KTUU) - The Alaska House of Representatives passed a bill with a 23-9 vote on Thursday that would protect the state’s college scholarship fund.

The $410 million Higher Education Investment Fund has been used to pay college scholarships for more than 5,000 Alaska students each year. It was drained last year due to a failed procedural vote by the Legislature needed to keep it full.

Anchorage Superior Court Judge Adolf Zeman sided with Gov. Mike Dunleavy’s administration in February, saying its legal interpretation was valid to drain the fund, but that ruling has been appealed.

Rep. Andy Josephson, D-Anchorage, introduced a bill that would effectively remove the scholarship fund from the state treasury so that it couldn’t be emptied again by another failed procedural vote. He said that would provide certainty for thousands of Alaska college students.

Zeman wrote in his decision that the Legislature could do that, but some Republican legislators from the House minority were skeptical. They cited the Alaska Constitution that prohibits the dedication of state funds in most instances.

Josephson said in response that the plan is “absolutely, 100% legal” and that the Legislature would still have the authority to draw money from the fund for other purposes. The fund, established in 2012, has used investment earnings from an initial deposit to pay for scholarships and student aid.

Some of the opposition to the bill came from the idea that college scholarships would not compete with other appropriations in the annual budget process.

The House passed an operating budget last week that set aside $359 million to recapitalize the fund, allowing it to continue paying out scholarships. The budget still needs support in the Senate.

Tuan Graziano, the University of Alaska Anchorage’s student body president, has been watching debates about the fund closely. He traveled to Juneau earlier in the year to advocate for its protection.

“When students don’t have the certainty of their scholarships, or these aid programs, that really puts their lives in limbo,” he said.

Graziano, 24, received the Alaska Performance Scholarship for the first two years he was at college and said it was “a huge deciding factor” for why he chose to study at UAA and remain in Alaska.

House Bill 229 now heads across to the Senate for its consideration. The current legislative session must end by May 19.

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