Senate Bill 653 Summary

• Consolidates three existing need-based financial aid programs into a single North Carolina Need-Based Scholarship for Public Colleges and Universities, combining the UNC Need-Based Financial Aid Program, Education Lottery Scholarship Program, and NC Community College Grant Program.

• Establishes eligibility requirements including North Carolina residency, undergraduate matriculation status, submission of FAFSA, and demonstrated financial need using federal methodology, with a maximum of 10 semesters for UNC students (12 for five-year programs) and 6 semesters for community college students.

• Creates a Scholarship Reserve Fund for Public Colleges and Universities to be funded by appropriations from the General Fund, Education Lottery Fund, and Escheat Fund, with the State Education Assistance Authority administering the program under a consolidated payment schedule.

• Redirects $77.9 million from UNC's general fund, $165,000 from the Community College Grant Program general fund, $10.7 million from UNC's lottery funds, $30.5 million from lottery scholarships for needy students, and $37.3 million and $15.8 million respectively from Escheat Fund allocations to the new reserve fund beginning in fiscal year 2022-2023.

• Takes effect January 1, 2022, with scholarship awards beginning in the 2023-2024 academic year; repeals Article 35A of Chapter 115C and related statutory provisions for the previous programs.