Untitled Texas Attorney General Opinion

A~STXN II.TEXAS
November 4, 1963
Honorable J. B. Morris Opinion No. C-170
Chairman, Board of Regents
Lamar State College of Re: Use that may be made of student
Technology deposit fund earnings as outlined
Beaumont, Texas in Article 2654d-1, Vernon’s Civil
Statutes.
Dear Mr. Morris:
: Your letter requesting the opinion of this office reads as
follows:
“The Board of Regents of Lamar State
College of Technology respectfully requests
an opinion regarding the specific use of stu-
dent deposit fund earnings as outlined in
Article 2654d-1, Vernon’s Texas Statutes.
“Section 3 provides that governing
boards shall use the income from these de-
posits ‘either for the purpose of making
student scholarship awards to needy and
deserving students or for the support of a
general student union program, or for both
such purposes.‘
“Can the ‘scholarship awards to needy
and deserving students’ be interpreted to
include use of these funds for student loans,
or can such student loans be made as a part
of the phrase ‘a general student union pro-
gram’?
“In the past we have interpreted stu-
dent loans to come under ‘student scholarship
awards to needy and deserving students,’ and
have assumed that it is within the power of our
Board of Regents to make this determination
under this statute.
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Honorable J. B. Morris, Page 2 (No. C-170 )
“As far as we know there has been no
previous departmental construction on this ~.
matter.”
Sections 2 and 3 of Article 2654d-1, Vernon’s Civil
Statutes, provide:
“Sec. 2. There is hereby established
a student deposit fund which shall be used
for the purpose of scholarship awards and
for the support of student union programs at
the respective institutions in the manner
hereinafter set forth. The income from the
investment or time deposits shall become a
part of this fund and any general property
deposits which heretofore or hereafter remain
without call for refund for a period of four
(4) years from the date of last attendance at
any of the institutions shall be forfeited and
become a part of and operative to the perma-
nent use and purpose of the student deposit
fund. Direct expenses of the administration
of the funds shall be paid from the student deposit
fund. Nothing in this Act shall be construed to
prohibit refund of any balance remaining in the
‘General Property Deposits’ when made on
proper demand and provided the above limita-
tion of four (4) years has not run. The
governing boards of the respective institutions
may require that no student withdraw his de-
posit until he has been graduated or has appa-
rently withdrawn permanently from school.
“Sec. 3. The student deposit fund, consist-
ing of the income from the investment or time de-
posits of the ‘General Property Deposits’ and
forfeited ‘General,Property Deposits,’ as pro-
vided in this Act, shall be used, at the discretion
of the respective governing boards of the several
institutions of higher education, either for the
purpose of making student scholarship awards to
needy and deserving students, or for the support
of a general student union program, or for both
such purposes. The governing boards shall ad-
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Honorable J. B. &forris, Page 3 (No. C -170 )
minister the scholarship awards for the
institutions under their jurisdiction, includ-
ing the selection of recipients and the amounts
and conditions of the awards; provided, how-
ever, that the recipients of such awards are
residents of the State of Texas as defined for
tuition purposes. Any use of such funds for
the support of student union programs shall
be approved as to amount and purpose by the
respective governing boards of the several
institutions; provided, however, that at the
Main University of The University of Texas,
A. & M. College at College Station, and Texas
Technological College at Lubbock such funds
shall be available for scholarship purposes
only.”
Under this statute, the student deposit fund may be used
for purposes of (1) student scholarship awards and (2) a general
student union program!
A student union program is limited to recreational and
social activities among the students. Therefore, it seems clear that
the student deposit fund may not be used for student loans under the
clause relating to a general student union program.
In answer to the remaining portion of your question,
Webster’s New Collegiate Dictionary defines scholarship as “a founda-
tion for the support of a scholar or student who is in a college.” In
Ussery v. United States, 296 F.2d 582, the Court defined scholarship
as an “allowance” to aid a student in the prosecution of his studies.
The statute itself does not merely say scholarship, but
states that the fund shall be used for scholarship “awards,” etc.
There are no cases, Texas or elsewhere, defining “award” in this conno-
tation. Again, Webster’s New Collegiate Dictionary defines it as “that
which is awarded, as a prize or honor,” and as a synonym for “grant.”
This, in turn, is defined as ” . . . allowance . . . . Thing or property
granted; gift; . . . granted by the government.”
In addition, Section 1 of the statute provides that at least
part of these funds shall be invested in United States Government
Securities or fully secured bank time deposits. It seems clear that a
loan to a student would not meet these requirements. For these reasons
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. .
Honorable 3. B. Morris, Page 4 (No. C-170 )
then, neither can scholarship awards to needy and deserving students
be interpreted to include use of these funds for student loans.
SUMMARY
--
The student deposit fund established by
Article 2654d-1, V. C. S. may not be used
for student loans under the clause relating
to scholarship awards to needy and deser-
ving students nor under the clause relating
to a general student union program.
Yours very truly,
WAGGONER CARR
Attorney General of Texas
BY
Charles B. Swarmer
Assistant Attorney General
CBS:nb
APPROVED
OPINION COMMITTEE
W. V. Geppert, Chairman
John Reeves
James M. Strock
Arthur Sandlin
Robert 0. Smith
‘APPROVED FOR THE ATTORNEY GENERAL
BY: Stanton Stone
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