The state Investment Council wants to scrap a college scholarship program it started five years ago and transfer the money to another program that provides scholarships to students who agree to stay in South Dakota and work in critical professions.
The plan would mean the Dakota Corps scholarship program would gain more than $600,000 a year, state Investment Officer Matt Clark told state lawmakers this week.
The Legislature's Executive Board approved the Investment Council's plan to end its own scholarship program, but it stopped short of approving the transfer of the money to the Dakota Corps scholarship program. The Investment Council should continue work on the transfer plan, lawmakers said.
The Investment Council, which manages the South Dakota Retirement System and some state trust funds, set up a new college savings plan in 2002 to give families a tax-exempt way to save for their children's college expenses. The savings plan, called a 529 plan after a section of federal law, is managed by Allianz.
As part of the management deal, Allianz agreed to offer scholarships to some of South Dakota's top students.
The scholarship money is based on the amount invested in the college savings plan, and the scholarship money now exceeds $600,000 a year, Clark said. It could grow to more than $1 million a year within several years, he said.
But most of the students who initially received the Allianz scholarships have decided to go to graduate school outside of South Dakota, so the program is not accomplishing its goal of keeping South Dakota's top students in the state, Clark said.
The Investment Council also decided it should focus only on managing investments instead of a scholarship program, so the council proposed switching the Allianz money to one of the state's other scholarship programs, he said.
The Investment Council is now negotiating with Allianz to extend the contract for managing the college savings plan, and that deal would likely include a continued funding of scholarships by Allianz, Clark said.
Gov. Mike Rounds asked that the Allianz money be shifted to the Dakota Corps scholarship program, which Rounds set up with private donations and some state economic development money.
Clark said the Investment Council believes the Legislature should make the policy decision on whether the Allianz money is shifted into Dakota Corps or another scholarship program.
Dakota Corps has awarded 162 scholarships worth $1.4 million since it started in 2004, said Dale Bertsch, an aide to the governor. Most of the awards have gone to students studying to become nurses, work in other health occupations, or teach in critical areas such as math, science, special education or foreign language, he said.
A student who gets a four-year Dakota Corps scholarship agrees to work in South Dakota for five years in a critical profession, Bertsch said. A graduate who decides to leave the state or work in some other field repays the scholarship at a low interest rate.
The maximum scholarship amount for next year is $5,764, Bertsch said.
The Dakota Corps scholarships are funded by several large corporations, some state economic development money, some Labor Department funds and some other private donations. If the Allianz money is shifted into the program, it would increase the size of the program and not replace existing financing, Bertsch said.
Some lawmakers said they think the entire Legislature should have a say in the proposed change in the scholarship programs, but others said no legislation is needed because the two scholarship programs are outside the state budget.
South Dakota has another major scholarship program, the Opportunity Scholarship, which differs from the other two because it is financed directly with state funds. It provides $5,000 over four years for students who qualify by taking rigorous high school courses, get good grades in high school and get a high score on college entrance tests.Labels: academy awards, career training, education online, free college, free education, scholarship |
