A~STXN II.TEXAS November 4, 1963

Honorable J. B. Morris Chairman, Board of Regents Lamar State College of Technology Beaumont, Texas Opinion No. C-170 Re: Use that may be made of student deposit fund earnings as outlined 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 student deposit fund earnings as outlined in Article 2654d-1, Vernon’s Texas Statutes.

“Section 3provides that governing boards shall use the income from these deposits ‘either for the purpose ofmaking 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 apart of the phrase ‘a general student union program’?

“In the past we have interpreted student 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 tomake this determination under this statute.
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“As far as we know there has been no previous departmental construction on this ~. matter.” Sections 2and 3ofArticle 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 ofthis fund and any general property deposits which heretofore or hereafter remain without call for refund for aperiod of four (4) years from the date of last attendance at any ofthe institutions shall be forfeited and become a part ofand operative to the permanent use and purpose ofthe student deposit fund. Direct expenses ofthe administration ofthe funds shall be paid from the student deposit fund. Nothing in this Act shall be construed to prohibit refund ofany balance remaining in the

‘General Property Deposits’ when made on proper demand and provided the above limitation offour (4) years has not run. The governing boards ofthe respective institutions may require that no student withdraw his deposit until he has been graduated or has apparently withdrawn permanently from school.

“Sec. 3. The student deposit fund, consisting ofthe income from the investment or time deposits ofthe ‘General Property Deposits’ and forfeited ‘General,Property Deposits,’ as provided in this Act, shall be used, at the discretion ofthe respective governing boards ofthe several institutions ofhigher education, either for the purpose of making student scholarship awards to needy and deserving students, or for the support ofa general student union program, or for both such purposes. The governing boards shall ad-
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minister the scholarship awards for the institutions under their jurisdiction, including the selection ofrecipients and the amounts and conditions ofthe awards; provided, however, 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 ofstudent union programs shall be approved as to amount and purpose by the respective governing boards ofthe several institutions; provided, however, that at the Main University ofThe University ofTexas, 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 foundation for the support ofa 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 ofhis 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 connotation. 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 1of the statute provides that at least part ofthese 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 ofthese 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 deserving students nor under the clause relating to a general student union program.

**Yours very**  **truly,** WAGGONER CARR Attorney General ofTexas

**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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