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 3 provides that governing 

boards shall use the income from these deposits ‘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 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 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 permanent 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 limitation of four (4) years has not run. The 

governing boards of the 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 of the income from the investment or time deposits of the ‘General Property Deposits’ and 

forfeited ‘General,Property Deposits,’ as provided 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, including the selection of recipients and the amounts 

and conditions of the 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 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 foundation 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 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 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 deserving 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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