Opinion ID: 1260328
Heading Depth: 1
Heading Rank: 1

Heading: The Virginia Constitutional Questions

Text: The Comptroller contends that Chapters 2 and 106 of the Acts of Assembly of 1973 provide, just as the 1972 legislation provided, for conditional grants or gifts not contemplated by Section 11 of Article VIII of the Virginia Constitution, which permits only loans. Therefore, the Comptroller concludes, insofar as the new chapters permit such conditional grants or gifts to be made to students in sectarian institutions, they are violative of Section 10 of Article VIII, which permits such type of aid only to students in public and nonsectarian private institutions. The Comptroller argues that the five alternative methods of repayment set forth in Chapters 2 and 106 differ in no way from the method of repayment set forth in the earlier legislation, viz., satisfactory academic progress, which we struck down in the first Miller case. The Attorney General contends, on the other hand, that the Report of the Commission on Constitutional Revision, the subsequent legislative action of the General Assembly, and the opinion of this court in the first Miller case, recognize that loans made under the authority of Section 11 of Article VIII may be repayable other than in money. This being so, the Attorney General argues, the legislation under review must be found constitutional if the methods of repayment set forth therein provide for the giving of any consideration recognizable in the law of contracts, that is, a benefit to the Commonwealth or a detriment to the recipient of a loan. The Attorney General insists that each of the five methods of repayment provides sufficient consideration in that each secures to the Commonwealth meaningful benefits and imposes upon the recipient significant restrictions which constitute legal detriments. And in an amicus curiae brief filed by the Council of Independent Colleges in Virginia in support of the Attorney General's position, it is stated that how valuable the recipient's service or benefit is -- how much it is worth to the Commonwealth -- is . . . a matter to be decided not by a court, but by the General Assembly. We accept the Attorney General's premise that a loan made pursuant to the authority of Section 11 of Article VIII need not be repayable only in money, but may be repayable in some other manner. And we might agree that if the case could be decided upon simple principles of contract law, the General Assembly's pronouncement of what is sufficient consideration for such a loan would be controlling. However, we do not think the case can be decided by reference to principles of contract law. The controlling question, in our opinion, is not whether sufficient consideration has been provided for but whether the General Assembly had, in the first instance, authority to provide that Section 11 loans could be repaid upon the terms set out in Chapters 2 and 106. We proceed to an examination of that question. Section 11 of Article VIII authorizes the General Assembly to provide for loans to students attending certain nonprofit institutions of higher education in Virginia. If all we had before us was the stark word loans, as used in Section 11, we would be forced to hold that any loan made pursuant thereto would have to be repayable in money. But we know that the Revisors of the Constitution, the electorate which approved it, and the General Assembly which put it into effect intended the word loans to have a meaning different from what it denotes in the ordinary commercial transaction. The extent of that difference, however, is the crucial determination we must make. We know the word loans was intended to convey something more than its usual meaning because in its Commentary upon Section 11 of Article VIII, the Commission on Constitutional Revision stated: {The Commission does not propose any state appropriations to private colleges and universities. Its proposals are much more modest. In the first place, the proposed section would allow the Commonwealth to extend to students in private institutions, whether church-related or not, loan programs available to students in public or private nonsectarian colleges in Virginia. For example, students in church-related colleges could be made eligible for the State Teacher Scholarships given by the State Board of Education. These loans, given to undergraduates preparing for teaching in the public school system, can be cancelled either by a specified period of teaching or by repayment. (Emphasis added.) Thus, although we know that in revising the Constitution it was intended that loans made under the authority of Section 11 of Article VIII could be repayable other than in money, we also know that any different manner of repayment was intended to be confined within very narrow limits -- the rendering of public service to the Commonwealth. We say this because the one example given, teaching in the public school system, is an act of public service and the one different method of repayment cited, a specified period of teaching, requires such public service. It cannot be presumed that because approval was given the revised Constitution with the intention that one alternative method of repayment of loans would be permitted, other far different methods were also intended to be permitted. To the contrary, it must be presumed that approval was given in light of the modest proposals of the Commission on Constitutional Revision. Those proposals displayed the clear intent to limit the manner of repayment of loans to methods substantially following the given example of public service to the Commonwealth. We hold, therefore, that in order for financial aid to be valid as a loan under Section 11 of Article VIII, it must be repayable either in money or by public service to the Commonwealth. Four of the five alternative methods of repayment set forth in the present legislation, those numbered 2 through 5, [7] fail to meet this test. Mere residence in the state, either by itself or coupled with employment by the nonpublic employers permitted by the legislation, or active duty in the armed services of the United States, are not acts substantially following the example of public service to the Commonwealth contemplated by Section 11 of Article VIII. 2. Residence and domicile in Virginia and employment by an organization or activity operated exclusively for religious, charitable, scientific, literary, or educational purposes or for testing for public safety or for the prevention of cruelty to children or animals. 3. Residence and domicile in Virginia and gainful employment other than as set forth in method No. 2 or as an employee of the Commonwealth or any of its political subdivisions. 4. Residence and domicile in Virginia. 5. Active duty in the armed services of the United States. To the extent that the legislation under review permits repayment of loans by methods 2 through 5, it must be held to provide for conditional grants or gifts in excess of the authority granted by Section 11 of Article VIII. And, since the conditional grants or gifts may, under the legislation, be made to students in sectarian institutions, they are, to that extent, violative of Section 10 of Article VIII, which limits such type of aid to students in public and nonsectarian private schools. This does not mean, however, that the entire programs envisioned by Chapters 2 and 106 must fall. Each of the Chapters now before us contains a severability clause. This situation differs from the first Miller case, where only one of the Acts under consideration had such a clause. Here, with a severability clause in each Chapter, we can eliminate what is bad and salvage what is good. We may salvage in three areas. First, method No. 1 set forth in Chapters 2 and 106, which method permits repayment of loans by employment by the Commonwealth or any of its political subdivisions, passes the test of Section 11 of Article VIII. This method substantially fits the pattern of public service contemplated by Section 11 as necessary to repay a loan other than in money. Therefore, we uphold Chapters 2 and 106 to the extent that they provide financial aid in the form of loans no students attending the eligible educational institutions defined therein, both sectarian and nonsectarian, such loans to be repayable only in money or by employment by the Commonwealth or any of its political subdivisions. Second, Section 10 of Article VIII permits financial aid, without restriction as to form, to students in public institutions. Thus, such aid may take the form of grants or loans. Therefore, we uphold Chapter 106 to the extent that it provides aid in such form to students in public institutions. The terms and conditions upon which the grants or loans are made shall be determined by the State Council of Higher Education. Code | 23-38.49(a). Third, Section 10 of Article VIII also permits financial aid, without restriction as to form, to students in nonsectarian private schools. Thus, such aid may take the form of outright grants. It follows that such aid may also be in the form of conditional grants. While, as we have held, conditional grants are not loans within the meaning of Section 11 of Article VIII and are invalid under Section 10 when sought to be made to students in sectarian schools, such grants may, under the authority of Section 10, be made to students in nonsectarian schools. And there is nothing in Section 10 to prevent such grants from being made upon the condition that they be repaid either in money or by one or more of the five alternative methods set forth in Chapters 2 and 106. Therefore, we uphold Chapters 2 and 106 to the extent that they provide financial aid in the form of conditional grants, repayable in the manner specified therein, to students in nonsectarian private institutions.