SB171

SECTION 1. The legislature finds that access to higher education plays an important role in individual and societal success. According to the College Board, there is a correlation between higher levels of education and higher earnings for all racial and ethnic groups, as well as both men and women. The College Board has noted that the income gap between high school graduates and college graduates has increased significantly over time, while higher levels of education also correspond to lower levels of unemployment, poverty, public health risks, and incarceration throughout society.

The legislature further finds that in April 2016, the Institute for Research on Higher Education at the University of Pennsylvania Graduate School of Education issued a study that analyzed college costs in relation to family income level. The study revealed that while Hawaiʻi ranks high in college affordability, higher education costs remain a major expense for working families, especially those earning less than $30,000 annually. The department of education also reported that the college-going rate for the class of 2021 high school students is fifty-one per cent, with Native Hawaiʻian, Pacific Islander, and Filipino students continuing to enroll in college at rates that are lower than other ethnic groups.

Additionally, the legislature finds that the Hawaiʻi community college promise program was established to alleviate the high cost of obtaining a college education for low—income families. Yet the program, along with other financial aid policies, has not made community college fully affordable for all students who wish to enroll in a community college. Currently, the State provides minimal need-based assistance to offset the unmet direct cost of community college for qualified students enrolled at any community college campus within the university of Hawaiʻi system, with the financial assistance through the program contingent upon available funding and on a greatest need basis.

The legislature also finds that some states have implemented programs to make community college free for all or most students, including California, Delaware, Nevada, New York, Oregon, Rhode Island, Tennessee, Virginia, and Washington. The legislature finds that expanding access to the Hawaiʻi community college promise program to all qualified applicants would increase Hawaiʻi's college-going rate, especially for students and families who are economically disadvantaged. Expanding access would also provide more students with the educational opportunities that are necessary for the development of a sustainable and diversified twenty-first century economy in the State.

The legislature notes that the cost of making community college tuition free can be estimated using data obtained from the university of Hawaiʻi's institutional research, analysis, and planning office. For the fall 2022 semester, the university of Hawaiʻi reported that 12,449 classified students with Hawaiʻi residency were enrolled in community college, 4,930 of whom were registered as full-time students and 7,519 of whom were registered as part-time students. The university of Hawaii also reported that approximately forty-two per cent of community college students received financial aid to cover the cost of their tuition in the most recent year for which data is available and that part-time residential community college students enroll in 6.6 credits per semester on average. When these data points are considered, the cost of making community college tuition free for Hawaiʻi residents can be estimated at less than $20,000,000, even after accounting for first-year enrollment increases experienced by other states that have implemented free community college programs. Moreover, the actual cost of making community college tuition free would likely be even lower than these numbers suggest, since many students received financial assistance from the military or from other scholarship programs.

Accordingly, the purpose of this Act is to expand access to higher education for qualified Hawaiʻi residents by:

(1) Expanding eligibility for scholarships under the Hawaiʻi community college promise program to all qualified students; and

(2) Appropriating funds to finance the expansion.

SECTION 2. Section 304A-506, Hawaii Revised Statutes, is amended by amending subsections (a) through (c) to read as follows:

"(a) Notwithstanding section 304A-501, there is established the Hawaii community college promise program to be administered by the board of regents. The program shall provide financial assistance in the form of scholarships for the unmet direct cost needs of all qualified students enrolled at any community college campus of the [~~University~~] university of Hawaii.

(b) [A] Each student enrolled at a community college campus shall be eligible for [~~scholarship consideration~~] and shall receive financial assistance through scholarships for a maximum of eight semesters [if] through the Hawaii community college promise program; provided that the student:

(1) Qualifies for Hawaii resident tuition;

(2) Completes and submits the Free Application for Federal Student Aid for each academic year and accepts all federal and state aid, grants, scholarships, and other funding sources that do not require repayment; provided that this paragraph shall not apply to a student who enrolls in a certificate program;

(3) Is enrolled in a classified degree or certificate program with six or more credits per semester;

(4) Maintains satisfactory academic progress, as defined by federal requirements established pursuant to title IV of the Higher Education Act of 1965, as amended, and determined by the campus at which the student is enrolled; and

(5) Has been determined by the campus to have unmet direct cost needs.

(c) [~~Scholarships shall be awarded to the extent possible based on available funds and on a greatest need basis.~~] An award granted to a student shall be equal to the student's unmet direct cost need, based on the Free Application for Federal Student Aid calculation of need, less the amounts available to the student from Pell grants and other scholarships; provided that the unmet direct cost need for a student who enrolls in a certificate program shall be based on a suitable instrument, as determined by the university of Hawaii, less the amounts available to the student from grants and other scholarships."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $20,000,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for expansion of eligibility for scholarships under the Hawaiʻi community college promise program to all qualified students.

The sums appropriated shall be expended by the university of Hawaii for the purposes of this Act.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2025.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	171
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII