                                 A~STXN       II.TEXAS
                                 November       4, 1963




Honorable  J. B. Morris                       Opinion     No. C-170
Chairman,  Board of Regents
Lamar State College    of                     Re:    Use that may be made of student
Technology                                           deposit fund earnings  as outlined
Beaumont,  Texas                                     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 stu-
                 dent 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 de-
                 posits    ‘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 pro-
                 gram’?

                        “In the past we have interpreted        stu-
                 dent 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 perma-
                nent 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 limita-
                tion of four      (4)    years has not run. The
                governing      boards of the respective           institutions
                may require        that no student withdraw          his de-
                posit until he has been graduated              or has appa-
                rently withdrawn         permanently       from school.

                          “Sec. 3. The student deposit fund, consist-
                 ing of the income from the investment             or time de-
                 posits of the ‘General         Property   Deposits’     and
                 forfeited     ‘General,Property       Deposits,’    as pro-
                 vided 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,        includ-
               ing the selection       of recipients     and the amounts
               and conditions       of the awards;      provided,    how-
               ever, 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 founda-
tion 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 conno-
tation.  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 deser-
                         ving 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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