Wisconsin Legislative Council
AMENDMENT MEMO
One Ea st Ma in Stre e t, Suite 401 • Ma dison, W I 53703 • (608) 266-1304 • le g.council@le gis.wisconsin.gov • http://www.le gis.wisconsin.gov/lc
Memo published: October 13, 2023 Contact: Emily Hicks, Staff Attorney
2023 Assembly Bill 86
Assembly Substitute
Amendment 1
2023 ASSEMBLY BILL 86
2023 Assembly Bill 86 generally prohibits the University of Wisconsin System (UWS), the Wisconsin
Technical College System (WTCS), and private institutions of higher education (collectively,
“institutions of higher education”) from reducing a student’s amount of institutional gift aid
1
as a result
of a private or external scholarship unless one of two exceptions applies.
First, if a student’s total gift aid from all sources exceeds the student’s financial need, an institution of
higher education (“institution”) may reduce the student’s institutional scholarships only to the point
that the student’s total scholarships no longer exceed the student’s financial need.
2
The institution may
further reduce the student’s institutional scholarships if it receives permission from the entity which
awarded the student the scholarship that resulted in the student’s total scholarships exceeding the
student’s financial need.
Second, an institution may reduce a student athlete’s institutional scholarships if doing so is necessary
to comply with a governing intercollegiate athletic association’s individual or team financial aid
restrictions.
ASSEMBLY SUBSTITUTE AMENDMENT 1
Assembly Substitute Amendment 1 retains large portions of Assembly Bill 86, but makes several
substantive changes.
First, the substitute amendment changes the definition of a private or external scholarship. Under the
bill, a private or external scholarship means a last-dollar scholarship awarded by a Wisconsin-based
company, private foundation, nonprofit organization, or service group. A last-dollar scholarship means
gift aid awarded to a student to meet any of the student’s financial need amount not met by federal gift
aid, state gift aid, or institutional gift aid. Under the substitute amendment, a private or external
scholarship means a scholarship of $5,000 or less awarded by a Wisconsin-based company,
3
private
foundation, nonprofit organization, or service group.
1
“Institutional gift aid” means gift aid that is funded by UWS, the UWS Board of Regents, the WTCS Board, a WTCS
district board, or an institution of higher education. “Gift aid” means all financial aid that is not a loan or work-study
program, including grants, scholarships, tuition waivers, and third-party payments.
2
Under the bill, financial need means the student’s expected family contribution, as determined under 20 U.S.C. s.
1087nn, minus the student’s cost of attendance, as determined under 20 U.S.C. s. 1087ll.
3
Under the substitute amendment, “Wisconsin-based company” means either: (a) an entity that has its primary place of
business located in Wisconsin; or (b) a local or state branch of an entity that has its primary place of business located
in the United States, if the local or state branch of the entity has its primary place of business located in Wisconsin. The
bill does not define the term “Wisconsin-based company.” - 2 -
Second, the substitute amendment creates a notification requirement regarding an institution’s
reduction of institutional gift aid. Specifically, the substitute amendment requires that before the
institution may reduce the student’s institutional gift aid, it must notify the student that the student can
request that the institution reassess the student’s cost of attendance. If the student makes such a
request, the institution is required to perform a reassessment.
Third, the substitute amendment creates an additional scenario in which an institution is permitted to
reduce a student’s institutional gift aid as a result of a private or external scholarship if the scholarship
causes a student’s total aid from all sources to exceed the student’s financial need. In this circumstance,
the institution may reduce the student’s institutional gift aid only to the point that the student’s total
aid no longer exceeds the student’s financial need.
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Before reducing the student’s institutional gift aid,
the institution must first attempt to correct for the excess by reducing the student’s aid associated with
a loan or work-study program or, if applicable and permitted by federal law, by replacing some or all of
the student’s expected family contribution amount with an amount associated with a loan or work-
study program. Further, if the student’s total aid still exceeds the student’s financial need after the
institution attempts to correct for the excess, the institution must notify the student that the student
can request that the institution reassess the student’s cost of attendance. If the student makes such a
request, the institution is required to perform a reassessment.
Fourth, the substitute amendment requires institutions to communicate with scholarship providers
when scholarships are awarded in a way that constrains how the institution can apply the scholarship to
the student’s cost of attendance. Specifically, the institution must contact the scholarship provider and
ask that the scholarship be rescinded and re-awarded in a way that does not constrain the institution’s
application of the scholarship to the student’s cost of attendance. The substitute amendment does not
require the scholarship provider to comply with this request.
Finally, the substitute amendment provides that the provisions of the legislation are to be implemented
to the maximum extent that federal law permits.
BILL HISTORY
Representative Sortwell offered Assembly Substitute Amendment 1 on October 6, 2023. On October 10,
2023, the Assembly Committee on Colleges and Universities voted to recommend adoption of the
amendment and passage of the bill, as amended, both on votes of Ayes, 9; Noes, 5.
For a full history of the bill, visit the Legislature’s bill history page.
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4
Under the substitute amendment, financial need still means the student’s expected family contribution minus the
student’s cost of attendance, but the definition of “expected family contribution” is changed to reflect anticipated
future changes to the definition of the phrase under federal law.