Arkansas Administrative Code
Agency 008 - Department of Higher Education
Division 10 - Financial Aid Division
Rule 008.10.05-004 - Amendments to the Rules of the Arkansas Challenge Scholarship Program

A. The applicant must be a citizen of the United States or a permanent resident alien.

B. The applicant shall have been a resident of the State of Arkansas for at least (12) months prior to graduation from an Arkansas high school, and the recipient's parent(s) or guardian(s) shall have maintained Arkansas residency for the same period of time.

C. The applicant shall have graduated from an Arkansas high school on or after March 5, 1991.

D. The applicant must be accepted for admission and enrolled as a fulltime, first-time freshman at an approved institution of higher education, as defined by the Department of Higher Education, within twelve (12) months of graduation from high school. Applicants who graduated from high school after December 31, 2001, and before December 31, 2002 must enroll within eighteen (18) months of graduation from high school.

E. The applicant must be enrolled full-time (12 semester hours or the equivalent) and complete twenty-four (24) semester hours, or the equivalent, per academic year. Those applicants who graduated from high school after December 31, 2000 must be enrolled full-time twelve (12) semester hours or the equivalent for the first semester and fifteen (15) semester hours or the equivalent every semester thereafter.

F. The applicant must be enrolled in a program of study, which leads to or is creditable towards a baccalaureate degree. These programs include baccalaureate degree programs, associate degree programs, and nursing school diplomas, which require concurrent college enrollment.

G. Applicants must certify that they are drug-free and must pledge in writing on the application form to refrain from the use or abuse of illegal substances. This includes alcohol for applicants under twenty-one years of age.

H. Any male applicant under twenty-six years of age must file a Statement of Selective Service Status with the postsecondary education institution at which he is enrolled certifying that he has complied with the terms of the Military Selective Service Act before funds can be disbursed.

I The applicant must score 19 or above on the ACT Composite or at least 730 on the SAT combined verbal and math (if the ACT score is not available). For students graduating after December 31, 2009, the applicant must demonstrate proficiency in the application of knowledge and skills in reading and writing literacy and mathematics by passing end-of-course examinations or by scoring at least a nineteen (19) on the applicable subscore of the ACT.

J. A recipient of a Governor's Distinguished Scholarship is prohibited from receiving an Academic Challenge Scholarship.

K. Applicants who graduate from high school after December 31, 2001 must achieve the following grade point average in the pre-collegiate core curriculum: 3. 0 on a 4. 0 scale if enrolling at an approved four-year institution or a grade point average of 2. 75 on a 4. 0 scale if enrolling at an approved two-year institution. These grade point averages may be revised to no lower than a 2. 5 grade point average on a 4. 0 scale if it is determined by the department, based on the most recent evaluation of the program's operation that the grade point requirement would unduly reduce the number of low-income or disadvantaged students who would otherwise be eligible for the program. At the Department's discretion, an exception may be made to institutions with a high percentage of students receiving full Pell grants, upon written petition to the department by the institution. The applicant who graduated from high school prior to December 31, 2001, must have achieved a grade point average (GPA) of 2. 50 on 4. 0 scale in the pre-collegiate core curriculum established by the State Board of Education and the Arkansas Higher Education Coordinating Board pursuant to A. C. A. 6-61-217 as listed below.

* English - Four units with emphasis on writing skill (not to include courses in oral communication)

* Natural Science - Two units, with laboratories, chosen from two of the following: Biology, Chemistry, or Physics (Applied Biology/Chemistry [two-year program] may be substituted for Biology. Principles of Technology I and II [two-year program] may be substituted for Physics). High School graduates in 2002 and beyond will be required to have an additional unit of science. The third unit may be any natural science, including Physical Science, with a lab.

* Mathematics - Three units: Algebra I, Algebra II and Geometry (Applied Math I and II [two-year program] may be substituted for Algebra I if the student who completes Applied Math I and II also completes Algebra II and Geometry [or more rigorous math courses such as calculus or trigonometry] with grades of C or better). Applicants graduating in the year 2002 and beyond will be required to have a fourth unit of Mathematics beyond Algebra II.

* Social Studies - Three units, including one of American History, one of World History, and at least one-half unit of Civics or American Government.

* Foreign Language - Two successive units in one foreign language.

A UNIT is defined as the credit received for completion of one (1) year of a course in high school. One semester is equal to one-half (1/2) unit.

OR

A UNIT is defined as the credit received for completion of one three credit-hour semester course in college as a high school student or as a student applicant seeking to meet the core requirements provided for in the grace period specified in Rule 2, Section I, Paragraph M. The Department shall have the authority to exercise professional judgment in the determination of course substitutions when special circumstances exist that prevents the student from meeting stated course requirements but evidence exists that shows the student meets the academic intent of the program.

L. Applicants who do not meet the requirements of both paragraphs I and K with respect to the minimum ACT score (or its equivalent), or the minimum GPA in high school core courses, shall qualify if they meet the combined test score and GPA requirements set out in the selection index below:

Applicants with ACT scores below 15 will not be eligible; applicants with GPAs below 2. 0 will not be eligible.

Applicants who graduate from high school after December 31, 2001, who do not meet the requirements of both paragraphs I and K with respect to the minimum ACT score (or its equivalent), or the minimum GPA in high school core courses, shall qualify if they meet the combined test score and GPA requirements set out in the selection index below:

Applicants with ACT scores below 15 will not be eligible; applicants with GPAs below 2. 25 will not be eligible.

Applicants who graduated from high school after December 31, 2001, and before December 31, 2002, must have achieved a minimum cumulative grade point average of 2. 0 in college to be eligible for a deferred award, unless they were unable to attend college in the academic year following high school graduation.

M. Applicants who graduate from high school after December 31, 2001, who have met the requirements as listed in Section I., Paragraphs A through I, but have not completed the precollegiate core curriculum defined in Paragraph K by the end of their senior year of high school shall have a grace period of twelve (12) months from graduation to make up any course deficiencies required for program eligibility, (as defined in Section I, Paragraph K) due to the unavailability of the courses in the applicant's high school. However, students will not be fully eligible for an award until all academic deficiencies are met.

N. For applicants graduating from high school after December 31, 2004, applicants must demonstrate financial need as defined below:

1. A recipient in his or her freshman year shall be awarded an amount not to exceed two thousand five hundred dollars ($2,500);

2. A recipient in his or her sophomore year shall be awarded an amount not the exceed two thousand seven hundred and fifty dollars ($2,750);

3. A recipient in his or her junior year shall be awarded an amount not the exceed three thousand dollars ($3,000); and

4. A recipient in his or her senior year shall be awarded an amount not the exceed three thousand dollars ($3,500).

(A) Teach, as required under § 6-82-1010, in a subject matter area designated by the Department of Education as having a critical shortage of teachers; or

(B) Teach, as required under § 6-82-1010, in a geographical area of the state designated by the Department of Education as having a critical shortage of teachers.

After all awards are made to applicants who agree to the provisions of § 6-82-

1009, awards will next be prioritized to students who meet all the eligibility criteria established in Rule 2, beginning with the neediest students first.

The Arkansas Department of Higher Education shall notify each eligible applicant of his/her award. The award notice includes the student's name, address, social security number, the actual amount the student is eligible to receive, and the student's first institutional choice as indicated on the application form. The award notice also explains the Arkansas Department of Higher Education's disbursement procedures and conditions of the Academic Challenge Scholarship.

Applicants, who are awarded pursuant to § 6-82-1009, shall execute a promissory note to the Arkansas Department of Higher Education for the purpose of entering into a loan agreement with ADHE. The terms of the loan agreement will include the general purpose, repayment and deferment procedures, interest calculations, and a schedule of advances. The promissory note shall be signed by the loan recipient and by a co-maker of eligible age. Modifications to any award amount will be confirmed through the issuance of a new promissory note.

A. Payment of Scholarships\Loans

The Arkansas Department of Higher Education shall disburse scholarship and loan funds to the approved institution of the student's choice. The Arkansas Department of Higher Education shall send funds to the institution via electronic funds transfer or state warrant. After verification of full-time enrollment, the institution will disburse the scholarship and loan funds to the student according to the institution's disbursement procedures. The scholarship or loan fund payment will correspond to academic terms, semesters, quarters, or equivalent time periods at the eligible institution. In no instance may the entire amount of the scholarship or loan disbursement for an educational year be paid to or on behalf of such student in advance.

B. Transfer of Scholarships\Loans to Another Approved Institution

A recipient who has received an Academic Challenge Scholarship may transfer the scholarship or loan to another approved Arkansas institution of higher education, provided that:

C. Withdrawal Policy

The Arkansas Department of Higher Education shall allow a student to withdraw from the Arkansas Academic Challenge Scholarship Program for no more than one year. The recipient must submit a written petition for withdrawal. The petition shall give the reason for withdrawal and be supported by documentation. In the absence of extraordinary circumstances, the award will be revoked if the recipient fails to enroll full-time in an eligible institution in Arkansas, and the Arkansas Department of Higher Education receives neither written notification of transfer of the scholarship\loan to another eligible institution, nor a petition for withdrawal by the recipient by October 1 for the fall term and February 1 for the winter and/or spring terms. At the discretion of the Department of Higher Education, the award will not be revoked if it is determined by ADHE that extraordinary circumstances prevented the student from notifying ADHE by the required dates.

D. Renewal of Scholarship

The scholarship may be awarded for a total of four academic years of undergraduate study, provided the recipient maintains at least a 2. 50 cumulative grade point average on a 4. 0 scale and completes 24 semester credit hours (or equivalent) per academic year.

Those recipients graduating from high school after December 31, 2000, must maintain a 2. 75 cumulative grade point average on a 4. 0 scale and complete twelve (12) semester hours or the equivalent for the first semester and fifteen (15) semester hours or the equivalent every semester thereafter.

Those recipients in their eighth semester on the Academic Challenge Scholarship AND who are set to graduate at the end of that eighth semester shall be exempt from the fifteen (15) credit hour requirement.

A student may not use these funds for educational purposes beyond the baccalaureate degree.

E. Cancellation of the Scholarship or Loan

F. Military Service

Recipients who are members of the Arkansas National Guard or Armed Forces Reserve units who are called to active duty for reasons other than regular unit training and are unable to complete the current term will be allowed to repeat the missed term without loss of scholarship credit. In addition, they will be placed in deferred status until six months after release from active duty, at which time they must be re-enrolled in an approved institution.

G. Repayment of Scholarships and Loans

H. Refunds

The Arkansas Academic Challenge Scholarship Program is entitled to a refund of the scholarship or loan amount, for that semester, if the recipient of a scholarship or loan withdraws, drops out, or is expelled on or after his or her first day of class of the payment period and the situation falls under the refund policy of the institution. The institution shall pay the refund to the Arkansas Department of Higher Education.

I. Overpayment

If the award of an Arkansas Academic Challenge Scholarship results in an overpayment to the student according to the state law governing the anti-stacking of scholarships, the institution shall follow the ADHE policy in reducing the student's financial package to prevent the student from receiving funds above the federally recognized cost of attendance.

A. Administrative Agreement

The chief executive officer of the eligible institution is responsible for appointing one representative from the financial aid office to act as administrator of the Arkansas Academic Challenge Scholarship Program and to receive all communications, forms, etc. This representative is responsible for verification, data and compliance with all program rules and regulations. The institution must comply with all rules and regulations in order to maintain continued eligibility status.

B. Disbursement Records

The institution shall maintain information on the student indicating disbursement of scholarship or loan funds.

C. Institutional Verification

The institution shall provide certification of full-time enrollment, as of the eleventh day of classes, by completing a Verification Roster each semester after registration. The Verification Roster is an alphabetical listing by institution of all persons receiving the award for a given academic term. The certifying official is responsible for completing the verification rosters each semester or trimester. The Arkansas Department of Higher Education shall provide electronic Verification Rosters to the Financial Aid Administrator for each semester or trimester as needed. The electronic Verification Rosters shall be returned to the Arkansas Department of Higher Education by November 1 for the fall term and by March 15 for the spring term Students who are enrolled less than full-time in the current term shall not receive scholarship or loan benefits in that term. The Arkansas Department of Higher Education shall also provide electronic continuing eligibility rosters to the Financial Aid Administrator before the end of the spring term. The continuing eligibility rosters shall be returned to the Arkansas Department of Higher Education no later than June 15 to ensure that adequate time is provided to notify students of their status in the program.

D. Deadlines for Disbursement of Funds

The deadline for disbursement of funds is no later than 10 days after written receipt of funds. Any outstanding funds not disbursed by these dates must be returned to the Arkansas Department of Higher Education. For those students whose applications are received by ADHE too late to allow disbursement by these dates, disbursement will be made within 10 working days of receipt of the verification roster and electronic transfer of funds.

E. Due Diligence

The institution will exercise due diligence in providing complete, accurate, and timely information as requested by the Arkansas Department of Higher Education on any Arkansas Academic Challenge Scholarship recipient or former recipient. In addition, the institution will exercise due diligence in complying with all the rules and regulations of the Arkansas Academic Challenge Scholarship Program. The Arkansas Department of Higher Education shall periodically review the institution's records concerning this program in an effort to exercise its due diligence requirements as a steward of state funds.

1. Contact references listed on the recipient's application;

1. Utilize telephone directory or check with directory assistance in the area of the recipient and/or co-signer's last known address;

3. Contact institutional offices (alumni office, admissions office, registrar's office, fraternity or sorority, and the department that the recipient majored in) at the campus where the recipient last attended;

4. Contact creditors, such as credit card companies, credit bureaus, or GSL lender;

5. Contact recipient's field of study--professional organization, union, or licensing board;

6. Contact post office;

7. Contact utility companies; and,

8. Contact Chamber of Commerce.

1. CSC Credit Reporting Services, Inc.

2. TRW Credit Data

3. Trans Union Credit Reporting

Forms for reporting defaulted loan recipients and/or co-signers are located in the collection file. ADHE will also respond promptly to any inquiries it receives from credit reporting agencies concerning delinquent or defaulted loan recipients and/or co-signers.

A. the cost of litigation would exceed the likely recovery if litigation were commenced; or

B. the recipient and/or co-signer do not have the means to satisfy a judgment on the debt, or a substantial portion thereof.

Proof of due diligence collection activities must be submitted to the Administrator of the Department of Finance and Administration and approval from the Administrator must be received before Academic Challenge accounts may be written off.

A. Loan recipients who fail to meet their repayment obligations may have added to their total obligation any costs for collection of the debt.

B. Loan recipients who fail to meet their repayment obligations shall have their Arkansas teaching certification revoked.