The proposed legislation, General Assembly Raised Bill No. 5158, aims to prohibit institutions of higher education in the state from reducing the financial aid awarded to students due to the receipt of scholarships from either private or public sources. The bill specifies that financial aid encompasses all scholarships, grants, and federal, state, and institutional aid, but excludes any federal, state, or private student loans. However, it allows for reductions in financial aid under two specific circumstances: if a student's total financial aid meets or exceeds their cost of attendance, or if the reduction is necessary to comply with financial aid restrictions imposed by athletic associations or conferences, such as the NCAA.

This act is set to take effect on July 1, 2026, and introduces new legal language to current law, specifically in Section 1, which outlines the conditions under which financial aid may be reduced. The bill does not propose any deletions from existing law, as it primarily establishes new provisions regarding scholarship displacement. The intent of the legislation is to ensure that students are not penalized in their financial aid packages for receiving scholarships, thereby promoting access to higher education.