LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6977 NOTE PREPARED: Dec 30, 2020
BILL NUMBER: HB 1251 BILL AMENDED:
SUBJECT: Educational Costs Exemption.
FIRST AUTHOR: Rep. Lauer BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: X GENERAL IMPACT: State
DEDICATED
FEDERAL
Summary of Legislation: Restrictions on CVO Fee Exemptions: The bill provides that an applicant is not
eligible for educational costs exemptions for any courses taken by the applicant after the applicant has
sufficient credit hours to obtain a baccalaureate degree from a State Educational Institution (SEI).
Repeal of Reduction of Fee Exemption Based on Disability Rating: The bill also repeals a provision that
limits the educational costs exemption amount for a person whose parent enlisted or initially served in the
armed forces after June 30, 2011, based on the percentage of the parent's disability rating. It makes
conforming changes.
Effective Date: July 1, 2021.
Explanation of State Expenditures: CVO Fee Exemptions: The bill would reduce expenditures for CVO
fee exemptions by an estimated $1.8 M to $3.1 M per year. The bill restricts the use of CVO fee exemptions
to undergraduate education only, and limits the number of credit hours for which a student could obtain a
fee exemption. In FY 2020, graduate students received $1.6 M in CVO fee exemptions. The estimate
assumes that undergraduate expenditures for CVO fee exemptions would be reduced between 1% and 5%
due to the bill’s credit hours restrictions. CVO fee exemptions are funded through General Fund
appropriations.
The bill also removes the provision which reduces the fee exemption for students based on their parents’
disability rating if their parents joined the military after June 30, 2011. There will be minimal impact on
expenditures for fee exemptions due to this provision in FY 2022 and FY 2023 because very few CVO
applicants for financial assistance have parents who enlisted after June 30, 2011. However, this proposal will
HB 1251 1
increase expenditures for CVO fee remissions in the future as children of veterans who enlisted after June
30, 2011 reach college age and become eligible. The full impact of the proposal will likely occur 10 to 20
years from now, at which point the cost could be significant.
Commission for Higher Education (CHE): The CHE administers the CVO fee exemptions and would have
to make administrative changes based on the provisions of this bill. The bill’s requirements should be able
to be implemented with no additional appropriations, assuming near customary agency staffing and resource
levels.
SEIs: The bill could result in fewer students enrolling in graduate programs at SEIs. State operating support
for Indiana’s state higher educational institutions is composed of base funding and performance funding.
Under the current higher education budget formula, reduced enrollment could result in reduced
appropriations for higher education in future bienniums. The impact is probably minor and would depend
on the higher education formula used in the future. [SEIs receive state funding through General Fund
appropriations.]
Additional Information - During FY 2020, 369 graduate students received $1.6 M in fee exemptions, while
5,129 undergraduate students received $31.3 M. Under current law, students can receive fee exemptions for
up to 124 credits. Under this bill, a student could receive a fee remission until the student has sufficient hours
to obtain a bachelor’s degree. Students who have no college credits before receiving a fee exemption would
be eligible to receive the exemption for 124 credit hours. Students with college credits before they received
their fee exemption, including students who earned AP or dual credit in high school, would have fewer
credits covered by the fee exemption. An eligible student who earned 30 college credits while in high school,
for example, would be eligible to receive a fee exemption for 94 undergraduate credit hours under the bill.
Explanation of State Revenues: State Educational Institutions: If fewer students attend graduate school
at SEIs due to this bill, the institutions would receive less tuition revenue.
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Commission for Higher Education; State Educational Institutions.
Local Agencies Affected:
Information Sources: Josh Garrison, CHE, JGarrison@che.in.gov.
Fiscal Analyst: Camille Tesch, 317-232-5293.
HB 1251 2


Statutes affected:
1. Introduced House Bill (H): 21-14-4-2