Lottery, Scholarships and Programs - As introduced, removes the requirement that a student with a documented intellectual disability be admitted to, and enrolled in, an eligible postsecondary institution in an eligible postsecondary program no later than 16 months after completing high school in order to be eligible to receive a Tennessee STEP UP scholarship. - Amends TCA Title 8, Chapter 50, Part 1; Title 49, Chapter 7 and Title 49, Chapter 4.

114th Regular Session (2025-2026) Introduced by Rusty Crowe

The bill removes the 16-month post-high-school enrollment deadline for STEP UP scholarships, expanding eligibility and increasing state costs.

Placed on Senate Finance, Ways, and Means Committee calendar for 4/20/2026

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Purpose and Intent

The bill eliminates a timing requirement for eligibility for the Tennessee STEP UP Scholarship. Specifically, it removes the rule that a student with a documented intellectual disability must be admitted to and enrolled in an eligible postsecondary institution in an eligible postsecondary program no later than 16 months after completing high school in order to receive the STEP UP scholarship.

Key Provisions and Changes

Amends Tennessee Code Annotated:

Title 49, Chapter 4, Section 49-4-943(b)(4): Deletes the requirement that a STEP UP eligible student enroll in an eligible postsecondary program within 16 months after high school completion.

Effective Date:

July 1, 2025 (the public welfare requiring it).

Applicability:

Applies to STEP UP scholarships awarded for the 2025-2026 academic year and for each academic year thereafter.

who would be affected

Students with intellectual disabilities who are pursuing postsecondary education under the STEP UP Scholarship program.

Postsecondary institutions eligible to participate in STEP UP.

The Tennessee Lottery for Education Account, which funds the program, and the Tennessee Student Assistance Corporation (TSAC), which administers the scholarship program.

Financial and Fiscal Implications

Recurring state expenditures from the Lottery for Education Account:

Estimated to exceed $99,000 beginning in FY 2025-26 and in subsequent years.
This increase arises because more students may qualify for the STEP UP scholarship without the 16-month enrollment deadline.

Budgetary note:

The additional funds would not be available for transfer from the Lottery for Education Account to the Tennessee Promise Scholarship Special Reserve Account, due to the change in eligibility timing.

Baseline program context:

STEP UP provides an annual amount of $4,500 for freshmen and sophomores in a 4-year program, and up to $5,700 per semester for juniors and seniors.
2024 data indicates about 101 students received STEP UP in FY 2023-24, totaling roughly $423,025 in expenditures.
TSAC estimates that about 22 additional students may become eligible in FY 2025-26 under the new provisions.

Procedural and Timeline Considerations

Legislative status:

Introduced in 2025, with ongoing committee actions noted (Education; Senate Finance, Ways and Means). Recent action suggests consideration in the Senate Finance, Ways and Means Committee.

Effective date aligns with academic years:

Applies to scholarships awarded starting in the 2025-2026 academic year and forward.

Summary of Impact

The bill expands eligibility windows for STEP UP scholarships, potentially increasing the number of recipient students.

It modestly raises state costs beginning FY 2025-26 (projected >$99,000 annually) to fund the larger eligible population.

No changes to the amount of the STEP UP award itself; rather, it broadens the pool of eligible students by removing the 16-month enrollment deadline.

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