July 10, 1997
Dr. Steven E. Brooks Executive Director
N. C. State Education Assistance Authority Post Office Box 2688 Chapel Hill, North Carolina 27515
Re: Advisory Opinion; The North Carolina Student Loan Fund N.C.G.S. § 116-209.3
Dear Dr. Brooks:
We write in response to your request for an advisory opinion regarding the power of the State Education Assistance Authority (hereinafter "the Authority") to create and administer certain outreach programs designed to equip high school guidance counselors and financial aid administrators to perform their role in counseling students and families about financial aid opportunities more effectively.
In your letter of July 9, 1997, you provide a detailed explanation of the objectives and components of these programs. That letter is therefore incorporated by reference for a specific recitation of the facts upon which this opinion is based. However, for the purpose of our response, we summarize the facts as follows:
To promote access to higher education in North Carolina, the Authority proposes to extend its educational and outreach activities directly to high school guidance counselors and financial aid professionals. The purpose of these activities is two-fold: (1) to equip counselors and financial aid professionals with current and accurate information about the financial aid process and the availability of financial aid to ensure that students and families are well informed about the opportunities for financing higher education in North Carolina; and (2) to facilitate communication between counselors and aid professionals about the delivery of financial aid for the benefit of students. The components of these programs fall into three categories:
Internships for High School Guidance Counselors: The Authority will provide grants to college and universities for the employment of high school counselors in financial aid offices for six-week internships during the summer months. Criteria for selection of the counselor interns and guidelines for the work experience itself will be established by regulations adopted by the Board of Directors.
Contracted and sponsored training opportunities: Afternoon training sessions held in conjunction with the College Board’s series of fall counselor workshops; workshops on college campuses around North Carolina with both counselors and aid administrators invited to engage in a dialogue on issues of importance to the financial aid process; and preparation and reproduction of materials for training guidance counselors and for their use in communicating with students.
Preparation and dissemination of materials for high school financial aid workshops: PowerPoint presentation, including federal and North Carolina financial aid opportunities, for use by financial aid administrators; provide color transparencies of the presentation for those aid administrators who request this medium rather than the computer file; and conduct a training effort for all participating aid administrators who desire an orientation on conducting an effective high school financial aid workshop.
The General Assembly created the State Education Assistance Authority in 1965 as the primary instrumentality for providing a comprehensive program of financial assistance to ensure postsecondary educational opportunity for the State’s citizens. Through the years the Authority has produced and disseminated information about financial aid primarily through the College Foundation, Inc., its contract agent for North Carolina’s Federal Family Education Loan Program, and its associations with the North Carolina Association of Student Financial Aid Administrators (NCASFAA) and the Southern Association of Student Financial Aid Administrators (SASFAA). Consistent with the statutory mission, the Authority now proposes to reach high school guidance counselors and financial aid administrators directly with additional educational activities designed to enhance their abilities to enable qualified students to obtain education beyond the high school level.
Historically, the North Carolina Student Loan Fund has been the source of funding for special projects that enhance the lending objectives of the Authority. If the State Education Assistance Authority has the authority to create and offer the additional outreach programs as described in your letter of July 9, 1997, then the Authority is planning to use the interest income on the North Carolina Student Loan Fund to fund these programs.
Based upon the foregoing facts, you have asked us to address the following legal questions:
Does the Authority have the power to create and administer these outreach programs that are designed to equip guidance counselors and aid administrators to perform their vital role in educating families and students about financial aid opportunities in North Carolina more effectively?
May the Board of Directors authorize use of the interest income from the North Carolina Student Loan Fund to administer these outreach programs consistent with G. S. § 116-209.3?
For the reasons and under the circumstances explained herein, we conclude that the Authority has the power to create and administer these outreach programs consistent with the provisions of Article 23 of Chapter 116 of the General Statutes. We also conclude that the Board of Directors of the Authority may authorize use of the interest income from the North Carolina Student Loan Fund to administer these outreach programs without violating G. S. § 116-209.3.
Under Article 23 of Chapter 116 of the General Statutes, the General Assembly has granted the Authority comprehensive authority to operate financial assistance programs to aid students in attaining postsecondary education. N.C. Gen. Stat. § 116-201(a) provides:
The purpose of this Article is to authorize a system of financial assistance, consisting of grants, loans, work-study or other employment, and other aids, to assist qualified students to enable them to obtain an education beyond the high school level by attending public or private educational institutions. The General Assembly has found and hereby declares that it is in the public interest and essential to the welfare and well-being of the State and to the proper growth and development of the State to foster and provide financial assistance to properly qualified students in order to help them to obtain an education beyond the high school level. The General Assembly has further found that many students who are fully qualified to enroll in appropriate educational institutions for furthering their education beyond the high school level lack the financial means and are unable, without financial assistance as authorized under this Article, to pay the cost of such education, with a consequent irreparable loss to the State of valuable talents vital to its welfare.
The General Assembly has further determined that the operation of a proper system of financial assistance for these purposes serves a public purpose and "is fully consistent with the long established policy of the State to encourage, promote and assist education to enhance economic development." G.S. § 116-201(a). The exercise of the powers conferred by Article 23 is deemed the "performance of an essential governmental function." G.S. § 116-203. To effectuate this governmental function, the legislature mandated that Article 23 be liberally construed. G. S. § 116-208.
Section 116-209.3 provides the Authority with the power to "develop and administer programs and perform all functions necessary or convenient to promote and facilitate the making and insuring of student loans and providing such other student loan assistance and services as the Authority shall deem necessary or desirable for carrying out the purposes of this Article." G.S. § 116-209.3. Furthermore, pursuant to G.S. § 116-204 the Authority is empowered, among other things:
- (3)
- To acquire, hold and dispose of personal property in the exercise of its powers and the performance of its duties;
- (4)
- To make and enter into all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers under this Article; [and]
***
(8) To do all other acts and things necessary or convenient to carry out the powers expressly granted in this Article; provided, however, that nothing in this Article shall be construed to empower the Authority to engage in the business of banking or insurance.
G.S. § 116-204(3), (4) and (8).
In construing laws that create and empower State agencies and political subdivisions, the courts strive to ensure that the purpose of the General Assembly in enacting those laws is accomplished. See, e.g., State ex rel. Commissioner of Insurance v. North Carolina Rate Bureau, 300 N.C. 381, 269 S.E. 2d 547, reh. denied, 301 N.C. 107, 273 S.E. 2d 300 (1980). The legislative purpose is manifest in the language of the statute, the spirit of the act and its objective. Stevenson v. City of Durham, 281 N.C. 300, 303, 188 S.E. 2d 281, 283 (1972). Furthermore, statutes in pari materia are construed together. Redevelopment Commission v. Security National Bank of Greensboro, 252 N.C. 595, 114 S.E. 2d 688 (1960).
When it created the Authority, the General Assembly granted it broad powers to "foster and provide financial assistance to properly qualified students" (G.S. § 116-201(a)) and authorized it "[t]o do all . . . acts and things necessary or convenient to carry out the powers expressly granted." G.S. § 116-204(8). The Authority is expressly granted the power to "promote and facilitate the making and insuring of student loans and providing such other student loan assistance and services as the Authority shall deem necessary or desirable . . ." G.S. § 116-209.3. In our opinion, it is necessary, or at least convenient, for the Authority to educate and train financial aid professionals and guidance counselors regarding financial aid programs.
The outreach programs described in your letter are all directed toward fostering an effective and efficient system of financial aid for properly qualified students in North Carolina. Therefore, we conclude that the State Education Assistance Authority has the power to create and administer those outreach programs; provided that, the Board of Directors determines that each proposed program serves to promote and facilitate the provision of financial aid for higher education or is otherwise desirable for carrying out the purposes of Article 23.
We now turn to your second question: May the Board of Directors authorize use of the interest income from the North Carolina Student Loan Fund to administer these outreach programs consistent with G. S. § 116-209.3?
Article 23 does not expressly identify any sources of funds for the type of outreach programs described in your letter. However, G.S. § 116-209.3 states in pertinent part that the Authority may use the State Education Assistance Authority Loan Fund (renamed the North Carolina Student Loan Fund) "for defraying the expenses of operation and administration of the Authority for which other funds are not available to the Authority." G.S. § 116-209.3. Having concluded that the Authority’s enabling statutes, read in their entirety, grant the Authority the power to operate the outreach programs described in your letter, it is also our opinion that the costs of such educational and training activities are "expenses of operation and administration of the Authority for which other funds are not available to the Authority." We thus conclude that, if the Board formally authorizes those outreach programs, it may also authorize the expenditure of funds from the North Carolina Student Loan Fund for the operation of those programs.
We trust that this advisory opinion addresses the issues that you presented to us. If we may be of further assistance on these or other issues, please write again.
Very truly yours,
Thomas J. Ziko Special Deputy Attorney General
Julia R. Hoke Assistant Attorney General