When a Tennessee adult with a disability uses Vocational Rehabilitation Services for college tuition, does the Tennessee HOPE scholarship count as a 'comparable benefit' the person must apply for first, or is it a 'scholarship based on merit' that the comparable-benefits rule excludes?
Plain-English summary
Tennessee's Department of Human Services, Division of Rehabilitation Services, runs the federally funded Vocational Rehabilitation Services (VR) program that helps adults with disabilities get back to work, including paying for college, trade school, or technical training. Federal law (29 U.S.C. § 721(a)(8)(A)) and a Tennessee rule say VR cannot pay for higher-education training unless the client has first made maximum efforts to get grants and scholarships from other sources. Those "comparable benefits" the client must seek expressly do not include "awards and scholarships based on merit."
Representative Casada asked whether the Tennessee HOPE scholarship is a "scholarship based on merit," which would exempt it from the comparable benefits requirement and let VR clients keep the HOPE money on top of VR funds. The AG said no. The Division of Rehabilitation Services had taken the position that "merit-based" requires the scholarship to recognize outstanding or unique talent (academic, athletic, or artistic), not just satisfaction of minimum eligibility standards open to everyone who applies. The AG concluded that interpretation is not plainly erroneous and is entitled to deference under Bellsouth Advertising & Publishing Corp. v. TRA. Because HOPE is awarded to every applicant who meets the minimum academic thresholds rather than to recognize special talent, it falls on the comparable benefit side of the line. VR clients must apply for HOPE first; VR fills any remaining gap.
Currency note
This opinion was issued in 2011. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Common questions
What is the Vocational Rehabilitation Services comparable benefits rule?
Before VR pays for vocational or other training in colleges, universities, community colleges, vocational schools, technical institutes, or hospital schools of nursing, the client and the Division must make maximum efforts to secure grant assistance from other sources. If a comparable benefit exists and is available to the client, it must be used to cover part or all of the training cost. The rule comes from federal law (29 U.S.C. § 721(a)(8)(A)) and state regulations (Tenn. Comp. R. & Regs. 1240-08-05-.03).
Are all scholarships treated as comparable benefits?
No. The Division's regulation expressly excludes "awards and scholarships based on merit" from the comparable benefits the client must use first.
Why didn't HOPE qualify as a merit scholarship?
Because the Division interpreted "merit scholarship" as one that recognizes outstanding or unique talents, skills, and abilities (academic, athletic, or artistic), not one that simply requires meeting minimum standards open to all applicants. The HOPE scholarship is awarded to any Tennessee student who meets minimum academic and other eligibility thresholds; the statute creating it did not single out talent or special achievement as the purpose. As a result, the AG concluded HOPE looks more like generally available need-and-eligibility aid than a competitive merit award.
What level of deference does the Division's interpretation receive?
Substantial. Under Bellsouth Advertising & Publishing Corp. v. Tennessee Regulatory Authority, 79 S.W.3d 506 (Tenn. 2002), an agency's interpretation of its own regulation receives controlling weight unless plainly erroneous or inconsistent with the regulation. The AG found the Division's reading of "merit" passed that test.
What was the practical effect of the opinion at the time it was issued?
A Tennessee VR client headed to college or technical school had to apply for the HOPE scholarship before VR would treat tuition as an unfunded expense. The HOPE award reduced the gap VR had to cover. The client did not get to receive HOPE plus the equivalent VR tuition on top.
Background and statutory framework
The federal Rehabilitation Act of 1973, as amended, conditions VR funds on the requirement that "comparable services and benefits" available to the individual under any other program must be used first, except for benefits expressly excluded from the comparable-services rule. 29 U.S.C. § 721(a)(8)(A); 34 C.F.R. § 361.53. Tennessee's regulation, Tenn. Comp. R. & Regs. 1240-08-05-.03(2), tracks the federal rule for higher-education funding and adopts the same exclusion for merit-based awards.
The HOPE scholarship sits inside a different framework. Article XI, Section 5 of the Tennessee Constitution requires that net lottery proceeds first fund post-secondary financial assistance to Tennessee citizens. The Tennessee Education Lottery Scholarship Act (Tenn. Code Ann. §§ 49-4-901, et seq.) implements that constitutional command, and the Tennessee Student Assistance Corporation administers HOPE. Students qualify by meeting minimum academic standards (typically a 21 ACT or 3.0 unweighted high school GPA at the time of this opinion) and other eligibility requirements. The scholarship is not awarded competitively from a fixed pool to top performers; it is paid to every eligible applicant.
Under standard Tennessee statutory construction (Waldschmidt v. Reassure America Life Ins., 271 S.W.3d 173, 176 (Tenn. 2008)), the AG read "merit" by its ordinary meaning, looking to Evans v. Kentucky High School Athletic Assn. for the reasonable proposition that merit-based aid is financial aid that turns "solely on academic and/or test performance." Because HOPE is broader than that and not directed at recognizing extraordinary individual talent, the Division's exclusion of HOPE from the merit-scholarship safe harbor was within the bounds of reasonable agency interpretation.
Citations
- 29 U.S.C. § 721(a)(8)(A) (federal comparable benefits requirement)
- 34 C.F.R. § 361.53(c)(1) and 34 C.F.R. § 361.5(a)(10)(ii) (federal regulations)
- Tenn. Comp. R. & Regs. 1240-08-05-.03(1)-(2) (Tennessee comparable benefits rule)
- Tenn. Code Ann. §§ 49-4-901, 49-4-902(36), 49-4-903, 49-4-904 through 49-4-913 (HOPE scholarship)
- Tenn. Const. art. XI, § 5 (lottery proceeds dedicated to post-secondary financial assistance)
- Bellsouth Advertising & Publishing Corp. v. TRA, 79 S.W.3d 506 (Tenn. 2002) (agency interpretation deference)
- Waldschmidt v. Reassure America Life Ins., 271 S.W.3d 173 (Tenn. 2008) (statutory construction)
- Houghton v. Aramark Educ. Resources, Inc., 90 S.W.3d 676 (Tenn. 2002) (regulations construed like statutes)
Source
- Landing page: https://www.tn.gov/attorneygeneral/opinions.html
- Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2011/op11-026.pdf
Original opinion text
March 22, 2011
Opinion No. 11-26
Vocational Rehabilitation Services Comparable Benefits Requirement
QUESTION
For the purpose of eligibility for vocational and other training services in institutions of higher education under the Vocational Rehabilitation Services program administered by the Department of Human Services, Division of Rehabilitation Services, does the Tennessee HOPE scholarship qualify as a "scholarship based on merit" so as to be excluded from being a "comparable benefit" under state regulations?
OPINION
No. A Tennessee HOPE scholarship does not qualify as a "scholarship based on merit" so as to meet the criteria for exclusion from "comparable benefits" for purposes of determining eligibility for vocational and other training services in institutions of higher education under the Vocational Rehabilitation Services program.
ANALYSIS
The Vocational Rehabilitation Program is a federally funded program administered by the Department of Human Services, Division of Rehabilitation Services. Prior to providing services to an eligible individual under this program, the Division must determine whether comparable services and benefits are available under any other program. 29 U.S.C. § 721(a)(8)(A). If comparable services or benefits exist under any other program and are available to the individual, the Division and the individual must use those comparable services or benefits to meet, in whole or part, the cost of the vocational rehabilitation services. 34 C.F.R. § 361.53(c)(1); Tenn. Comp. R. & Regs. 1240-08-05-.03(1) (2009). For the purpose of determining eligibility for vocational and other training in institutions of higher education, the Division's regulation provides:
Vocational and other training services in institutions of higher education may not be paid for with funds under this part unless maximum efforts have been made by the state entity and the individual to secure grant assistance in whole or part from other sources to pay for the training. Institutions of higher education include universities, colleges, community/junior colleges, vocational schools, technical institutes, or hospital schools of nursing. Comparable benefits do not include awards and scholarships based on merit.
Tenn. Comp. R. & Regs. 1240-08-05-.03(2) (2009) (emphasis added). See also, 34 C.F.R. § 361.5(a)(10)(ii).
You have asked whether the Division's classification of the Tennessee HOPE scholarship as a comparable benefit is in conflict with the exclusion for scholarships based on merit. The Division has interpreted the term "merit scholarship or award" as one in which eligibility is not based upon financial need or meeting standard qualifications applicable to all who apply, but is instead based upon an individual's outstanding or unique talents, skills, and abilities in, for example, academics, the arts or athletics. It is our opinion that the Division's determination that the Tennessee HOPE scholarship is not a "scholarship based on merit" is not plainly erroneous or inconsistent with state or federal regulations.
Neither state nor federal regulations specifically define the term "scholarships based on merit." Further, our research did not find any decisions in which a court has construed the term "scholarships based on merit" in the context of determining eligibility for vocational rehabilitation services. Accordingly, in ascertaining the meaning of this term as used in the Division's regulation, the same principles that govern the construction of state statutes would apply. Houghton v. Aramark Educ. Resources, Inc., 90 S.W.3d 676, 679 (Tenn. 2002). In construing a statute, a court looks at the words of the statute and "must (1) give these words their natural and ordinary meaning, (2) consider them in the context of the entire statute, and (3) presume that the General Assembly intended that each word be given full effect." Waldschmidt v. Reassure America Life Ins., 271 S.W.3d 173, 176 (Tenn. 2008). In addition, in construing an administrative regulation, an agency's interpretation will be afforded deference by the courts and become controlling weight unless plainly erroneous or inconsistent with the regulation. Bellsouth Advertising & Publishing Corp. v. Tennessee Regulatory Authority, 79 S.W.3d 506, 514 (Tenn. 2002).
The Division's interpretation of its regulation to require a scholarship based on merit to be one awarded on the basis of academic, athletic or artistic merit is not plainly erroneous or inconsistent with the regulation. Rewarding talent is the primary objective of merit scholarships. See Evans v. Kentucky High School Athletic Assn., No. 3:09-CV-953-H, 2010 WL 1643758 (W.D. Ky. Apr. 20, 2010) ("Merit-based aid is like an academic scholarship; it is financial aid that is based solely on academic and/or test performance."). Accordingly, the next question is whether the Division's application of this definition to the Tennessee HOPE scholarship is plainly erroneous or inconsistent with its regulation.
The Tennessee HOPE scholarship program is a state program administered by the Tennessee Student Assistance Corporation. Tenn. Code Ann. § 49-4-903. The Tennessee HOPE scholarship program was created to fulfill the requirement in Tenn. Const. art. XI, § 5, that the net proceeds from the state lottery first be used for the purpose of providing financial assistance to Tennessee citizens to attend post-secondary educational institutions located within the State. Tenn. Code Ann. §§ 49-4-901, 49-4-902(36). Students wishing to receive a Tennessee HOPE scholarship must meet several requirements, including minimum academic requirements. Tenn. Code Ann. §§ 49-4-904 through 49-4-913.
While there are minimum qualifications to be eligible for a HOPE scholarship, there is no expressed purpose or legislative intent that the primary purpose of the Tennessee HOPE scholarship is to reward talent or special achievement. On the contrary, the Tennessee HOPE scholarship is provided to all students who meet the eligibility requirements. Therefore, it is our opinion that the Division's determination that the Tennessee HOPE scholarship does not qualify as a "scholarship based on merit" so as to be excluded from being a "comparable benefit" is not plainly erroneous or inconsistent with state or federal regulations.
ROBERT E. COOPER, JR.
Attorney General and Reporter
BARRY TURNER
Deputy Attorney General
DIANNE STAMEY DYCUS
Deputy Attorney General
Requested by:
Honorable Glen Casada
State Representative
112 War Memorial Building
Nashville, TN 37243-0163