(a) The sum of five hundred thousand dollars ($500,000) is hereby specifically appropriated to the agency which shall be held in reserve to guarantee loans granted under the provisions of this act and guaranteed under the provisions of the act of August 7, 1963 (P.L. 549), entitled “An act creating the Pennsylvania Higher Education Assistance Agency; defining its powers and duties; conferring powers and imposing duties on the Governor, President Pro Tempore of the Senate, Speaker of the House of Representatives, Superintendent of Public Instruction¹ and the Department of Banking; and making appropriations,”² and for the payment of possible losses of such loans guaranteed.

(b) The agency is authorized to conduct a matching funds program for the purpose of assisting Pennsylvania institutions of higher learning and Pennsylvania students attending any approved institution of higher learning in securing and distributing Federal or other funds to be used by the institutions, the agency or other entities approved by the agency as financial aid to students in meeting their costs of attendance at the institution of higher learning. The program is to be carried out in accordance with rules and regulations promulgated by the board of directors of the agency. Rules and regulations may include, but shall not be limited to, provisions for the repayment of funds to the agency where appropriate.

(c) Scholarships awarded to secondary school graduates selected under clause (1) of section 5 of this act³ shall be awarded as follows: the financial need of the highest ranked student shall be met through appropriations allocated by the agency for such purpose; and the financial need of the next highest ranked student shall be met in turn until the total allocation for such purpose has been disbursed. Applicants who qualify on the basis of ability but do not demonstrate financial need shall receive a certificate of merit. Applicants who receive an award under this category will not be eligible under clauses (2) or (3) of section 5 of this act.

(d) Scholarships awarded to secondary school graduates selected under clause (2) of section 5 of this act shall be awarded as follows: the financial need of the highest ranked student shall be met through appropriations allocated by the agency for such purposes; and the financial need of the next highest ranked student shall be met in turn until the total allocation for such purpose has been disbursed. Applicants who receive an award under this category will not be eligible under clauses (1) or (3) of section 5 of this act.

(e) Scholarships awarded to students currently enrolled or accepted for enrollment in approved postsecondary programs, in accordance with clause (3) of section 5 of this act, shall be selected in accordance with rules and regulations to be drawn up by the agency.