(a) The authority is authorized to establish and administer a program to provide state student incentive grants to students enrolled at the undergraduate level who demonstrate a substantial degree of need for such financial assistance as provided for in the federal Higher Education Act of 1965 (P.L. 89-329), as amended, relative to state student incentive grant programs, including rules and regulations prescribed by the secretary pursuant thereto. The authority is authorized to use such federal funds as may become available to the authority for this purpose and state funds as may be appropriated for use by the authority for this purpose and to prescribe such rules and regulations as may be necessary for administration of the program pursuant to the federal law.

(b) Residents of this state for a period of at least 12 months immediately preceding their date of registration in a branch of the university system; a private college or university which is an approved school for purposes of Subpart 5 of this part, which provides for grants to citizens of Georgia who are students attending colleges or universities in this state which are not branches of the university system; a college or university receiving funds under Article 4 of this chapter; a state supported vocational-technical school; or an accredited or approved nonprofit hospital school of nursing located in this state shall be eligible to apply for a state student incentive grant. The authority is authorized to extend coverage and the benefits of the program to students attending other nonprofit institutions of higher education located in this state which are approved by the United States for purposes of eligibility under the federal and state student incentive grant programs but only to the extent necessary to receive federal funds available for purposes of the program. Until the amount of funds available to the authority for purposes of this program is sufficient to provide assistance to qualifying students at all undergraduate levels, such assistance shall be limited to full-time students, the maximum student incentive grant that may be awarded to any student shall be approved by the board of directors, subject to appropriations by the General Assembly, and such grant assistance shall not be provided for study during the summer school term. No student shall be eligible to receive a state student incentive grant for a period of more than five academic years.