Principal Fellows & Admin. Intern. Stipends.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 2
HOUSE BILL 1143
Committee Substitute Favorable 5/19/26

Short Title: Principal Fellows & Admin. Intern. Stipends. (Public)
Sponsors:
Referred to:
May 4, 2026
*H1143-v-2*
A BILL TO BE ENTITLED 1
AN ACT TO MAKE VARIO US CHANGES TO THE PR INCIPAL FELLOWS PROG RAM 2
AND TO CODIFY ADMINISTRATIVE INTERNSHIP STIPENDS. 3
The General Assembly of North Carolina enacts: 4
5
PART I. MODIFY ALLOWABLE USES OF FUNDS FOR THE PRINCIPAL FELLOWS 6
PROGRAM 7
SECTION 1. Article 5C of Chapter 116 of the General Statutes reads as rewritten: 8
"Article 5C. 9
"North Carolina Principal Fellows Program. 10
"§ 116-74.41. North Carolina Principal Fellows Commission established; membership. 11
(a) There is established the North Carolina Principal Fellows Commission. The 12
Commission shall exercise its powers and duties independently in its administration of the North 13
Carolina Principal Fellows Program in accordance with this Article. The Director of the Program 14
shall staff the Commission in accordance with G.S. 116-74.49. The State Education Assistance 15
Authority as created in G.S. 116-203 shall be is responsible for awarding grants upon selection 16
of the recipients by the Commission in accordance with G.S. 116-74.46 and G.S. 116-74.46A 17
and executing agreements for forgivable scholarship loans, cancelling through service, 18
collecting, and otherwise enforcing the agreements under G.S. 116-74.48. 19
… 20
"§ 116-74.41A. Definitions. 21
For the purposes of this Article, the following definitions apply: 22
(1) Authority or SEAA. – The State Education Assistance Authority as created in 23
G.S. 116-203. 24
(2) Commission. – The North Carolina Principal Fellows Commission. 25
(2a) Developmental grant. – A grant awarded to an eligible entit y pursuant to 26
G.S. 116-74.46A. 27
(3) Eligible entity. – A for-profit or nonprofit organization or an institution of 28
higher education that has an evidence-based plan for preparing school leaders 29
who implement school leadership practices linked to increased student 30
achievement. 31
(4) High-need local school administrative unit. – A local school administrative 32
unit with the majority of its schools deemed to be high-need schools as defined 33
in subdivision (5) of this subsection. 34
(5) High-need school. – A public school that meets one or more of the following 35
criteria: 36
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a. Is a school identified under Part A of Title I of the Elementary and 1
Secondary Education Act of 1965, as amended. 2
b. Is a persistently low-achieving school, as identified by the Department 3
of Public Instruction for purposes of federal accountability. 4
c. A middle school containing any of grades five through eight that feeds 5
into a high school with less than a seventy -five percent (75%) 6
four-year cohort graduation rate. 7
d. A high school with less than a seventy -five percent (75%) four -year 8
cohort graduation rate. 9
(6) Repealed by Session Laws 2019-60, s. 1(x), effective July 1, 2021. 10
(7) Principal. – The highest administrative official in a public school building 11
with primary responsibility for the instructional leader ship, talent 12
management, and organizational development of the school. 13
(7a) Principal Fellows grant. – A grant awarded to an eligible entity pursuant to 14
G.S. 116-74.46. 15
(8) Repealed by Session Laws 2019-60, s. 1(x), effective July 1, 2021. 16
(9) Program. – The North Carolina Principal Fellows Program established 17
pursuant to G.S. 116-74.44. 18
(9a) Program participant. – An individual enrolled at an eligible entity that has 19
been awarded a Principal Fellows grant. 20
(10) Public school. – An elementary or secondary school located in North Carolina 21
that is operated by a local board of education, charter school board of 22
directors, regional school board of directors, chancellor for a University of 23
North Carolina laboratory school, an innovative school operator, or the United 24
States government. 25
(11) School leader. – An individual employed in a school leadership role, including 26
principal or assistant principal roles. 27
(12) Student achievement. – At the whole school level, after three years of leading 28
a school, consistent and methodologically sound measures of: 29
a. Student academic achievement. 30
b. Aggregated individual student academic growth. 31
c. Additional outcomes, such as high school graduation rates, the 32
percentage of students taking advanced -level coursework, or the 33
percentage of students who obtain a career -related credential through 34
a national business certification exam. 35
(13) Trust Fund. – The North Carolina Principal Fellows Trust Fund established 36
pursuant to G.S. 116-74.41B. 37
"§ 116-74.41B. The North Carolina Principal Fellows Trust Fund. 38
(a) Trust Fund Established. – The North Carolina Principal Fellows Trust Fund shall be 39
an institutional trust fund established pursuant to G.S. 116-36.1. All funds appropriated to, or 40
otherwise received by, (i) the Program for the awa rd of Principal Fellows grants pursuant to 41
G.S. 116-74.44, and developmental grants , (ii) all funds received as repayment of scholarship 42
loans, including under the former Principal Fellows Program administered under G.S. 116-74.42 43
and the Transforming Principal Preparation Program under G.S. 116-209.77, and (iii) all interest 44
earned on these funds shall be placed in the Trust Fund. 45
(b) Use of Monies in the Trust Fund. – The monies in the Trust Fund may be used only 46
for the purposes set forth in this subsect ion, including the award of Principal Fellows grants 47
pursuant to G.S. 116-74.44, and developmental grants, administrative costs, and costs associated 48
with Program operations in accordance with this Article. The Authority may use up to two 49
percent (2%) of the funds appropriated for the Program or one hundred sixty thousand dollars 50
($160,000) from the Trust Fund, whichever is greater, each fiscal year for administrative costs, 51
General Assembly Of North Carolina Session 2025
House Bill 1143-Second Edition Page 3
including recovery of funds advanced under the Program, and may allocate to the Commission 1
up to eight hundred thousand dollars ($800,000) from the Trust Fund each fiscal year for the 2
following: 3
(1) The salary and benefits of the director and staff of the Program. 4
(2) The expenses of the Commission to administer the Program. 5
(3) Program monitoring and evaluation. 6
(4) Extracurricular enhancement activities for the Program. 7
(5) Repealed by Session Laws 2019-60, s. 1(y), effective July 1, 2021. 8
(6) Programming on research-based school leadership practices to be shared with 9
eligible entities in order to improve principal preparation throughout the State. 10
(c) Remaining Funds. – If at the end of each fiscal year there are funds remaining in the 11
Trust Fund that are not obligated or otherwise encumbered for another purpose, upon the request 12
of the Commission , the Authority shall allocate the funds to the Commission for any of the 13
purposes identified in subdivisions (3) through (6) of subsection (b) of this section. 14
… 15
"§ 116-74.44. North Carolina Principal Fellows Program established; administration. 16
(a) Established. – There is established the North Carolina Principal Fellows Program as 17
a competitive grant program for eligible entities for the purpose of elevating educators in North 18
Carolina public schools by transforming the preparation of principals across the State and 19
providing for forgivable scholarship loans to the participants of those school l eader preparation 20
programs. The Authority shall administer the North Carolina Principal Fellows Program in 21
collaboration with the Commission as set forth in this Article to provide funds for the preparation 22
and support of highly effective future school principals in North Carolina. 23
(b) Program Administration. – The Commission shall select grant recipients recipients of 24
Principal Fellows grants and developmental grants and notify the Authority for the award of the 25
grants with the Authority acting as the fiscal agent for the Trust Fund with respect to grants 26
awarded by the Commission. The Commission shall also coordinate with Principal Fellows grant 27
recipients to provide extracurricular enhancement activities for program participants. The 28
Authority shall monitor the implementation of forgivable scholarship loans to school leader 29
preparation program participants, as authorized by this Article. 30
(c) Administration of Forgivable Scholarship Loans. – Upon the Principal Fellows grant 31
recipients' selection of the program participants for the school leader preparation programs, the 32
Commission shall transfer the names of all program participants to the Authority. The Authority 33
shall perform all of the administrative functions necessary to implement the forgivable 34
scholarship loans to the school leader preparation program participants, which functions shall 35
include rulemaking, disseminating information, acting as a liaison with partic ipating eligible 36
entities, implementing forgivable loan agreements in the form of promissory notes, monitoring 37
loan repayment through service and cash, and performing all other functions necessary for the 38
execution, payment, and enforcement of promissory notes required under this Article. 39
(d) Prior Loan Monitoring. – The Authority, in collaboration with the Commission, shall 40
also monitor the implementation of forgivable scholarship loans to school leader preparation 41
program participants executed pursuant to G.S. 116-209.77, and the Authority shall administer 42
all outstanding forgivable scholarship loans previously awarded and subject to repayment under 43
the former Transforming Principal Preparation Program administered pursuant to Part 4 of 44
Article 23 of this Chapter. 45
"§ 116-74.45. Grant Principal Fellows grant applications; priority. 46
(a) Application Requirements. – Subject to the availability of funds for this purpose, the 47
Commission shall issue a request for proposal with guidelines and criteria for applying for a 48
Principal Fellows grant. An eligible entity that seeks a Principal Fellows grant shall submit to the 49
Commission an application at such time, in such manner, and accompanied by such information 50
as the Commission may require. Eligible entities may create partnerships to develop and establish 51
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school leader preparation programs and apply jointly to be a grant recipient. An applicant shall 1
include at least the following information in its application for consideration by the Commission: 2
… 3
(b) Application Priority. – The Commission shall evaluate the applicants for Principal 4
Fellows grants by giving priority to an eligible entity with a record of preparing principals 5
demonstrating the following: 6
(1) Improvement in student achievement. 7
(2) Placement as school leaders in eligible schools. 8
(3) A proposed focus on and, if applicable, a record of serving high-need schools, 9
high-need local school administrative units, or both. 10
(4) A detailed plan and commitment to share lessons learned and to improve the 11
capacity of other entities in reaching similar outcomes. 12
(5) A service area that is underserved by existing principal preparation programs 13
or demonstrates unmet need despite current available programs. 14
"§ 116 -74.46. Recipient Principal Fellow s grant recipient selection; use of grant funds; 15
duration and conditions of grants; reporting requirements. 16
(a) Selection. – After evaluation of Principal Fellow s grant applications pursuant to 17
G.S. 116-74.45, the Commission shall notify the Authority of its selection of t he recipients of 18
Principal Fellows grants for each fiscal year. The Commission shall select up to eight Principal 19
Fellows grant recipients to be operating a school leader preparation program with grant funds in 20
any fiscal year. 21
(b) Use of Funds. – Each eligible entity that receives Principal Fellows grant funds shall 22
use those funds to carry out the following: 23
(1) Recruiting and selecting, based on a rigorous evaluation of the competencies 24
of the school leader candidates participating in the program and their potential 25
and desire to become effective school leaders. 26
(2) Operating a school leader preparation program that provides the opportunity 27
for all candidates to earn a master's degree, if they do not already have one, 28
and subsequent principal licensure by doing the following: 29
a. Utilizing a research -based content and curriculum, including 30
embedded participant assessments to evaluate candidates before 31
program completion that prepares candidates to do the following: 32
1. Provide instructional leadership, such as developing teachers' 33
instructional practices and analyzing classroom and 34
school-wide data to support teachers. 35
2. Manage talent, such as developing a high-performing team. 36
3. Build a positive school culture, such as building a strong school 37
culture focused on high academic achievement for all students, 38
including gifted and talented students, students with 39
disabilities, and English learners; maintaining active 40
engagement with family and community members; and 41
ensuring student safety. 42
4. Develop organizati onal practices, such as aligning staff, 43
budget, and time to the instructional priorities of the school. 44
b. Providing opportunities for sustained and high -quality job-embedded 45
practice in an authentic setting where candidates are responsible for 46
moving the practice and performance of a subset of teachers or for 47
school-wide performance as principal -in-planning or interim school 48
leaders. 49
(3) Collecting data on program implementation and program completer outcomes 50
for continuous program improvement. 51
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(4) Covering the cost of attendance and completion for program participants for 1
the school leader preparation program from the funds received on behalf of 2
program participants through forgivable scholarship loans issued in 3
accordance with the requirements of G.S. 116-74.48. 4
(c) Duration and Conditions of Principal Fellows Grants. – The Commission shall also 5
notify the Authority of its decisions on the duration and renewal of Principal Fellows grants to 6
eligible entities made in accordance with the following: 7
… 8
(d) Reporting Requirements for Grant Recipients. – Recipients of Principal Fellow s 9
grants shall participate in all evaluation activities required by the Commission and submit an 10
annual report to the Commission with any information requested by the Commission. The 11
recipients shall comply with additional report requests made by the Commission. Whenever 12
practicable and within a reasonable amount of time, grant recipients shall also make all materials 13
developed as part of the program and with Principal Fellows grant funds publicly available to 14
contribute to the broader sharing of promising practices. Materials shall not include personally 15
identifiable information regarding individuals involved or associated with the program, 16
including, without limitation, applicants, participants, supervisors, evaluators, faculty, and staff, 17
without their prior written consent. The Commission shall work with recipients, local school 18
administrative units, and public schools, as needed, to enable the collection, analysis, and 19
evaluation of at least the following relevant data, within necessary privacy constraints: 20
… 21
"§ 116-74.46A. Developmental grants. 22
(a) Selection. – Subject to the availability of funds after awarding Principal Fellows 23
grants, the Commission may select up to two eligible entities that did not receive Principal 24
Fellows grants to receive a one-year developmental grant of up to two hundred fifty thousand 25
dollars ($250,000) per recipient . The Commission shall notify the Authority of selected 26
developmental grant recipients for each fiscal year. 27
(b) Use of Funds. – An eligible entity that receives a developmental grant may use those 28
funds for any of the permissible uses of a Principal Fellow s grant in G.S. 116-74.46(b) except 29
for covering the cost of attendance and completion for program participants under 30
G.S. 116-74.46(b)(4). 31
(c) Renewal. – The Commission may renew a developmental grant up to five times based 32
on compliance with the grant terms and performance. The Commission shall notify the Authority 33
of its decisions on the renewal of developmental grants. 34
(d) Reporting Requirements for Grant Recipients. – Recipients of developmental grants 35
shall participate in all evaluation activities required by the Commissi on and, for each year in 36
which developmental grants are received , submit a report to the Commission with any 37
information requested by the Commission. The recipients shall comply with additional report 38
requests made by the Commission. 39
"§ 116-74.47. Reports. 40
The Commission shall provide the State Board of Education, the Authority, and the Joint 41
Legislative Education Oversight Committee with the data collected from grant recipients in 42
accordance with G.S. 116-74.46 and G.S. 116-74.46A on an annual basis. 43
"§ 116-74.48. Terms of forgivable scholarship loans for program recipients. 44
(a) Notes. – A program participant shall be is eligible for a forgivable scholarship loan in 45
the amount of up to twenty thousand dollars ($20,000) per year for up to two years in the program, 46
with a maximum loan amount of forty thousand dollars ($40,000) per participant. All forgivable 47
scholarship loans for school leader preparation program participants shall be evidenced by notes 48
made payable to the Authority that bear interest at a rate not to exceed ten percent (10%) per year 49
as set by the Authority and beginning 90 days after completion of the school leader preparation 50
program, or 90 days after termination of the loan, whichever is earlier. The funds from the 51
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forgivable scholarship loan shall be disbursed directly to the Principal Fellows grantee on behalf 1
of the recipient for participation in the school leader preparation program. The forgivable 2
scholarship loan may be terminated upon the recipient's withdrawal from the preparation program 3
or by the recipient's failure to meet the standards set by the Commission or the Principal Fellows 4
grantee. 5
… 6
(c) Repayment Period. – The Authority, in collaboration with the Commission and 7
Principal Fellows grantees, shall monitor the acceptability of service repayment agreements and 8
compliance of the recipient with the agreement. The Commission shall notify the Authority of 9
any relevant information or change in the circumstances pertaining to the recipient impacting the 10
enforcement of the promiss ory note. A forgivable scholarship loan shall also be forgiven if the 11
Commission finds it is impossible for the recipient to work for four years as a school 12
administrator, within seven years after completion of the preparation program supported by the 13
loan, because of the death or permanent disability of the recipient. If the recipient repays the 14
forgivable scholarship loan by cash payments to the Authority, all indebtedness shall be repaid 15
within 10 years after completion of the school leader preparation program supported by the loan. 16
If the recipient completes the school leader preparation program, payment of principal and 17
interest shall begin no later than 27 months after the completion of the program. Should a 18
recipient present extenuating circumstances, the Authority may extend the period to repay the 19
forgivable scholarship loan in cash to no more than a total of 12 years. 20
"§ 116-74.49. Staff to the Commission. 21
The Commission shall appoint a director of the North Carolina Principal Fellows Program. 22
The director shall chair and staff the Commission and shall administer the extracurricular 23
enhancement activities of the Program. The University of North Carolina System Office shall 24
provide office space for the Program. The office space shall not be located o n the campus of a 25
constituent institution." 26
27
PART II. APPROPRIATION FOR PRINCIPAL FELLOWS PROGRAM 28
SECTION 2. There is appropriated from the General Fund to the North Carolina 29
Principal Fellows Trust Fund the sum of five million dollars ($5,000,000) in rec urring funds 30
beginning in the 2026 -2027 fiscal year to increase the number of Principal Fellows candidates 31
supported by the North Carolina Principal Fellows Program in accordance with Article 5C of 32
Chapter 116 of the General Statutes. These funds shall be allocated as follows: 33
(1) The sum of two million six hundred thousand dollars ($2,600,000) to be used 34
to bring the number of Principal Fellows candidates receiving funds in the 35
2028-2034 award cycle into parity with the number of recipients in other 36
award cycles. 37
(2) The sum of two million four hundred thousand dollars ($2,400,000) to expand 38
the number of Principal Fellows candidates supported by the Program with 39
the goal of having fifty-five percent (55%) of all principals employed in North 40
Carolina be graduates of the North Carolina Principal Fellows Program. 41
42
PART III. ADMINISTRATIVE INTERNSHIP STIPENDS 43
SECTION 3. Article 19 of Chapter 115C of the General Statutes is amended by 44
adding the following new section to read: 45
"§ 115C-284.2. Administrative internship stipends. 46
(a) Definitions. – The following definitions apply in this section: 47
(1) Administrative intern. – A participant enrolled full time in an approved 48
administrator preparation program who is completing a full-time internship 49
pursuant to G.S. 115C-284.1(d)(1). 50
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(2) Administrator preparation program or APP. – As defined in 1
G.S. 115C-284.1(a). 2
(b) Stipend. – To the extent funds are made available for this purpose, the Department of 3
Public Instruction shall provide administrative interns with a 10 -month stipend during the 4
internship that is the higher of the following: 5
(1) The beginning salary of an assistant principal. 6
(2) For a teacher who becomes an administrative intern, the salary the person 7
would earn as a teacher on the teacher salary schedule. 8
(c) If the funds made available for the stipends required by this section are insufficient to 9
fully fund the stipends, the Department of Public Instruction may use funds appropriated to the 10
State Public School Fund for this purpose. 11
(d) The North Carolina Principal Fellows Program or the APP where the administrative 12
intern is enrolled shall provide the Department of Public Instruction with certification of eligible 13
administrative interns in order to receive the stipends provided pursuant to this section. 14
(e) Report. – No later than February 15 of each year, the Department of Public Instruction 15
shall report to the Joint Legislative Education Oversight Committee on the stipends provided 16
pursuant to this section, including at least the following information: 17
(1) Demographic information of administrative interns. 18
(2) Total number of administrative interns. 19
(3) Number of administrative interns who are participating in the North Carolina 20
Principal Fellows Program. 21
(4) Number of administrative interns by APP. 22
(5) Number of administrative interns who serve as a n assistant principal or 23
principal in a public school unit within five years of completing the internship, 24
disaggregated based on whether the intern participated in the North Carolina 25
Principal Fellows Program." 26
27
PART IV. EFFECTIVE DATE 28
SECTION 4. This act becomes effective July 1, 2026. 29