Gov. Tom Wolf’s latest budget proposal includes a $204 million tuition assistance program that could enable more than a quarter of the students who attend Pennsylvania’s 14 state universities to graduate debt-free.

The Nellie Bly Scholarship Program is largely aimed at students from lower-income families already eligible for federal Pell grants and state assistance, but also could help some middle-income families. It would cover remaining tuition, fees, and room and board costs.

About 25,000 students could benefit from the initiative annually, said J.J. Abbott, the governor’s spokesperson, hours after Wolf cited it in his address before the legislature.

Both in-state and out-of-state students would be eligible to apply. Those who accept the money would have to agree to remain in the state after graduation for at least as many years as they received the grant funding, or would have to pay it back.

State officials say the effort not only would help students avoid debt and keep young talent in the state, but also would assist state universities with their struggle to attract and retain students. The 14 universities have lost about 20% of their enrollment since 2010 as the number of high school students falls and competition rises.

Wolf has proposed getting money for the scholarship program from the state Horse Race Development Trust Fund, specifically money “dedicated to the horse owners and breeders purse account and restricted racing programs," an idea that already has drawn detractors.

Sen. Andrew E. Dinniman, ranking Democrat on the Senate education committee, whose district includes West Chester University, said he had “serious concerns" about the possible impact on the horse farms and racing industries in Chester County.

It’s also unclear whether the proposal will win approval from Republican legislators, who are the majority. Mike Straub, a spokesperson for the House Republicans, said the horse fund has been included in other proposals over the years.

“We agree with efforts to improve enrollment across our state universities,” he said, “and we’ll take a closer look at this proposal and [the] impact moving money away from the horse fund may have on tracks and casinos, and thus what impact might be felt in terms of gaming tax revenues.”

Daniel Greenstein, chancellor of the Pennsylvania State System of Higher Education, called the proposal a “watershed investment in the success of Pennsylvania’s students.”

The state system had asked for a 2% boost — nearly $10 million — in its yearly appropriation and an additional $20 million to help with redesign of the system. Wolf’s budget doesn’t increase funding for the system, but does include nearly $13 million for a redesign.

Wolf also proposed no new funding for the state’s community colleges and the four-state related universities: Temple, Pennsylvania State, Lincoln, and Pittsburgh.

The commission that represents Pennsylvania’s 14 community colleges was disappointed with the proposal.

“We hope the General Assembly recognizes the invaluable educational and training programs our institutions provide and include a much-needed increase for community colleges in the 2020-21 fiscal year budget," said Elizabeth Bolden, its president and CEO.

The 14 universities in the state system are Bloomsburg, California, Clarion, Cheyney, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock, and West Chester.

SpotlightPA’s Cynthia Fernandez contributed to this article.