JUNEAU -- A revamped version of the governor's student scholarship proposal has passed the Senate Education Committee.

The committee version would use income earned on oil royalty settlement funds to cover scholarships for graduating high school students based on merit and financial need.

It now goes to the Senate Finance Committee for consideration.

Gov. Sean Parnell proposed scholarships for students who complete a set curriculum and meet certain achievement standards, including having at least a 2.5 grade point average in high school. He has advocated a $400 million set-aside of funds, from which the investment profits would be used to pay scholarships. Lawmakers, though, have been lukewarm to tying up such a huge chunk of money amid budget concerns.

Parnell proposed spending $8.2 million in the upcoming fiscal year to get the program started.