The board of trustees of a community college shall not authorize or permit the expenditure of any public funds, either directly or indirectly, for scholarships for students who reside outside of the community college district. No public funds shall be expended for athletic scholarships. For the purpose of this section, moneys received from sale of admissions to activities which the community college sponsors and moneys received from private sector persons or organizations shall not be deemed to be public funds. Notwithstanding any provision of law to the contrary, a community college may use student fees to grant student scholarships if such use is approved by the board of trustees and acknowledged by student government representatives.