(a) Each institution shall establish a student endowment fund consisting of the revenue from the additional student fee and the interest and other income from investment of the fund. The fund shall be invested by the governing board in accordance with the policies governing investment of other funds held and invested by the board on behalf of the institution.
(b) Scholarships and internships shall be paid from the fund, subject to the requirements of this section and § 56.246.

(c) Scholarships and internships may be paid from both the income and the principal of the fund, except that after the first five-year period after the date the fund is established, not more than five percent of the principal of the fund may be expended for scholarships and internships for any year.
(d) For purposes of this section, five percent of the capital gains for any year from investment of the fund is considered income.