The Colorado House and Senate passed the bill Tuesday and sent it along to Gov. Bill Owens who is anxious to sign it, the Rocky Mountain News reported.
The innovative system, possibly the first in the nation, is seen by Owens and other supporters as a way to save the state's colleges and universities.
"This is something that will make higher education more tangible and more real for many Coloradans," said Dan Hopkins, the governor's spokesman.
Under the bill, students would receive state stipends of $2,400 to attend public colleges and universities. Students who want to attend private colleges or universities would get half of that amount, or $1,200, under the legislation.
The bill also frees the state universities and schools from new fiscal restraints under the state's Taxpayer's Bill of Rights that impose tuition caps and bonding limits.