This is absolutely terrible, purely from the perspective from the students. Having your four years of hard work devalued like that, just because of a political move, must really suck.
Worst of all, it's past the matriculation deadline for most universities in the United States, so these students can't even attend other schools that have offered them scholarships, leaving them to either drop out or go into debt.
Well the oil revenues did fall down a lot. Alaska has no state income taxes. Someone has to pay for that, and killing the Alaskan universal (very) basic income is too unpopular of a move. This is something worth remembering once more countries and regions will try introducing UBI.
True, but the optics of this move are worse than some other alternative. A state representative was also quoted in the article saying that putting the education fund in the sweep was not necessary. Pretty sure they can reappropriate funding from somewhere else if they tried to (and it's not like their scholarships are particularly large, $3k to $4k a year scholarships given to a limited number of people will not break the bank).
Other states have no income taxes, and Dunleavy ran on protecting and growing the Alaska Permanent Fund. And as to your UBI FUD comment, why do we need to find a reason? Cutting public education is well inline with right winged US policy.
Worst of all, it's past the matriculation deadline for most universities in the United States, so these students can't even attend other schools that have offered them scholarships, leaving them to either drop out or go into debt.