For more than 20 years the Lake Mason Lions Club has been providing a $500 scholarship to young men and young women attending a trade school or community college. But not this year.

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The Wisconsin Dell School District rejected the service organization's scholarship over a requirement that the recipient be a citizen of the United States.

"They told us it violated federal law and state law," Lions Club spokesman Ralph Jacobsen told me. "We were really blindsided. We're just asking for the student who receives the scholarship to be a U.S. citizen. That isn't okay with them apparently."

Wisconsin Dells High School Principal Hugh Gaston told NBC News the scholarship requirement raised red flags because the requirement was not fair for all students.

"Regardless if they were born in Baraboo and grew up a block from the school or if they were born in another country and they came here legally or illegally, I still think it's our mission to serve and connect with all students regardless of their background," the principal said.

Jacobsen told me the service club adjusted its scholarship requirements about five years ago. Club members wanted to make sure the money would go to a legal resident of the country.

"We as a charitable organization we felt that we should be serving the citizens of the United States," he said.

The Lions Club was given an ultimatum by the school district: either remove the wording or they would not be permitted to give the scholarship. Club members took a vote and the majority decided that the wording would not be removed.

"Who would ever think in this country that you can't specify (that) something goes to a U.S. citizen? It's unbelievable," Jacobsen said.

It's unfortunate that American-born students and legal immigrants are not permitted to be honored or celebrated because of political correctness.

Sadly, a future Wisconsin auto mechanic or welder or pipe fitter has been denied a $500 scholarship simply because he's an American citizen.