CSHB 506(FIN) AM: "An Act relating to student loans; to sanctions for defaulting on a student loan, including denial of a state occupational license; and providing for an effective date."
00CS FOR HOUSE BILL NO. 506(FIN) am 01 "An Act relating to student loans; to sanctions for defaulting on a student loan, 02 including denial of a state occupational license; and providing for an effective 03 date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 08.02 is amended by adding a new section to read: 06 Sec. 08.02.025. COMPLIANCE WITH STUDENT LOAN REQUIREMENTS. 07 (a) A person licensed under this title shall comply with the student loan repayment 08 provisions under AS 14.43 that are applicable to the person. Notwithstanding another 09 provision of law, a license issued to a person under this title may not be renewed if 10 the borrower and the Department of Commerce and Economic Development have 11 received notice from the Alaska Commission on Postsecondary Education that the 12 licensee is in default on a student loan provided to the licensee. This action may be 13 taken no sooner than 60 days after the Alaska Commission on Postsecondary 14 Education has notified the borrower of the default status of the loan as provided under
01 AS 14.43.120(i). If an appeal of a determination of default status is pending on behalf 02 of the licensee, the Alaska Commission on Postsecondary Education shall notify the 03 department and renewal may not be denied under this section until and unless the 04 appeal has been concluded and the default status affirmed. Denial of renewal of a 05 license shall continue until the Department of Commerce and Economic Development 06 receives notice from the Alaska Commission on Postsecondary Education that the 07 licensee is no longer in default on the student loan. 08 (b) The Department of Commerce and Economic Development shall provide 09 the applicable licensing board, if any, a copy of a notice received under (a) of this 10 section. 11 * Sec. 2. AS 14.43.120(f) is repealed and reenacted to read: 12 (f) Interest on a loan made under AS 14.43.090 - 14.43.160 is equal to the 13 interest rate 14 (1) paid in each year on bonds issued by the Alaska Student Loan 15 Corporation under AS 14.42.220; and 16 (2) necessary to pay the administrative cost of the student loan program 17 that is represented by the loan. 18 * Sec. 3. AS 14.43.120(i) is amended to read: 19 (i) If a loan is in default, the commission 20 (1) shall notify the borrower that, if the borrower has an occupational 21 license issued under AS 08, the license may not be renewed under AS 08.02.025 22 and that repayment of the remaining balance is accelerated and due by sending the 23 borrower a notice by registered or certified mail; 24 (2) may take the borrower's [. THE] permanent fund dividend [OF 25 A BORROWER MAY BE TAKEN] under AS 43.23.065(b)(3) to satisfy the balance 26 due on the defaulted loan; and 27 (3) shall provide notice of the default to the Department of 28 Commerce and Economic Development, if the loan recipient is licensed under 29 AS 08. 30 * Sec. 4. AS 14.43.120 is amended by adding a new subsection to read: 31 (v) In determining a rate of interest under (f)(2) of this section
01 (1) the commission shall use a method that ensures that the rate of 02 interest is as low as possible without precluding the ability of the commission to 03 administer loans made under AS 14.43.090 - 14.43.160; and 04 (2) the total amount charged for administrative costs of the student loan 05 program may not exceed two and one-half percent above the amount determined under 06 (f)(1) of this section. 07 * Sec. 5. AS 14.43 is amended by adding a new section to read: 08 Sec. 14.43.122. CONSOLIDATION OF LOANS. (a) The commission may 09 offer 10 (1) a borrower who has received more than one loan under this chapter 11 the option of consolidating the multiple loans into a single loan; or 12 (2) to consolidate loans made to married borrowers if the married 13 borrowers agree to be jointly and severally liable for repayment of the consolidated 14 loan, regardless of the borrowers' future marital status or the death of one of the 15 borrowers. 16 (b) Notwithstanding AS 14.43.120(f), if loans are consolidated under (a) of this 17 section, the consolidated loan shall bear annual interest equal to the weighted average 18 of the interest rates on the loans being consolidated, rounded to the nearest 1/10 of a 19 percent. 20 * Sec. 6. AS 14.43.125(a) is amended to read: 21 (a) A person may apply for and obtain a scholarship loan if the person 22 (1) is 23 (A) enrolled as a full-time student in a career education, 24 associate, baccalaureate, or graduate degree program; 25 (B) enrolled as a half-time student in a career education, 26 associate, baccalaureate, or graduate degree program in 27 (i) the state; or 28 (ii) a career education, associate, baccalaureate, or 29 graduate degree program and is physically present in the state while 30 attending the career education, associate, baccalaureate, or graduate 31 degree program; or
01 (C) a graduate of a high school or the equivalent, or scheduled 02 for graduation from a high school within six months, with sufficient credits to 03 be admitted to a career education program or to an accredited college or 04 university; 05 (2) is not delinquent or in default on a previously awarded scholarship 06 loan; and 07 (3) is a resident of the state at the time of application for the loan; for 08 purposes of this section, a person qualifies as a resident of the state if at the time of 09 application for the loan the person 10 (A) has been physically present in the state for at least two 11 years immediately before the time of application for the loan; 12 (B) is dependent on a parent or guardian for care, the parent or 13 guardian has been present in the state for at least two years immediately before 14 the time of application for the loan and the person has been present in the state 15 for at least one year of the immediately preceding five years except that the 16 commission may by a two-thirds vote, acting upon a written appeal by the 17 person, grant an exemption to the requirement that the person has been present 18 in the state for one year of the immediately preceding five years; 19 (C) has been physically present in the state, or is a dependent 20 of a parent or guardian who has been physically present in the state, for at least 21 two years immediately before the applicant was absent from the state and the 22 absence is due solely to 23 (i) serving an initial period of up to six years on active 24 duty as a member of the armed forces of the United States; 25 (ii) serving for up to three years as a full-time volunteer 26 under the Peace Corps Act; 27 (iii) serving for up to three years as a full-time volunteer 28 under the Domestic Volunteer Service Act of 1973; 29 (iv) required medical care for the applicant or the 30 applicant's immediate family; 31 (v) being a person who otherwise qualifies as a resident
01 and is accompanying a spouse who qualifies as a resident under (i) - 02 (iv) of this paragraph; or 03 (D) has been physically present in the state, or is a dependent 04 of a parent or guardian who has been physically present in the state, for at least 05 two years immediately before the applicant or the parent or guardian was 06 absent from the state and the absence is due solely to 07 (i) participating in a foreign exchange student program 08 recognized by the commission; 09 (ii) attending a school as a full-time student; 10 (iii) full-time employment by the state; 11 (iv) being a member of or employed full-time by the 12 state's congressional delegation; 13 (v) being a person who otherwise qualifies as a resident 14 and is accompanying a spouse who qualifies as a resident under (i) - 15 (iv) of this paragraph; [AND] 16 (4) does not have a past due child support obligation established by 17 court order or by the child support enforcement division under AS 25.27.160 - 18 25.27.220 at the time of application; and 19 (5) has not, within the previous five years, had a scholarship loan 20 discharged or written off by the commission for any reason. 21 * Sec. 7. AS 14.43 is amended by adding a new section to read: 22 Sec. 14.43.150. ORDER TO ASSIGN WAGES FOR DEFAULTED LOAN. 23 (a) In a court proceeding regarding a defaulted loan under this chapter in which the 24 court has entered judgment in favor of the commission, the court may, on its own 25 motion or motion of the commission, after notice and an opportunity for hearing, order 26 the loan recipient to assign to the commission that portion of salary or wages due the 27 loan recipient currently and in the future in an amount sufficient to pay the amount 28 ordered by the court to be repaid to the commission. 29 (b) The order of assignment is binding upon an employer upon service of a 30 copy of the order upon the employer and until further order of the court or until the 31 employment of the obligee is terminated. The employer may, for each payment made
01 under the order, deduct $1 from other wages or salary owed to the employee. 02 (c) An employer may not terminate an employee's employment because wages 03 of the employee are subject to an order under this section. 04 * Sec. 8. AS 14.43.740(b) is amended to read: 05 (b) The provisions of AS 14.43.120(p) apply to a loan made under 06 AS 14.43.710 - 14.43.790 with respect to the borrower [FAMILY MEMBER ON 07 WHOSE BEHALF A LOAN IS MADE]. 08 * Sec. 9. AS 14.43.750(a) is amended to read: 09 (a) A person may apply for and obtain a family education loan on behalf of 10 a family member if 11 (1) the borrower is a resident of the state at the time of application for 12 the loan; for purposes of this paragraph, a borrower qualifies as a resident of the state 13 if the borrower has been physically present in the state for at least one year [TWO 14 YEARS] immediately before the time of application for the loan; 15 (2) the family member [HAS BEEN CLAIMED AS A DEPENDENT 16 FOR FEDERAL TAX PURPOSES BY THE BORROWER FOR THE TAX YEAR 17 IMMEDIATELY BEFORE THE TIME OF APPLICATION AND] 18 (A) is enrolled as a full-time student in a career education, 19 associate, baccalaureate, or graduate degree program; or 20 (B) is a graduate of a high school or the equivalent, or 21 scheduled for graduation from a high school within six months, with sufficient 22 credits to be admitted to a career education program or to an accredited college 23 or university; and 24 (3) neither the borrower nor the family member is delinquent or in 25 default on a previously awarded student loan from the state. 26 * Sec. 10. Sections 6, 7, 8, and 9 of this Act take effect July 1, 1994. 27 * Sec. 11. Except as provided under sec. 10 of this Act, this Act takes effect July 1, 1995.