SB 123: "An Act relating to student loan programs, interstate compacts for postsecondary education, and fees for review of postsecondary education institutions; and providing for an effective date."
00SENATE BILL NO. 123 01 "An Act relating to student loan programs, interstate compacts for postsecondary 02 education, and fees for review of postsecondary education institutions; and 03 providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 14.43.110 is repealed and reenacted to read: 06 Sec. 14.43.110. STUDENT LOANS. (a) In a school year, the commission 07 may make a loan not to exceed 08 (1) $8,500 to a full-time undergraduate student or $5,000 to a half-time 09 undergraduate student attending a college or university if the full- or half-time student 10 is otherwise eligible under AS 14.43.125; 11 (2) $9,500 to a full-time graduate student or $4,500 to a half-time 12 graduate student attending a college or university if the full- or half-time graduate 13 student is otherwise eligible under AS 14.43.125; 14 (3) $5,500 to a full-time student or $2,000 to a half-time student if the
01 full- or half-time student is attending a career education program that is nine or more 02 months in length and is otherwise eligible under AS 14.43.125; 03 (4) $3,000 to a full-time student or $1,000 to a half-time student if the 04 full- or half-time student is attending a career education program that is less than nine 05 months in length and is otherwise eligible under AS 14.43.125. 06 (b) The commission may make a loan for a summer term, even if the total 07 loan for the school year exceeds the limit imposed under (a) of this section if the loan 08 for the summer term is counted against the limit imposed under (a) of this section for 09 the following school year. 10 (c) The commission shall adopt regulations establishing a minimum amount 11 for which a loan may be made. 12 * Sec. 2. AS 14.43.120(a) is amended to read: 13 (a) Proceeds from a scholarship loan to a full-time student may only be used 14 for books, tuition and required fees, loan origination [GUARANTEE] fees, and room 15 and board. Proceeds from a scholarship loan to a half-time student may only be used 16 for books, tuition and required fees, and loan origination [GUARANTEE] fees. 17 * Sec. 3. AS 14.43.120(b) is amended to read: 18 (b) Scholarship loans may only be used to attend a 19 (1) career education program operating on a sound fiscal basis that 20 has [BEEN] 21 (A) operated [APPROVED BY THE COMMISSION BEFORE 22 JULY 1, 1986; 23 (B) OPERATING] for two years before the borrower attends; 24 and 25 (B) submitted an executed program participation agreement 26 as required by the commission; [OR 27 (C) OPERATING FOR ONE YEAR BEFORE THE 28 BORROWER ATTENDS AND THE COMMISSION DETERMINES THE 29 PROGRAM IS OPERATING ON A FISCALLY SOUND BASIS;] or 30 (2) a college or university that 31 (A) has operated [BEEN APPROVED BY THE
01 COMMISSION BEFORE JULY 1, 1986, OR HAS BEEN OPERATING] for 02 at least two years before the borrower attends; 03 (B) is accredited by a national or regional accreditation 04 association recognized by the Council on Postsecondary Accreditation or is 05 approved by the commission; [AND] 06 (C) if the loans are federally insured, is approved by the United 07 States Secretary of Education; 08 (D) is a degree granting institution; and 09 (E) has submitted an executed program participation 10 agreement as required by the commission. 11 * Sec. 4. AS 14.43.120(d) is amended to read: 12 (d) Scholarship loans may not be made to a student 13 (1) for more than a total of $42,500 for [FIVE YEARS OF] 14 undergraduate study; 15 (2) for more than a total of $47,500 for [FIVE YEARS OF] graduate 16 study; 17 (3) for more than a combined total of $79,000 for [EIGHT YEARS 18 OF] undergraduate and graduate study; 19 (4) to attend an institution, other than a nonprofit institution, if the total 20 amount of scholarship loans made to students to attend that institution exceeds 21 $100,000 and the default rate on those loans exceeds the program default rate by more 22 than 150 percent as defined by regulation. 23 * Sec. 5. AS 14.43.120(e) is repealed and reenacted to read: 24 (e) Interest on a scholarship loan accrues from the time the loan is disbursed; 25 however, the state shall pay the interest while the borrower continues to be enrolled 26 under (c) of this section. 27 * Sec. 6. AS 14.43.120(g) is amended to read: 28 (g) A borrower's obligation to commence repayment [REPAYMENT] of 29 the principal and interest on the loan begins six months [NOT LATER THAN ONE 30 YEAR] after the borrower is no longer enrolled under (c) of this section. The 31 borrower shall repay [BORROWER'S STUDIES ARE TERMINATED. THE LOAN
01 SHALL PROVIDE FOR REPAYMENT OF] the total amount owed in periodic 02 installments of at least $50 a month over a period of [IN] not more than 15  03 years from the commencement of the repayment obligation [IF THE LOAN IS TO 04 A FULL-TIME STUDENT, OR IN NOT MORE THAN FIVE YEARS FROM THE 05 COMMENCEMENT OF REPAYMENT IF THE LOAN IS TO A HALF-TIME 06 STUDENT, EXCEPT AS PROVIDED IN (k) AND (m) OF THIS SECTION]. If the 07 commission and the borrower agree to a different repayment schedule, the borrower 08 shall repay the loan in accordance with the agreement. A borrower may make 09 payments earlier than required by this subsection or the agreement. 10 * Sec. 7. AS 14.43.120(h) is amended to read: 11 (h) Security may not be required for a loan; however, a loan origination 12 [GUARANTEE] fee, as specified in (u) of this section, shall be deducted 13 [CHARGED] at the time that the loan is disbursed [AWARDED]. Additionally, the 14 borrower shall pay [PROVISION SHALL BE MADE FOR PAYMENT OF] all fees 15 and costs incurred in collection [OF THE AMOUNT OWED] on the loan if it becomes 16 delinquent or in default. 17 * Sec. 8. AS 14.43.120(i) is amended to read: 18 (i) If a loan is in default, the commission 19 (1) shall notify the borrower that, if the borrower has an occupational 20 license issued under AS 08, the license may not be renewed under AS 08.02.025 and 21 that repayment of the remaining balance is accelerated and due by mailing 22 [SENDING] the borrower a notice at the most recent address provided to the 23 commission by the borrower [BY REGISTERED OR CERTIFIED MAIL]; 24 (2) may take the borrower's permanent fund dividend under 25 AS 43.23.065(b)(3) to satisfy the balance due on a [THE] defaulted loan; and 26 (3) shall provide notice of the default to the Department of Commerce 27 and Economic Development, if the loan recipient is licensed under AS 08. 28 * Sec. 9. AS 14.43.120(k) is amended to read: 29 (k) A borrower's obligation to make periodic payments [PERIODIC 30 INSTALLMENTS] of principal shall be deferred, but the borrower's obligation to 31 pay interest shall continue unless the state pays the interest by appropriation
01 under (t) [ACCRUE AND BE PAID UNLESS THE BORROWER IS ELIGIBLE FOR 02 INTEREST PAYMENT BENEFITS UNDER (l)] of this section, during any of the 03 following periods: 04 (1) [IF THE BORROWER RECEIVED A LOAN TO ATTEND AS A 05 FULL-TIME STUDENT,] return to full-time student status in good standing in a career 06 education program, college, or university that meets the requirements under (b) of this 07 section; 08 (2) if the borrower received a loan to attend as a half-time student, 09 return to at least half-time student status in good standing in 10 (A) a career education program, college, or university in the 11 state that meets the requirements under (b) of this section, or 12 (B) a career education program, college, or university that meets 13 the requirements under (b) of this section, and the borrower is physically 14 present in the state while attending the career education program, college, or 15 university; a borrower is not eligible for deferral under this paragraph for a 16 period longer than eight years; 17 (3) serving an initial period of up to three [SIX] years on active duty 18 as a member of the armed forces of the United States; 19 (4) serving, for up to three years, as a full-time volunteer under the 20 Peace Corps Act; 21 (5) serving, for up to three years, as a full-time volunteer under the 22 Domestic Volunteer Service Act of 1973; 23 (6) for a one-time period up to 12 months in which the borrower is 24 seeking and unable to find employment in the United States; or 25 (7) during the period of disability if, after the loan is disbursed, the 26 borrower becomes totally [50 PERCENT OR MORE] disabled as certified by 27 competent medical authority. 28 * Sec. 10. AS 14.43.120(l) is amended to read: 29 (l) The state shall pay the interest on that portion of a loan that is not federally 30 insured during 31 (1) the period while [IN WHICH] the borrower continues to be
01 enrolled under (c) of this section [IS A FULL-TIME OR HALF-TIME STUDENT]; 02 and 03 (2) deferments under (k) of this section. 04 * Sec. 11. AS 14.43.120(m) is amended to read: 05 (m) In case of hardship, the commission may extend repayment of a loan for 06 an additional period of up to five years [IN INCREMENTS NO LONGER THAN 12 07 MONTHS EACH]. 08 * Sec. 12. AS 14.43.120(q) is amended to read: 09 (q) For the purposes of this section, a loan is in default if a loan payment is 10 180  or more days past due. 11 * Sec. 13. AS 14.43.120(t) is amended to read: 12 (t) Payment of interest under (l) of this section and forgiveness 13 [FORGIVENESS] under (s) of this section are [IS] subject to appropriation by the 14 legislature. Money obtained from the sale of bonds by the Student Loan Corporation 15 under AS 14.42.220 may not be appropriated for the payment of interest or the 16 forgiveness of loans. 17 * Sec. 14. AS 14.43.120(u) is amended to read: 18 (u) The commission by regulation shall set a [A] loan origination 19 [GUARANTEE] fee, not to exceed five [OF ONE] percent of the total scholarship 20 loan amount, to [SHALL] be assessed upon a scholarship loan that is funded from the 21 student loan fund of the Alaska Student Loan Corporation. The loan origination 22 [GUARANTEE] fee shall be deducted at the time [ADDED AS A FINANCE 23 CHARGE TO] the [TOTAL] loan is disbursed [AMOUNT AWARDED, 24 NOTWITHSTANDING THE LOAN LIMITS SET OUT AT AS 14.43.110 AND 25 14.43.115]. Subject to appropriation, the loan origination [GUARANTEE] fees shall 26 be deposited into an origination [A GUARANTEE] fee account within the student 27 loan fund of the Alaska Student Loan Corporation, and subsequently used 28 [TRANSFERRED] by the corporation [COMMISSION TO LOAN ACCOUNTS 29 WITHIN THE STUDENT LOAN FUND] to offset losses incurred [DUE TO 30 STUDENT LOAN DEBT CANCELLATION] as a result of death, disability, default, 31 or bankruptcy of the borrower [STUDENT].
01 * Sec. 15. AS 14.43.125(a) is amended to read: 02 (a) A person may apply for and obtain a scholarship loan if the person 03 (1) is 04 (A) enrolled as a full-time student in a career education, 05 associate, baccalaureate, or graduate degree program; 06 (B) enrolled as a half-time student in a career education, 07 associate, baccalaureate, or graduate degree program [IN] 08 (i) in the state; or 09 (ii) out of the state [A CAREER EDUCATION, 10 ASSOCIATE, BACCALAUREATE, OR GRADUATE DEGREE 11 PROGRAM] and is physically present in this [THE] state while 12 attending that [THE CAREER EDUCATION, ASSOCIATE, 13 BACCALAUREATE, OR GRADUATE DEGREE] program; or 14 (C) a graduate of a high school or the equivalent, or scheduled 15 for graduation from a high school within six months, with sufficient credits to 16 be admitted to a career education program or to an accredited college or 17 university; 18 (2) is not delinquent or in default on a previously awarded scholarship 19 loan; and 20 (3) is a resident of the state at the time of application for the loan; for 21 purposes of this section, a person qualifies as a resident of the state if at the time of 22 application for the loan the person 23 (A) has been physically present in the state for at least one year 24 [TWO YEARS] immediately before the time of application for the loan; 25 (B) is dependent on a parent or guardian for care, the parent or 26 guardian has been present in the state for at least one year [TWO YEARS] 27 immediately before the time of application for the loan, and the person has 28 been present in the state for at least one year of the immediately preceding five 29 years except that the commission may by a two-thirds vote, acting upon a 30 written appeal by the person, grant an exemption to the requirement that the 31 person has been present in the state for one year of the immediately preceding
01 five years; 02 (C) has been physically present in the state [, OR IS A 03 DEPENDENT OF A PARENT OR GUARDIAN WHO HAS BEEN 04 PHYSICALLY PRESENT IN THE STATE,] for at least one year [TWO 05 YEARS] immediately before the applicant was absent from the state and the 06 absence is due solely to 07 (i) serving an initial period of up to three [SIX] years 08 on active duty as a member of the armed forces of the United States; 09 (ii) serving for up to three years as a full-time volunteer 10 under the Peace Corps Act; 11 (iii) serving for up to three years as a full-time volunteer 12 under the Domestic Volunteer Service Act of 1973; 13 (iv) required medical care for the applicant or the 14 applicant's immediate family; 15 (v) being a person who otherwise qualifies as a resident 16 and is accompanying a spouse who qualifies as a resident under (i) - 17 (iv) of this paragraph; [OR] 18 (vi) an absence allowed under (D)(i) - (iv) of this 19 paragraph; or 20 (D) [HAS BEEN PHYSICALLY PRESENT IN THE STATE, 21 OR] is a dependent of a parent or guardian who has been physically present in 22 the state [,] for at least one year [TWO YEARS] immediately before [THE 23 APPLICANT OR] the parent or guardian was absent from the state and the 24 absence is due solely to 25 (i) participating in a foreign exchange student program 26 recognized by the commission; 27 (ii) attending a school as a full-time student; 28 (iii) full-time employment by the state; 29 (iv) being a member of or employed full-time by the 30 state's congressional delegation; 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; 03 (4) does not have a past due child support obligation established by 04 court order or by the child support enforcement division under AS 25.27.160 - 05 25.27.220 at the time of application; and 06 (5) has not, within the previous five years, had a scholarship loan 07 discharged or written off by the commission for any reason. 08 * Sec. 16. AS 14.43.125(c) is amended to read: 09 (c) A person may not be awarded a scholarship loan under AS 14.43.090 - 10 14.43.160 [IF A FAMILY EDUCATION LOAN IS MADE ON BEHALF OF THAT 11 PERSON UNDER AS 14.43.710 - 14.43.790 OR] if that person receives a teacher 12 scholarship loan under AS 14.43.600 - 14.43.700 for the same period of attendance 13 [SCHOOL YEAR]. 14 * Sec. 17. AS 14.43.125 is amended by adding a new subsection to read: 15 (d) A person incarcerated full-time in a correctional facility may not be 16 awarded a scholarship loan under AS 14.43.090 - 14.43.160. In this subsection, 17 "correctional facility" has the meaning given in AS 33.30.901. 18 * Sec. 18. AS 14.43.150 is amended by adding a new subsection to read: 19 (d) An assignment of wages authorized under this section that is made under 20 court order has priority as against an attachment, execution, or other assignment, 21 except for an assignment for payment of child support under AS 25.27.070 or as 22 otherwise ordered by the court. 23 * Sec. 19. AS 14.43.300(g) is amended to read: 24 (g) The commission by regulation shall set a [A] loan origination 25 [GUARANTEE] fee, not to exceed five [OF ONE] percent of the total memorial 26 scholarship loan amount, to [SHALL] be assessed upon a memorial scholarship loan. 27 The loan origination [GUARANTEE] fee shall be deducted at the time [ADDED 28 AS A FINANCE CHARGE TO] the [TOTAL] loan is disbursed [AMOUNT 29 AWARDED]. Subject to appropriation, the loan guarantee fee shall be deposited into 30 a guarantee fee account within the memorial scholarship revolving loan fund, and 31 subsequently transferred by the commission to the appropriate memorial scholarship
01 accounts within the memorial scholarship revolving loan fund to offset losses incurred 02 due to loan debt cancellation as a result of death, disability, or bankruptcy of the 03 student. 04 * Sec. 20. AS 14.43.640 is amended by adding a new subsection to read: 05 (e) Teacher scholarship loans made to a student may not exceed a total of 06 $37,500. 07 * Sec. 21. AS 14.43.650(c) is amended to read: 08 (c) A student may not be awarded a teacher scholarship loan under 09 AS 14.43.600 - 14.43.700 [IF A FAMILY EDUCATION LOAN IS MADE ON 10 BEHALF OF THE STUDENT UNDER AS 14.43.710 - 14.43.790 OR] if the student 11 receives a scholarship loan under AS 14.43.090 - 14.43.160 for the same period of 12 attendance [SCHOOL YEAR]. 13 * Sec. 22. AS 14.43.740(a) is amended to read: 14 (a) The provisions of AS 14.43.100, 14.43.110, [14.43.115,] 14.43.120(a) - (d), 15 (i), (m), and (r) - (u), and 14.43.135 apply to a loan made under AS 14.43.710 - 16 14.43.790. 17 * Sec. 23. AS 14.43.790(a)(1) is amended to read: 18 (1) "default" means a loan that is 180  days or more past due in 19 repayment; 20 * Sec. 24. AS 14.43 is amended by adding a new section to read: 21 Sec. 14.43.920. UNAUTHORIZED SCHOLARSHIPS, LOANS, AND 22 GRANTS. If a person receives a scholarship, loan, or grant under this title for which 23 the person is not eligible under the provisions of this title, the scholarship, loan, or 24 grant is void and the entire balance of money paid is immediately due to the 25 scholarship, loan, or grant fund. This section is in addition to any penalty that may 26 be imposed according to another provision of law. 27 * Sec. 25. AS 14.44.025 is amended to read: 28 Sec. 14.44.025. PROVISIONS OF SERVICES. State participation under 29 Articles VIII and XIII of the Western Regional Higher Education Compact shall be 30 limited to the provision of adequate services and facilities in the professional fields 31 of study available through the Professional Student Exchange Program
01 administered by the Western Interstate Commission on Higher Education. The 02 Alaska Commission on Postsecondary Education shall establish funding priorities 03 under AS 14.44.035 for the available fields of study by analyzing student access 04 and state labor needs [FIELDS OF LAW, DENTISTRY, MEDICINE, 05 OSTEOPATHY, PUBLIC HEALTH, VETERINARY MEDICINE, PHARMACY, 06 PHYSICAL THERAPY, OCCUPATIONAL THERAPY, OPTOMETRY, PODIATRY, 07 FORESTRY, ARCHITECTURE, GRADUATE NURSING, PETROLEUM 08 ENGINEERING, MARITIME TECHNOLOGY, AND GRADUATE LIBRARY 09 STUDIES]. 10 * Sec. 26. AS 14.48.050 is amended by adding a new paragraph to read: 11 (10) establish fees for the review of institutions requesting approval for 12 participation in the scholarship loan program under AS 14.43.120(b)(2)(B). 13 * Sec. 27. AS 14.42.032; AS 14.43.115, and 14.43.750(b) are repealed. 14 * Sec. 28. TRANSITION. The Alaska Commission on Postsecondary Education may 15 proceed to adopt regulations necessary to implement this Act. The regulations take effect 16 under AS 44.62 (Administrative Procedure Act), but not before July 1, 1995. 17 * Sec. 29. APPLICABILITY. A borrower's obligation to pay interest on a student loan, 18 as required by AS 14.43.120(k), amended in sec. 9 of this Act, applies to a scholarship loan 19 disbursed after June 30, 1995. 20 * Sec. 30. Section 28 of this Act takes effect immediately under AS 01.10.070(c). 21 * Sec. 31. Except as provided in sec. 30 of this Act, this Act takes effect July 1, 1995.