CSSB 277(FIN): "An Act relating to the Alaska Commission on Postsecondary Education; relating to the Alaska Student Loan Corporation; relating to bonds of the corporation; relating to loan and grant programs of the commission; relating to an exemption from the State Procurement Code regarding certain contracts of the commission or corporation; making conforming changes; and providing for an effective date."
00 CS FOR SENATE BILL NO. 277(FIN) 01 "An Act relating to the Alaska Commission on Postsecondary Education; relating to the 02 Alaska Student Loan Corporation; relating to bonds of the corporation; relating to loan 03 and grant programs of the commission; relating to an exemption from the State 04 Procurement Code regarding certain contracts of the commission or corporation; 05 making conforming changes; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 14.42.030(e) is amended to read: 08 (e) The commission may 09 (1) adopt regulations under AS 44.62 (Administrative Procedure Act) 10 to 11 (A) carry out the purposes of 12 (i) AS 14.43.091 - 14.43.750, 14.43.990, AS 14.44, and 13 AS 14.48; and
01 (ii) AS 14.43.910 and 14.43.920 as they relate to the 02 purposes of AS 14.43.091 - 14.43.750, 14.43.990, AS 14.44, and 03 AS 14.48; [AND] 04 (B) ensure compliance with the requirements imposed by state 05 and federal statutes and regulations governing the guaranty, insurance, 06 purchase, or other dealings in eligible loans by federal agencies, 07 instrumentalities, or corporations; and 08 (C) establish standards for the 09 (i) administration of hearings conducted under 10 AS 14.43.153; and 11 (ii) administrative enforcement of collection orders 12 under AS 14.43.151 - 14.43.155; 13 (2) delegate to the executive director of the commission or a 14 subcommittee of the commission any duty imposed on or power granted to the 15 commission by this chapter, AS 14.43, AS 14.44, or AS 14.48, except its power to 16 adopt regulations and its duty to consider appeals under AS 14.43.100(b) and 17 AS 14.48.120; 18 (3) establish task forces, committees, or subcommittees, not 19 necessarily consisting of commission members, to advise and assist the commission in 20 carrying out its functions; 21 (4) contract with or use existing institutions of postsecondary 22 education or other individuals or organizations to make studies, conduct surveys, 23 submit recommendations, or otherwise contribute to the work of the commission; 24 (5) establish fees for the review of an out-of-state institution that 25 (A) requests approval for participation in the programs under 26 AS 14.43.091 - 14.43.750, 14.43.990, and AS 14.44; and 27 (B) is not accredited by a national or regional accreditation 28 association recognized by the Council for Higher Education Accreditation; and 29 (6) collect all fees and costs incurred in collection of the amount owed 30 on a loan or repayment obligation if the loan or repayment obligation becomes 31 delinquent or in default; in this paragraph, fees and costs include attorney fees, court
01 costs, and collection fees charged by a collection agency. 02 * Sec. 2. AS 14.42.210(a) is amended to read: 03 (a) The education loan fund is established in the corporation. The education 04 loan fund is a trust fund to be used to carry out the purposes of AS 14.42.100 - 05 14.42.990, AS 14.43.091 - 14.43.175, 14.43.400 - 14.43.420, 14.43.600 - 14.43.700, 06 14.43.710 - 14.43.750, 14.43.990, and AS 14.44.025. The fund consists of money or 07 assets appropriated or transferred to the corporation for the fund and money or assets 08 deposited in it by the corporation. The corporation may establish separate accounts in 09 the fund. 10 * Sec. 3. AS 14.42.210(b) is amended to read: 11 (b) Money and other assets of the education loan fund may be used to 12 (1) secure bonds of the corporation; 13 (2) pay the costs of administration of the fund; 14 (3) invest in education loans and investments under AS 37.10.071; 15 (4) finance programs approved under AS 14.43.091 - 14.43.175, 16 14.43.400 - 14.43.420, 14.43.600 - 14.43.700, 14.43.710 - 14.43.750, or 17 AS 14.44.040; and 18 (5) pay the costs of administering and collecting the loans and 19 repayment obligations under the financial aid programs listed in (4) of this subsection. 20 * Sec. 4. AS 14.42.220(a) is amended to read: 21 (a) The [SUBJECT TO (f) OF THIS SECTION, THE] corporation may 22 borrow money and may issue bonds, on which the principal and interest are payable 23 from its income and receipts or other assets or a designated part or parts of them. The 24 corporation may use the proceeds of its bonds for any purposes that the 25 corporation considers appropriate, including providing money to 26 (1) make or purchase education loans; 27 (2) finance programs identified in AS 14.42.210; 28 (3) finance projects of the state as those projects may be identified 29 by law; and 30 (4) pay for any other purpose or program of the corporation that 31 is authorized in AS 14.42.100 - 14.42.310.
01 * Sec. 5. AS 14.42.220 is amended by adding a new subsection to read: 02 (g) The corporation may not issue bonds to finance projects under (a)(3) of 03 this section in an aggregate amount that exceeds $280,000,000. 04 * Sec. 6. AS 14.43.120(u) is amended to read: 05 (u) The corporation [COMMISSION] by regulation shall set a loan 06 origination fee, not to exceed five percent of the total education loan amount, to be 07 assessed upon an education loan that is funded from the education loan fund of the 08 corporation [ALASKA STUDENT LOAN CORPORATION]. The loan origination 09 fee shall be deducted by the commission at the time the loan is disbursed. The 10 [SUBJECT TO APPROPRIATION, THE] loan origination fees shall be deposited into 11 an origination fee account within the education loan fund of the corporation 12 [ALASKA STUDENT LOAN CORPORATION], and subsequently used by the 13 corporation to offset losses incurred as a result of death, disability, default, or 14 bankruptcy of the borrower. 15 * Sec. 7. AS 14.43.122(a) is amended to read: 16 (a) The commission may offer 17 (1) a borrower who has received more than one education loan 18 [UNDER AS 14.43.091 - 14.43.160] the option of consolidating the multiple loans 19 into a single loan; or 20 (2) to consolidate education loans made [UNDER AS 14.43.091 - 21 14.43.160] to married borrowers if the married borrowers agree to be jointly and 22 severally liable for repayment of the consolidated loan, regardless of the borrowers' 23 future marital status or the death of one of the borrowers. 24 * Sec. 8. AS 14.43.145(a) is amended to read: 25 (a) For the purposes of this chapter, a loan is in default after a loan payment 26 has become 180 or more days past due or, for a loan under AS 14.43.161 - 14.43.168 27 or 14.43.170 - 14.43.175, the default requirements established by the commission have 28 been met. Upon default, 29 (1) repayment of the remaining balance is accelerated and due; 30 (2) the commission may take the borrower's permanent fund dividend 31 under AS 43.23.067;
01 (3) the commission may issue an order to withhold and deliver under 02 AS 14.43.147; 03 (4) the commission may provide notice of the default to a licensing 04 entity for nonrenewal of the license under AS 14.43.148; [AND] 05 (5) the commission may record the lien created under AS 14.43.149; 06 and 07 (6) the commission may establish an administrative collection 08 order under AS 14.43.151 - 14.43.155. 09 * Sec. 9. AS 14.43 is amended by adding new sections to read: 10 Sec. 14.43.151. Authority and procedure to administratively establish and 11 enforce a collection order. If a judgment in favor of the commission has not been 12 entered by the court regarding a defaulted loan awarded under this chapter, the 13 commission may establish a duty to repay the defaulted loan through a collection order 14 using the procedures prescribed in AS 14.43.152 - 14.43.155 and may enforce the 15 collection order. Action under this section may be undertaken at the commission's 16 discretion if the borrower is in default under AS 14.43.145. 17 Sec. 14.43.152. Initiation of administrative action to establish a collection 18 order; required notice. (a) An action to establish a collection order authorized under 19 AS 14.43.151 is initiated by the commission's serving on the borrower a notice of 20 establishment of collection order. The notice shall be served by mailing the notice to 21 the borrower at 22 (1) the borrower's most recent address provided to the commission by 23 the borrower; or 24 (2) another address known to the commission. 25 (b) The notice served under (a) of this section must state 26 (1) the amount of the liability for default under AS 14.43.145 for 27 which the borrower is found to be responsible; the amount stated under this paragraph 28 shall include all principal, interest, and collection fees; 29 (2) that a lien may be recorded against the borrower's property as 30 authorized under AS 14.43.145(a)(5); 31 (3) that the borrower may appear at a hearing held by the commission
01 and show cause that a collection order should not be entered because, at the time of the 02 notice, 03 (A) no loan payment was more than 180 days past due or, for a 04 loan under AS 14.43.161 - 14.43.168 or 14.43.170 - 14.43.175, the default 05 requirements established by the commission had not yet been met; or 06 (B) the borrower had entered into, or was in compliance with, 07 an agreement to forbear default with the commission; and 08 (4) that, if the borrower served with the notice does not request a 09 hearing within 30 days after the date of mailing of the notice, a collection order will be 10 entered and the property of the borrower will be subject to a lien under AS 14.43.149 11 in the amount stated in the collection order without further notice or hearing. 12 Sec. 14.43.153. Hearings in administrative action to establish a collection 13 order; burden of proof. (a) A borrower served with a notice of establishment of 14 collection order under AS 14.43.152 is entitled to a hearing before the commission if 15 the request for a hearing is served on the commission by registered mail, return receipt 16 requested, within 30 days after the date the notice is mailed to the borrower. 17 (b) If a request for a hearing in accordance with (a) of this section is made, the 18 issuance of a collection order is automatically stayed pending the decision of the 19 hearing officer for the commission. If a request for a hearing is not made, the 20 collection order is final at the expiration of the 30-day period specified in (a) of this 21 section. 22 (c) A borrower claiming that the notice is incorrect has the burden at hearing 23 to document the existence of one of the conditions described in AS 14.43.152(b)(3)(A) 24 and (B). 25 (d) Within 60 days after the date of the hearing, the hearing officer shall enter 26 a decision determining whether default has occurred and, if default has occurred, 27 specifying the amount of the collection order and declaring that the property of the 28 borrower is subject to a lien under AS 14.43.149 in the amount of the collection order. 29 (e) If the borrower who requested the hearing fails to appear at the hearing, the 30 hearing officer shall enter a decision 31 (1) confirming that a default has occurred;
01 (2) confirming the amount of the collection order; 02 (3) declaring that the property of the borrower is subject to a lien under 03 AS 14.43.149 in the amount stated under (2) of this subsection. 04 (f) The decision of the hearing officer is a final decision that may be appealed 05 to the superior court under the Alaska Rules of Appellate Procedure. 06 Sec. 14.43.154. Collection orders as judgments. A collection order is 07 equivalent to a judgment and becomes vested 08 (1) at the expiration of the 30-day period described in AS 14.43.153(b) 09 if a hearing is not requested; or 10 (2) on the date the hearing officer enters a decision in favor of the 11 commission if a hearing was requested by the borrower. 12 Sec. 14.43.155. Nature of remedies. AS 14.43.154 provides a remedy in 13 addition to and not as a substitute for any other remedies available to the commission. 14 * Sec. 10. AS 14.43.161 is amended to read: 15 Sec. 14.43.161. Purpose; creation. There is established the AlaskAdvantage 16 [ALASKA ADVANTAGE] loan program to provide postsecondary educational 17 financial assistance through the federal guaranteed student loan program. The 18 AlaskAdvantage [ALASKA ADVANTAGE] loan program is the primary source for 19 financial aid to eligible borrowers under this chapter. 20 * Sec. 11. AS 14.43.166 is amended to read: 21 Sec. 14.43.166. Repayment of loans. A borrower's obligation to commence 22 repayment of the principal and interest on a loan under AS 14.43.161 - 14.43.166 and 23 14.43.168 [AS 14.43.161 - 14.43.168] begins six months after the borrower's 24 completion or other termination of the postsecondary education program. The 25 commission may accelerate the repayment of any loan made in error or in reliance 26 upon a false statement made by the borrower. The commission shall determine the 27 period over which loans are repaid; however, the maximum period of repayment of 28 loans may not exceed the maximum period permitted under applicable provisions of 29 the federal guaranteed student loan program. 30 * Sec. 12. AS 14.43.168(b) is amended to read: 31 (b) The provisions of AS 14.43.145 - 14.43.155 [AS 14.43.145 - 14.43.150]
01 apply to loans under AS 14.43.161 - 14.43.168 that are in default. 02 * Sec. 13. AS 14.43.170 is amended to read: 03 Sec. 14.43.170. Creation; purpose. There is created the Alaska supplemental 04 education loan program to provide postsecondary educational supplemental financial 05 assistance. Supplemental financial assistance is available only if the financial aid 06 available through the AlaskAdvantage [ALASKA ADVANTAGE] loan program is 07 insufficient to cover the costs of attendance at a postsecondary institution or if the 08 borrower does not qualify for financial aid under the federal guaranteed student loan 09 program. The commission shall make the public aware of the Alaska supplemental 10 education loan program to facilitate providing loans to as many eligible borrowers as 11 possible. 12 * Sec. 14. AS 14.43.171 is amended to read: 13 Sec. 14.43.171. Applicability of other laws. The provisions of 14 AS 14.43.120(d)(4), 14.43.122, 14.43.135, 14.43.140, 14.43.145 - 14.43.160, 15 14.43.164, 14.43.166, and 14.43.168 [AND 14.43.166 - 14.43.168] apply to the loans 16 made under AS 14.43.170 - 14.43.175 as if the loans were made under those 17 applicable provisions. 18 * Sec. 15. AS 14.43.172(c) is amended to read: 19 (c) In addition to the provisions of (a) of this section, a borrower is eligible for 20 a loan under AS 14.43.170 - 14.43.175 if the borrower 21 (1) is not delinquent in payment [ON AND HAS NEVER BEEN IN 22 DEFAULT] on a loan previously awarded by the commission; 23 (2) at the time of application or loan disbursement, does not have a 24 past due child support obligation established by court order or by the child support 25 enforcement division under AS 25.27.160 - 25.27.220; 26 (3) has not, within the previous five years, had a loan discharged or 27 written off by the commission for any reason; 28 (4) does not have a status, at the time of application for a loan or 29 disbursement of loan money, that would prevent the borrower from repaying the loan 30 as it becomes due; 31 (5) has not, within the previous five years, defaulted on another loan
01 made to the borrower by a lending entity unless the borrower can show good faith 02 efforts to repay the loan and extraordinary circumstances that led to the default; 03 [AND] 04 (6) does not have a credit history, at the time of application for a loan, 05 that demonstrates chronic inability or unwillingness to pay an extension of credit or 06 loan as it becomes due; and [.] 07 (7) has [AS] complied with the military selective service registration 08 requirements imposed under 50 U.S.C. App. 453 (Military Selective Service Act), if 09 those requirements were applicable to the person. 10 * Sec. 16. AS 14.43.172(d) is amended to read: 11 (d) The commission may not make a loan to a borrower who has been in 12 default on a loan previously awarded by the commission unless [IF 13 (1)] the previously awarded loan has been paid in full [; AND 14 (2) ANOTHER INDIVIDUAL WHO SATISFIES THE 15 REQUIREMENTS OF (c) OF THIS SECTION COSIGNS THE LOAN]. 16 * Sec. 17. AS 14.43.300(a) is amended to read: 17 (a) An education loan to a recipient under AS 14.43.250(b)(1) - (4) or (6) may 18 not exceed $2,500 a school year for an undergraduate student or $5,000 a school year 19 for a graduate student [, EXCLUSIVE OF LOAN GUARANTEE FEES UNDER (g) 20 OF THIS SECTION,] and may not be made to a student for more than six years. An 21 education loan to a recipient under AS 14.43.250(b)(5) may not exceed the cost of 22 tuition and required fees, [LOAN GUARANTEE FEES UNDER (g) OF THIS 23 SECTION,] books and educational supplies, room and board, and transportation for 24 two round trips between the recipient's home and school each year. A loan under 25 AS 14.43.250(b)(5) may not be made for more than five years of undergraduate study, 26 five years of graduate study, or a combined maximum of eight years of study. 27 * Sec. 18. AS 14.43.400 is amended to read: 28 Sec. 14.43.400. Purpose; creation. There is created [ESTABLISHED] the 29 AlaskAdvantage education [ALASKA STATE EDUCATIONAL INCENTIVE] 30 grant program to provide financial assistance to eligible students to enable them to 31 attend, or continue their attendance at, postsecondary educational institutions. Funds
01 designated by the corporation or appropriated for this program may [SHALL] be 02 used as matching funds for the state's participation in the federal [STATE STUDENT 03 INCENTIVE] grant program under 20 U.S.C. 1070c - 1070c-4 [(P.L. 92-318; 20 04 U.S.C. 1070c - 1070c-3)]. 05 * Sec. 19. AS 14.43.405(a) is repealed and reenacted to read: 06 (a) The AlaskAdvantage education grant program created under AS 14.43.400 07 - 14.43.420 shall be administered by the executive director of the commission. 08 * Sec. 20. AS 14.43 is amended by adding a new section to read: 09 Sec. 14.43.406. Applicability of other laws. (a) To the extent they are not in 10 conflict with the provisions of AS 14.43.400 - 14.43.420, the provisions of 11 AS 14.43.162(b), 14.43.910, and 14.43.920 apply to a grant made under AS 14.43.400 12 - 14.43.420. 13 (b) In determining a student's eligibility for a grant under AS 14.43.400 - 14 14.43.420, the executive director of the commission shall apply the standards 15 contained in the definitions of "full-time student," "half-time student," and "school 16 year" in AS 14.43.160 as if those provisions were applicable to application for the 17 grant. 18 * Sec. 21. AS 14.43.410 is amended to read: 19 Sec. 14.43.410. Distribution of funds. The funds [APPROPRIATED] for the 20 AlaskAdvantage education [EDUCATIONAL INCENTIVE] grant program may 21 [SHALL] be allocated to eligible students in accordance with the provisions of the 22 federal [STATE STUDENT INCENTIVE] grant program under 20 U.S.C. 1070c - 23 1070c-4 and regulations adopted under AS 14.43.105 and 14.43.405. 24 * Sec. 22. AS 14.43.410 is amended by adding a new subsection to read: 25 (b) The commission may set aside a portion of grant awards for otherwise 26 eligible applicants whose employment prevents them from attending school on a full- 27 time basis. The commission shall adopt regulations to carry out the purposes of this 28 subsection. 29 * Sec. 23. AS 14.43.415 is repealed and reenacted to read: 30 Sec. 14.43.415. Eligibility; priority. (a) For an applicant to be eligible for a 31 grant under AS 14.43.400 - 14.43.420, the applicant must be
01 (1) a resident of this state; 02 (2) enrolled or about to be enrolled 03 (A) at an institution approved to participate in federal financial 04 aid programs under 20 U.S.C. 1070 - 1099c-2, as amended, located in this 05 state; and 06 (B) on at least a half-time basis; and 07 (3) able to demonstrate financial need in accordance with standards for 08 determining financial need established by the commission under 20 U.S.C. 1070c-2, as 09 amended. 10 (b) The commission shall give an applicant eligible under (a) of this section 11 priority for a grant award if that applicant is, or is about to be, enrolled in a program of 12 study that is preparatory for employment in an occupation or profession for which the 13 Department of Labor and Workforce Development, or another workforce data source 14 selected as reliable by the commission, indicates there is a severe shortage of trained 15 individuals in this state. Additionally, the commission may give an applicant priority 16 for a grant award if that applicant has participated in a secondary education program 17 of study that can be demonstrated to the commission to be a predictor for success at 18 the postsecondary education level for a program of study described in this subsection. 19 For purposes of this subsection, 20 (1) "occupation or profession" means a job for which specific 21 postsecondary certification is a prerequisite for entry-level placement; 22 (2) "severe shortage" means a current or recurring job vacancy rate of 23 15 percent or greater, as determined by the Department of Labor and Workforce 24 Development or by another workforce data source determined reliable by the 25 commission. 26 (c) The commission shall adopt regulations to establish a prioritization process 27 for awarding grants under AS 14.43.400 - 14.43.420. 28 * Sec. 24. AS 14.43.420(a) is amended to read: 29 (a) A grant made under AS 14.43.400 - 14.43.420 [AS 14.43.400 - 14.43.500] 30 may not be in an amount less than $500 [$100] nor more than $2,000 [$1,500] for 31 each school [ACADEMIC] year.
01 * Sec. 25. AS 14.43.420 is amended by adding a new subsection to read: 02 (c) A student may receive not more than a total of $8,000 in grants awarded 03 under AS 14.43.400 - 14.43.420. 04 * Sec. 26. AS 14.43.740(a) is amended to read: 05 (a) The provisions of AS 14.43.100, 14.43.120(a) - (c), (m), and (r) - (u), 06 14.43.122 [14.43.110, 14.43.120(a) - (d), (m), AND (r) - (u)], 14.43.135, 14.43.145 - 07 14.43.155 [14.43.145 - 14.43.150], and 14.43.910 - 14.43.990 apply to a loan made 08 under AS 14.43.710 - 14.43.750. 09 * Sec. 27. AS 14.43.740 is amended by adding a new subsection to read: 10 (g) The commission may, by regulation, set loan limits for loans made under 11 AS 14.43.710 - 14.43.750. 12 * Sec. 28. AS 14.43.990 is amended by adding new paragraphs to read: 13 (5) "AlaskAdvantage" means the service mark registered by the 14 commission under 15 U.S.C. 1051 (Trademark Act) that is used to describe financial 15 aid and higher education outreach programs and services provided by the commission; 16 (6) "education loan" means a loan made to finance the cost of 17 attendance in a postsecondary education program that is made by the commission or is 18 a loan received through the federal guaranteed student loan program. 19 * Sec. 29. AS 14.44.040(c) is amended to read: 20 (c) If a program participant defaults on the repayment obligation, the 21 provisions of AS 14.43.145 - 14.43.155 [AS 14.43.145 - 14.43.150] apply to collect 22 on the obligation as if it were a defaulted loan under AS 14.43. 23 * Sec. 30. AS 36.30.850(b) is amended by adding a new paragraph to read: 24 (44) contracts of the Alaska Commission on Postsecondary Education 25 or the Alaska Student Loan Corporation for the guarantee and disbursing of financial 26 aid money to institutions of postsecondary education under the financial aid programs 27 under AS 14.43.091 - 14.43.750 and AS 14.44.025. 28 * Sec. 31. AS 14.42.110, 14.42.220(f); AS 14.43.122(b), 14.43.300(g), 14.43.405(b), 29 14.43.420(b), and 14.43.500 are repealed. 30 * Sec. 32. The uncodified law of the State of Alaska is amended by adding a new section to 31 read:
01 TRANSITION: REGULATIONS. The Alaska Student Loan Corporation may 02 proceed to adopt regulations to implement the changes made by sec. 6 of this Act. The 03 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the 04 effective date of sec. 6 of this Act. 05 * Sec. 33. The uncodified law of the State of Alaska is amended by adding a new section to 06 read: 07 REVISOR OF STATUTES INSTRUCTIONS. (a) The revisor of statutes is 08 instructed to change the heading of Article 5 of AS 14.43 from "Article 5. Alaska Advantage 09 Loan Program." to "Article 5. AlaskAdvantage Loan Program." 10 (b) The revisor of statutes is instructed to change the heading of Article 8 of AS 14.43 11 from "Article 8. Educational Incentive Grant Program." to "Article 8. AlaskAdvantage 12 Education Grant Program." 13 * Sec. 34. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 REGULATIONS ATTORNEY INSTRUCTIONS. Wherever in the Alaska 16 Administrative Code the term "Alaska advantage" is used, it shall be read as 17 "AlaskAdvantage" when to do so would be consistent with the changes in this Act. Under 18 AS 44.62.125(b)(6), the regulations attorney is instructed to make changes in the Alaska 19 Administrative Code consistent with this section. 20 * Sec. 35. Section 6 of this Act takes effect January 1, 2005. 21 * Sec. 36. Except as provided in sec. 35 of this Act, this Act takes effect immediately under 22 AS 01.10.070(c).