Legislature(1993 - 1994)
03/08/1994 03:00 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
TAPE 94-40, SIDE A
Number 000
CHAIR BUNDE called the meeting to order at 3:08 p.m., noted
members present and announced the calendar. He then read
portions of an article from the Anchorage Daily News
regarding students and student loans. He indicated that
collectively students in the United States owe $41.9 billion
on student loans. He said in many schools 70% of the
student body choose to borrow, and the average debt per
student is $79,000. He further related that in a survey of
551 recent college graduates, four out of ten students said
they could handle their payments; however, one out four said
their debt affected their decision as to when or if to
marry. One-third stated that it also influenced their
decision to start a family, and four out of ten work at two
jobs or more because of their debt. He further stated that
1/4 said their loans have caused them to live with relatives
and 35% said they have postponed needed health care because
of their debt. He also said that 13% said they were forced
to drop out of school because of their debt.
(CHAIR BUNDE stated for the record that Rep. Nicholia and
Rep. B. Davis arrived at 3:10 p.m.)
CHAIR BUNDE then brought HB 506 to the table.
HB 506 - STUDENT LOAN PROGRAM
Number 122
CHAIR BUNDE indicated that Amendment 1 was before the
committee, which would address the issue of consolidating
loans and would allow loans to be rounded off to the nearest
tenth. (He indicated that Rep. Olberg arrived at 3:11 p.m.)
He then moved Amendment 1 for purposes of discussion.
REP. BRICE objected.
CHAIR BUNDE asked Mr. McCormick to speak to the amendment.
Number 130
JOE MCCORMICK, Executive Director, Alaska Commission on
Postsecondary Education (ACPE), answered questions on HB
506. He stated that "this is just a mechanical, or what I
would call a technical, amendment to exact the
administration of this provision of the bill. And, this is
the only further amendment that we have today..."
Number 165
CHAIR BUNDE asked Rep. Brice to speak to his objection.
REP. BRICE asked, if loans are consolidated and the average
rate is 7.6%, will the rate then be rounded off to 8%?
MR. MCCORMICK explained that it is the nearest tenth of a
percent.
REP. BRICE said he understood.
CHAIR BUNDE asked if Rep. Brice still maintained his
objection.
REP. BRICE said no.
Number 194
CHAIR BUNDE, hearing no further objections, declared that
Amendment 1 was adopted. He said HB 506 as amended was
before the committee.
REP. VEZEY proposed an amendment that would incorporate the
body of a bill he introduced (HB 488) with that of HB 506 as
amended. He said it dealt with the same chapters of Alaska
statutes.
CHAIR BUNDE interjected and said he assumed Rep. Vezey's
amendment would limit student loans to Alaskan schools only.
REP. VEZEY said yes.
CHAIR BUNDE asked if he were interested in pursuing the
issue.
REP. VEZEY asked the pleasure of the committee in regards to
HB 488.
REP. BRICE said he felt that the amendment might hold merit
in certain circumstances, but indicated that he would feel
much more comfortable with back-up information and the
opportunity to debate that specific bill before the
amendment would be made. He said he opposed the amendment.
Number 262
CHAIR BUNDE asserted that he would rather address HB 488
separately to allow opportunity for testimony and
discussion.
REP. TOOHEY suggested that a roll call vote be taken.
CHAIR BUNDE stated that before the amendment could be
addressed it would have to be seen and testified upon. He
said the committee would not vote on something that has not
been discussed. He reiterated that he wanted to handle it
as a separate issue.
REP. VEZEY concurred.
CHAIR BUNDE asked for further discussion on HB 506.
REP. BRICE suggested that perhaps some discussion should be
made in the Labor and Commerce Committee in regards to
capping the interest rate at 15% or 16%. He referred to the
article that indicated that employers are looking for highly
skilled and technically trained college graduates. He said
that a free floating percentage rate could leave students in
very difficult situations and that the loan program would
not be making any loans.
CHAIR BUNDE asked the pleasure of the committee.
REP. VEZEY made a motion to pass HB 506 as amended out of
committee with individual recommendations and accompanying
fiscal note.
CHAIR BUNDE, hearing no objections, stated that HB 506 was
so moved. He then brought HB 466 to the table. He asked
for public testimony.
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