Legislature(1993 - 1994)

03/08/1994 03:00 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  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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