Legislature(1997 - 1998)
03/27/1997 03:11 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
HB 193 - REPAY GRADUATE EDUCATION AID Number 0030 CHAIRMAN BUNDE announced the first item on the agenda was HB 193, "An Act relating to financial assistance for students attending certain graduate education programs; and providing for an effective date." A quorum was not present, but the chair explained that this was the first time the bill was being heard and he would not ask the committee to take any action on it today. Number 0066 CHAIRMAN BUNDE explained that HB 193 addresses the WAMI program (Washington, Alaska, Montana and Idaho Medical Education Program). Representative Dyson joined the committee meeting and so HB 193 would be addressed later in the meeting. HB 193 - REPAY GRADUATE EDUCATION AID Number 2138 CHAIRMAN BUNDE announced the next item on the agenda was HB 193, "An Act relating to financial assistance for students attending certain graduate education programs; and providing for an effective date." TAPE 97-24, SIDE B Number 0000 CHAIRMAN BUNDE explained that HB 193 addresses a forgiveness provision for those who take advantage of the state subsidy to attend medical school. If those graduates return to the state of Alaska and practice medicine for five years, they would be forgiven a portion of their indebtedness. If they choose not to return, then they would reimburse the state. There are ten students a year who go into this program, historically a little less than half return to the state and practice medicine. The program costs $1.6 million a year for a total of 40 students. A hefty investment is being made for these students and the state has a right to expect that they will return. The people at the university, who supervise this program, are quick to note that another five physicians do come to Alaska and practice medicine. He suggested that Alaska should receive the credit, rather than giving the program credit. CHAIRMAN BUNDE noted that Ms. Barrans was hear to testify. He referred to her written comments and said he would work with her to address those questions in the bill. If needed, they would be addressed in a committee substitute. Number 0151 DIANE BARRANS, Executive Director, Postsecondary Education Commission, Department of Education, apologized for the lateness of getting the written testimony to the committee. The commission has not taken a position on HB 193, it has not been reviewed, so at this time they would be considered neutral. Number 0189 CHAIRMAN BUNDE clarified that the postsecondary education commission would be the vehicle in which to collect the repayment. Number 0203 REPRESENTATIVE GREEN said that some of the postsecondary education loans have met with less than a desirable response in terms of repayment. He asked what sort of repayment occurs for those medical people who don't come back to Alaska. Number 0227 MS. BARRANS explained that she did not have information about the repayment plan for those medical students who are currently training and borrowing from the regular Alaska student loan program and do not come back to the state. A sophisticated system research would have to be done to come up with that data. The older loans did not have the field of study, which is currently being done, so it would be difficult to get meaningful information about how well these people behave in terms of repayment. She suspected that the repayment behavior is quite good because some examinations for students who graduate from four year colleges have occurred and it has shown a high repayment rate. Number 0285 CHAIRMAN BUNDE asked if any research had been done on if there is a difference in repayment for those people who graduate from four year institutions and remain non-residents of Alaska as opposed to those who remain residents of Alaska. Number 0307 MS. BARRANS answered that this is perhaps the case, but she would have to review the information and get back to the committee. Number 0313 REPRESENTATIVE GREEN expressed concern that the state is paying a significant amount for these students and we don't know whether they are repaying the state. Number 0335 MS. BARRANS explained that global default rate calculations have been done, but there is not a research staff to determine how many psychiatrists or medical doctors repay the state. Number 0354 REPRESENTATIVE GREEN clarified that he was asking about loan tracking. Number 0362 MS. BARRANS stated that approximately 18 percent of borrowers default. Of that amount, the state continues to collect on an additional 8 percent. As far as the money given out, money to be repaid, the state fails to collect between 11 and 12 percent of that money due to default or death. Number 0392 REPRESENTATIVE GREEN said this was pretty specific. He asked whether the commission knew whether this was equal between those who are in the state or those who are not in the state. Number 0396 MS. BARRANS explained that the statistical analysis shows that the repayment behavior of those who remain outside the state is somewhat better than those who remain in the state. Number 0421 MIKE MAHER, Director of Student Financial Aid, Postsecondary Education Commission, Department of Education, stated that of the plus $1.3 million which is funneled through the commission for this program, it is a direct grant. None of the money is paid back into the program. Ms. Barrens talked about how these students can also borrow through the regular student loan program, approximately $10,000 a year. This is an area which is being tracked, they are just like any other general fund money which the legislature appropriates every year. This is the $1.6 million direct grant which is not returned. This bill attempts to turn this portion into a loan program. Number 0476 CHAIRMAN BUNDE clarified that many of the students eligible for the grant program also receive student loans. Number 0513 LAURA BURLESON, Student, testified next via teleconference from Fairbanks. She voiced her support for the proposed format of this program. As a pre-medical student, she is aware of the importance of this program. Getting into medical school is more difficult than it ever was in the past. She received a medical school rejection letter with an explanation that the school had received 10,096 applications for 113 positions. This is true throughout most of the country. The WAMI program gives students from Alaska, who don't have an in-state medical school, a medical school preference and a chance at getting admitted. She was in favor of keeping the program. She realized, in these financial times, the state needs to find ways to generate revenue and felt this bill was fair. If the state is going to pay something for a person's education, then something should be required in return whether it is by serving the state or paying money back if a student decides to practice medicine elsewhere. MS. BURLESON expressed concern about the repayment conditions. The bill says does not require repayment while the student is in medical residency. Above this, the bill states that repayment is not required until six months after termination of the graduate program. If she chose to move out of state, she questioned whether repayment would begin right after residency or within that six months after medical school. Aside from that concern, she is in support of this bill as it is fair to the students, the state and the taxpayers. It is an equitable solution and a compromise. Number 0647 JEAN RICHARDSON, Student, testified next via teleconference from Fairbanks. She thought HB 193 was a good bill, it focused the intent of the lending program. This program is supposed to be there for students who need it, it asks that they not move out of state and assists them in getting preference to an out of state medical school as Alaska does not have a state medical school. It takes those people, who are committed to staying in Alaska, gives them a chance to go to school and then come back to Alaska. They wouldn't be competing against people who plan to move out of Alaska. Those people are not providing a benefit back to the state. Number 0688 CHAIRMAN BUNDE stated that their testimony was refreshing as compared with other students, in years past, who had told him no, that if they had to repay the money they would go somewhere else on a scholarship. Those students were only participating in this program because Alaska was giving them 100 percent. Number 0712 REPRESENTATIVE VEZEY asked the status of the WAMI program. Number 0721 CHAIRMAN BUNDE said the legislature had looked at changing the program a year or two ago. Number 0729 MS. BARRANS suggested that they might be thinking of the Western Interstate Commission on Higher Education (WICHE) student exchange program which was also health education; veterinary medicine, optometry, allied health, occupational therapy, et cetera. That program has been effectively phased out. The WAMI program is the sole program through which Alaskans have preferential access to medical education at the University of Washington. Number 0744 CHAIRMAN BUNDE commented that last year the legislature passed a bill affecting the whole student loan program, which allowed a floating interest rate and diligence in repayment. He said as this is the first time the bill has been heard, no action will be taken on it today.
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