Legislature(2007 - 2008)

03/25/2008 02:30 PM MLV

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 405-STUDENT LOAN FORGIVENESS FOR MILITARY                                                                                  
2:40:03 PM                                                                                                                    
CHAIR ROSES announced  that the final order of  business would be                                                               
HOUSE  BILL  NO.  405,  "An  Act relating  to  forgiveness  of  a                                                               
percentage  of student  loans for  a member  of the  armed forces                                                               
deployed since 2001."                                                                                                           
2:40:11 PM                                                                                                                    
CHRIS BIRDSALL,  Intern to Representative Harry  Crawford, Alaska                                                               
State Legislature, introduced HB  405 on behalf of Representative                                                               
Crawford, sponsor.   He stated that  this bill will provide  a 50                                                               
percent  Alaska student  loan forgiveness  to residents  who have                                                               
served in the armed forces since  2001, and have been deployed to                                                               
Iraq or Afghanistan.  This legislation  is a way for the state to                                                               
recognize  the sacrifices  made  by veterans,  and  it will  ease                                                               
their  re-entry  into civilian  life  by  reducing the  financial                                                               
burden of college.                                                                                                              
2:41:25 PM                                                                                                                    
DIANE  BARRANS,   Executive  Director,   Postsecondary  Education                                                               
Commission,  Department   of  Education  and   Early  Development                                                               
(DEED),  clarified   that  the  bill  provides   for  50  percent                                                               
forgiveness  of  any  loan  made   by  the  Alaska  Postsecondary                                                               
Education  Commission,   including  those  administered   by  the                                                               
commission  for  the  state supplemental  loan  program  and  the                                                               
federal family education loan program.                                                                                          
2:42:17 PM                                                                                                                    
REPRESENTATIVE   LEDOUX  asked   whether  the   state  would   be                                                               
responsible  for repayment  of $10,000  per loan  to the  federal                                                               
loan program, on behalf of the servicemen.                                                                                      
2:42:36 PM                                                                                                                    
MS. BARRANS explained that the  lender is the Alaska Student Loan                                                               
Corporation,  and   the  federal  government   simply  guarantees                                                               
repayment of the loan in the event of default.                                                                                  
2:43:04 PM                                                                                                                    
REPRESENTATIVE RAMRAS asked  for the fiscal note  attached to the                                                               
bill.  He  then pointed out that there are  armed service members                                                               
who are unable to collect  a permanent fund dividend (PFD) during                                                               
their  deployment and  that  the legislature  has  not taken  the                                                               
steps  to   resolve  this   situation.     Representative  Ramras                                                               
expressed his  hope that there  will be testimony from  the state                                                               
and legal resources  to address the question  of resident status.                                                               
He   urged  the   committee  to   take  into   consideration  the                                                               
resistance,  by  standing committees  and  the  legislature as  a                                                               
whole,  to  the establishment  of  resident  status for  deployed                                                               
service members  in order to qualify  for the PFD.   He noted his                                                               
personal  support for  the payment  of PFDs  to deployed  service                                                               
2:45:48 PM                                                                                                                    
MS.  BARRANS explained  that the  fiscal note  was determined  by                                                               
identifying borrowers  who had  qualified for  the 2007  PFD, and                                                               
who had received  a military deferment or  forbearance on student                                                               
loan payments.   She clarified that the $1.1 million  cost is the                                                               
immediate   entitlement  forgiveness,   and   future  costs   are                                                               
2:46:47 PM                                                                                                                    
REPRESENTATIVE LEDOUX asked whether there  are any other areas of                                                               
danger to which Alaska service members have been deployed.                                                                      
2:47:37 PM                                                                                                                    
MR.  BIRDSALL said  that he  did not  know.   He opined  that the                                                               
intent is  to reward  all of  those who are  serving in  areas of                                                               
2:47:57 PM                                                                                                                    
REPRESENTATIVE LEDOUX stated that,  in the bill, loan forgiveness                                                               
is  limited  to  those  who   have  been  deployed  to  Iraq  and                                                               
2:48:23 PM                                                                                                                    
MR.  BIRDSALL acknowledged  that the  bill began  with those  who                                                               
have served  in Iraq;  however, the sponsor  does not  oppose the                                                               
expansion of the program to other troops.                                                                                       
REPRESENTATIVE DAHLSTROM stated her  agreement with the intent of                                                               
the bill.  She supported  the point made by Representative LeDoux                                                               
to  include others  who are  serving under  dangerous conditions.                                                               
She suggested  changing the language  in HB 405 to  encompass all                                                               
who are serving.                                                                                                                
2:50:27 PM                                                                                                                    
CHAIR ROSES  noted the lack  of sufficient time to  consider this                                                               
important  issue.    He  indicated his  intent to  reschedule the                                                               
bill,  hear  further  testimony,  and  address  the  concerns  of                                                               
committee members.                                                                                                              
2:51:09 PM                                                                                                                    
REPRESENTATIVE RAMRAS  stated that he represents  Ft. Wainwright,                                                               
and that  there is no  greater source of  pride.  He  pointed out                                                               
that there  are Alaska National Guard  troops who are in  no less                                                               
danger.  The complexity of  the bill warrants further discussion,                                                               
perhaps by Representative Kawasaki, who is a co-sponsor.                                                                        
2:52:58 PM                                                                                                                    
REPRESENTATIVE  KAWASAKI agreed  that there  are questions  about                                                               
the bill.   For example, how  to determine whether a  borrower is                                                               
stationed  in  Iraq  or  Afghanistan,  rather  than  on  a  brief                                                               
2:53:45 PM                                                                                                                    
CHAIR ROSES  encouraged the bill's sponsors  to make improvements                                                               
to be heard at later hearing.                                                                                                   
2:53:56 PM                                                                                                                    
REPRESENTATIVE RAMRAS  stressed that  there are many  more pieces                                                               
to  this legislation  when  the  loss of  life  of other  service                                                               
members, such as the Coast Guard, is considered.                                                                                
2:54:44 PM                                                                                                                    
REPRESENTATIVE DAHLSTROM  encouraged the sponsor to  add a policy                                                               
for those who  default in their student loans,  previous to their                                                               
application for forgiveness.                                                                                                    
2:55:40 PM                                                                                                                    
CHAIR ROSES explained that there  could be a deliberate action to                                                               
avoid payment prior to deployment.                                                                                              
2:56:01 PM                                                                                                                    
MS. BARRANS  advised the committee  that the period of  time that                                                               
an applicant could apply for  forgiveness is not specified in the                                                               
bill; in  fact, there is  no authorization for  the Postsecondary                                                               
Education Commission  to write regulations  and define  the terms                                                               
and conditions of the program.                                                                                                  
2:56:50 PM                                                                                                                    
CHAIR ROSES stated his support for further discussion by Ms.                                                                    
Barrans and the sponsor of HB 405.                                                                                              
2:57:07 PM                                                                                                                    
CHAIR ROSES announced that HB 405 would be held in committee                                                                    
with public testimony open.                                                                                                     

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