Legislature(2007 - 2008)
03/25/2008 02:30 PM MLV
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* first hearing in first committee of referral
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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 members. 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 indeterminate. 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 danger. 2:47:57 PM REPRESENTATIVE LEDOUX stated that, in the bill, loan forgiveness is limited to those who have been deployed to Iraq and Afghanistan. 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 assignment. 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.