01/17/2001 09:05 AM House EDU
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON EDUCATION
January 17, 2001
9:05 a.m.
MEMBERS PRESENT
Representative Con Bunde, Chair
Representative Brian Porter
Representative Joe Green
Representative Peggy Wilson
Representative Gary Stevens
Representative Reggie Joule
Representative Gretchen Guess
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Senator Bettye Davis
Representative Mary Kapsner
COMMITTEE CALENDAR
HOUSE BILL NO. 37
"An Act relating to reimbursement of certain student loans; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 54
"An Act relating to reimbursement of student loans; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 37
SHORT TITLE:STUDENT LOAN FORGIVENESS
SPONSOR(S): STEVENS
Jrn-Date Jrn-Page Action
01/08/01 0033 (H) READ THE FIRST TIME - REFERRALS
01/08/01 0034 (H) EDU, HES, FIN
01/08/01 0034 (H) REFERRED TO EDU
01/17/01 Text (H) EDU AT 09:00 AM HOUSE FINANCE 519
BILL: HB 54
SHORT TITLE:STUDENT LOAN FORGIVENESS
SPONSOR(S): DAVIES
Jrn-Date Jrn-Page Action
01/10/01 0055 (H) READ THE FIRST TIME - REFERRALS
01/10/01 0055 (H) EDU, HES, FIN
01/10/01 0055 (H) REFERRED TO EDU
01/12/01 0074 (H) COSPONSOR(S): KERTTULA
01/17/01 Text (H) EDU AT 09:00 AM HOUSE FINANCE 519
WITNESS REGISTER
VERNON MARSHALL, Executive Director
NEA-Alaska, [National Education Association]
114 Second Street
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of HB 37.
REPRESENTATIVE JOHN DAVIES
Alaska State Legislature
Capitol Building, Room 415
Juneau, Alaska 99801
POSITION STATEMENT: Testified as sponsor of HB 54.
LARRY WIGET, Executive Director
Public Affairs
Anchorage School District
PO Box 196614
Anchorage, Alaska 99519
POSITION STATEMENT: Testified in support of HB 37.
ARNOLD SHYROCK
PO Box 1632
Kodiak, Alaska 99615
POSITION STATEMENT: Testified on HB 37.
BETTY WALTERS, Superintendent
Kodiak Island Borough School District
722 Mill Bay Road
Kodiak, Alaska 99615
POSITION STATEMENT: Testified in support of HB 37.
PAT HOLMES
PO Box 2651
Kodiak, Alaska 99615
POSITION STATEMENT: Testified on HB 37.
JACK WALSH, School Administrator
Kodiak Island Borough School District
722 Mill Bay Road
Kodiak, Alaska 99615
POSITION STATEMENT: Testified on HB 37.
JEFF STEPHAN, President
Board of Education
Kodiak Island Borough School District
PO Box 2917
Kodiak, Alaska 99615
POSITION STATEMENT: Testified in support of HB 37 and HB 54.
MIKE MILLIGEN
12056 Gara Drive
Kodiak, Alaska 99615
POSITION STATEMENT: Testified on HB 37 and HB 54.
LOUISE PARISH
Parent Advocate for the Learning Disabled
(Address not provided)
Valdez, Alaska
MELISSA HILL
Alaska Teacher Placement
PO Box 756880
Fairbanks, Alaska 99775
POSITION STATEMENT: Testified on HB 37.
SHEILA KING, Finance Officer
Alaska Commission on Postsecondary Education
Department of Education and Early Development
3030 Vintage Boulevard
Juneau, Alaska 99801
POSITION STATEMENT: Answered questions on HB 37 and HB 54.
ACTION NARRATIVE
TAPE 01-1, SIDE A
Number 0001
CHAIR CON BUNDE called the House Special Committee on Education
meeting to order at 9:05 a.m. Members present at the call to
order were Representatives Bunde, Porter, Green, Stevens, Joule
and Guess. Representative Wilson joined the meeting as it was
in progress.
HB 37 - STUDENT LOAN FORGIVENESS
HB 54 - STUDENT LOAN FORGIVENESS
CHAIR BUNDE announced the committee would first hear HOUSE BILL
NO. 37, "An Act relating to reimbursement of certain student
loans; and providing for an effective date," and then HOUSE BILL
NO. 54, "An Act relating to reimbursement of student loans; and
providing for an effective date," since they are similar bills.
Number 0170
REPRESENTATIVE STEVENS, sponsor of HB 37, stated that this bill
fills a very important need because the state is faced with many
difficulties in education. There is a real need for quality
teachers, and that is crucial if students are expected to
achieve through their school experience. There is also a
statewide shortage of teachers, and many school districts are
struggling to find people to fill the needed positions.
REPRESENTATIVE STEVENS noted that presently there is no
incentive in the student loan programs to encourage students who
have received their teaching certificate to return to Alaska.
If Alaskans who have received that student loan can be convinced
to come back and teach in Alaska, it will be a great advantage
to the state.
REPRESENTATIVE STEVENS pointed out that many other states have
great incentives to draw teachers, including assistance with
mortgages, assistance with apartments, and all sorts of bonuses.
Alaska is in a nationwide market trying to attract the same
people and is at a disadvantage because of the bonuses being
offered in other states. He indicated that HB 37 is just a
piece of the puzzle; it does not solve all of the problems.
REPRESENTATIVE STEVENS explained that HB 37 offers 10 percent
forgiveness; it is not a reimbursement. People do not get money
back, but they do receive a 10 percent per year credit up to
five years if they stay in Alaska. He said he thinks that once
teachers are attracted to come to Alaska for five years, there
is a good chance that they will stay and continue their careers
here.
Number 0348
CHAIR BUNDE asked if HB 37 was aimed at teachers in general and
not specific areas of teaching or geographic areas of Alaska.
He mentioned that the National Student Defense Loan had a 50
percent forgiveness rate if a teacher taught for five years. If
the teacher taught special education, additional monies were
forgiven. He asked Representative Stevens if he wanted carte
blanche as far as the forgiveness goes.
REPRESENTATIVE STEVENS said currently there is a teacher
scholarship loan that is geared toward people who have decided
at an early age that they want to become teachers, and it is
also geared toward rural teachers. Many people do not know what
they will major in their first few years in college, and this
bill would expand the opportunities for people who would not be
eligible under the teacher scholarship loan program. If people
decide to teach after a few years of college, they could apply
for this forgiveness. It is his goal to have any teacher in
Alaska who has received a student loan eligible for the loan
forgiveness.
CHAIR BUNDE noted there are people who have had other careers
and then decide to come back and be teachers and this would help
them. He asked Representative Stevens how many people have
taken advantage of the teacher scholarship loan program.
REPRESENTATIVE STEVENS said he didn't know, but someone from the
student loan program could probably address that issue.
Number 0512
REPRESENTATIVE GREEN commented that he has heard the same lament
from principals in his district that they are having difficulty
keeping and trying to get new teachers in any discipline. He
asked if there is a fiscal note and does Representative Stevens
concur with it.
REPRESENTATIVE STEVENS indicated that the fiscal note is in the
packet, and he would like it explained to him.
Number 0571
REPRESENTATIVE JOULE agreed that HB 37 is a good step in the
right direction. One of the problems that plagues the state,
especially in rural Alaska, in addition to getting teachers to
come out to the rural areas, is to get them to stay there.
Teacher retention is an issue. Studies show that if there is
consistency in the classroom with teachers and longevity, not
only do they get to know the curriculum and the children, the
chances of them doing better goes up. He asked Representative
Stevens if he had given any thought to getting people to stay
longer by providing additional incentives beyond the 50 percent,
so there will be some retention of teachers. He asked if
Representative Stevens and the committee would be willing to
entertain additional incentives to retain teachers in rural
areas.
REPRESENTATIVE STEVENS said he hadn't considered that but agreed
that is a problem. He explained that even though HB 37 says it
is for five years, 10 percent a year for a total of 50 percent
forgiveness, it really works by the teacher having to teach the
first year before he/she is even considered, so someone would
have to teach for six years to realize the 50 percent
forgiveness. He said he thought if someone stayed for six
years, there would be a good chance that he/she may want to
stay.
Number 0756
REPRESENTATIVE GUESS asked if HB 37 would only be in effect if
someone stayed in the same school or school district, or would
it be in effect regardless of where the person taught.
REPRESENTATIVE STEVENS agreed it would be in effect regardless
of where the person taught.
REPRESENTATIVE GUESS said it wouldn't necessarily stem the tide
of the problem of people moving between districts.
REPRESENTATIVE STEVENS agreed that it wouldn't solve that
problem, but it would be an accumulative thing.
Number 0804
VERNON MARSHALL, Executive Director, NEA-Alaska, [National
Education Association], came forward to testify. He said the
NEA-Alaska is pleased that HB 37 has been introduced. As HB 54
also relates to the efforts to attract and retain teachers in
Alaska classrooms, the NEA-Alaska is pleased that the bills have
been introduced. It appreciates the focus on the classroom.
There is a teacher shortage in Alaska and in this country.
Partly because of the teacher shortage in this country, it does
make it very difficult for Alaska to step up to the employment
plate and have to compete with the rest of the states.
MR. MARSHALL told the committee about a job fair held in
Anchorage where a school district in California had a booth and
offered financial incentives for Alaskans to take California
jobs. He agreed that HB 37 could serve as an incentive to
attract people to the teaching profession. Alaska is struggling
to attract and keep quality teachers. A program such as loan
forgiveness is one means to strengthen the teaching force.
MR. MARSHALL noted there are a lot of excellent teachers in
classrooms who struggle to deal with almost new learning
environments in order to teach all children relative to new
instructional strategies or to confront the learning problems
found in classrooms. The committee may want to think about an
effort on the part of the state to encourage those with
undergraduate degrees who are teaching in Alaska schools to take
advantage of the university's master's program for higher levels
of training and experience.
Number 1032
CHAIR BUNDE asked Representative Stevens if there was anything
in HB 37 to preclude someone taking a student loan and getting a
master's degree and then continuing to teach in Alaska to be
eligible for the loan forgiveness.
REPRESENTATIVE STEVENS explained that anybody could apply for a
student loan for graduate work, and it would all count toward
the loan forgiveness.
REPRESENTATIVE STEVENS asked Mr. Marshall to comment on the
incentives from other states.
MR. MARSHALL replied that he would be glad to get him a report,
but he is aware of hiring bonuses, housing relocation offers,
loan forgiveness programs, and even memberships in athletic-type
facilities. There are many different types of programs being
offered to attract teachers and the market is lean, so states
have had to institute these things.
CHAIR BUNDE asked Representative Davies to present HB 54 and
then the Alaska Commission on Postsecondary Education will be
asked to comment on both bills.
Number 1147
REPRESENTATIVE DAVIES, Alaska State Legislature, sponsor of HB
54, came forward to present the bill. He noted that the
fundamental difference between HB 54 and HB 37 is that HB 54
applies to anybody who has a student loan and stays in Alaska
for the requisite five years. He noted that almost everything
that Representative Stevens said also applies to HB 54. The
fundamental motivation to enlarge the scope is because the
Alaska student loan program is different than what most states
would have. Many states have loan programs that apply to both
in-state and out-of-state students who attend school in that
state. The Alaska student loan program works oppositely in
terms of its incentive for getting qualified people into the
work force in that state. For example, a student from Alaska
can get a Massachusetts school loan if he/she is attending a
school in Massachusetts. Those student loan programs have the
effect of bringing qualified people to the state.
REPRESENTATIVE DAVIES reported that there is a problem in Alaska
of a huge "brain drain." There is a decline in the population
between ages 18-34. He said he believes part of the reason is
that the Alaska student loan program works in the direction of
taking some of those qualified individuals out of the state.
Alaska has a unique circumstance because it is a big state but
sparsely populated; there are a few good universities in the
state. Other states have many good universities with many
opportunities for students. From a parent's point of view,
having a student loan program in those states doesn't limit
their student's options as much as that kind of a structure
would if that were done in Alaska. There are some good reasons
why the student loan program is structured as it is, but it has
at least one severe unintended consequence.
REPRESENTATIVE DAVIES noted that the obvious drawback is it is
expensive, but the only other option, it seems to him, would be
to convert it to a program where it was only for students who
attend college in the state. If the state can afford it, that
is not the direction to go.
REPRESENTATIVE DAVIES explained that there are other professions
besides teaching where there are shortages: nursing, for
example. Alaska is also going to need a lot of trained people
to work hopefully on the gas pipeline which will require
training at higher levels, in operator levels. The work force
on the existing pipeline will have to be replaced also. This
bill would apply to keep some of that talent in the state.
REPRESENTATIVE DAVIES noted that there is always the question of
equity between groups of people, so the equity issue is covered
in HB 54 as well. He agreed that this is undoubtedly an
expensive proposition and the broader it is, the more expensive
it will be. He has thought about some other things like
limiting the scope of the loan, which the committee might
consider to help with the cost.
Number 1401
LARRY WIGET, Executive Director, Public Affairs, Anchorage
School District (ASD), testified via teleconference on HB 37.
He read the following testimony:
The Anchorage School District does support legislation
which enables districts to address shortages of public
school teachers and has adopted as an ASD board
legislative priority the support of legislation
enabling districts to address the shortage of
certificated special education and related personnel
statewide.
A reimbursement program for borrowers employed as
public school teachers particularly in areas of high
need, such as math, world languages, science,
technology and librarians, as well as special
education and related services personnel, is one means
of helping all our districts who need teachers.
Thus, the Anchorage School District supports the
concept of a student loan reimbursement in HB 37 and
asks the committee ... to consider the following in
your discussion: the expansion of the bill, if not
already, to include special education and related
personnel outside the classroom and to expand the
bill, and I think you've done this, to graduate
programs, particularly in the areas of severe
shortages such as special education and related
services.
Number 1500
ARNOLD SHYROCK testified via teleconference. He and his wife
are parents of a child who has a student loan. The one aspect
of the bill that they both noticed is the applicability. What
they have seen through this process - their daughter is in her
fifth year of student loans in a master's program - is the lack
of evenhandedness. There is always a special deal; if a student
was born in a certain time or graduated in a certain time, if
he/she is a good student, then tuition is forgiven. He
suggested making the bill applicable to all students who have
taken student loans in Alaska, not just the ones who will be
taking student loans in 2001 and beyond.
MR. SHYROCK said that all the money their daughter gets from the
student loan is going for tuition and then some. She struggles
to make it. They've looked at all the special deals and thought
their daughter was just born at the wrong time. She has worked
hard; she's been a good student; she was a top graduate of her
university; and yet she struggles just to get through school.
He would like to see the applicability extended backwards to
include all students that have had student loans.
CHAIR BUNDE said that the committee would certainly ask for
input from the Alaska Commission on Postsecondary Education as
to what the price tag would be to make this retroactive to all
student loans. He noted that it is interesting that these loans
are provided, but he wondered if it is always a good idea to
encourage people to graduate $40,000 or $50,000 in debt. That
is an on-going question and a challenge.
Number 1595
BETTY WALTERS, Superintendent, Kodiak Island Borough School
District, testified via teleconference. She said that
encouraging the residents of Alaska, both recent high school
graduates, as well as adults returning to the college or
university setting to graduate and remain in Alaska or return to
Alaska is imperative. She specifically addressed HB 37 but
certainly supports both of these bills. She addressed the
incentives that are given by people outside the state of Alaska,
the districts and the communities. People are encouraged to
enter the field of education, and then they are given those
opportunities outside Alaska. She said that it is important for
everyone to know the difficulties that Kodiak is having, as well
as other districts across the state, in recruiting and keeping
teachers and other certified staff. She encouraged the
committee to consider this and move this bill through the
process.
Number 1684
PAT HOLMES testified via teleconference. He has two sons that
were born and raised in Alaska. One is in medical school in
Virginia, and he ended up getting much better financing program
down there. He did not use the Alaska student loan at all. His
other son is at the University of Washington and is using the
student loan program, but he won't be a teacher. He's studying
biology. If it came to a choice of the bills, the teacher bill
would be the easier one to sell the legislature, but he is a
parent, and he thinks about his children. As far as benefiting
Alaska's children and getting them back to Alaska, HB 54
probably would be of greater interest to him.
MR. HOLMES mentioned that the reason his younger son left Alaska
was shortly after he started college in Fairbanks, the bill was
passed for tuition forgiveness for the upper 10 percent, and he
was disgusted with that, just like the Shryock's daughter. He
said he thinks that this teacher problem extends up into the
university because one of his sons told him about a geography
class on Alaskan geography that was taught by some guy from
Arkansas, and his son thought that was amusing because he had
been to more places in Alaska than the professor had. He urged
the committee to consider an incentive to attract Alaskans back
to being professors at the university.
CHAIR BUNDE clarified that the Alaska Scholars Program, the top
10 percent of the high school graduates that are getting tuition
waivers, was not a legislative program; it was a university
program.
Number 1802
JACK WALSH, School Administrator, Kodiak Island Borough School
District, testified via teleconference. He has been involved in
the hiring process of teachers for the last few years. He has
traveled to Minneapolis and the Midwest and other places trying
to help with that process of attracting some of the top
teachers. There are a lot of things to compete with that are
going on around the country that put Alaska at a tremendous
disadvantage. For example, Baltimore provides teachers with
low-interest mortgages; he has heard of a California district
that gave a $5,000 signing bonus, depending on the specialty
area, when it was in the Anchorage Captain Cook [at a job fair];
Chicago offers similar kinds of assistance.
MR. WALSH noted that he likes the idea that the bill provides
the assistance and relief for all teachers and may encourage
many to look at this career as one they can come back to and be
very productive in the state where they grew up. As a former
special education director, he'd have to put in the plug for at
least the consideration of greater forgiveness for those
specialty areas of special education, speech and language, PT/OT
[physical therapy/occupational therapy] and some of the harder-
to-fill positions. He supports both bills but more heavily
favors the one for education.
Number 1882
CHAIR BUNDE informed the committee and the audience that as a
general rule, it will not be the committee's policy to move a
bill the first hearing. Action won't be taken on the bill until
there is an opportunity to gather more information, and then
there will be a second hearing.
Number 1907
JEFF STEPHAN, President, Board of Education, Kodiak Island
Borough School District, testified via teleconference. He
expressed support for HB 37 and said it becomes more and more
difficult to recruit quality teachers to Alaska. He believes
that an in-depth assessment of this issue would illustrate a
very troublesome trend. The recruitment of top talent of
teachers for Alaskan schools is a very critical issue for the
state and for the children. He hopes that the committee will
recognize in the attempt to recruit high-quality teachers and
somehow match the competitive situation that exists outside
would also assist with meeting some of the benchmarks and
standards in the high school qualifying exam.
MR. STEPHAN stated that districts in other states are evermore
competitive; Alaska is less and less able to compete for quality
teachers. Education is a very important key to the future of
the state itself. The state has to do what it can to prepare
for the new challenges that face it in this century. He said
that HB 37 is a good first step toward addressing this issue.
MR. STEPHAN mentioned that the issue of retention in the
villages raised by Representative Joule is very relevant. He
has no suggestion for the structure or construct of a solution
to that, but it is probably an issue that needs to be addressed.
Kodiak is a unique district in that it has both urban and rural
school settings and can understand the issue of retention of
teachers in the villages.
Number 2049
MIKE MILLIGEN testified via teleconference. He noted that he is
pleased to see both of these bills so early in the session. He
said that he feels that the problem in education runs deeper
than what may be addressed particularly by HB 37. He also is
concerned with the "brain drain" that is occurring in Alaska.
He agreed with [University] President Hamilton who has
encouraged the state to invest in the university system because
if people go to school in Alaska, the chances are they will seek
employment in Alaska.
MR. MILLIGAN noted that when people look for employment they
look at what the job pays. According to information he gathered
last year from Quality 2000, Alaska's average teacher pay is
within $900 of the average teacher pay for a teacher in
Tennessee. If that situation continues, Alaska can expect to
always have to offer things that he classifies as baubles or
gimmicks to keep teachers here. Alaska will never be able to
catch up. He said the basic problem is that teacher pay needs
to be higher.
MR. MILLIGAN explained that he is a single parent in his forties
currently going to school at Kodiak College and is pursuing an
associate degree. He has been substitute teaching since 1995.
If he is lucky, he can make $13,000 a year as a non-certified
substitute teacher. He thinks he's a good teacher, but he can
make more money right now with an associate degree than he can
with a bachelor degree in teaching, so he is going to pursue a
profession that doesn't involve teaching. This is a subject
that needs to be dealt with immediately. The root of the
problem is that the educational system needs more money put into
it. As long as the average teacher pay is the same as average
teacher pay in the states, Alaska can expect to fight to get
teachers and in many cases lose that fight.
Number 2176
LOUISE PARISH, Parent Advocate for the Learning Disabled,
testified via teleconference. She expressed support for HB 37
and would even like to see it go up to 100 percent if possible.
One of her daughters receives special education in Alaska, and
her other daughter is a sophomore in college and is now thinking
of majoring in education. She said she thinks it is a good idea
to leave the options open for college students so they are able
to decide later on what they want to do.
MS. PARISH informed the committee that when her daughter told
her advisor that she was interested in becoming a teacher, he
told her that that was laudable, but she could expect to make
$50,000 in the private sector with a math degree as opposed to
$25,000 as a teacher in Iowa. Her daughter has student loans
from Alaska and with the 50 percent forgiveness would amount to
about $20,000. When someone is looking at the difference in
going into the private sector anywhere in the nation or to
coming back to Alaska, the incentives have to be as strong as
possible. She supports the 50 percent forgiveness and would
hope it would move up to 100 percent if possible.
MS. PARISH also noted that there has been an unfilled special
education position in Valdez for the last six months. It is
disturbing to her as a parent to finally get the special
education position and then not be able to fill it.
Number 2328
MELISSA HILL, Alaska Teacher Placement (ATP), testified via
teleconference. She agreed that teacher retention is an issue.
The two biggest factors seen by surveys done by ATP pertaining
to the rural districts are the salaries and the housing
situation. Because the cost of living has increased in the
rural districts, it is hard to convince teachers to go out to
the rural districts where potentially they could run into
situations where there is no running water. The second biggest
question she usually gets after the question of certification is
what kind of incentives does Alaska offer. There is concern
regarding the incentives offered by other states.
TAPE 01-1, SIDE B
Number 0001
MS. HILL said she gets a lot of calls from teachers who have
been in a rural area. The retention rate for the rural areas is
about two to three years. That is something to consider in this
bill. Any incentives that can be implemented in the state will
definitely encourage the ATP in its recruitment efforts.
Number 0070
REPRESENTATIVE GUESS asked Ms. Hill if there is the potential to
train enough Alaskans either in or out of the state as teachers
to fill the positions, or will districts need to still recruit
people who are not Alaska residents.
MS. HILL answered that the university system does not
technically produce enough teachers to fill the need. The whole
university system produces about 30 percent of the actual need
for the demands in the state; however, only 17 percent of those
are actually going into the pool, so districts do have to look
outside the state in order to fill the demand. The ATP does
track the number of Alaska Natives that are encouraged to go
into the teaching profession. Right now Alaska Natives make up
about 5 to 7 percent of the hires in the state. The Lower
Kuskokwim school district has a scholarship program available
where the district actually pays for the local residents to go
to school for up to five years at any Alaskan university, then
the teachers come back and work for that district to pay off
that loan.
CHAIR BUNDE asked Ms. Hill how many participants are in the
Alaska Scholarship Program for encouraging native folks to
become teachers.
MS. HILL replied that they don't actually track those numbers;
that could be looked into. For example, in Lower Kuskokwim
three students are currently in the program and who will go back
to work in their school district next year. These are very non-
traditional students. There needs to be good support systems so
these students will succeed.
CHAIR BUNDE asked if Ms. Hill said nearly half of the students
who graduate in education are choosing to not either work in
education in Alaska or leave the state.
MS. HILL replied yes. There are two reasons for that. Some of
the teachers in programs are already teaching on waiver, so
those applicants are not going back into the hiring pool because
they already have jobs.
Number 0322
REPRESENTATIVE JOULE asked what the percentage of Alaska Native
teachers is in the Lower Kuskokwim school district that offers
incentives as compared to the 5 to 7 percent mentioned earlier.
MS. HILL answered in that school district it is at 17 percent,
getting close to 20 percent.
Number 0384
SHEILA KING, Finance Officer, Alaska Commission on Postsecondary
Education (ACPE), Department of Education and Early Development,
came forward to answer questions. She commented that the ACPE
is still reviewing the bills. The commission is in support of
the concept of trying to retain and attract teachers and others
in professions needed in the state. Regarding a retroactive
application of the forgiveness in either bill, she highlighted
some issues that need to be considered: Regarding the fairness
issue that was brought up, the loans that are developed for each
program year are issued with specific loan terms and loan types,
and those may change prospectively. The commission develops
those loan terms because of its bond indentures. In
retroactively applying changes to those terms, the commission
needs to make sure that the bond holders are made whole because
there are agreements regarding the bonds that have been
purchased to fund these loans.
CHAIR BUNDE explained that when the student loan program was
initiated, it was funded by the general fund, so there wasn't a
great concern about due diligence and payback because there was
always a bottomless pit of money coming into the student loan.
About ten years ago the legislature said it can't afford this
any longer; the fund was basically "annuitized" and the
commission was told to sell bonds to support the loans because
there will be no more general fund money. It is now self
sustaining and just last year turned a profit.
CHAIR BUNDE mentioned several areas of information that Ms. King
could later share with the committee on this subject.
REPRESENTATIVE JOULE suggested an earlier start time for the
committee since time has run out today.
Number 0708
MS. KING referred to the fairness issue and said that people who
prepay their loans or who have paid off prior to the effective
date would also be excluded.
REPRESENTATIVE GUESS asked Ms. King if the forgiveness laws
worked when it was offered before and if more young people came
back to Alaska under the previous forgiveness laws.
CHAIR BUNDE said he would be interested in seeing what impact
that had on the default rate. [HB 37 and HB 54 were heard and
held.]
ADJOURNMENT
Number 0810
There being no further business before the committee, the House
Special Committee on Education meeting was adjourned at 10:05
a.m.
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